Transcript Professor Colin Bamford, University of Huddersfield

Should there be a third runway at
Heathrow?
Professor Colin Bamford, University of Huddersfield
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Introduction
• C Airports, especially in the South East and Heathrow in particular,
are vital for the country’s business well-being and competitiveness
in the global economy.
• C Airports and air travel generate a wide range of negative
externalities, the most important being noise disturbance.
• C There are also serious concerns about emissions from aircraft with
around 6% of all CO2 emissions coming from aircraft.
• C But as the CBI has recently said: “The UK risks becoming a branchline destination and will find it increasingly hard to compete in global
export markets if it does not ... tackle constraints on capacity at
Heathrow.”
• C There are also positive externalities through additional employment
created around Heathrow and throughout the economy as a whole.
The lack of a clear policy
• C Air transport policy in the UK has been haphazard and lacking a clear
strategic objective as far as London’s principal airport is concerned.
• C Many would argue that this is due to the widely held view that
Heathrow is in the wrong place.
• C Far too many people are affected by the noise of aircraft taking off and
landing and from road traffic in the vicinity of Heathrow.
• C The Coalition government reversed its predecessor’s decision to
approve a limited expansion through a third runway and sixth
terminal.
• C A new aviation review is about to take place, and this has reopened
the political debate about building a third runway at Heathrow.
The demand for air travel
• C The demand for air travel is a derived demand.
• C It is not demanded for its own sake but because it allows users to fulfil a
purpose such as travelling for business or holidays.
• C For air passenger services the annual rate of change has been
remarkably steady until the 2008 recession began to affect passenger
numbers.
• C In 2011 UK airports handled 219m terminal passengers, 134m at London
airports, which was an increase of 5% on 2010.
• C Over 69m passengers passed through Heathrow, an all time high, and a
growth of 6% on 2010.
• C Heathrow is operating at 99.2% of capacity with Gatwick not far behind.
Why we need more
airport capacity 1
• C If forecasts of demand are to be believed, by 2030 between 410m and
500m passengers will be using our airports.
• C In the March 2012 Budget it was announced that the
Government would conduct a review of aviation policy.
• C According to the CBI this will be the eleventh such policy
review over the past 60 years.
• C The CBI argues that quick decisions need to be made
on a new runway to serve the South East, and how to
maximise capacity and improve access to other
regional airports.
Why we need more
airport capacity 2
• C The case for a third runway at Heathrow is being vigorously promoted by
leading industry figures.
• C In their view Heathrow has to be the hub solution for the short to medium
term at least.
• C Recent research by the British Chambers of Commerce has shown that
business leaders in the emerging high growth economies such as China,
India, Brazil and Russia put a high value on direct air links.
• C Of those interviewed, 80% claimed that they would trade more with the
UK if flight connections were improved to their countries.
• C At present only three cities in China have direct links with Heathrow.
• C The key business issue is that the UK is already losing out in terms of its
competitiveness in the global economy.
Environmental
considerations 1
• C For many years the noise from aircraft arriving and taking off at Heathrow
has been measured.
• C The problem with aircraft noise is that above a certain level,
it becomes an unwanted disturbance on our ears.
• C But over the years, aircraft have become quieter, and despite
an increase in traffic, less people in the vicinity of Heathrow
have been adversely affected by aircraft noise.
• C The main cause of the improvement has been technical, with
newer aircraft making less noise.
Environmental
considerations 2
• C A third runway at Heathrow would cause the village of Sipson to disappear
and much of Harmondsworth to be demolished.
• C In addition, it has been estimated that an additional one million people
living under flight paths will suffer from noise disturbance.
• C A second environmental issue is that of CO2 emissions.
• C If the third runway operates at full capacity then an estimated 27m tonnes
of CO2 will be generated from Heathrow’s operations, a 50% increase on
current levels.
Environmental
considerations 3
• C The UK has a legal commitment to reduce its greenhouse gas emissions
by 80% below 1990 levels by 2050.
• C It has been estimated that by 2050, with a third runway fully operational,
Heathrow will generate between 20 and 25% of the UK’s entire emissions
budget.
• C A further cause for environmental concerns is the emission of nitrogen
dioxide from aircraft movements.
• C Further negative externalities come about because of the road
congestion in the vicinity of Heathrow.
• C Rail travel though has improved considerably with the Heathrow Express
services from Paddington.
Does cost-benefit
analysis help?
• C Cost benefit analysis is a well tried method for assessing the desirability of
a project like that of a third runway.
• C It tries to estimate the respective benefits and costs over time and over a
wide area.
• C In 2009 a Department for Transport report stated that adding a third
runway would generate net benefits of around £5bn.
• C But in 2010 the New Economics Foundation concluded that there would
be a net cost to society of between £5b and £7.5bn, based on a Social
Return on Investment approach.
• C However, critics of this would say that the economic and business
benefits are not given the same degree of prominence as measures
designed to reduce environmental impact.
Conclusions
• C Like many controversial topics in Economics there is no particular
agreement amongst those concerned as to whether a new third runway
should be built at Heathrow.
• C We will have to await a decision until the consultation on airport strategy
has been completed.
• C Other possibilities include a completely new airport on the Thames
Estuary popularly known as ‘Boris Island’ as it is supported by the
London Mayor, Boris Johnson.
• C There could also be a major expansion of Birmingham Airport, or the
construction of a high speed rail link between Heathrow and Gatwick to
create a better hub.
• C Unless decisions are made soon, the UK really will be a branch-line
destination for global air transport.