rethinking debate the aviation capacity · 2013. 9. 16. · in association with terry farrell∙...

In association with

Terry Farrell ∙ Cheryl Gillan ∙ Zac Goldsmith ∙ Graham BradyStewart Wingate ∙ Simon Calder ∙ Tim Yeo ∙ Louise Ellman

RethinkingDebatethe

Aviationon

Capacity

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ROUND TABLE PARTICIPANTS

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Kyran HanksStrategy and regulation director, Gatwick Airport

Jon BernsteinFreelance editor andwriter (chair)

Ian KincaidVP economic analysis, InterVISTAS Consulting

Shamal RatnayakaPrincipal transport planner,aviation, Transport for London

Adam MarshallDirector of policy, BritishChambers of Commerce

Simon CalderTravel correspondent,The Independent

Graham Brady MP for Altrincham and Sale, Chair of the 1922 Commitee

John DickieDirector of strategy andpolicy, London First

Roy McNultyChairman,Gatwick Airport

02 participants:Statesman supplements 10/09/2013 11:50

13–19 SEPTEMBER 2013 | NEW STATESMAN | 3

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Partnerships andEvents ManagerRosalind Goates020 7936 6456

Challenging conventionDear Sir Howard... P16

4 Runners & ridersLondon airports by numbers

5 Think big, build smallAviation planners should take inspiration from Isaiah Berlin’s fox, argues Terry Farrell

6 Issue by issueA trawl through the data throws up some intriguing insights, by Jon Bernstein

8 Facing up to the capacity crunchHighlights from the New Statesman / Gatwick Airport round table

10 Jargon busterGet to know your transits from your transfers, connectivity from connections

13 Start with the passengersWhy competing gateway airports better serve communities, by Mike Thretheway

14 Facts & figuresHow aviation is changing

16 Dear Sir Howard...Leading politician, business and consumer groups write to the chair of the Airports Commission

20 NS Interview: Simon Calder“I started out cleaning Freddie Laker’s planes”

22 There is no alternativeHub capacity remains the unresolved issue of the UK’s aviation strategy, writes Louise Ellman

23 The view from GatwickLondon enjoys world-class air links but for how long, asks Stewart Wingate

The paper in this magazineoriginates from timber that issourced from sustainableforests, responsibly managedto strict environmental, socialand economic standards. The manufacturing mills haveboth FSC and PEFCcertification and also ISO9001and ISO14001 accreditation.

“My principal argument is that after sixtyyears [of inaction] we really need to get onwith something.” So said Graham Brady MPduring a New Statesman-hosted round tabledebate on aviation capacity earlier thissummer. Sir Roy McNulty, chairman ofGatwick Airport (our partner in puttingtogether this supplement) agreed, describingthe need as “staringly obvious” while AdamMarshall of the British Chambers ofCommerce talked of “massive constraint”.Government figures suggest 35 millionpassengers will be left grounded every yearfrom 2050 if the status quo remains.

So far, so consensual. But while theprognosis is broadly, if not universally, agreed,the nature of the cure divides opinion. Thediscussion to date has been underwritten by aseries of assumptions about the future shapeof air travel. Here conventional wisdom isbeing traded as fact and conclusions are beingdrawn that urgently need revisiting.

As the title of this supplement –“Rethinking the debate on aviation capacity” – suggests, these pages are an attempt tochallenge some of those assumptions. It is aimed at the expert and non-expert reader alike. l

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First published as a supplement to the New Statesman13 - 19 September 2013.© New Statesman Ltd. All rightsreserved. Registered as anewspaper in the UK and USA.

This supplement, and other policy reports, can be downloaded from the NS website at newstatesman.com/page/supplements

Facts & figures P14

CONTENTS

ARTICLES

passengers fly in and out of UK Airports each year

87%

221m134m

London’s 5 key Airports handle

passengers each year

f ith b i dRound table P8

03 contents:Statesman supplements 10/09/2013 11:45


Gatwick

Opened: 1930Passengers per year: 34.2mOutstanding capacity: 24 per centRunways: 1Terminals: 2Annual air transportmovements: 242,498Airlines: 90

Destinations: 180Countries served: 90Aircraft stands: 115Population affected by adverse noise: 3,700Journey time to central London: 30 minutes (Gatwick Express)Total runways proposed*: 2Timetable: 2025Estimated cost: £5bn – £9bn

Heathrow

Opened: 1946Passengers per year: 70mOutstanding capacity: 1.5 percentRunaways: 2Terminals: 5Annual air transportmovements: 471,341Airlines: 84Destinations: 184

Countries served: 80Aircraft stands: 186Population affected by adverse noise: 258,500 Journey time to central London: 22 minutes (from Terminal 5 on Heathrow Express)Total runways proposed*: 3 Timetable: 2029Estimated cost: £14 – £18bn

South-east airports by numbers

RUNNERS & RIDERS

Stansted

Opened: 1991Passengers per year: 17.5mOutstanding capacity: 42 per centRunways: 1Terminals: 1Annual air transportmovements: 131,365Airlines: 12Destinations: +150

Countries served: 30Aircraft stands: 110Population affected by adverse noise: 1,900Journey time to London: 47 minutesTotal runways proposed*: 4 Timetable: tbcEstimated cost: £10bn – £15.2bn

Thames Estuary / Isle of Grain (proposed)

Projected passengers per year:150mRunways proposed: 4Timetable: 2029Estimated cost: £50bn (includingroad and rail links)Estimated journey time tocentral London: 20 minutes (based on high-speedlink)

*Includes existing runwaysSources: Gatwick, Heathrow, Stansted, Transport for London, BBC, ONS, Guardian R

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04 Runners & Riders:Statesman supplements 10/09/2013 11:33

13-19 SEPTEMBER 2013 | NEW STATESMAN | 5

Ihave come to a stage in my career, as anarchitect planner, where I increasinglybelieve that there are two very differ-ent philosophies of planning. Like Isa-iah Berlin’s Hedgehog and the Fox,

these competing philosophies tell us a lotabout the predispositions of those who es-pouse them, the way we attempt to shapethe future of our regions and cities and thetimes that we live in.

In Berlin’s seminal essay, the hedgehogknows one big thing and relates all of life’sapparent complexity including the inci-dental to this big thing. The fox, on theother hand, knows many things and natu-rally goes about piecing them together toform a patchwork quilt within overarchingstrategies or visioning.

I write therefore not to propose yet an-other project but a different way of think-ing about aviation provision. Before anychoice is made between a third runway atHeathrow or a new estuary airport or anyother singular grand projet, there needs tobe a wider search for the right set of solu-tions for London, the south-east and forthe UK overall.

Thinking like the fox, I wonder whetherthere are interim deliverable solutions thatdon’t rely on bigness, that can unlock theproblem and begin transformation, in anincremental and pragmatic way, while notpreventing the bigger things happening ata later date.

Closing major airports, building giantnew hubs or any other grand gestures mustonly be considered in the light of looking

first at what we have now, and how thoseresources can be better used, not onlywithin themselves but in the light of ournetwork of other transport systems. In thiswe must include the addition of high speedrail and all the other substantial rail im-provements that will change and rebalancethe potential of the total system.

Examples of the sequential and incre-mental steps toward this could includemuch better surface links to Gatwick andStansted, with additional runway capacityclosely aligned to demand, all working to-gether within a bigger overarching strategy

of a constellation system of three dual run-way airports serving London – smart andappropriate solutions to our aviationneeds, capitalising on clever IT and logisticand network solutions that could be:• provided incrementally, responding todemand, rather than being a big bang proj-ect that will take many years to deliver• affordable and low risk, not a huge initialinvestment and very high risk• provide an optimum performance levelin terms of capacity and connectivity• be a big picture, resilient, sustainable andappropriate set of solutions consolidatingand intensifying existing employment andinfrastructure in the heart of Britain.

Think big,build small

These options will takedecades and our rivals will

be out of sight

by Terry Farrell

Using the fox in Isaiah Berlin’s famous essay as inspiration, let’s think about large infrastructure projects in an incremental and pragmatic way

OPINION

The same cannot be said for all of the bighardware of the proposed new airports inthe Thames Estuary and elsewhere, someof them requiring the dismantling of ouralready successful “aerotropolis” atHeathrow and all of the hundreds of thou-sands of jobs and business that go with it.These options also bring with them a con-siderable embedded, and ongoing, carbonemissions cost, for building a new airportfrom scratch and for the additional travel toa single airport east of London.

These solutions cannot be delivered fordecades by which time competitors in Eu-rope will be out of sight.

To turn to the question of system re-silience and of competition - a world cityand mega metropolis on the scale of Lon-don shouldn’t put all its eggs in one basket– let’s learn from what is working else-where – the similar “constellation sys-tems” of New York and Tokyo served by 2to 3 competing airports, as compared to thesmaller non-metropolitan cities like HongKong, Frankfurt and Amsterdam that havea single big airport – it’s all a question of bal-ance and scale. Don’t over simplify, but in-tensify, integrate and connect.

Let us look at all of the options, andwhether we can use existing and proposedairport and transport infrastructure to in-crementally form an evolutionary and net-worked answer to the call for airport capac-ity – a constellation system of airports. lSir Terry Farrell is principal at architect planners Farrells Jargon buster, page 10

05 Terry Farrell:Statesman supplements 10/09/2013 11:45 Page 4


In the run up to the publication of itsinterim recommendations at the endof the year, the Airports Commissionhas put together a series of discussionpapers around the issues central to the

decision-making process. Meanwhile, theHouse of Commons transport select com-mittee contributed its own thoughts onthe matter in a weighty 124-page tome.Here we pull together some of the moretelling data, analysis and insights fromthis body of work.

Future demandAirports in the UK currently serve 221million passengers a year. Forecasting fu-ture growth is always an inexact sciencebut based on the Department for Trans-port numbers there will need to be capac-ity to accommodate 320 million passen-gers per annum in 2030 and 480 millionby 2050. These numbers are the “central”forecasts based on unconstrained capac-ity. In other words, they are constructedon the assumption that additional run-ways will be built to accommodate addi-tional flights. And as the term “central”implies these figures represent a middleground in forecasting. On the extremes,2050 demand might be as low as 350 mil-lion passengers or as high as 660 million.

If, on the other hand, there is no extracapacity in the airport system then theconstrained capacity across airportsaround the capital will be 315 million by2030 and 445 million by 2050. That leavesa shortfall of 35 million passengers by2050 if the numbers play out as predicted.

The trouble with forecastsForecasts should be treated with caution.For example, there could well be unfore-seen trends that will dramatically alterhow patterns of domestic and interna-tional demand change over time. Thesemight be changes in the economic for-tunes of countries around the world orthey could be policy-driven changes suchas an increase in levies aimed at reducingcarbon emissions.

Equally, improvements in alternativemodes of transport – such as faster,cheaper continental train journeys – mayimpact demand in air travel, althoughthese are likely to have relatively minorimpact and/or be localised.

Finally, it is worth noting that forecastsprepared a decade ago as part of the 2003Future of Air Transport white paperproved to overestimate demand. Thepost-2008 global downturn, unforeseenin 2003, played a key role in ensuringthose forecasts were not met.

What drives demand?DfT has identified a series of “drivers” thatinfluence aviation demand. Broadly, thesesplit into two categories: general economicperformance and the price of travel. In theformer category (and in order of impor-tance) there are the following factors:

• UK consumer expenditure• UK GDP• Foreign trade • GDP

In the latter category, and again in order of

Issueby issueby Jon Bernstein

From demand to connectivity, economic and environmental impact, a trawl through the data throws up some interesting insights

ANALYSIS

importance, there are:• Oil prices• Airline costs• Carbon prices• Load factors • Exchange rates

Potential impact of lost capacityThe Department for Transport has also at-tempted to model the impact of constrainedcapacity (that is, no new runways) on thenumber of routes airports will be able toserve in 2050. Accordingly, Heathrow willlose 72 potential routes; Gatwick 23 andStansted 11 routes. However, when you takein to account the London airport market as awhole and the fact that different airportswill be able to serve different destinations,the net loss of routes falls to 26.

Meanwhile, regional airports will gainroutes in significant numbers. Birminghamwill add an additional 15 routes, Manchesteranother 22 and East Midlands Airport another 40 routes. This reflects today’s underutilised capacity at these airports.

Impact on national and localeconomyThe air transport sector has a turnover of£28bn a year while generating a further£9.8bn in terms of economic output, basedon 2011 figures. The sector directly employs120,000 people with a secondary marketbenefiting from airports employing manythousands more.

Meanwhile, the UK’s aerospace industry– the second biggest in the world – employs100,000 and generates £23bn in turnover.

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Secondary markets through which airportsplay a positive economic role:

• Trade in services• Trade in goods• Tourism• Business investment and innovation• Productivity

To take tourism as just one example, theUK was visited by 31 million people in 2011and most arrived by air. Between them theyspent £18bn. Key to the discussion aboutaviation capacity is whether (and if so, towhat extent) limited connectivity will im-pact these economic benefits.

NoiseAircraft noise levels are expressed as dBLAeq. In simple terms that’s the averagesound level in decibels across an airport’soperating day, 16 hours between 7am and11pm. As far as the UK government is con-cerned the cut off is 56 dB eq above whichnoise levels become unacceptable.

For its part Heathrow says that as a resultof improvements in technology resultingin quieter aircraft the number of peoplefalling into the 57 dB Laeq catchment hasdropped from two million in 1980 to justover 250,00 today.

Nevertheless, a study undertaken by theAirports Commission illustrates the widevariation in noise impact from airport toairport. By the first of its two measures, thecommission showed that Heathrow serves281 passengers for every person affected bynoise at 57 dB LAeq (or above) compared to12,467 passengers per person affected

around Stansted and 9,233 around Gatwick.By its second measure, Stansted carries out108.8 air transport movements per personaffected compared to 1.8 at Heathrow.

Based on a traditional measure of popula-tion affected Heathrow (by far the busiestairport) affects 258,500 people, Gatwick3,700 and Stansted 1,900.

Environmental impact In 2010, London’s five key airports(Heathrow, Gatwick, Stansted, Luton, andLondon City) accounted for a total of 24.7million tonnes (MT) of CO2. Of that num-ber, Heathrow contributed 18.8 MT andGatwick 3.9 MT. While the London num-ber is predicted to rise to 31.4 MT in 2030 itwill fall away again to 25.7 MT by 2050. Sim-ilarly, while London airports accounted for75 per cent of UK departure CO2 in 2010, itwill fall to 55 per cent by 2050.

There are two factors at play here. One isthe assumption that London will be hit by a capacity shortfall. Should the go-ahead for additional runways across London begiven (and delivered on) before 2050 expectthese numbers to rise. Second, airlines op-erating out of London airports will increas-ingly use a new generation of fuel efficientaircraft.

In its 2009 forecasts the committee onclimate change (CCC) estimated that of thetotal greenhouse gas emissions allowed forthe UK to meet its 80 per cent reduction tar-gets by 2050, aviation would account for 35per cent. Given total air passenger forecastshave fallen since 2009, it is reasonable to as-sume that percentage has fallen also.

Terminal passengers

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Terminal Passengers at UK airports and GDP, 1960 to 2012

Connectivity At first glance the numbers look impres-sive. Ninety per cent of the UK’s popula-tion live within two hours of an airportthat has international connections and,combined, London’s five key airportsserves 131 million passengers a year, morethan any other city in the world. More-over, the UK serves 186 destinationsevery day (albeit down from pre-reces-sion peak of 220 in 2007).

However, while there are areas of theworld where connectivity from the UK isstrong (there are 35,000 flights from theUK to the United States every year, com-pared to 13,000 from Paris), there areother regions where provision is light.

Paris serves 52 African destinationscompared to London’s 32; Frankfurtserves 42 Asian destinations to London’s33; while Madrid-Barajas airport serves 25destinations across Latin America and theCaribbean compared to 17 out ofHeathrow. In part these figures reflecthistorical and cultural ties, and the location of the airports. If London lookswest than Germany looks east; whileFrance and Spain’s strengths are a nod totheir imperial pasts.

International transfer passengers ac-count for 9 per cent of total terminal pas-sengers, while a similar number of pas-sengers at UK airports make their transferabroad. To underscore this point, Man-chester and Birmingham airports, com-bined, have more than 5,000 flights inand out of Amsterdam Schiphol airport,4,000 to Charles de Gaulle in Paris, 3,500to Frankfurt and 1,500 to Dubai.

The commission has plotted the cur-rent number of flights to the ten destina-tions forecasts to enjoy the greatest realterms increases in GDP over the next fiveyears. While Gatwick and Heathrowcombined serve 35,800 and 30,000flights to the United States and Germanyrespectively, they only serve 1,800 toChina, 900 to South Korea and none toIndonesia. In response, Heathrow canpoint to the fact that it increased the num-ber of services to Bric nations faster thanany other European airport between 1990and 2010, while Gatwick points out thatout of the eight world “growth markets”as identified by Goldman Sachs, it will beserving half by the end of 2013. lThe Aviation Commission discussionpapers are available to read in full attinyurl.com/discussionpapers

6-7 Issue by Issue:Statesman supplements 10/09/2013 11:47 Page 23


Graham Brady, MP for Altrin-cham and Sale, and chairmanof the Conservative back-bench 1922 Committee, is re-calling the first time he truly

engaged in the airport expansion debate.It was during the final years of the lastLabour government when the Conser-vative opposition shifted its position ona proposed third runway at Heathrow. “I was very concerned that we might besetting back the achievement of capacitywhich was obviously much needed inthe south-east,” Brady said.

“I got the then shadow secretary ofstate [for transport], Theresa Villiers togive an absolute assurance that the factthat we were opposing the third runwayat Heathrow did not mean that we wereopposed to capacity in the south-east.Theresa gave that assurance very graciously and then spent the next 18months travelling around the south-eastand ruling it out in every constituencywhere it could happen.”

Brady was speaking as the principalguest at a round table debate – “Rethink-ing the debate on aviation capacity: com-petition and the passenger” – hosted bythe New Statesman earlier this summer.And although we will have to wait untilafter the next election before we get a final decision on airport expansion, theround table proved timely coming daysbefore the major airports (and those be-hind new airport projects that are beingproposed) presented their detailed rec-ommendations to Sir Howard Davies’sAirports Commission. The commissionwill present its initial recommendationsbefore the end of this year and will de-liver its final recommendations in thesummer of 2015.

Meeting the needThe New Statesman aviation capacitydebate covered a lot of ground. Topics in-cluded the economic and environmentalimpact of delivering extra capacity; thebenefits of competition; and the argu-

Facing up to the capacity

crunchTalk of demand, competition, connectivity and the economic and

environmental consequences of air travel dominated a New Statesman-hosted debate on the future of aviation

ROUND TABLE

ments for and against a hub airport, aconstellation of airports and a variety ofother models designed to solve the com-ing capacity crunch. Indeed there wasonly one issue which generated near-universal agreement: namely that inac-tion was not an option.

“My principal argument is that aftersixty years we really need to get on withsomething,” Brady told his fellow panel-lists during his opening remarks. “Myprincipal concern is that we get the capacity. My second concern is that weshould do it as soon as soon as is reason-ably possible for economic purposes.”For Gatwick chairman Sir Roy McNulty,the argument for extra capacity had been“staringly obvious for the last twentyyears and it’s no less obvious today.”

McNulty then summarised why he be-lieved that Gatwick’s preferred solution– a constellation of three two-runwayairports across London and the south-east – has “significant merit”. “It will de-liver airport competition. And competi-

08-12 Roundtable write up:Statesman supplements 10/09/2013 13:07 Page 4


ROUND TABLE

Making the case (clockwise from left): Shamal Ratnayaka (talking), Graham Brady, Adam Marshall, Jon Bernstein, Ian Kincaid, Roy McNulty and John Dickie

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tion delivers more passenger choice, bet-ter service, lower fares,” he argued. “Of[all] the airport concepts, the constella-tion is certainly likely to be more re-silient to disruption. We’ve seen whathappens at Heathrow over and overagain [when there is disruption]. And ifyou put all your eggs in one basket resilience inevitably suffers. And we’recertain that our proposal has less envi-ronmental impact than expandingHeathrow . . . finally we believe that ourproposition will be affordable. It will bepossible to finance it privately ratherthan from public funds.”

Levels of demandUnderpinning Gatwick’s propositionand that of its competitor airports is apredicted capacity crunch. According tothe Department for Transport forecastsUK passenger number will most likelyreach around 480 million passengers ayear by 2050 if there are no constraintson capacity. If there are constraints (in

other words, no new runways) therewill be a shortfall of 35 million passengerspaces by 2050 across the whole country.Moreover, the aviation industry believesthe crunch will hit the south-east asearly as the mid-2020s.

But how trustworthy are these num-bers? Ian Kincaid, vice president of eco-nomic analysis at InterVISTA Consult-ing, urged a degree of caution. He notedthat there are significant exampleswhere forecasting proved inadequate.“St Louis thought they were going to bea massive airport. [Then] TWA wentbust.” But he added: “The absolute levelof that demand is uncertain but even onthe low side of things, there’s still a needfor additional capacity.”

The Airports Commission’s stated re-mit is “to examine the timing and thescale of any requirement for extra capac-ity” which provides at least some wrig-gle room for it to conclude that there isno such requirement.

Asked if anyone disputed conventional

thinking that extra capacity was essen-tial, Simon Calder, travel correspondentof The Independent (and “avid consumerof the aviation services from across theLondon airports”) offered this: “WhenHeathrow says, ‘We are 98 or 99 per centfull’ what they mean is ‘of the allowedslots, 98 or 99 per cent of those are full’.What they don’t continue to say is, ‘butif you were to extract the maximumvalue . . . you could certainly squeezemaybe 10 or 15 per cent more operationsin or out.’”

“Heathrow isn’t full, Gatwick isn’tfull. And overall, south-east Englandhas, when you look at it holistically, toomuch capacity. And Britain has far toomuch capacity.”

To take that argument to its logical conclusion, does that mean the UKcould manage without any new runways?

“We will survive for eight to ten yearswithout building any new runways,”said Calder. And beyond that point? t


“It would be uncomfortable but notunmanageable.”

Business impactUnsurprisingly perhaps, that view was-n’t shared around the table. Adam Mar-shall, director of policy and external af-fairs, British Chambers of Commerce,said the collective opinion of the busi-ness community was quite clear. “Wethink there is a massive constraint on capacity in the south-east,” he said. “Yesthere are things we can do in the shortterm with what we’ve got but these assets need to be expanded.”

How short term is the short term?“Well, the short term has been sort ofrolling five year cycles for the past fortyyears, hasn’t it? My big concern is thatwe’ll go into another one of those fiveyear cycles quite naïvely and not do anything. Unless we all are [actively] infavour of extra capacity, in the south-east in particular, we’re going to end updoing just that, nothing.”

Meanwhile, John Dickie, director ofstrategy and policy at London Firsturged the government to let the airportsget on with expanding. He characterisedthe approach to aviation capacity as “dirigiste mass central planning” anddrew a parallel with retail sector suggesting that it would be absurd ifWestfield was prevented from buildinga shopping centre in Croydon just because it happened to have one in WestLondon. Similarly, letting airports expand at their own cost “is a pretty sen-sible thing to do”.

“Business firmly believes we need bet-ter connectivity, growth to grow theeconomy,” Dickie said. “We are an is-land nation. London is a great tradingcity. If you do not have great connectiv-ity, how does that work for you? Andthat connectivity is going to be princi-pally by air.”

Hub vs point-to-point Some believe that connectivity can bedelivered only via a hub airport. Both afuture Thames Estuary airport, pro-posed by London Mayor Boris Johnson,and an expanded Heathrow are predi-cated on this model. It assumes a signifi-cant number of passengers are transfer-ring – neither beginning nor ending theirjourney in London – rather than travel-ling from point-to-point.

Graham Brady, for one, is persuaded by

t

Aircraft movementAny aircraft taking off or landing at anairport. For airport traffic purposes onearrival and one departure are counted astwo movements.

Aircraft standsA designated area for aircraft parking.Although the term suggests fixed stands,it is increasingly used as a catch-all todescribe a fixed apron, an air bridge or aremote stand.

CapacityWhen an airport reaches capacity it is nolonger able to deal with the flow ofpassengers and cargo without delay andinconvenience. This can be influenced bya number of factors beyond physicalcapacity such as restrictions on overnighttake-off and landing, the number ofaircraft movements (see above) allowedwithin a certain time period and so on.

Connection Also known as a transfer; the ability tochange from one flight to another on theway to an ultimate destination. Theconnection could be between twodifferent flights operated by twodifferent airlines, or different flightsoperated by the same airline.

Connectivity Defined by the Airports Commission asthe ease with which a potential passenger– whether for business or pleasure – cantravel from A to B. Factors that need to betaken into account here are the location ofthe airport, cost of flights, time of flightsand whether the journeys are direct orrequire a transfer.

dB LAeq A measure of noise which refers to theequivalent continuous level. In simpleterms it is an attempt to convey anaverage across a period of time. Asapplied to the noise around an airportthat means across 16 operational hoursbetween 7am and 11pm. A measure ofnoise dB(A) is a measure of a noise eventat the maximum sound level.

HubAn airport that has a high volume offlights that allow passengers, who haveflown into that airport, to travel on toanother destination.

JourneyRefers to travel from origin airport todestination airport. The journey mightbe direct (see “point-to-point”) or itmight involve a transfer or connection.

Origin and destination The origin refers to the airport at thebeginning of each leg of a journey and thedestination is the endpoint airport ofeach leg of the journey

PassengerWith the exception of members of thecrew, refers to any person carried or to be carried in an aircraft with the consentof carrier.

Point-to-point Where a passenger travels directly to adestination and where the airport iseither the starting point or the end pointof an air journey.

Split hubSometimes referred to as a “dispersed”hub where the facility of changing planesto complete a journey is provided by twoor more airports within close proximity,often within a major city.

Transit Passengers who arrive at an airport andleave on the same plane rather thantransferring to another service or endingtheir journey.

Transfer Changing from one plane to another enroute to the passenger’s ultimatedestination. This may involve twodifferent airlines or two different servicesfrom the same airline.

2-2-2 Refers to a proposed “constellation” ofthree two runway airports: Gatwick,Stansted and Heathrow. l

ROUND TABLE

Jargon buster

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the merits of a UK hub airport. “Increas-ingly we’re seeing people fly point-to-point – that’s a good thing. Where it’ssensible, sustainable, where it fits withthe types of aircraft becoming availableand so on,” he acknowledged. “Butwe’re also seeing people hubbing fromUK regional airports to somewhereother than the UK. Whether it’s flyingfrom Manchester to Schiphol or flyingfrom Newcastle to Dubai in order toconnect to ongoing flights. So, I’m en-tirely happy for Gatwick to have a sec-ond runway (the sooner the better) but Ido think we need a hub airport as well.”

It was a point picked up by Shamal Rat-nayaka, principal transport planner, avi-ation, at Transport for London. “Interms of short haul, you’recompletely right – there’s amove towards point-to-point traffic,” he said. “Butwith long haul you see amove in the other direction: aconcentration towardsfewer, bigger hubs whereAmsterdam, Heathrow (al-beit imperfectly), Charles deGaulle and Frankfurt aredominating the market.”

In response, McNultypointed out that London isthe largest “origin and desti-nation” market in the world.“It is the best connected cityin the world and I don’t thinkanybody is arguing that we’re the bestconnected because we had the best hubfor the last twenty years. So clearlythere’s not a direct link between hub ca-pability and connectivity.”

Looking ahead he claimed that be-tween the mid-2020s and 2040, 87 percent of travel will be origin and destina-tion; 60 plus per cent to Europe, 70 percent short haul. Part of this is a reflectionof current habits and part is the emer-gence of new aircraft like the Boeing 787and the A350 which can take passengerspoint-to-point over very large distances.“We’re in danger of getting fixated onthe minority of traffic and not looking atthe majority.”

Kyran Hanks, strategy and regulationdirector at Gatwick Airport, added: “Ifyou’d gone with the hub argument tenyears ago, you wouldn’t have the most successful British airline based atGatwick, which is EasyJet. You wouldn’t have the biggest European air-

line based at Stansted, which isRyanair.”

Economic impactOne of the arguments against building anew airport to the east of London is thedamage it would do to the west of Lon-don. It was a point neatly captured byThe Economist earlier this year when itnoted in an editorial: “If the purpose ofairport expansion is to help lay the foun-dations for faster economic growth, thensabotaging one of the country’s mostsuccessful business clusters is an oddway to go about it.”

In response Ratnayaka, who is advisingthe Mayor of London on airport strategy,said: “Does Heathrow need to close? It

needs to reduce in scale. There are ad-vantages in closing it, not least the re-generation potential of that site. But wehave to decide, if we need a hub airport,where do we have it?

“Munich closed their airport andmoved one out. Hong Kong is anotherexample. The French, as always severalyears ahead of us, opened Paris Charlesde Gaulle back in the 1960s and it is nowone of the most successful airports in theworld. And Charles de Gaulle has the ca-pacity to expand and has the capacity tooffer optimised connections in a waythat dwarfs Heathrow.”

Adam Marshall disputed this reading

of events. “I don’t think any of those ar-guments about other cities reflect thesituation we have in London. What wehave is an existing, mature airport sys-tem. In Hong Kong for example, one air-port was closed to make way for another.Talk about capacity constraints, that wasa real capacity constraint as you roaredover the department blocks.”

“The concern I have with the argumentthat we can suddenly displace all of ouraviation activity eastwards is economicgeography.” Marshall pointed to over-seas companies that had chosen to locatetheir regional headquarters in theThames Valley, along the M4 corridorand along the M23 to be near Heathrowand Gatwick.

But won’t businesses sim-ply adapt to the new eco-nomic geography if a ThamesEstuary airport gets the greenlight?

“What a lot of them tell us isthat they’ll just go elsewhere,because it’s just too uncertainhere,” Marshall said. “Theycan have their Europeanheadquarters just as easily ona massive industrial estatenear Schiphol airport [in Am-sterdam] which they know isstill going to be going to bethere and is extremely wellconnected.”

Noise pollutionIf Boris Johnson is struggling to win overthe business community to the advan-tages of an Estuary airport, thenHeathrow is equally struggling to con-vince those concerned about the envi-ronmental impact extra flights willcause. A recent Airports Commissionpaper sought to express noise pollution– that’s 57 decibels and above across a 16-hour flying day – per passenger flown.By that metric, Stansted serves 12,467passengers for every local resident af-fected by noise; Gatwick serves 9,233;and Heathrow 281.

“I think noise is the biggest single chal-lenge for Heathrow to overcome,” con-ceded John Dickie. So is there a viable so-lution to the problem? “There are waysin which you can manage the noise en-velope through technology. There areways in which you can manage the im-pact on local people by the way youschedule flights.” Dickie encouraged

ROUND TABLE

“Let’s allow competition toflourish for the benefit ofpassengers and business”

Graham Bradyt



“imaginative thinking” and suggestedthat by removing a small number offlights that land early in the morningHeathrow could make a huge differenceto its noise problem.

“One of the things that we’ve arguedfor in the past is that there should be independent regulation of noise atHeathrow. There should be a cap and anenvelope. And the airports and airlinesshould be required to work within that.”

Landing timesRoy McNulty accepted that there are anumber of technology and schedulingsolutions that can alleviate noise, “but inthe list of the things you can do, dou-bling the number of flights is not one ofthem.”

Shamal Ratnayaka insistedthe scheduling problem wasinsurmountable. He said pas-sengers from the keyeconomies the UK is lookingto trade with wanted to arriveearly in the morning. Hepointed to British Airwaysand Cathay Pacific flightsfrom Hong Kong, many ofwhich arrived at between4.30am and 6.30am “Theydon’t do that because thatworks operationally forthem, they do that becausethat’s where the demand is.”

Simon Calder disagreed. “Ireally don’t think any of usever wants to arrive at Heathrow at 4.30in the morning.” Far better, he said, toarrive at 7.00am when more connectingservices are available. The pressure [forthese earlier times comes from] the de-parture airports where flights need totake off before midnight.”

Turning his thoughts to Gatwick, Rat-nayaka argued that the airport lacked theeconomic incentives it can offer airlinesto truly compete with either Heathrowor a new hub airport. McNulty acceptedyields were higher at Heathrow whichmade it more profitable for airlines.“What goes with that are higher fares,”he said before asking rhetorically: “Whydo we think that’s a good idea?”

McNulty pointed to studies in theUnited States that showed higher fareswere a typical outcome when a city had adominant airport. The US studies sug-gested that fares were 10-20 per centhigher when that was the case.” Hispoint was underscored by Ian Kincaid,

who advised Gatwick on its submissionto the Davies Commission. Kincaidcited extensive research in the UnitedStates of large airports dominated bynetwork carriers. This research foundthat dominant airlines were often able toextract a “hub premium”. Even allowingfor a higher proportion of business trav-ellers (who are typically less price con-scious than leisure travellers) and otherfactors, this hub premium varied be-tween 5 and 10 per cent, Kincaid said.

For his part, Ratnayaka said that UScomparisons should be treated with cau-tion because hubs over there tended tobe dominated by one carrier – control-ling up to 70 to 80 per cent of the market.By comparison the likes of British Air-

ways were not dominant. “Even afterthe [acquisition of BMI] BA’s share [atHeathrow] is smaller than Lufthansa’s orAir France’s at their hubs.”

CompetitionRatnayaka argued that the flaw inGatwick’s “constellation” model (tworunway airports at Heathrow, Stanstedand Gatwick), is that it simply replacesHeathrow’s monopoly with “a sort ofoligopoly, which is very nice if you’reone of the owners of those three airportsbut it doesn’t deliver open competition.”

“The way to encourage competition isnot to have the competition fixed by the

infrastructure provider but by those us-ing the infrastructure, the airlines.”

Kincaid disagreed, pointing to the howthe cost of flights from London toDublin had fallen dramatically over thelast two decades following the entry ofRyanair in to the market, using Stanstedand Gatwick. British Airways has sincere-entered the Dublin market throughits acquisition of BMI, offering verycompetitive fares. On this route, effec-tive competition is being provided byairlines operating at different Londonairports.

Adam Marshall added: “I don’t under-stand why there would be a problemhaving competition around both infra-structure operators on the one hand and

airlines on the other. That’s aperfectly reasonable assump-tion providing the regulatoryframework is there so every-one actually has a chance tocompete.”

The Independent’s SimonCalder said his opening re-marks notwithstanding, hewanted more capacity simplybecause “as a customer I wantto see competition flourish.”He added that airports andairlines should “consider achange of model” when ad-dressing the connectivity is-sue. A straight point-to-point versus conventionalhub approach was a limited

way to think about the problem, he said.Instead he suggested low-cost, predom-inantly short haul carriers like EasyJetshould consider “interlining” (codesharing) with other carriers.

In his closing remarks, Roy McNultysaid that one of the strongest lessons toemerge from the debate was “the need toavoid thinking that we can predict thefuture precisely”. For Graham Brady thetwo big themes were capacity and com-petition. “Let’s allow competition andlet it flourish for the benefit of passen-gers and business.” l

This New Statesman round table, inassociation with Gatwick Airport, tookplace on 10 July 2013 at Portcullis Houseadjoining the Houses of Parliament. For a full list of participants, see page 2and for explanation of any terms used in this piece, see Jargon buster on page 10. An interview with Simon Calder is on page 20.

“We’re in danger of gettingfixated on a minority

of passengers”Roy McNulty

tROUND TABLE



Why competing gateway airportsbetter serve communitiesThe crux of the debate on airport capacityis whether the south-east should have onemega-hub airport offering the maximumnumber of connections, or whether the UKwill be better served with two or threecompeting airports. It is my view that com-petition will provide residents and visitorswith better service, greater economic im-pact and, critically, affordable access. Wecan learn from many major cities aroundthe world, such as New York, Tokyo andShanghai. A mega-hub is not a require-ment for greatness. Affordable connectiv-ity for residents and visitors is.

Connectivity vs connectionsThe term connectivity is often heard in thisdebate, but its meaning is ambiguous. It isimportant to distinguish between connec-tivity, the UK’s accesss to the rest of theworld, and connections, how an airline groupoptimises traffic flows across its network.

Connectivity is what drives economicimpact and societal interactions. The goalshould not merely be about connections tothe greatest number of points. Instead itshould be about affordable connectionsand adequate capacity to the right destina-tions across the world.

Affordable connectivity mattersAffordable connectivity to destinationsthat people want to go to is of much greaterimportance than having the world’s high-est number of destinations. What is thepoint of an exhaustive list of destinations,if the price for desired destinations is sohigh and the capacity so limited that only afraction of potential travellers can actuallyuse the service?

CompetitionCompetition is the single strongest driverof price. The UK has used competition asits main policy tool for aviation. As an avia-tion economist, I recognise that the UK hasled the world in instilling competition ininternational air transport. While the USwas the first to deregulate domestic mar-kets, the UK led the privatisation of air-lines, negotiating the first open skies agree-ments, privatising airports, and ensuringcompetition between airports. In a boldpolicy move, the U.K. in 2009 required thebreakup of BAA to ensure that not onlywould airlines compete with each otherbut that the airports would as well. En-abling a mega-hub would undermine thispro-competition policy.

Connecting passengers, economicimpact and riskWhat about passengers that merely con-nect between flights in London but do notvisit the UK? Some emphasise the need tomaximise such connections and claim thatonly a mega-hub can do this. Connectingpassengers can add the critical massneeded for viability of a number of routes.However, the economic impact of theseconnecting passengers is much lower thanpassengers who want to come to the UK. The business risk is higher too.

Some airports with high connecting pas-senger ratios discovered that such trafficwas risky and could move overnight to an-other hub. St Louis and Pittsburgh werehigh connecting traffic US airports, buttheir home carriers either failed or changedstrategy. These airports saw their trafficplummet when carriers realigned networksand moved connecting traffic to anotherhub. Today, as carriers form large carrier

Start with the passengersby Mike Tretheway

OPINION

groups, management may decide that froma network perspective, certain types of traf-fic are best connected from a different hubin the group’s network.

Where is the growth?The contemplated airport capacity in-crease will not be in place until well intothe 2020s. By that time, the carriers currently operating at Gatwick andStansted will have evolved their businessmodels. When we look elsewhere in theworld, we see low cost carriers (LCCs)whose business models include not onlyconnections between a single airline’sflights, but also an increasing number of connections with other carriers. LCCs inthe US, Canada, Australia and Brazil aregood examples.

Today many of the most profitable air-lines are not the traditional full service net-work carriers (FSNCs), but the LCCs. This isthe case in the U.K. In a recent study Ishowed that FSNC traffic in London hasfallen from 77 per cent in 1990 to 40 percent today. Growth is highest at the LCCs. Apolicy that would only add capacity at theairport used by FSNCs will not supportgrowth for the fastest growing carriers.

London: the world’s largest airmarketLondon is the largest aviation market in theworld. Like other major cities, it can sup-port multiple airports. Capacity growthshould support competition between air-ports and carriers. Competing airports willbetter serve the region through affordableconnectivity to where people want to go. lDr Michael Tretheway is an aviation econo-mist. He is currently engaged as an advisorby Gatwick Airport

13 Tretheway Op:Statesman supplements 10/09/2013 12:14 Page 4

260

617

800

320m

by

2030

480m

by

2050

315m

by

2030

445m

by

2050

787 Dreamliner A350

Unconstrained capacity

Constrained capacity

A380

Gatwick1.2

16

0.0354

33

10

3

0.01

London City

Heathrow

Luton Stansted18

DemandPassenger type per London airport (in millions)


GR

APH

ICS

BY

LA

UR

EN M

ESS

ERV

Y

FACTS & FIGURES

Point-to-point vs hubbing: number of aircraft on order

Origin / Destination

Transfer

14-15 Info graphic:Statesman supplements 10/09/2013 11:51 Page 4

81%

39%Estimated

capacity shortfall by 2050

£16bn

35m

35%

]120,000 people

passengers fly in and out of UK Airports each year

13%87%

221m134m

London’s 5 key Airports handle

passengers each year

of passengers either begin or end their air travel in London

of passengers at London airports are transferring to another flight


Economic ImpactLondon Calling

Capacity

Sources: gov.uk; Department for Transport; the Economist; Transport Select Committee; HM Treasury; CAPA

The aviationindustry directlyemploys

Amount the aviationindustry contributesto economic output

of UK non-EU trade by value entersor leaves the country by aeroplane

of runwaycapacity currentlybeing used acrossLondon airports

of runwaycapacity currentlybeing used nationally

14-15 Info graphic:Statesman supplements 10/09/2013 11:51 Page 5


Integrated transport, pleaseIf I could put one challenge to the AirportsCommission, it would be to use the opportunity of your interim report tostress there must be a properly integratedtransport strategy for the UK – and thatwithout this your report will be renderedineffective. Then, if the government is de-termined to build a brand new railway,you could point out it should have far bet-ter links to our airports than is currentlyplanned.

The solution to our future airport capac-ity must be settled before embarking on anew high speed railway. Such a strategyshould embrace the south-east, the great-est revenue-earner and economic driver,rather than try to dilute the effect of London and its environs.Yours,Cheryl Gillan, Conservative MP forChesham and Amersham

Bold decision making nowWe can’t bury our heads any more. Avia-tion drives growth yet the south-east’s air-ports will be full in a decade and our re-gional network is under-utilised.

Every day ministers delay these criticallong-term decisions, we fall further be-

hind. Firms in high-growth economies arenot waiting for us – they’re taking theirbusiness elsewhere.

Business needs bold, decisive thinkingfrom you to tackle the pinchpoints on theground and in the air: by 2020, huge improvements in airport transport linksto boost passenger demand; by mid-2020s, a new runway near London orBirmingham; by 2030 onwards, a newsouth-east hub.

Politicians have failed for decades toagree a way forward and outsourced thedecision to you. We want cross-partyagreement now to accept your final rec-ommendations. We must not go back tosquare one yet again.Yours,Katja Hall, chief policy director, CBI

Resist one-size fits allAviation is a complex issue. For politi-cians, the temptation is to point to a singleeasy-to-understand solution: Heathrowexpansion. But it would be the wrong solution. London is well served already,with vast spare capacity and a distributednetwork.

Instead of pandering to the slick lobbymachine that is Heathrow Ltd, which

Dear SirHoward...

The New Statesman invited leading politicians and heads of think tanks,business and consumer groups to pen an open letter to the chairman ofthe Airports Commission, Sir Howard Davies. This is what they wrote

OPINION

wants monopoly control and an expandedasset base, we should be learning from re-cent experience.

Competition has improved Gatwick andif we invest in extending Crossrail toStansted, the same will be true of that air-port. The smart solution is a hub-Londonapproach, with three main airports furi-ously competing with one another, and de-livering value for customers.

I hope you can resist the one-size fits allapproach being pushed by vested interestand lazy thinkers, and deliver an alternativethat works with, not against London’s busi-nesses and residents.Yours,Zac Goldsmith, Conservative MP forRichmond Park and North Kingston

Publish earlyNone of the options on airport capacity areperfect. Your job is to pick the least-worstoption. The truest act of public servicethough, concerns not what you say butwhen you say it. The commission is due toreport in the summer of 2015, immedi-ately after the next election.

The idea, as always, is to “take the poli-tics out” of the decision. What this actu-ally means is denying the public a say.

16-19 Dear Sir Howard:Statesman supplements 10/09/2013 11:52 Page 4


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The sky’s the limit? Howard Davies and his team will need to extend their thinking before making recommendations on aviation capacity



Governments have tried this approach be-fore, with tuition fees, and look where itgot us. It is corrosive to public trust and nosubstitute for leadership. Your commis-sion should publish before May 2015 andforce the politicians’ hands.Yours,Duncan O’Leary, deputy director, Demos

Expand into growth marketsWe have had some useful discussionsabout the needs of the aviation industry,and in advance of the Airport Commis-sion’s report, I am summarising what Ihope to see in the report:

• a coherent strategy that provides ablueprint for airport provision for the next25 years

• reflecting the needs of tourism andbusiness;

• with sufficient capacity for expansioninto growing markets, especially the fareast and southern America; and

• positions the UK as a major hub for Eu-ropean air transport

Airport provision is crucial to the avia-tion industry, tourism and business, andeconomic growth is going to be increas-ingly dependent on international trans-port. The future of UK plc depends onmaking the right decisions about futureairport provision and capacity now.Yours,Brian Donohoe, Labour MP for CentralAyrshire and Chairman, All Party Parlia-mentary Group for Aviation

Work with the evidenceMy constituency borders Heathrow anddepends on the airport for jobs and localindustry. However, local residents andschools also suffer enormously from noiseand air pollution, with impacts on wellbe-ing and learning. The local communityhas campaigned against a third runwaybecause of concerns that the price thecommunity pays will be too high, and hasbeen in the past where particularly ade-quate compensation has not been forth-coming.

Your commission needs to provide clar-ity to our aviation debate and to recognisethe complexity of the Heathrow situation.Local communities cannot just keep ab-sorbing the impact, but at the same timewe reject Boris Johnson’s proposals thatwould see the end of Heathrow and a dev-astation of the west London economy.Over 110,000 west London jobs depend

on Heathrow, and my constituents wouldbe hit particularly hard for generations ifthe airport was to move.

Your commission needs to work withthe evidence, and separate fact from fic-tion. We need clear and unequivocal as-sessments about whether expansion isneeded, if so is the UK right to have a huband spoke model or point-to-point, andcould a split hub work with improved in-frastructure between sites. The quality oflife of the local community must be a consideration in your options and yourrecommendations.Yours,Seema Malhotra Labour MP for Felthamand Heston

Look northThere is constant reference in the media to“south-east airport capacity problems”but your commission has been tasked bygovernment to “maintain a UK-wide per-spective, taking appropriate account of thenational, regional and local implications ofany proposals” you may bring forward.

While it is clear that air capacity prob-lems are most acute in London and thesouth-east, we believe that we need a na-tional solution to the problem. Evidencegathered by the Northern Economic Fu-tures Commission last year demonstratesthat Manchester airport holds significantpotential to become the nation’s secondinternational hub. Supported by HS2 andwith the added benefit of driving northern economic growth we urge you toexplore this as an exciting and viable option that looks beyond the metropoli-tan myopia.Yours,Ed Cox, director, IPPR North

Yes to HeathrowFor Britain to remain a first-rate, competi-tive economy in the twenty-first century,we need a world-class transport system.Adequate aviation capacity is key to this –without it we will not be able to operatenew connections with cities in China andother emerging economies.

In the short to medium term, I favour athird runway at Heathrow – it can befunded entirely by private investment andwill be completed relatively quickly com-pared to other proposed options.

Nevertheless, what is clear is that con-tinued uncertainty is the worst possibleoption for the UK, in terms of business

opportunities lost and for the local com-munities who must continue to wait tolearn which project will get the go-ahead.Yours,Tim Yeo, Conservative MP for SouthSuffolk

No to HeathrowAfter experiencing thirty years of brokenpromises and guile from the advocates ofHeathrow expansion, I regrettably con-clude that only greed and laziness drivesthem on in the face of overwhelming arguments on congestion, noise, pollu-tion, safety and the quality of life of my constituents.

The two million folk of west London arenot Nimbys. Most are prepared to put upwith one of the world’s busiest airports ontheir doorstep because of the contributionit makes to the regional and national econ-omy. Expansion, if and when it comes,needs to recognise the unique nature ofLondon and the south-east which cannotbe served by a single airport and is indeedalready served by five airports, some withsubstantial existing capacity.

Improved video technology, HS2, big-ger and quieter planes will help. New run-ways at Stansted, Gatwick and Luton allcause less human misery. Let’s not go forthe quick and dirty solution for once. NOto Heathrow expansion. Yours,Andy Slaughter, Labour MP forHammersmith, shadow justice minister

Consider social impactsAny airport expansion inevitably carries amassive environmental footprint – spew-ing millions of tonnes of carbon pollutioninto the atmosphere. Importantly, airportgrowth is also already bringing misery totens of thousands of residents living incommunities close to airports, both be-cause of excessive noise pollution (oftenthrough the night) and through shockingdamage to air quality.

A dispassionate evidence-based reviewof the arguments for and against the ex-pansion of Britain’s airports can only bewelcome but the environmental and so-cial impacts of any new runway capacitymust not be brushed under the carpet.

Given that the formal timetable for yourCommission sets aside the whole of nextyear for detailed consideration of the dif-ferent options for new capacity, we areconcerned that the commission’s conclu-

OPINION


sion on the question of whether new run-way capacity is needed at all appears tohave been reached before your assessmenthas even begun.Yours,John Sauven, executive director,Greenpeace

Case not madeThe case for expanding aviation capacity,despite industry pressure, is far from clear.Close analysis of the evidence suggestsrunway expansion could cost us more insocial, environmental and economicterms than it delivers in return.

Our study of the previous Heathrow ex-pansion plan re-ran the Department forTransport’s own model, adding in some ofthe social impacts that had been excludedby the department. The result showed anet cost to Britain of £5.5bn.

Our research highlighted how focusingon particular economic interests risks cre-ating a worrying false economy for soci-ety. We hope the Airports Commissionfully recognises the wide-ranging eco-nomic, social and environmental impactsof aviation expansion and includes theseelements in their future analyses.Yours,David Theiss, researcher, nef

Time to be daringIt’s no wonder people despise politicians.For decades, governments have given in toshort-term fears and refused to face thetruth about airports. The UK will only beable to take advantage of expanding worldmarkets – and keep London’s place as thepre-eminent financial centre of the world– if we have a world-class hub airport.

Current restraint is already holding theeconomy back – to the tune of some £14bna year. Heathrow is at capacity and its in-frastructure is overloaded. We need a hubairport to the east of London - either atStansted or in the Thames Estuary.

If we don’t start planning such a daringproject now, future generations will beright to despise us for our lack of courage!Yours,Eleanor Laing, Conservative MP forEpping Forest

Consider doing nothingFormer aviation minister Chris Mullin hassaid of his term in office “I learned twothings. First, that the demands of the avia-tion industry are insatiable. Second, that

successive governments have usuallygiven in to them.”

The current government clearly antici-pates that your report in 2015 will includeoptions for significant new airport infra-structure, and various proposals for newrunways have been published this week.Some present air quality challenges. Manypresent noise issues. And all, unless ac-companied by the closure of existing run-ways, will be incompatible with our na-tional CO2 reduction commitmentenshrined in the Climate Change Act.

The option of “no new runways”should therefore be on your shortlist fordetailed consideration next year.Yours,Cait Hewitt, Deputy Director, AviationEnvironment Federation

Thames is for ships, not planes Can we scotch once and for all the pro-posal for a hub airport in the Thames Estu-ary? The potential impact on the shippingchannels is significant and could cost jobs.Tilbury docks supports upwards of tenthousand jobs, yet the Foster plan woulddirectly impact access to the port as well asother port facilities throughout Thurrock.Boris Johnson may think that the dockshave left London, but they have justmoved downstream to Thurrock. ThePort of London is still very active port andit will become even busier when LondonGateway is open for business.

The fact is we already have a hub airportat Heathrow. The River Thames is forships not planes.Yours,Jackie Doyle-Price, Conservative MP forThurrock

Reduce noiseThe ITC's recent report [theitc.org.uk/docs/98.pdf] concludes the key need isbetter connectivity with global destina-tions. This means the UK needs to host atop-tier hub because the extra throughputmakes frequent, direct, flights to moredestinations viable. Expanding other air-ports helps but is not a substitute.

We propose criteria for site selectionand highlight critical questions. ForHeathrow a key test is reducing noise nui-sance for Londoners. Any alternative sitewould mean closing Heathrow. Costsmust be affordable for airlines and passen-gers - or we risk pricing them abroad, los-ing the very connectivity we need.

Yours,Stephen Hickey, Chairman, ITC Aviationworking group, Independent TransportCommission

No to unlimited growthThe committee on climate change haswarned that if the UK is to meet its targetof an 80 per cent reduction in carbonemissions by 2050, aviation growthshould be limited to around 370 millionpassengers per annum. This is 68 per centmore than last year, allowing a generouslevel of growth compared to other sectors,and so you should resist pressure from theaviation lobby to allow unlimited growth.

The UK has more than enough runwaycapacity to cater for 370 million passen-gers per annum. In fact we have more run-way capacity than Germany, France, Spainor Italy. We even have more runway ca-pacity than Japan - also an island tradingnation - which has twice our populationand twice our GDP.Yours,Susan Pearson, communications director,AirportWatch

No choice at allFor those who appreciate the Englishcountryside, the choice of a “constella-tion” of large airports around London or asuper-hub is no choice at all. Your pro-posed measure of airport efficiency – thenumber of households disturbed perflight – fails to value rural tranquillity, anincreasingly scarce joy in an ever morecrowded island.

There’s increasing recognition of thebenefits to local public transport from re-placing competition between rail and buswith a planned, integrated network. Yetfor longer distance travel, including avia-tion, the invisible hand of the market stillseems to reign. In practice the scleroticsystem of grandfather rights over landingslots means busy airports are forced toserve yesterday’s travel markets.

The growth of Europe’s high speed railnetwork offers a chance to reallocate slotsfrom shorter haul destinations. No newrunway capacity is needed for the foresee-able future. lYours,Ralph Smyth, senior transportcampaigner, CPRE

Louise Ellman MP, chair of the transportselect committee, page 22




Where do you stand on the aviationcapacity debate? I’d politely suggest predictions of the im-minent demise of British aviation havebeen exaggerated. Listening to parts of thedebate it’s interesting how it’s described asa terrible capacity crunch when in factwe’ve actually got a bit too much capacity– it’s just in the wrong places. And I joy-fully celebrate every time I board a planehow lucky we are to have such a competi-tive, low-cost aviation sector. And be-cause everybody wants to fly into Londonwe have better fares than one would pre-dict. To take a brief example, London toMelbourne (just about the longest journeyyou can make from the UK) costs £900 di-rect which is about 40 per cent, some-times 50 per cent, less than a Melbourneresident would pay. Things will get evenbetter once you begin to erode the marketdistortion caused by having Heathrow ateffectively its declared capacity.

Are you saying that the capacity crunch isoverstated? That it doesn’t exist?Heathrow has no spare capacity under itscurrent rules and operating regime. Theonly way to get proper competition in a meaningful way is to have spare capacityin parts of the system that do not have spare

capacity at the moment.

And where are those parts?So Gatwick has bits [of capacity] around theedges which is fine. Heathrow has plenty ofspare capacity; it is currently about 80 percent of its ATC [air traffic control] potentialcapacity within the hours of operation. Sowhen [Heathrow] says they are 98 per centfull what they mean is that “we use 98 percent of the slots that we are allowed to use”,which is a completely different metric.

So given that competition will onlyflourish where there is spare capacity, wedo need some spare capacity and that mightinvolve building a third runway atHeathrow. It might involve building a sec-ond runway at Gatwick; it could conceiv-ably involve building a second runway atStansted but I think we’re looking at an-other twenty, thirty, forty years for that.

Might that involve building no newrunways at all?Only with the sorts of command economydecisions that we are not going to see. So we’ve got plenty of capacity but wehaven’t really got it where people reallyneed it. And it’s difficult to see whereGatwick can begin meaningfully to com-pete with Heathrow while we have the

“I started outcleaning FreddieLaker’s planes”Simon Calder, the Independent’s travel correspondent, talks capacitymyths, his first job in travel and a love of Singapore’s Changi airport

INTERVIEW

current alignment of runways.

When people talk about connectivity theytend to elide this with talk of a single hubairport…But these people who talk about connectiv-ity tend to be politicians – who have theirown reasons to do all sorts of things – andHeathrow airport.

Are they wrong to talk in those terms?Let’s just take a step back. London is thebiggest aviation market in the world andrather more than half that capacity is atHeathrow. So Heathrow is important. Butthe figures suggest (or one set of figures suggest) that 37 per cent of people atHeathrow are connecting. Let’s call it a thirdroughly. But they are not doing that everysingle day because nine out of ten of peopleflying in and out of London are origin anddestination passengers.

Now British Airways would much ratherfly everybody between Heathrow and Miami point-to-point because it will get apremium for that. It would rather fly every-body from Heathrow to Moscow point-to-point because it can get a premium for thattoo. But on a wet Tuesday in November, it’snever going to do that. So therefore theyhave this great power to turn on capacity, to

20-21 Simon Calder Interview:Statesman supplements 10/09/2013 11:52 Page 22


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say to travellers in Moscow and Miami,“Hey, if you work around our schedules,our availability, we will give you a greatprice.” And that helps fill up spare capacityand aviation has very high fixed costs andvery low marginal costs. So that’s a fantasticthing to have and it’s not something AirFrance or Lufthansa has because they donot have sufficient capacity at their hubs tooffer that origin and destination traffic.

British Airways wants lots of point-to-point traffic but it also wants to have theright to lots of connecting traffic and I’mnot sure the extent to which of the other air-line alliances apart from oneworld reallysees London as a potential lone hub ratherthan just simply a rich source of traffic.

So we’re not talking about the need for ahub, we’re talking about the needs ofBritish Airways. Or is that unfair?If you want a traditional 20th century hubthen the best shot Britain and London hasis Heathrow and British Airways. But I’mjust not sure whether that’s the rightquestion to ask. You need to be aware ofwhat the 787 might do, of what the AirbusA350 might do in terms of point-to-point. Look at what Norwegian – by farthe most radical low-cost airline, far moreso than Ryanair or EasyJet – is doing buy-ing 787s and flying them to New York. Tosay, “Here’s how air traffic works, it’s allhubs and spokes” is not correct. And nei-ther is it correct to say it’s all going to bedirect. It’s going to be messy.

What’s your favourite airport in the world?I’m going to be quite conventional and sayAmsterdam Schiphol. I don’t love it justbecause it has somehow managed tocompress a hub into an area where youcan actually have simple terminal con-nections but because they put a bit of theRijksmuseum in there too. They reallythought, “Okay, what do we do in Hol-land. Well, we do lots of trading; we’revery good at that. Oh, and we had thegolden age and produced the world’sgreatest art. So let’s put some of that in.”

Any others?[Singapore’s] Changi airport because it’sgot a swimming pool on the roof and a cac-tus garden. And furthermore you can getfrom Jumbo Seafood on the East CoastParkway to Changi in about ten minutes ina cab which means you can have the bestfeast ever and then fly home to London.

And your least favourite airport?[New York’s John F] Kennedy used to be butnot anymore. Sheremetyevo in Moscow isprobably top of the list. On the other hand,airports are a means to an end like prisons,like hospitals. [You want to] get in and getout as fast as possible. It doesn’t matter ifthey are Amsterdam or Changi or Shereme-tyevo, you just want to get out.

If you could change one thing about airtravel what would it be?Security.

To make it more efficient?To make it more human. You, and everyonereading this, has no evil intent in their heartbut if they fly they will be treated as if theyare international terrorists. Ensuring thatthey don’t have any sharp objects or guns isa forty year old paradigm of how we makethe skies safe.

You should be looking at people for their

behaviour – and absolutely not their race orreligion – to spot some reason to want toenquire a bit further as opposed to friskingpeople even though they are clearly not going to cause any trouble. You might oneday have lounge marshals much like skymarshals: they won’t have guns, they’ll sitaround and look around.

Is it true that your first job was as a cleanerat Gatwick?It was my first job in travel. I’d had a paperround before that. But yes, I started clean-ing out Freddie Laker’s planes. And then Istarted frisking people.

So is that where the love affair with travelbegan? No, no. That began when I realised I was living in Crawley and I thought there mustbe better places in the world than this. l

Interview by Jon Bernstein

20-21 Simon Calder Interview:Statesman supplements 10/09/2013 11:52 Page 23


The recent flurry of proposals to theAirports Commission on how todeal with capacity come hot on theheels of the Transport Committee’sreport on Aviation Strategy. In

preparing our report we spent nine monthsgathering written and oral evidence frombusiness groups, local campaigners, envi-ronmental groups, airlines, airport opera-tors, air traffic managers, and many others.

UK airports handled a staggering 221 mil-lion passengers in 2012, 1.4 million morethan in 2011. The latest passenger forecastspredict that unconstrained demand at UKairports—with no airspace constraints orcapacity limitations—will be 320 mppa(million passengers per annum) by 2030and 480 mppa by 2050.

The UK aviation sector had a turnover in2011 of around £53bn and generated around£18bn of economic output. Aviation alsosupports the economy by providing busi-nesses across all sectors with greater con-nectivity to international markets. Hub air-ports like Heathrow are vital for connectingincoming transfer passengers and makingflights out to new destinations more viable.

For many years Heathrow has operatedwith two runways at full capacity whileother competitor hubs, such as Paris,Frankfurt and Schiphol, have benefittedfrom having four to six runways each.Alongside this, the growth of large hubs inthe Middle East has threatened the UK’sposition as an international aviation hub.

We looked closely at the main options toaddress the critical issue of aviation capacity

in the UK. We rejected ideas for a new hubto the east of London, including plans for anew airport in the Thames Estuary area, asresearch we commissioned showed signifi-cant public funding (£10-30bn) would berequired. There were additional concernsaround the impact on wildlife habitats, riskof birdstrike and problems with over-crowded airspace. Significantly, our re-search showed that the development of anew hub airport, regardless of its exact loca-tion, would mean the closure of Heathrow.This would have unacceptable conse-quences for the economy in and aroundwest London and the M4 corridor.

We also rejected the notion of linking ex-isting airports by high-speed rail to form asplit-hub due to uncompetitive connectiontimes. Nor would it be feasible to moveflights to other regions or airports withspare capacity. Airlines are commercial en-tities and operate where there is a viablemarket. Ultimately, we concluded that ex-pansion of Heathrow is the best option.

We recognise that the main argumentagainst expansion of Heathrow is environ-mental. Noise, in particular, is a significantissue for the hundreds of thousands of peo-ple living nearby. It is important to remem-ber that Heathrow did not start out sur-

There is no alternative

Hub capacity remains the unresolved issue of UK

aviation strategy

by Louise Ellman

For the benefit of the whole of the country, the goverment must allow Heathrow airport to expand

OPINION

rounded by quite so many people. A newhub to the east of London might, in duecourse, also have a large local populationwith similar concerns about noise. Never-theless, if Heathrow expands it is essentialthat its environmental impacts are properlyaddressed. Local air quality should be im-proved, planes must get quieter, flight pathsand landing angles should be reviewed, anda comprehensive approach to noise com-pensation must be developed. ShiftingHeathrow’s new runway to the west, awayfrom people under the flight path mightalso reduce noise annoyance. Heathrow’srecent proposals address this issue.

Looking at the UK’s broader aviationstrategy, we concluded that an expandedHeathrow could better serve the whole ofthe UK by providing protected slots toflights from regions that are currentlypoorly connected. We also made recom-mendations on how the Governmentshould support airports outside the southeast, improve road and rail infrastructurearound existing airports, and address con-cerns about the level of taxation, particu-larly Air Passenger Duty.

It is, however, hub capacity that remainsthe main unresolved issue in the UK’s avia-tion strategy. It can no longer be avoided.Our recommendation is clear: for the bene-fit of the whole of the UK, the governmentmust allow Heathrow to expand. lLouise Ellman MP is chair of House ofCommons transport select committee. To read its report in full go to:tinyurl.com/hoc-aviation

22 view from Westminister:Statesman supplements 10/09/2013 12:18 Page 4


Much is already changing in airtravel. Low cost carriers con-tinue to gain market share, or-ders for new long distance, hub-busting aircraft are increasing,

and new hubs in the Middle East and FarEast are growing rapidly – all of which re-duce the relative importance of traditionaltransfer traffic through London. We havealso seen a transformation within Londonitself. The three largest airports are nowseparately owned and have begun to com-pete. This is a real game-changer.

Despite this, we are still told that it isonly growth at our largest airport that mat-ters. But London is a world city and desti-nation in its own right: 87 per cent of pas-sengers begin or end their journey here. It’snot a city people pass through. Only 13 percent of passengers make up the transferjourneys we hear so much about. This pro-portion is likely to increase in the comingyears, which means that despite what theproponents of creating a ‘mega hub’ atHeathrow or in the Thames Estuary mightsay, the importance of hub passengers inLondon is exaggerated.

Policy should be framed around thetravel needs of all passengers and not dic-tated solely by those who only want tochange planes in London. Transfer passen-gers are important but they are in the mi-nority. As the Airports Commission looksat the options, it will need to ensure thatany recommended solution is deliverable,environmentally sustainable, and has astrong business case behind it. A degree of

political consensus is also key, as is theneed to deliver certainty to airlines, busi-nesses and communities.

Our vision for a two runway Gatwick, aspart of a constellation of three major air-ports surrounding London, is affordable,deliverable, sustainable and promotescompetition for the benefit of passengers.

We believe a constellation model pro-vides a better strategic fit for London andfor the UK. It could be delivered at a frac-tion of the cost of a new airport in the

Thames Estuary and would generate sig-nificantly less noise than a third runway atHeathrow. It will also be the most benefi-cial option for passengers, allowing com-petition between airports, better connec-tions and affordability. Twenty two of theworld’s 40 busiest cities for air travel suc-cessfully employ this model and havemore than one airport serving their needs.

Building the next runway at Gatwickwould not only solve the capacity issue fora generation but allow us to collectively of-fer a greater selection of destinations topassengers. We have already invested over£1bn since the change of ownership in2009. We’ve opened new direct routes tosome of the fastest growing economiessuch as China, Russia and Vietnam. More

The view fromGatwick

So far the needs of thepassengers have largelybeen lost in this debate

by Stewart Wingate

London enjoys world-class air links. With 134 million passengers flying inand out each year, it’s the best-connected city in the world. Yet with a futurecapacity problem it begs the question: for how long?

OPINION

competition will deliver the enhancedconnectivity the UK economy needs.Where there is passenger demand, themarket should be able to respond

So far, the needs of passengers have beenlargely lost in the aviation debate. I believethey should be able to choose where to fly,when to fly, and who to fly with. In thelonger term, capacity has to be matched tothe passenger need. They want better valuefares, new destinations, higher quality air-ports and more convenient door-to-doorjourneys every time they travel. Our op-tion will deliver these benefits by creatingmultiple layers of choice for passengers.

Crucially though, noise impacts will besubstantially lower than for Heathrow’splans. A two runway Gatwick will affectfewer than 5 per cent of the peopleHeathrow impacts today. And unlikeHeathrow, we will not breach Europeanand national air quality standards.

The Airports Commission has providedus with a unique opportunity to look to thefuture and develop a strategy which willbenefit the UK for decades to come.Gatwick expansion will cost between£5bn and £9bn – a fraction of the cost of ex-pansion at Heathrow – and a second run-way can be open by 2025. Our runwayplans are currently backed by local authori-ties and business groups. With the rightpolitical will, our vision is not only possi-ble but the best. l

Stewart Wingate is chief executive ofGatwick Airport

23 View from Gatwick:Statesman supplements 10/09/2013 11:52 Page 4

Greater competition amongst London’s existing majorairports will deliver more choice for all passengers – onroutes, service and price – and ensure the needs of UK Plc. are met for a generation.

A two-runway Gatwick, as part of a constellation of three major airports surrounding London, is affordable, deliverable, sustainable and promotes competition for the benefit of passengers.

A new runway at London Gatwick would deliver:

( The connectivity the UK needs( More certainty( True competition leading to more passenger choice,

better service and lower fares( Less environmental impact( An affordable, privately financed solution( More economic benefits spread across the south east( Greater resilience to disruption( Building on our successful airports

Gatwick OBC:Layout 1 10/09/2013 11:53 Page 1

rethinking debate the aviation capacity · 2013. 9. 16. · in association with terry farrell∙...

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