The Confederation of British Industry (CBI) has stated that expansion of the UK’s airports is critical to long-term economic growth and has urged action by 2020. Declaring its position on the future aviation capacity, the business lobby group said the UK is losing out to European rivals on direct flights to emerging markets.
“There can be no more excuses,” CBI Deputy Director General Katja Hall said.
As early as last year, a study by Guild of Travel Management Companies (GTMC) revealed that up to a quarter of international business travellers from the UK are having to use a non-UK air hub because of lack of capacity in the South East’s airports.
According to the survey of more than a thousand frequent international business travellers in the South East, 25 per cent already fly via a rival European hub to reach the destinations they wish to do business in.
“The capacity of our airports is one of a series of barriers to growth in the UK winning more events business. Alongside Air Passenger Duty, the limitations of our airports are reducing the competitiveness of the UK in being an attractive location in which to hold international events and one where business travellers choose to return as leisure travellers,” said Simon Hughes, Vice Chair of the Business Visits & Events Partnership.
Luke Flett, Head of Sales & Marketing at Ashfield Meetings & Events, added: “Making our country as accessible as possible will only it a more attractive destination for MICE events.
“The capital in particular has had a renaissance in recent years with lots of high profile events and investment in hotels and meeting venues to make it a stronger proposition to corporate clients.
“However, we haven’t necessarily converted this exposure into the level of incoming event business you might expect. The high price of services on the ground may be a contributing factor to this and increased flight competition should help reduce some of the travel cost and offset costs such as high hotel rates. Increased direct routes and frequency will also help our outbound business opening more destinations for incentive programmes and other groups. A lot of our clients have restrictions on how many staff they can have on one aircraft and again this should help to open additional viable destinations,” Flett added.
No Boris Island
One of the options mooted to increase UK airport capacity, and backed by London Mayor Boris Johnson, was an ‘aerotropolis’ modelled on Hyderabad’s two-runway airport. Mayor Johnson offered the Thames estuary as a way of alleviating London’s airport congestion and expansion issues, and as an alternative to the plans to build another runway at Heathrow.
The so-called ‘Boris Island’ has, however, been rejected by the Airports Commission. Commission Chairman Sir Howard Davies said the huge cost, economic disruption and environmental concerns made the proposal unviable. “We are not persuaded that a very large airport in the Thames estuary is the right answer to London’s and the UK’s connectivity needs,” Davies said in the report.
“While we recognise the need for a hub airport, we believe this should be part of an effective system of competing airports to meet the needs of a widely spread and diverse market like London’s,” he added.
Prior to the decision on the island-idea, the CBI urged the commission to ensure its decision “maximised links across the UK” and made “the best use of existing capacity”, and strongly recommended the need for a single, larger hub airport where passengers can transfer to a range of destinations.
“While no one can predict the future of air travel, the track record shows that it tends to be hub airports that deliver the new connections to emerging markets that we desperately need,” Hall said.
Harris, meanwhile said in his report that the need for additional capacity was urgent and it was necessary to focus on solutions which were “deliverable, affordable, and set the right balance for the future”.
The decision not to shortlist the aerotropolis idea leaves the commission with three choices: adding a third runway at Heathrow; lengthening an existing runway at Heathrow; and a new runway at Gatwick.
Heathrow boss John Holland-Kaye, said: “Only Heathrow has the ability to provide the long haul routes that will help businesses make the deals on those countries that will help the UK prosper.”
A Gatwick spokesperson, however, said more hub capacity could be achieved by switching some traffic to its own airport, freeing up space at Heathrow. The spokesperson added that a second runway at Gatwick would create two world-class airports able to address all travel markets and airline models and foster competition between airports and airlines.
Addressing the available options, Ian Cummings, UK & Ireland MD at CWT Meetings & Events, said: “The capacity issue in London and the south east means we have limited scope for the development of new routes in and out of the UK.
“Gatwick isn’t a connecting hub, so while there is wiggle-room here, it will only attract a certain amount of traffic. While fine for whisking incentive groups abroad, it can potentially mean the UK missing out on inbound events and conference business.
“In an ideal world we’d see expansion in both airports as at the moment there is little leeway when weather or other unplanned disruption occurs. All of this is damaging to UK PLC and the events industry is no exception. We’d concur that airport expansion is critical and hope the Davies Airport commission will make decisions about where and when to invest, as soon as possible,” he added.
The least ambitious version of ‘Boris Island’ was reported to cost £70bn to £90bn, while the third runway at Heathrow is expected to cost £14bn-£18bn; lengthening the existing runways at Heathrow will cost £7.5bn; and a second runway could be built at Gatwick for between £5bn and £8bn. All substantially cheaper options.
The final report from the commission on expanding airport capacity is expected next summer, so for now it’s a case of watch this (air) space.
This was first published in the October issue of CN. Any comments? Email Zoe Vernor