Gatwick argues against need for a hub airport – just more point-to-point flights
Gatwick is arguing that aviation is evolving to make hub airports obsolete – as the future is in more point to point flights. This is in Gatwick’s self interest, in its fight against Heathrow, to be chosen as the potential site for a new runway. Gatwick says Britain will have less need for a big hub airport like Heathrow because of the way the aviation industry is evolving, and because the rise of low-cost airlines means Britain will have ever more short-haul flights, which are mostly into Europe. Gatwick has commissioned research to back up its case, which it will present with the architect Sir Terry Farrell (to the Airports Commission?) on 25th March. Sir Howard Davies has repeatedly made the point that the distinction is between hub and spoke, or point to point aviation models for the future – the industry is highly internally divided on this. Gatwick says a 2nd Gatwick runway would allow 10 million more passengers to fly per year by 2050 – most to Europe or near destinations – than if Heathrow were to add a 3rd runway, with its focus on lower demand, longer haul destinations. For the UK as a whole, about 70% of air passengers were on short haul trips in 2013.
Gatwick argues against need for a hub airport
24 March 2014
The UK will have less need for a big hub airport such as Heathrow because of the way the aviation industry is evolving, Gatwick will argue this week.
Gatwick has commissioned research to bolster its case for expansion over rival Heathrow, which it will present with architect Sir Terry Farrell tomorrow (Tuesday), the Financial Times reported.
The airport argues that it is the best site for another runway because the rise of low-cost airlines means Britain must set itself up to cater for short-haul flights, which are mostly into Europe.
European budget carriers, such as Ryanair, easyJet and Norwegian, hold the bulk of orders for short-haul aircraft with more than 800 outstanding – far more than network carriers such as British Airways.
The budget carriers do not fly out of Heathrow because of its high airport charges – easyJet is Gatwick’s biggest customer, while Ryanair’s London base is at Stansted – so if Heathrow were to expand, it could price those airlines out, said Gatwick chief executive Stewart Wingate.
The competing airports are on a shortlist drawn up by the Airports Commission, which is studying where to build a new runway in the southeast.
Wingate told the FT: “If you look at where the demand is coming from, overwhelmingly the majority of the demand is on short-haul.
“Heathrow always focuses on the most marginal of destinations and never talks about how this market [Europe] is going to be served.”
According to Gatwick’s research, a second runway there would allow 10 million more passengers to fly by 2050 than if its rival Heathrow were to add a third runway.
Heathrow is the UK’s only hub airport – where transferring passengers can take flights to a wide range of destinations. Most growth in long-haul is projected to come from direct flights where a transfer would not be needed, according to Gatwick’s research, produced by aviation consultancy SH&E.
It noted that airlines in Asia and the Middle East have made the bulk of orders for aircraft to serve long-haul routes – such as the world’s largest passenger airliner, the Airbus A380.
The UK’s need for a hub airport will diminish because the hubs of the future would be in cities such as Doha, Dubai, Abu Dhabi and in China, Wingate said
However, the airline alliances have said they would prefer to stay at Heathrow.
“It’s hard to see a future where the premier UK hub airport isn’t Heathrow,” said Stephen Furlong, airline analyst at Davy. “If you polled all the world’s airlines and said ‘We’ll give you a choice – you can grow at Gatwick or at Heathrow’, I know what the answer would be: Heathrow.”
Extra capacity at Heathrow could bring airport charges down and open them up to low-cost airlines, said Gerald Khoo, transport analyst at investment bank Liberum.
“There is the question, if you add a third runway at Heathrow what happens to the pricing? Madrid added a runway and low-cost airlines went in.”
The projected dominance of Middle Eastern hubs to the exclusion of Heathrow was also queried.
“A Middle East hub won’t work if you’re travelling to the US,” Khoo said. “Nobody goes to Brazil, or to South Africa via the Middle East.”
Gatwick’s research was produced by aviation consultancy SH&E. (Simat, Helliesen & Eichner, Inc). SH&E is said to be one of the world’s largest air transport consultancies. It is now ICF SH&E since being bought by ICF International.
This said that most growth in long-haul travel in future is expected to come from direct point to point flights, not needing transfer flights to feed in passengers to fill the planes.
The SH&E report said airlines in Asia and the Middle East have been the ones buying most of the larger planes, designed to serve long-haul routes eg. the Airbus A380.
The SH&E report says in future the main world hub airports will be in cities such as Doha, Dubai, Abu Dhabi in the Middle East, and in China for south east Asia.
The problem Gatwick has is that to pay for a new runway and a new terminal, costing at least £8 billion (probably more) means the cost per passenger in landing charges would have to rise substantially. A recent paper from GACC (Gatwick Area Conservation Campaign), using Airports Commission figures, suggested these might need to rise from £8 now to £33. If that happened, the low cost model for Gatwick would be seriously undermined.
There were some 228 million UK air passengers in 2013, of whom some 120 million were to Europe, some 69 million were to longer haul destinations, and some 38 million were domestic. CAA airport data for 2013