Manchester Airport MD says UK needs a national aviation policy to address north-south economic divide
Ken O’Toole, who is the Managing Director of Manchester airport, (and on the board of Manchester Airports Group), says government ‘paranoia’ over Heathrow expansion harms efforts to close the north-south economic divide – and this means the “northern powerhouse” risks being derailed. He says there is an “over-emphasis on the south-east at the expense of everywhere else”. Ministers needed to draw up a national aviation policy to address the north-south economic divide. Though he was confident that Theresa May’s government was supportive of ex-chancellor George Osborne’s “northern powerhouse” agenda, there was a lack of a national aviation policy behind the strategy. Manchester airport is part of the northern powerhouse agenda, in part because it deals with much of the business travel into the north of England. The MAG owns Manchester and Stansted airports, the 3rd and 4th largest by passenger numbers in the UK. With the over-emphasis on the south east, Mr O’Toole believes the south east should not over-shadow the north or the rest of the UK. Manchester airport is the only airport other than Heathrow, with two runways. While it has 25 million (or fewer till recently) passengers per year it has capacity for 55 million, and “could overtake Gatwick to become the UK’s second-biggest airport within 15 to 20 years.”
Northern powerhouse at risk from south-east bias, says airport boss
Manchester airport chief says government ‘paranoia’ over Heathrow expansion harms efforts to close north-south economic divide
By Josh Halliday North of England correspondent (Guardian)
Friday 30 September 2016
The northern powerhouse risks being derailed by the government’s “absolute paranoia” over Heathrow expansion and an “over-emphasis on the south-east at the expense of everywhere else”, the managing director of Manchester airport has said.
In a stark message to Theresa May, who is due to decide this month on the contentious third runway at Heathrow airport, Ken O’Toole said ministers needed to draw up a national aviation policy to address the north-south economic divide.
“We need to be careful that the north and the UK as a whole is not overshadowed again by the south-east,” he said. “If we’re not careful that’s just going to take over.”
Ministers are set to decide later in October where to allow a new runway in the south-east of England after decades of procrastinating. Expansion at Heathrow airport is expected to be given the green light instead of a rival Gatwick airport plan, despite widespread opposition.
In an interview with the Guardian, O’Toole said he was confident May’s government was supportive of ex-chancellor George Osborne’s northern powerhouse agenda – but said there was a lack of a national aviation policy behind the strategy.
“If you really want to drive the northern powerhouse, if you really want to drive the recalibration of north and south, Heathrow ain’t the answer – it’s Manchester airport,” he said.
“I’m not sure I would isolate it to Manchester being overlooked – there seems to be this absolute paranoia or over-emphasis on the south-east to the expense of everywhere else. How can you say you’ve got a national economic strategy if your aviation strategy seems to be over-emphasised on the south-east?”
In the fierce PR battle over the third runway, Heathrow has said that expanding its airport would deliver £12.5bn of growth to the north-west compared to Gatwick’s £8.6bn by 2050. But Manchester airport bosses say it will deliver more than £70bn for the region over the same period, nearly six times the figure put forward by Heathrow.
Pointing out that the £16.8bn Heathrow scheme could take up to 20 years before it is built, O’Toole said there was “a gap in terms of an aviation policy that’s going to make best use of what’s in the UK for those 15 to 20 years while we’re waiting for something to come along”.
Manchester airport is the third-biggest in the UK and the only hub, other than Heathrow, with two runways. Twenty five million passengers travel through Manchester airport every year but it has the capacity to carry 55 million, meaning it could overtake Gatwick to become the UK’s second-biggest airport within 15 to 20 years.
The airport was at the heart of former Osborne’s northern powerhouse agenda, in part because it funnels as much as 60% of the business travel into the north of England. In October last year it hosted the Chinese president Xi Jinping on his state visit to the UK, when he launched a new direct flight from Manchester to Beijing – the first outside London.
O’Toole said the vote to leave the European Union would slow the airport’s growth because airlines and passengers “don’t like uncertainty”. “Airlines are deciding where to put planes and routes 12 to 18 months in advance,” he said. “The longer the uncertainty goes on the more likely that the UK misses out.”
He urged Brexit minister David Davis to urgently clarify whether Britain will seek to remain part of the historic EU open skies deal, which lets airlines fly from anywhere in the US to anywhere in the EU. Withdrawing from the deal would potentially mean airlines such as easyJet or Jet2 having to negotiate individual deals for each country they fly to.
O’Toole, who is on the board of Manchester Airports Group, which owns London Stansted, east Midlands and Bournemouth airports, described the government’s aviation policy to date as “some progress, but a lot more to do”.
He said: “Do we have integrated road, rail and airports? No. Do we have a taxation regime that supports and encourages airlines to bring capacity into the UK? No.
“Do we have an immigration service that while protecting the border, which is critical, actually makes it easy and appealing for people to visit the UK? I contend we don’t.
“Is it easy, cheap, quick and convenient to gain a visa to the UK? Again, it’s improved. I’m not saying there isn’t progress being made but there is a lot more that could be done.”
Manchester Airport rubbishes claims Heathrow expansion is crucial for Northern Powerhouse to succeed
The boss of Manchester Airport, Ken O’Toole, has rubbished Heathrow’s claims that a new London runway is crucial to the Northern Powerhouse. He argues that Manchester is an international airport in its own right with many direct long-haul routes. He says Manchester airport could make up any long haul capacity gap over the next 15 years and beyond “if the country adopts a culture of healthy competition.” Manchester started a direct service to Beijing last week, giving the North its first ever non-stop flight to mainland China. But Heathrow continually tries to persuade that, without a third Heathrow runway, northern businesses would lose “up to £710m” per year. Manchester airport believes it can have a range of long haul flights, not only to tourist destinations – mentioning important markets like “Singapore, Hong Kong, Atlanta, Los Angeles, Boston and, from next March, San Francisco.” If people can get flights to these destinations direct from Manchester, they do not need to – inconveniently – travel via Heathrow. Ken O’Toole says some 22 million people live within two hours’ drive of Manchester Airport. They have a huge amount of spare capacity on their two runways. Heathrow is very nervous of losing the transfer traffic it cannot manage without, to either other hubs like Schiphol or Dubai – or the growth of airports like Manchester.
Owner of Manchester and Stansted airports, MAG, unsurprisingly wants airport growth outside the south-east
The Manchester Airports Group (MAG) which owns/runs Manchester, Stansted, East Midlands and Bournemouth airports) says a new strategy is needed to promote local airports rather than investing in a megahub in the south-east. MAG wants a nationwide network of competing airports rather than investing all energies — and taxpayer funding — in an even larger airport in the south-east. While Heathrow claims it would provide a significant net benefit to northern England, allegedly “with the creation of up to 26,400 manufacturing jobs”, the Airports Commission’s own figures show negative impacts of a 3rd Heathrow runway on the UK’s regional airports. MAG believes that the expansion of local airports would provide a greater boost to the nation, and provide “an important catalyst for rebalancing UK plc.” So unsurprisingly Heathrow and MAG are both speaking from a position of self interest. While the Airports Commission ended up, misguidedly, just looking at whether they should be a runway at Heathrow or Gatwick, the main question of whether there should be a new runway in the south east at all still needs a convincing answer. MAG believes there is more likelihood of a successful “Northern Powerhouse” if northern airports get successful long haul routes, rather than Heathrow.
MAG hopes to invest in airport upgrade to be hub for “Northern Powerhouse”
Manchester Airports Group could raise up to £400 million from the bond market next year as part of a £1 billion upgrade programme for its flagship airport. MAG’s chief financial officer Neil Thompson said that raising finance from bond or debt investors was one option the firm would explore over 12 to 18 months. It is looking to spend £1 billion at Manchester so that it can act as the hub airport for the “Northern Powerhouse” that the Government wants to develop to counter London’s dominance. MAG, which also owns Stansted in Essex, is the largest UK-owned airport operator. Thompson said that it is in talks with Middle Eastern carriers and BA owner IAG about offering long-haul services out of Stansted.
Last week MAG said that pre-tax profits had risen by 11.8 per cent to £90.3million and revenues by 10 per cent to £738.4 million. MAG is deeply opposed to a new runway at Heathrow or Gatwick, and the huge sums of public money needed to be spent on either, for infrastructure.
Stansted plans to start discussions with government in a couple of years about a 2nd runway
Not to be outdone by the hopes of Heathrow and Gatwick to get another runway, Stansted is getting in on the act, and saying they will be wanting a runway in due course too. Stansted was not assessed by the Airports Commission, as Stansted had no need of a new runway, being far below capacity. The Airports Commission partly understood that, to even try to keep within the carbon cap for aviation of 37.5MtCO2 by 2050, the addition of one runway would be difficult [it risks UK carbon targets] but it still suggested that by 2040, even if building a runway by 2030, another would be “needed.” Stansted has said in the past that it would like a 2nd runway some time after 2035. Its owners, MAG, are now saying that it will “need” another runway earlier than that. Though they appreciate that there is likely to be a dip in demand for air travel for several years, due to Brexit, they are still keen on adding a runway. MAG’s CEO Charlie Cornish has told the Times: “We will be at capacity some time between 2025 and 2030, so in the next two to three years we will need to start having the appropriate dialogue with the government over the need for a second runway [at Stansted].” MAG repeatedly says the existing runway capacity at Stansted must be fully utilised, including improving its rail links.