BAA challenged on claim that it is lack of runway capacity at Heathrow that is limiting flights to China

HACAN has challenged BAA’s claim that it is lack of capacity at Heathrow that is limiting the number of flights between the UK and mainland China.  In reality there is a bilateral agreement between the two countries which restricts passenger flights between the two countries to 62 a week – 31 each.  HACAN has also produced evidence to show that the greater difficulty of getting a visa for the UK than for the EU is a major deterrent to Chinese people coming to Britain. BAA is claiming, disingenuously or dishonestly, that Frankfurt and Paris are leaving Heathrow behind as they forge ahead with extra flights to Beijing, Shanghai and Guangzhou – while conveniently omitting to mention that Heathrow has many more flights to Hong Kong, which is also an important part of China and a key hub airport. BAA is working hard to make out that huge numbers of transfer passengers are important for London’s economy. In reality  Heathrow has the largest number of terminating passengers of any airport in the world. Therefore it does not need the extra passengers an expanded hub would bring to make it commercially viable to operate lots of flights to key business destinations.



BAA challenged on claim that it is lack of runway capacity at Heathrow that is limiting flights to China

14.11.2012  (HACAN)

Campaign group HACAN has challenged BAA’s claim that it is lack of capacity at Heathrow that is limiting the number of flights between the UK and mainland China.  There is a bilateral agreement between the two countries which restricts flights between the two countries to 62 a week (1).  HACAN has also produced evidence to show that the difficulty of getting a visa is a major deterrent to Chinese coming to Britain (2).

BAA today claimed that Frankfurt and Paris are leaving Heathrow behind as they forge ahead with extra flights to Beijing, Shanghai and Guangzhou, China’s biggest cities (3).  BAA Chief Executive said the two continental airports combined offered 1,000 more flights to the cities than Heathrow in the 12 months to September last year, and another 532 on top by September this year.  But HACAN Chair John Stewart said BAA was being disingenuous.

Stewart said: “When they talk about China, they exclude Hong Kong. If you include Hong Kong which is the natural destination for a lot of British business, Heathrow outperforms the other European competitors.” (4)

HACAN is also critical of claims BAA will make tomorrow that it is essential Heathrow expands as a ‘hub’ airport if it is to complete with other major European airports.  BAA will claim that it is the number of transfer passengers who will use an expanded hub airport which will make it commercially viable for airlines to run more flights to key destinations of the world and so make London an attractive place to do business.

But Stewart challenged this: “We can find no hard evidence that the London economy will lose out if Heathrow does not expand as a hub. The reason for this is London’s importance as a destination to business people.  Heathrow has the largest number of terminating passengers of any airport in the world.  It therefore does not need the extra passengers an expanded hub would bring to make it commercially viable to operate lots of flights to key business destinations.”

 

Notes:

(1). http://www.whatdotheyknow.com/request/bilateral_aviation_agreements_re_2    “China—restricted to six points in the UK and six points in China since 2004 with a current limit of 31 passenger services per week by the airlines of each side allowed;”

There is a separate agreement covering Hong Kong.

 

(2). See “Chinese Checkers pamphlet”  and   “Visa red tape and cost are putting off Chinese visitors – not APD or a lack of runways

 

(3). http://www.standard.co.uk/news/politics/britain-being-left-behind-as-heathrow-is-missing-out-on-china-boom-8316024.html

 

(4). See data below

 

(5). See evidence from Hounslow below on how new capacity is likely to be used for more flights on profitable routes, rather than on new routes to destiations such as Chinese cities.

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Below is the Evening Standard article at  http://www.standard.co.uk/news/politics/britain-being-left-behind-as-heathrow-is-missing-out-on-china-boom-8316024.html

Britain ‘being left behind as Heathrow is missing out on China boom’

Heathrow airport: ‘Lacking links to China,’ says airport boss
14 November 2012

Britain is being left behind in a “gold rush” to China because of poor air links, Heathrow’s chief executive warned today.

Frankfurt and Paris are leaving the London hub in their slipstream as they forge ahead with extra flights to Beijing, Shanghai and Guangzhou, China’s biggest cities, said Colin Matthews. [Conveniently ignoring Hong Kong]. 

The two continental airports combined offered 1,000 more flights to the cities than Heathrow in the 12 months to September last year, and another 532 on top by September this year.

“London is already slipping behind in the global race to build connections with important markets like China,” Mr Matthews said.

From the Frontier Economics consultancy, the figures are key in Heathrow’s first dossier of evidence to Sir Howard Davies’s review of UK airports.

Heathrow also argued that a lack of airport capacity, and consequently fewer flights, means far more Chinese visitors head for other European countries. Britain had 147,000 last year, while France hosted 1.2 million in 2010.

The UK’s many enterprising businesses have “the ideas and endeavour to boost jobs and economic growth” said Mr Matthews. “But they don’t have the flight connections they need.”

Paris Charles de Gaulle had 1,125 more flights than Heathrow’s 1,630 to the three biggest Chinese cities in the year to September, while Frankfurt offered 407 extra, said the new report, called One Hub or None. To all mainland Chinese cities, the French and German airports offered 2,200 more flights than Heathrow a year.

Gatwick also opened up a route to Beijing this year, with four flights a week, as it seeks to become Britain’s gateway to emerging economies.

Frontier Economics warned last year that the lack of direct flights to emerging markets could cost the economy £1.2 billion a year. However, John Stewart, chairman of anti-expansion group Hacan, said today: “When they talk about China, they exclude Hong Kong. If you include Hong Kong which is the natural destination for a lot of British business, Heathrow outperforms the other European competitors.”

He claimed that rather than lack of capacity, the “real obstacle” to better air links with China is a bilateral agreement limiting the number of flights to 62 a week. Heathrow also warns that  if Mayor Boris Johnson wins his battle to build a mega-hub airport in the Thames Estuary or Stansted, Heathrow will close with the loss of tens of thousands of jobs.

The Department for Transport said: “The UK is one of the best-connected countries in the world. Maintaining that is vital to our economy and history suggests that to do so, we will need an agreed evidence base and a high degree of political consensus.”

Do nothing, and the UK is poised to lose its global competitive edge 

Commentary: Colin Matthews

Heathrow is London and the UK’s only hub airport, and tomorrow we will publish new evidence showing just how important a successful hub is for London’s future.

London has been home to the world’s largest port or airport for 350 years. Consequently the world has travelled through London to reach its final destination and our city has become the centre of global service industries like insurance, law and finance.

This competitive advantage will end sometime in the next decade as Heathrow is overtaken by Paris, Amsterdam, Frankfurt or Dubai as the busiest airport for international passengers. Each of these cities competes directly with London for inward investment and jobs. So Heathrow’s comparative decline will make London a less attractive place to do business as we fail to offer the range of destinations businesses need.  London is already slipping behind in the global race to build connections with important markets like China.

In a new report out tomorrow we explain how a hub airport works and why it is so important.  Unlike at “point-to-point” airports such as Stansted or Gatwick, transfer passengers at a hub supplement the ups and downs of local demand, allowing airlines to fill long-haul flights day in and day out. This allows Heathrow to operate flights from London to global destinations not served by any other UK airport.

Having two hubs in one city does not work. Splitting the pool of transfer passengers available to fill flights undermines airline routes. Tokyo’s attempt to operate hubs at Haneda and Narita airports saw it slip from first to seventh in Asian city connectivity rankings. And New York, with eight million inhabitants, is less well connected to long-haul destinations than Frankfurt, whose population is 600,000.

The Mayor understands the importance of a single hub to London. Last month he said: “There is absolutely no point in simply scattering new runways randomly around the South-East. What this country urgently requires is a hub airport with several runways that will solve the pressing need to increase hub aviation capacity.”

We agree. London and the UK need a single hub. The Government has three options: do nothing and let the UK fall behind; add capacity at Heathrow, or close Heathrow and build a new hub airport elsewhere.

Colin Matthews is chief executive of Heathrow.

http://www.standard.co.uk/news/politics/britain-being-left-behind-as-heathrow-is-missing-out-on-china-boom-8316024.html

 

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Number of passengers to China from Heathrow and its rivals

More details at http://www.airportwatch.org.uk/?p=1563

The data  below  show that there are many more passengers flying to China from Heathrow, (considering Hong Kong as China) in years for which data can be found. Though Heathrow may lack a few direct flights to a couple of regional airports in China, it appears to have more passengers travelling to and from China  than Frankfurt, or Paris, or Schiphol. Figures below are for Beijing, Shanghai and Hong Kong (not other regionals).

About 1,113,000 passengers for Paris Charles de Gaulle airport.

About 757,100  passengers for Frankfurt Airport. (2010)

About 1,061,500 passengers for Schiphol (2009)

And 2,074,826 passengers to China including Hong Kong in 2011 for Heathrow.

And 1,993,593 passengers to China including Hong Kong in 2010 for Heathrow.

And 2,065,130 passengers  in 2009.

Passengers:

 Airport Beijing Shanghai Hong Kong Total
Heathrow
2011 275,058 331,756 1,386,564  2,074,826
2010 310,758 351,933 1,412,749 1,993,593
2009 299,858 236,386 1,528,886 2,065,130
Paris CDG ? 2010? 2011? ? 512,000 601,000 1,113,000
Frankfurt 2010 270,500 264,900 221,700  757,100
Schiphol 2009 ? ? ? 1,016,518
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From the London Borough of Hounslow evidence to the Transport Select Committee on 25th October 2012
2.5   Evidence suggests that airlines operating in a completely free market will tend to use new capacity to operate yet more flights on existing profitable routes rather than open up new ones. Taking Virgin Atlantic as an example, despite the industry mantra that it is necessary to have more flights to China when newly obtained slots are assigned, Virgin choose to fly to San Francisco, Vancouver and Manchester [3]
http://www.publications.parliament.uk/pa/cm201213/cmselect/cmtran/writev/aviation/m101.htm