- Introduction - The debate over the future of UK airport capacity has been high on the political agenda, with the Coalition Government standing by its decision not to approve additional runways at Heathrow, Gatwick or Stansted, at least for the present. There has been considerable pressure from business, industry, the airport operators, and the airlines for them to reconsider this position, arguing that a lack of new investment in additional capacity significantly weakens the UK economy and adversely impacts on the UK’s competitiveness globally, as well as having negatives consequences for employment. The forthcoming consultation document on Airports Policy will add to this debate.
This briefing note outlines the current situation with respect to three main issues that are central to the debate. It summarises the expected levels of demand for air travel to 2050 and the need for additional capacity, particularly in the South East Region. It then comments of the importance of hub operations to the airlines and the impact that this might have on the London wide economy. Finally, it is suggested that the decision to increase runway capacity in the South East is too late, as competitor airports in Europe have already provided the necessary capacity to meet the expected levels of demand. Extensive networks will have been established between those airports and the emerging global cities, and any additional capacity at Heathrow will be operational too late to influence this new connectivity.
- Demand – Effective forecasting of demand for future air travel is essential, as it provides the basis for the provision of sufficient capacity and it helps clarify the main issues for debate. But this debate should not be demand led, as the predict and provide solution is costly, inefficient and unsustainable - this approach has already been discredited in the 1990s with the decisions over the appropriate levels of UK motorway investment. With respect to UK aviation, there seems to be some disagreement over what levels of demand should be accommodated. The Committee on Climate Change1 suggests that allowance should be made for a 60 per cent increase in passenger demand (to about 340 million passengers a year) and a 55 per cent increase in Air Traffic Movements to 2050 (on 2005 levels). It was also concluded that this level of increase could be accommodated within the UK emissions targets of reducing aviation carbon emissions by 50 per cent to 2050 (on 2005 levels), but this optimism has not been supported by subsequent evidence. The Department for Transport2 forecasts a total of 470 million passengers will use UK airports in 2050 (about a doubling on the 2005 levels), amounting to an increase of about 2 per cent per annum. Without runway expansion in the South East, growth in air travel would have to be allocated to the regional airports, hence the need for a more strategic and coherent policy that would either promote a concentration at Heathrow or an alternative regional approach.
- The Hub Debate – Central to much of the debate has been the case that hub airports3 are crucial for economic growth (www.heathrow.com/hub), and substantial numbers have been cited to support this assertion. For example, the CBI have concluded that 80 per cent of long haul visitors to the UK come through Heathrow (4 million passengers), and they are responsible for £4.4 billion of spend in the UK economy. There are 8 million long haul passengers that transfer through Heathrow, 2.5 million of whom stop over (31 per cent) and this in turn results in £1.25 billion of spend. Business travel accounts for 20 percent of long haul passengers, and this helps sustain the £600 billion of trade between the UK and the rest of the world. Some 76,000 work at Heathrow, with a further 180,000 other jobs being supported4. The counter argument here is that there are also passengers leaving the UK and spending their money overseas, and business activity also results in benefits accruing elsewhere – it is the net effects that are important.
These hubs are attractive as they provide a greater range of destinations, and offer better connections through the higher volumes and more frequent services, and there are clear benefits to some operators (see Table). Yet the passengers have to travel further and they have the inconvenience of changing flights. The ‘low cost’ airlines have adopted a different type of network using a point to point direct service that offers more convenience, but less flexibility. These services tend not to use the hubs, but a range of secondary airports. It is these services that have consistently shown the greatest growth in demand over the last ten years, and they have been profitable. The hub strategy needs rethinking, as there are viable alternatives.
Table: The Main Airports in Europe
Please click here to view table.
Comment: The number of runways is complex – for example Schiphol has 3 north-south runways, 1 east-west runway, and 2 diagonal runways, and the use of each depends on wind direction and strength.
Source: Mayor of London (2011) A new airport for London: The economic benefits of a new hub airport, London, Greater London Authority, November, and other sources.
- Time for action – The competitive market is no longer national, and Heathrow and Gatwick have benefited from their prime positions near to London over the last 40 years. The competition comes from Europe where there has been considerable investment in new runway capacity (see Table), and it will be in these four expanded airports that future growth will be concentrated, as can be seen by the numbers of destinations served, and by the potential for higher load factors and larger planes. Heathrow has only two runways, but there may be scope for larger planes and even higher load factors.
It is not just a matter of capacity but the time needed for additional capacity to be realised. The celebrated case of Heathrow Terminal 5 is well known, and it took 19 years to complete from the original Rogers 1989 design to its opening in 2008. The process took 11 months from application to Inquiry, a further 21 months for the Inquiry, and 46 months until the inspector’s report was submitted, and then a 27 month delay until the decision was made. This was a total of 105 months, and this was followed by a six year construction period (2002-2008). Such delays are not just a planning issue, but one of ministerial delay and the lengthening process of financing and construction. All major decisions relating to airports are intensely political, and there are also strong environmental concerns over pollution, noise and ground level access, as well as the high levels of carbon emissions from aviation.
The current debate over the potential for a new airport in the Thames Estuary well illustrates this problem, as its proponents suggest that it would open in 2028 at the earliest, even if the funding was available and the planning process was not extended. If its development is contingent upon Heathrow being closed and all activities relocated at the new airport, then that process would take much longer. History might suggest that a new terminal can be built within 10-15 years, a new runway might take 15-20 years, and a new airport 20-30 years. So even if the decision in principle to build a new runway was taken today, there would be no substantial capacity increase until 2030.
By that time the global aviation system may have changed substantially, and the competitor airports in Europe will already have established firm and mature patterns of connectivity with the emerging cities and the growth markets. In addition, the global hubs may have migrated to the Middle East where there is extensive space available, smaller population concentrations, and the greatest ‘reach’ in terms of global markets – this has already been recognised in Dubai with its 5 runways. The key issue for debate here is that even if a new runway is built at Heathrow or a new airport in the Thames Estuary, it is already too late and London has effectively lost its hub status.
- Possible futures – Within a resource constrained world, it would seem that competition between airports and the focus on competing hubs being seen as the only way forwards needs reassessment. One possibility is to look at cooperation between airports and airlines, so that travellers (and freight) can have a full choice of destinations from a network of airports that are linked together to form a distributed system. This type of distributed network could either operate at the national level where UK airports would offer different destinations and travellers would use the rail (or road) system to access the appropriate airport. For example, this could mean that Heathrow would focus on the North American routes, together with those to Europe and South America, whilst Manchester and Birmingham would take on flights to the Far East, and Gatwick might concentrate on South East Asia and Australia.
The same type of thinking could evolve across the European market, but there would need to be closer coordination between the High Speed Rail network and the airports, as access distances are much greater. There may need to be more connecting flights for the longer distance links to collect and distribute passengers around Europe. The distribution of destinations need not be geographical, but they could be allocated on some other basis, for example with many destinations but lower frequencies. Such a Europe wide strategy requires a vision of the total network of airline routes across Europe and globally, now and over the next 40 years to 2050. The objective would be to provide a complementary and coordinated set of options for travellers. It would reduce competition and duplication, but provide appropriate capacity for the full range of services through a distributed network, with destinations and frequencies being allocated to the main airports.
David Banister
Professor of Transport Studies
University of Oxford
