Plans for 3rd runway at Heathrow hang in balance

1.11.2009   (Observer)

A high court review in February could force ministers to reconsult on giving
permission for any expansion at Heathrow

by Tim Webb

In 1998, the government began a review of its policy on airports.   It took five
years and 13 months of consultation to conclude what everyone knew already: that
the UK’s airports, and those in the south-east in particular, were bursting at
the seams.   The resulting white paper said that additional runways should be built
Heathrow and Stansted to ease the pressure.

Next February, a coalition of campaigners opposing airport expansion hope to
drive the final nail in the coffin of the Heathrow expansion plan, more than a
decade after it was first conceived.   The high court will stage what lawyers describe as a “rolled-up judicial review”.
The three-day hearing could force ministers to consult again on the most contentious
aspects of building another runway, such as the impact of noise pollution on local
residents or the resulting rise in carbon emissions.

By the time they’re done, the country, in all likelihood, will have voted in
a Conservative government that has promised to ban the construction of new runways,
at Heathrow and everywhere else.  No wonder a despairing
BAA, the owner of Heathrow, has decided not to submit its planning application for
the third runway until after the general election.   Local campaigners are also
hopeful of blocking similar moves to build new runways at Stansted and Gatwick,
or at the very least of kicking the plans into the very long grass.

Welcome to airports planning, UK-style: toothless policy statements, countless
consultations and legal challenges, all adding up to zero progress for those advocating
expansion – or victory to those campaigners opposing it.   Peter Morris, chief
economist at Ascend, the
air transport consultancy, gloomily predicts that the current political and economic landscape makes it unlikely that any new runway
will be completed in the south-east in less than two decades.

Last month, BAA finally announced it had sold Gatwick, the UK’s second largest
airport after Heathrow, to investment fund Global Infrastructure Partners.   BAA
had already been ordered to sell the airport, along with Stansted and either Edinburgh
and Glasgow airport, following a three-year review by the Competition Commission.

The watchdog argued that the company’s ownership of Heathrow, Gatwick and Stansted
constituted a monopoly that had resulted in severe congestion, because BAA had
little incentive to spend billions expanding the airports when it could ramp up
landing fees for airlines on the existing squeezed capacity it already owned instead.  
The watchdog also said that the monopoly had resulted in poor customer service
because the alternatives for passengers to use other airports not owned by BAA
were limited.

BAA used to boast that Gatwick’s single runway was the world’s busiest, handling
more than 32 million people every year.   It’s a legacy GIP will be stuck with
for some time to come.

In 1979, in return for the go-ahead to build the north terminal at Gatwick, BAA
promised West Sussex county council that it would not build a second runway before
.   GIP insists that the moratorium is legally binding.   The fund also claims
that the issue of a second runway is not on its agenda, not least because there
is neither Conservative nor Labour support for it.   But, if this were to change,
there is a strong economic case for a second runway, particularly if the Heathrow
and Stansted growth plans continue to be stymied.

In the meantime, GIP says that it will embark on an £850m investment programme
to overhaul the airport’s shabby terminals, which will allow it to handle more than 40 million passengers a year.

BAA now finds itself in the uncomfortable position of potentially being forced
to scrap plans for a third runway at Heathrow, while looking on nervously as Gatwick’s
new owners expand the newly acquired airport.   BAA insists that whatever the commission
may say, Heathrow is not a competitor to Gatwick as the two airports serve two
different kinds of passenger.

Gatwick traditionally was the UK’s base for charter flights but as this market has shrunk, a large share of its traffic comes from low-cost
airlines such as easyJet, its biggest user.   While Gatwick operates long-haul
flights, it operates on a point-to-point basis, rather than a “hub” like Heathrow, where over a quarter of its passengers are transferring flights.   But if Heathrow does lose out on a third runway, and Gatwick expands, the
two airports will come more directly into competition.  Indeed, BAA has been warning
for years that without a third runway, Heathrow will cease to be an important
hub airport for transfers.

Whether there is the political will to build a runway at Gatwick, rather than
Heathrow, is not clear. The Competition Commission questioned the government’s
decision to favour new runways at Heathrow and Stansted, instead of Gatwick.  
Because Gatwick is further away from London than Heathrow, there is also likely
to be less fierce opposition to expansion from local residents
. [eh??!!] ***

Morris says that while it makes more financial sense to build a runway at Heathrow
to protect its hub status, it would be pragmatic to focus on Gatwick. “If we are
looking at a 20-year war of attrition to get a third runway at Heathrow, it might
not be optimal to build a second runway at Gatwick but at least it’s more likely
we can get on with it.”   He also thinks London mayor Boris Johnson’s plan to build
a new airport in the Thames Estuary, lacks the political support from either party.

John Stewart from Hacan, the group lobbying against Heathrow expansion, is keeping his fingers
crossed that the Tories win the next election and believes their moratorium on
new runways would hold for the duration of their first term of office at the very
least.   Exacting emissions targets are also incompatible with expanding airports, he argues.

Either way, whether Heathrow, Gatwick or neither are expanded, another dreaded
review is certain. The government’s consultation on a third runway at Heathrow
last year was based on its 2003 white paper, which pre-dated carbon emissions
targets. The paper also forecast huge growth in air travel demand, based on the
assumption that fares would keep falling.

Given high oil prices and increasing environmental taxes – the government’s air
passenger duty increases this week – this is clearly absurd. Traditionally, economists
forecasted that air traffic would increase at double the rate of GDP. Morris says demand is now more likely to rise at the same rate of economic growth
as a result of rising fares.

With the UK still in recession and the weak pound also discouraging air travel,
the clamour to expand the UK’s airports has temporarily quietened.   But once the
economy recovers, so will demand – and congestion at the south-east’s airports
will get even worse, even if new high-speed rail links are built.

The alternative to incurring the wrath of environmentalists and local residents
by building more runways is to price people out of air travel. Neither option
is popular.

The next government – be it Conservative or Labour – will have some tough decisions
to make.
*** There is  ancient woodland (over 70 hectares of it) close to the runway site at
Gatwick – some of which is owned by the Woodland Trust.   And that is just one
aspect of the fight that would happen if a runway was proposed.
There are BAA maps to show the area at Gatwick that would be affected by a new
runway at

Download a map of  BAA’s Gatwick  master plan here  (2.46MB)