We need to stop playing politics with aviation and go for growth

 
Allister Heath

IT is time for our political establishment to get its act together and take the tough decisions this country needs. The case in favour of airport expansion is overwhelming. Britain has failed to build a single new full-length airport runway anywhere in the South East of the country since the Second World War (City Airport, while great, has a very short runway which only accommodates smaller planes).

Modern Britain – or at least its politicians – has an endless ability to dither when it comes to giving the green-light to infrastructure projects. The private sector would be willing to stump up the cash to build more airport capacity; the blockage is entirely political.

The real problem is that there is no mechanism to properly compensate the minority that would lose out from building more runways; as in all cases of dispersed benefits but concentrated costs, the aggrieved minority therefore has an incentive to organise politically and block all development.

Yet it is clear from economic history that connectivity in all of its forms is key to trade, growth and prosperity; and for modern economies, that must also mean plentiful flights to every possible destination. Yet capacity constraints are throttling London’s potential, reducing trade and costing jobs.

Heathrow is now 99 per cent full; it has grown by 53 per cent over the past couple of decades, far less than Frankfurt (up 84 per cent), Paris Charles de Gaulle (up 142 per cent) and Amsterdam Schipol (up 160 per cent). Heathrow can no longer grow; but hub expansion at Amsterdam and Paris has been unconstrained. Gatwick will be full by the mid-2020s (and if new low-cost Transatlantic flights replicate the success of shorter-haul low-cost destinations, it could arguably fill up even more quickly). There is still capacity at Stansted but it specialises in low-cost European carriers, not in business flights.

While there are plenty of daily flights from Heathrow to Hong Kong, the airport only offers 3-5 in total to Beijing and Shanghai. What about all of the other booming Chinese cities? Paris Charles de Gaulle boasts 11 flights per day to four Chinese cities; Frankfurt offers ten flights per day to six Chinese cities. Paris, Frankfurt, Amsterdam, Munich and Madrid offer more connections to half of the emerging market economies than London is able to provide; the same is true of seven of the eight growth economies identified by the IMF.

I could go on listing depressing statistics but here is one last set: As the Let Britain Fly campaign rightly notes, London has no daily flights to 10 emerging economies and yet 26 cities in those economies are served by daily flights from other European cities. It is complete madness: we are shooting ourselves in the foot, reducing trade links with fast growing nations and hurting economic growth. We are also artificially restricting the growth of the aviation business, which directly employs 326,000 and supports an additional 600,000 or so indirectly.

Why bother supporting new WTO trade deals – let alone sending huge delegations of politicians on trade missions – if we are unable to access newly liberalised markets because of artificial restrictions on aviation? Business travel is being crippled – and so is tourism, which ought to be one of Britain’s growth industries in the years ahead.

Sir Howard Davies will be releasing his interim report on Tuesday, giving a shortlist of four options for expansion. Not everybody will like his findings, and many will be even more upset when his final recommendations are published, and their favourite choice isn’t selected. But it is now time for the leaders of all of the main parties to pledge to back whatever Davies comes up with. The time wasting and the cowardice must come to an end; it is time for Britain to drag its airports into the 21st century.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath