Plans for airport expansion still grounded

Posted on 11 Dec 2015 by Fred Tongue

The announcement to delay a decision on whether to extend Heathrow or Gatwick airport has frustrated business leaders.

The Government’s recent decision to delay an outcome on how to maximise aviation output has sparked a number of strong response from business.

The British Chamber of Commerce described the decision as “gutless”, and argues that the delay is bad for the UK economy.

The Government said that a decision would be made in the summer of 2016 after further environmental research has been carried out.

Transport Secretary Patrick McLoughlin said the Government needed to “undertake more work on environmental impacts, including air quality, noise and carbon” before coming to a decision on how expand airport capacity in the South East.

In a recent survey of 722 firms by The CBI, 92% of firms believed that flights to one or more market are crucial or important to their business, 65% views flights to the US as crucial or important, and 64% feel the same way about flights to emerging markets.

Less than half of the businesses surveyed (45%) believe that connections from the UK to emerging markets are fit for purpose, and more than a third (39%) believe that domestic links are a problem.

A vast majority of 91% of firms see a new runway in the South East as crucial or important, and 41% of all businesses (and 50% of London firms) are already being impacted by the lack of runway capacity.

Carolyn Fairbairn named as next CBI director-general
Carolyn Fairbairn, director general, CBI.

CBI director general, Carolyn Fairbairn commented: “Delaying this decision on an issue of critical importance to the future prosperity of the UK is deeply disappointing.

“We urgently need to increase our runway capacity to spur trade growth, investment and job creation. Just eight new routes to emerging markets could boost our exports by up to £1 billion a year.

“But by 2025 – the earliest a new runway would be built – London’s airports could already be operating at full capacity and the longer we wait the further we fall behind the likes of Amsterdam and Paris. If we don’t have a new runway up and running by 2030 the cost to the UK will be as much as £5.3 billion a year in lost trade to the BRICs alone.

“It is of course essential that environmental conditions are met. But the Airports Commission spent three years analysing impartial evidence, at a cost of £20 million, and the National Infrastructure Commission was set up just two months ago to take an evidence-based approach to our needs. We cannot fall into the habit of simply commissioning new evidence, instead of the Government taking the tough decisions needed at the end of the process.”

There are three options for expansion currently:

  • a third runway at Heathrow
  • a second runway at Gatwick
  • extend an existing runway at Heathrow

In July, an independent report by Sir Howard Davies back building another runway at Heathrow, but was open to the other options. Business groups currently favour the proposal for expanding Heathrow.