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Heathrow expansion is a start, but it’s not enough to guarantee UK’s future

William Perugini

Heathrow expansion is a start, but it’s not enough to guarantee UK’s future

William Perugini

The move to expand Heathrow airport’s capacity with a third runway is encouraging and a positive step towards boosting the UK’s economic growth. But it is not enough. Heathrow is used by more than 80 airlines flying to 185 destinations in 84 countries – Britain’s busiest airport handles about 75m passengers every year – but there is the potential to do more. Airport expansion is urgently needed both at Heathrow and Gatwick.

Heathrow and Gatwick are among the world’s busiest airports. Heathrow has two runways and Gatwick just one – and they are both currently operating at capacity. If growth in air travel demand continues as projected, there is a risk that a shortage of airport capacity will impede Britain’s economic development – particularly in the south-east, where capacity constraint is the most serious.

Research in urban economics shows that the positive impact of increased air traffic is dependent on airport expansion. Those proposing that the UK should simply try to grow traffic at the already congested Heathrow Airport must understand that the economic benefit would be much greater if we invested in our other airports. Airlines continue viewing Heathrow as their preferred airport to fly into London – even low-cost carriers (LCCs) such as easyJet are eager to enter the expanded Heathrow. Heathrow expansion will also allow for better realisation of “agglomeration economies” – which combine a number of different economic activities and are commonly associated with hub airports.

It’s imperative that the government realises the benefits that come with good airport connectivity. The EU single market access we currently enjoy hangs in the balance – and losing this may force overseas firms to explore alternative entry points to the EU, outside our shores. Increased airport capacity has a robust impact on employment, the number of businesses and on the average wage. So we shouldn’t play it safe by focusing on adding a single runway to one airport. Further aviation infrastructure development in the south-east of the UK is well aligned with the government’s ambition to boost regional economic growth.

Sending a message

While the UK remains a key economic player on the international stage, that doesn’t mean we can become complacent. The uncertainty that has clouded the country since the UK’s decision to leave the European Union has damaged business confidence and placed a question mark on London’s position as a global financial and industrial hub.

London: getting mighty crowded. EQRoy / Shutterstock.com

A commitment to infrastructure investment will demonstrate the government’s resolve to make a success out of leaving the EU. Since the referendum, UK and international businesses are looking for clarity – and, in the short term, the decision on this issue will be important for boosting morale. In the longer run, expansion of Heathrow is the right step towards turning the country into an even larger-scale international hub that can counter the negative effects of the blow to the economy that Brexit threatens to impose.

But there remains a very pressing concern with the fact that the final commitment to Heathrow expansion has not yet been made. The UK Airports Commission spent a lot of time and effort producing its report, which is clear and comprehensive. Now that a decision has been made, the government must act on it. So while the government needs to commit to further increases in airport capacity, we also need immediate clarity around implementation of the third runway at Heathrow. Even if construction on the third runway started tomorrow, it would take seven to eight years before it becomes operational. With the decision scheduled for winter 2017-18, the additional capacity will only come online around 2025.

Delays will only cause further uncertainty. Moving forward, it is critical for policymakers to communicate with businesses and members of the public to ensure that implementation is successful. The public needs to be clearly advised on the benefits aviation infrastructure brings to an island nation such as the UK. We can use recent airport infrastructure investment cases from Hong Kong, South Korea, and other countries to demonstrate how this can work. Importantly, members of the public adversely affected by the new runway must receive adequate compensation.

The south-east of England hasn’t seen a new full-length runway since the 1940s – and it is time for a wholesale change of attitude around airport expansion in general. We cannot afford to wait another 70 years for another runway to be built.

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