Top business executives lead revolt on Heathrow 3rd runway

3.5.2009   (Sunday Times)


THE leaders of some of Britain’s biggest companies have begun a revolt against
plans for a third runway at London’s Heathrow airport.

The campaign includes chief executives of leading companies – Justin King of J Sainsbury, Charles Dunstone of Carphone Warehouse, Ian Cheshire of
Kingfisher, and Sir Roy Gardner, chairman of Compass
– and highlights the deep divisions within the business community over the expansion
of Britain’s largest airport.

Gordon Brown controversially approved a third runway there earlier this year,
saying environmental concerns were outweighed by benefits to the economy.   The
CBI and TUC led a vigorous business lobby in favour of the extra runway.

Russell Chambers, an adviser at Credit Suisse instrumental in forming the group, said:  "Many people in business have misgivings
about the decision on the third runway, both in terms of the rationale put forward
and the environmental impact.    It’s possible to be pro-transport, pro-aviation
and yet, at the same time, pro responsible citizenship."

Others who are asking Brown to rethink his decision are David Levin, chief executive of United Business Media, and two leading players from private equity, Jon Moulton of Alchemy and Dominic Murphy of KKR.

Kingfisher’s Cheshire said:     "We feel strongly that the real business case for this expansion has
not been made.   A business perspective on the situation would focus much more
on how we restructure existing resources at Heathrow, with high-speed rail and
options at other airports, before pushing ahead with more capacity that seems
to be driven by transit-passenger growth rather than improving Heathrow as a hub
for UK plc."

He added: "It is clear many other people share our desire for a more balanced
review of the options, but have felt inhibited about speaking out for fear of
somehow being seen as disloyal to the business community.  I believe the opposite,
which is that responsible business leaders must bring their experience to this
debate to ensure we get the right answer for the UK in the long term."

The emergence of business opposition is a blow to British Airways, Virgin Atlantic
and BAA, Heathrow’s owner, all of whom stand to benefit from the airport’s expansion
and have campaigned strongly for it.

Heathrow backlash

GORDON BROWN and Willie Walsh, the chief executive of British Airways, will splutter
in their cornflakes this morning when they read how business leaders are lining
up to oppose the construction of a new runway at Heathrow.  As we reveal today,
a group of Britain’s top entrepreneurs, including Charles Dunstone of Carphone
Warehouse and Justin King of J Sainsbury, have had enough of everyone assuming
that they support the plan. They think a third runway at Heathrow is a dumb idea
and are not afraid to say so.

Their intervention shatters all the assumptions made when the runway was approved.
The business community, carefully marshalled by British Airways, Virgin Atlantic
and BAA, was regarded as a natural supporter of Heathrow expansion. The CBI and
TUC, normally deadly rivals, made common cause on the issue, and urged Brown to
back the runway because the benefits to the economy outweighed the harm done to
the environment.

Brown accepted the argument and overruled substantial opposition within the cabinet
to approve the new runway earlier this year. It now turns out that not all business
leaders agree with what Brown was told, and some of them would like the issue
to be looked at again.

Leaving aside the obvious environmental costs — eventually one-third more flights
over the capital, increased greenhouse gas emissions, air pollution in west London
from increased activity around Heathrow and the nuisance of extra noise — the
rebellious executives say the business benefits from an expanded Heathrow are
not clear. Many of the extra trips could be done by high-speed rail, they say,
and the two existing runways at Heathrow should provide sufficient capacity to
answer Britain’s network needs.

Building a new runway would not actually help the economy greatly, as allowing
Heathrow to grow again as a true hub would merely promote transfer traffic — a
worthy goal for airports such as Dubai, where the whole intention is to create
a transport interchange, but not for a crowded island like ours, where servicing
genuine visitors should be the priority.

Expect a furious backlash this week, particularly from BA.      Dunstone, King
& Co will be accused of not understanding the airline business, of failing
to see that, without an extra runway at Heathrow, London will become an international
backwater, with an economy robbed of the high-value trade associated with extra
air travel.

Brown and Walsh will now be aware, however, that they cannot assume that the
business world supports their runway plan.  The tide has begun to turn against
expansion at Heathrow.

These business leaders are not anti-aviation. They rely on air transport for
their businesses. But they are serious about the environment and they want a rethink
of a government decision that they believe is flawed. They will break their silence
tomorrow in an open letter and I will be surprised if they don’t gain huge support.
This is an emotive subject and a large percentage of the public say their voice
has not been properly heard.
see also

Business can do without a Heathrow third runway – letter from 13 business leaders

News Item added: 4th May 2009

A letter to the Times, signed by 13 top business leaders including Ian Cheshire
(Chief Executive, Kingfisher), Russell Chambers (Adviser, Credit Suisse), Jon
Moulton (Founder, Alchemy Partners) says it is a misconception that the business
community support the Government rationale for a 3rd runway at Heathrow. They
say the business benefits are unclear and unproven, and there is little benefit
from increased reliance on transfer passengers. (Times)


Hoon admits figures error on Heathrow exaggerates benefit

18th March 2009       The Government has admitted making an error in one of its forecasts on the net
benefit of new runways at Heathrow and Stansted. But Geoff Hoon said the mistake
did “not materially affect” evidence presented on the impact of expansion of the
airport. The Heathrow 3rd runway and 6th terminal net benefit comes down from
£5.4billion to £5.1billion. (Standard)       Click here to view full story…


Heathrow case undermined – by House of Commons Library

7th February 2009         An independent parliamentary audit has called into question the government’s
economic and environmental case for expanding Heathrow airport. The briefing produced
last week by House of Commons library researchers, who are widely respected for
their objectivity and trusted by MPs, casts doubt on some of the government’s
key assumptions.   (Sunday Times)         Click here to view full story…

DfT releases Heathrow consultation responses – showing an overwhelming NO

16th January 2009          There were 306 responses from aviation and airline companies but only a total
of 241 from all other businesses.  
HACAN Chair John Stewart commented:  "These figures give the lie to the claim
that business is clamouring for a 3rd runway.   Outside the aviation industry,
only 241 businesses from right across the UK felt the need to express their view.  
How underwhelming is that."             (HACAN)         Click here to view full story…