Home Business News Yet another economics report flies in face of what Londoners want, again pushing for Heathrow expansion

Yet another economics report flies in face of what Londoners want, again pushing for Heathrow expansion

by LLB Editor
22nd Sep 11 9:33 am

The government should expand London’s Heathrow airport or risk “being cut off from global growth”, according to a report commissioned by a transport hub.

Up to £14bn of business could be lost over a decade due to poor aviation links, the report by economic consultants Frontier Economics claims.

Yet the report flies in the face of what London businesses really want. Our survey of 1,600 Londoners, including 750 business leaders, found only 14 per cent were bothered about airport expansion, contrary to reports such as this.

Our survey found that in fact Londoners and London executives think sorting out roadworks disruption should be the mayor’s number one priority.

The Frontier Economics report said Britain could already be missing out on £1.2bn a year in trade to better-connected competitors and this figure could increase to £1.6bn by 2021, or around one-third of the UK’s current balance of trade deficit.

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It said: “The net present value of this missed opportunity to the UK economy over the next 10 years totals £14bn at a conservative estimate.”

More aviation capacity in south-east England has been ruled out by a government consultation and Labour’s approval of a third runway at Heathrow in west London has been reversed.

But the report argues Britain could become a “less competitive place to do business” and “risks being cut off from global growth” by losing out to European competitors who offer more flights to emerging markets.

Heathrow is likely to lose its position as Europe’s busiest airport by 2021 if its capacity remains constrained, the report said. It would drop into third place behind Frankfurt and Paris Charles de Gaulle, while Amsterdam Schiphol would not be far behind.

UK businesses trade 20 times more with emerging market nations that have a direct daily flight to this country than those that do not, said the report. However, a major transport hub is required to maintain these links and because the UK’s hub airport has reached full capacity, Britain risks losing trade to its European competitors.

Chief executive of Heathrow’s owners BAA, Colin Matthews, said: “The opportunity for the UK to establish itself as the leader in Europe in its connections to India, China and other important markets still exists.

“But if Britain is not to lose out to international competitors, we need an aviation policy from government that recognises the role of a hub airport in supporting growth – and we need it quickly.”

Aviation minister Theresa Villiers said: “A successful Heathrow is a key part of any aviation strategy, which is why we are taking active steps to improve the way the airport works. Heathrow continues to be a highly successful airport and there is every reason to believe it will continue to be so.”

UK airline trade body the British Air Transport Association chief executive Simon Buck said: “Ministers need to wake up from their obsession with planning hugely-expensive, publicly-funded national railway schemes and recognise the urgent need to permit privately-funded investment at our overcrowded London airports in order for the UK to compete for business with the rest of the world.”

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