Poor air links costing UK £14 billion in trade – Heathrow report

15 Nov 2012 by BusinessTraveller

The UK economy is losing £14 billion in trade a year because of Heathrow’s current lack of capacity, according to a report commissioned by the airport’s owner.

Heathrow has commissioned Frontier Economics to produce the report entitled One Hub or None, which also claims that this loss of trade could increase to £26 billion a year by 2030.

The report argues that the UK is losing trade to key emerging markets – particularly to China – due to a lack of flights between the countries with other European hubs such as Frankfurt and Paris benefiting from Heathrow being full.

Heathrow’s CEO Colin Matthews said: “London is already slipping behind in the global race to build connections with important markets like China.”

The UK’s hub airport had 1,630 flights to China’s main gateways to Beijing and Shanghai in the year to the end of September but Heathrow does not currently have any services to the third major city of Guangzhou.

Paris Charles de Gaulle had 1,125 more flights to these three Chinese cities while Frankfurt had 407 extra services. Overall, Paris and Frankfurt have 2,200 more flights per year to all mainland Chinese cities than Heathrow.

The report, which is being sent to the new independent commission on how to increase the UK’s airport capacity, argues that the UK can only have one hub airport which means expanding Heathrow or replacing it with a new larger airport.

“Only a single hub airport can meet the UK’s connectivity needs and the choice is therefore between adding capacity at Heathrow or replacing it with a new UK hub airport,” said Matthews.

The independent commission into aviation capacity is being led by former CBI boss Sir Howard Davies but it will not report fully until after the next general election in the summer of 2015 although there will be an interim report looking at short-term options before the end of 2013.

Virgin Atlantic said that the report made a “compelling case” for a single hub airport in the UK.

“The UK needs one hub airport, with sufficient capacity to allow the UK to be competitive and reap the benefits of the connectivity air transport provides,” said the airline. “Whether that’s at Heathrow or elsewhere, is up to the Davies Commission and the government to decide.

“What they must recognise is that, unlike for other transport modes, it will be airlines and their customers who will pay for any new infrastructure.”

Willie Walsh, CEO of British Airways’ owner IAG, has already said that he does not expect the Davies Commission to come up with a suitable solution to improve airport capacity because politicians “lack the will” to resolve the issue.

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Report by Rob Gill

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