Aeroplane undercarriage

We may never get a decision on airport expansion says BA Chief

By: Gill Upton @gillupton1
Published: Thursday, November 20, 2014 - 15:31 GMT Jump to Comments

The cost of increasing runway capacity in the south east of England is in a steep climb and may yet stall. The Gatwick 2nd runway plan will cost an extra £2bn and extending the northern runway at Heathrow a massive £3.5bn.

The UK runways debacle shot back into the limelight recently with news from the Airport Commission of the escalating cost of more new UK runways. The announcement also served to highlight the political quagmire the issue is stuck in as the Commission’s final report and recommendations has been pushed back to post next year’s election.

With vocal residents living around the airport boundaries at both sites, no political party wants to campaign on this issue and lose vital votes in the run-up to next May’s election.  The anti-Heathrow expansion group HACAN says that ultimately “it will come down to political deliverability”.

The Commission’s author Sir Howard Davies is in a no-win situation, having to recommend either a second runway at Gatwick, a third runway at Heathrow or an extension to an existing runway at Heathrow. Those are his three options although the report highlighted the greater economic benefit a third runway at Heathrow would bring, despite it costing £4bn more than estimated. 

All three options will cost far more than originally thought. The cost of building a second runway at Gatwick has shot up by £2bn to £9.3bn and the cost of extending the northern runway at Heathrow a further £3.5bn, totalling £13.5bn.

The Airport Commission also detailed the GDP boost that expanding either airport would bring, namely some £42-127bn at Gatwick’s and between £112-211bn at Heathrow. Job creation would swell by 32,600 by 2050 at Gatwick and by 108,000 at Heathrow.

Davies will have to walk through a political minefield to come up with a plan that he believes the next Government will accept. Aside from costs, noise pollution and air quality are two major stumbling blocks.

Keith Williams, Chief Executive of British Airways, said this week that he wouldn’t be surprised if a decision is never made on new runways for the UK, such is the toxicity of the issue.

Can UK PLC afford to wait another year? No. Heathrow will gradually lose status on the world stage and its role as Europe’s pre-eminent hub, to front-runners Amsterdam Schiphol, Paris Charles de Gaulle or Frankfurt.

Moreover, no expansion will stultify UK economic growth. Deloitte has said that exports to regional and global markets will become growth drivers, but only if those businesspeople going to clinch the deals can get there.

Without direct flights to key global cities, particularly to emerging cities in Asia and Latin America, Heathrow is doomed. Moreover, UK PLCs ability to export will be affected. Crucially, of the top emerging cities in Asia, only half can be reached directly from the UK.

In its report, ‘The Voice of the Business Traveller’, the GTMC (which represents the UKs main travel management companies), and Audience.net highlighted that of the 25% of the report’s sample that travelled to Mexico, Indonesia, Nigeria or Turkey (known collectively by the acronym MINT countries), some 44% had to connect via Amsterdam Schiphol, Frankfurt or Dubai.

The report singled out Osaka, Tianjin and Santiago  – three burgeoning Asian and Latin American cities – as not having a direct connecting flight from the UK.

Frontier Economics estimates that the UK could be losing out on £1.2bn pa in trade due to lack of direct fights to emerging markets. Moreover, they also forecast that Heathrow would have 2 million fewer flights to emerging markets than Frankfurt by 2021, if the UK does not expand capacity.

Paul Wait, chief executive of the GTMC, said: “Our members and their clients are the business people who travel to ‘do the deals’ that underpin future economic prosperity and their message has consistently been that that they cannot directly access the destinations and markets where they wish to do business.

“Instead, around 25% of regular business travellers are being forced to use rival EU hubs to make those connections – a significant blow to our status as a global business centre.”

Wait said that while issues like cost and noise have to be considered, it is aviation’s function as a critical link for a global, trading nation that the GTMC believes should take precedence.

To this end, the GMTC will be responding to the consultation and ensuring that the voice of the business traveller will be heard loud and clear by the Airport Commission. However, whether that voice will hold sway with the election victors next summer is another issue altogether.

 

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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