Third LHR runway 'could reduce fares by £300'

17 Apr 2014 by GrahamSmith

Passengers travelling through London Heathrow are already paying an average of £95 more for a return ticket than they would do if the airport had a third runway, according to a report.

Research firm Frontier Economics also estimates that the average ticket price could be £300 lower by 2030 if Heathrow was allowed to expand.

And the report, commissioned by LHR, claims a third runway could add 40 new routes from the airport.

The figures take into account the costs of building a third runway and, Frontier Economics said, show that “the savings delivered to consumers by additional capacity are far greater than the costs of construction”.

Heathrow third runway proposal

Colin Matthews, LHR’s chief executive, said: “This research shows that not building a third runway at Heathrow will add hundreds of pounds to the cost of a family holiday, be a disincentive to doing business in the UK, and increase the cost of the goods and services that are imported and exported through Britain’s most important trade gateway.

“This additional burden on both the cost of living for families and on businesses is entirely avoidable. The private sector stands ready to invest in the infrastructure Britain needs.

“Government has it within its power to lower prices for consumers by taking a clear decision to support expansion and end the years of prevarication that are now causing fares to rise and routes to be constrained.”

The Airports Commission estimates that the costs of building a new runway are around £20 per return passenger, whereas Frontier estimates the total reduction in the average return fare by allowing airlines the freedom to compete would be £320.

The commission, headed by former CBI boss Sir Howard Davies, is currently looking at two possible expansion options at Heathrow, as well as a possible second runway at Gatwick (see news, December 2013).

The proposal for a new airport in the Thames estuary, dubbed Boris Island after London mayor Boris Johnson, is also still being considered and could be added to the shortlist if it is shown to be economically viable.

The commission will make its final recommendation in summer 2015 after the next general election.

Frontier argued that passengers would benefit more if both Heathrow and Gatwick were allowed to expand.

The research firm added that Heathrow could add long-haul routes to key cities in emerging markets such as Kolkata in India, Mombasa in Kenya and the Peruvian capital Lima.

Expansion would also improve connections between Heathrow and UK regional airports such as Inverness, Liverpool, Newquay and Humberside.

Frontier said that adding a second runway at Gatwick would add between five and seven new routes, which would be mainly to package holiday destinations.

Graham Smith

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