A bigger Heathrow hub is the only real option for Britain

 
Corin Taylor
AFTER years of dithering from politicians of all parties, Friday’s report from the Transport Select Committee was a breath of fresh air. Mirroring many of the proposals we made in our aviation report last December, the Committee’s recommendations (that the government should reject proposals for an airport in the Thames Estuary and expand Heathrow instead) could make Britain a world-leader in air transport once again.

Enough has been written about the aviation sector to leave little doubt of its importance to business and tourism. But outside the Transport Committee, the crucial points are still too often misunderstood.

First, the UK serves short-haul and established long-haul markets, especially North America, very well. But connections to the high-growth parts of the world economy are far less comprehensive. Heathrow serves 26 cities in the US and Canada daily, but only three cities in South America. And there are more flights from Heathrow to Hong Kong than to all the other cities in China put together.

Nearly two thirds of our members say that direct flights to high-growth markets will be important to their business over the next decade, but transatlantic connections should not be ignored. The US is the UK’s largest trading partner outside the EU and 3.5m people from North America visit Britain each year for business and pleasure. That’s why these routes are so busy.

Second, the only way to develop a significant number of new connections to Asia and South America, without losing the established routes, is though a hub airport. Unless passengers are concentrated in one location, there won’t be sufficient volumes to make new long-haul routes viable. At the margin, competition between London’s airports and new, smaller, long-haul aircraft can help. But the Committee was right to reject the idea of building new runways at airports that already have spare capacity.

Third, Britain only has one hub airport, and it is full. Heathrow is allowed 480,000 flights a year, and for most of the last decade has been operating more than 470,000. The only airport that can realistically add more than a handful of new routes has no room to do so.

Fourth, the UK is hardly awash with money. But this obvious fact seems to have escaped the notice of the many bodies that have put forward schemes to build a new hub to the East of London. There is little sense in replacing an airport that already has good underground, road and surface rail links – many being upgraded – with an airport that would take longer to get to, clash with Amsterdam’s airspace, and need the full suite of surface access infrastructure to be built from scratch. And unlike Hong Kong’s old airport, squeezed between apartment buildings, Heathrow has a great deal of space to expand.

The Davies Commission is rightly assessing all the evidence in detail, but the conclusions are staring it in the face. Expansion of Heathrow is an infrastructure project that requires no subsidies and could provide a massive boost to growth. Why wait until 2015 to give it the go-ahead?

Corin Taylor is a senior economic adviser at the Institute of Directors. www.iod.com