Unions and industry join forces to push Heathrow third runway

BAA has commissioned a study from Oxford Economics (not part of Oxford University) to look at the economics of expanding Heathrow. The study has not been made publicly available.  It apparently claims that the UK could lose 141,000 jobs per year by 2012 through some very convoluted calculations, taking absolutely every possible job vaguely related throughout the UK. They claim that if Heathrow is constrained, “capacity constraints will cost the UK £4.5bn in GDP from foreign investment and £1.6bn in lost trade with emerging markets per year by 2021” (unless there is a new runway ??)  Basically they are lobbying for a 3rd Heathrow runway, and to hell with its environmental impacts. The report is enthusiastically backed by Unite and the GMB, and by the Institute of Directors.  When experts analyse the report in detail, it is likely that the claims will be shown to be greatly exaggerated, and ignore costs it is inconvenient to include.

Unions and industry join forces to push Heathrow third runway

Unite and Institute of Directors back BAA-sponsored research claiming UK could lose out on 140,000 jobs without a hub airport

The report is at  Oxford Economics Report 6th March 2012  (14 pages)
A protest against a third runway being built at Heathrow. The government has ruled out expansion at the airport. 

Aviation industry lobbyists have stepped up attempts to force the vexed question of a third runway at Heathrow back on to the agenda of an unwilling government, with unions and directors warning that inaction will cost thousands of jobs.

BAA-sponsored research by Oxford Economics claims Britain could lose out on more than 140,000 jobs if there is no clear support for a UK hub airport.

Len McCluskey, general secretary of the Unite union, said that decisive action was needed to maintain the airport’s status. “Our economy desperately needs an airport infrastructure which is better than the patchwork provision we currently have around the capital,” he said.

“Our politicians must think big and act in the national interest. We need an aviation strategy that acknowledges Heathrow as a hub, and we need it now.”

The Institute of Directors also endorsed the research, which found that capacity constraints will cost the UK £4.5bn in GDP from foreign investment and £1.6bn in lost trade with emerging markets by 2021.  

Mick Rix, of the GMB union, said it was “plain daft” to exclude the option of expanding Heathrow. “As this new research shows, there’s an immediate need to safeguard the jobs and GDP that Heathrow provides.”

The latest salvo in BAA’s campaign for a third runway at Heathrow comes before this month’s expected publication of the aviation white paper, which will discuss long-term strategy and options for airport capacity growth – possibly including a new hub in the Thames estuary.

More than 70 business leaders signed an open letter to chancellor George Osborne and transport secretary Justine Greening, published at the weekend in the Sunday Telegraph, demanding an aviation strategy for growth that “considers all options” – a thinly veiled demand to back Heathrow, for which a third runway was explicitly ruled out again in the autumn statement. [ See Sunday Telegraph letter.   And there was a Sunday Times letter. ]

BAA on Monday reiterated its threat to seek a judicial review if Heathrow is pre-emptively removed from consideration before any consultations on expanding airport capacity. It said: “None of the options for providing new hub capacity is easy, but all options should be on the table. It is important that major decisions by government follow due process and the option to seek a judicial review if they do not is always available. We expect the government to carefully consider the pros and cons of all options and consult properly before taking any policy decisions.”

Environmentalists have been monitoring BAA’s latest lobbying offensive, but the presence of Greening at the Department for Transport, who campaigned against a third runway, rules out imminent change for Heathrow.  Moves toward expansion would make her position untenable.

At the official opening of London Southend airport on Monday, Greening insisted British airports were well placed to provide flights to the far east markets that BAA fears losing. “Any decision will need careful consideration,” she said.

“If you were starting from scratch today, you would not put Heathrow where it is, and we need to look at how we can keep a competitive edge going forward.”

John Stewart, chair of Hacan, which represents residents under the Heathrow flight path, said: “The argument has been settled. BAA will not accept that the current government rejected both the environmental and economic case for Heathrow expansion. It’s a sign of its desperation that it has wheeled out Oxford Economics to do the report. These were the consultants who provided the economic basis for the now discredited 2003 air transport white paper.”

Seema Malhotra, the recently elected MP for Feltham and Heston, a constituency under the Heathrow flight path, has tabled an amendment to the civil aviation bill to compensate residents for noise pollution.

• Justine Greening echoed the complaints of campaigners through the years that Heathrow was in the wrong place on Monday.

Asked to comment on the debate around the need for a new hub, including controversial plans for a new airport in the Thames Estuary, she insisted existing UK airports were well placed in providing flights to the far east.

But Greening added: “Any decision will need careful consideration. If you were starting from scratch today, you would not put Heathrow where it is, and we need to look at how we can keep a competitive edge going forward.”

She was speaking at the opening of London Southend airport’s new passenger terminal, where she stressed the importance of looking beyond the biggest airports serving London.

“The current debate on the future of aviation in our country as a whole has focused on hubs such as Heathrow and Gatwick.

“Our regional airports have an absolutely vital part to play in making sure the aviation sector remains competitive and continues to serve businesses and the community.”




Greening Weighs Maximizing Heathrow Capacity With BAA After New Runway Ban

By Chris Jasper
Mar 6, 2012  (Bloomberg)

U.K. Transport Secretary Justine Greening will meet with managers from London Heathrow airport and its airline customers to discuss ways of maximizing capacity at a hub where the government has blocked expansion.

Greening will meet with the Heathrow Leadership Group to explore possible “short-term solutions” to capacity constraints, she said last night in a speech in London to members of the U.K. Airport Operators’ Association. The HLG meets once a month and is headed by Colin Matthews, chief executive officer of Heathrow owner BAA Ltd., according to the airport’s website.

The government will also call for testimony on ways that the U.K. can maintain its air-hub status, Greening said. BAA and British Airways, Heathrow’s biggest user and also represented on the HLG, favor development of the existing airport with the addition of a third runway, something that the government has said it opposes on environmental grounds.

“We are clear that we must look at what steps we can take to make the most out of existing capacity and deliver more capacity in the long term,” Greening said. While she added that solutions must be “sustainable,” she made no mention of the moratorium on adding extra runways at London’s airports.

The latest initiatives are separate to the government’s development of a new policy framework for U.K. aviation, proposals which are due for publication this spring.

Jobs, GDP

Heathrow is Europe’s busiest hub, attracting a record 69.4 million passengers last year and handling 476,197 flights, or 99.2 % of its 480,000 limit, according to BAA figures.

Britain could lose more than 140,000 jobs and £8.5 billion ($13.4 billion) in annual gross domestic product by 2021 without urgent action to maintain airline connectivity, according to research released today by Oxford Economics and sponsored by Heathrow.

Construction of an alternative hub in the Thames estuary, as favored by London Mayor Boris Johnson, would take a minimum of 25 years and risk the loss of even more positions as traffic transferred to Frankfurt, Amsterdam and Paris, according to the report.

U.K. Institute of Directors Director-General Simon Walker said in a statement he backed the study’s conclusions and that the failure to add capacity was “lamentable.” Mick Rix, aviation officer at the GMB labor union, said all options for growth should be considered, including an additional runway at Heathrow.

About 70 business and union leaders urged Prime Minister David Cameron to look again at expanding Heathrow in a letter published March 4 in the Sunday Telegraph newspaper. Cameron’s coalition government canceled plans for a third runway in 2010 amid concern about increasing noise levels for people living directly beneath the flight path.

To contact the reporter on this story: Chris Jasper in London at cjasper@bloomberg.net



Comments from AirportWatch members:

Breathtakingly flimsy report – maybe this is why they don’t even seem to have put it on their own website!

Note the only reference to £8.5bn is in the ‘main findings’ bit at the start, but it isn’t explained or backed up by the report itself. So they list a load of reasons why LHR contributes to economy – but not why a “constraining” LHR would necessary have such a big impact.
Journos have just covered this stuff verbatim and that’s disappointing. They just rehash the press release without analysing the figures.

If they need flights to China, India, Brazil, Indonesia, or wherever – what stops them putting these flights on, and reducing some of the holiday / leisure slots instead?  Reason seems to be that there is not sufficient demand from these emerging or rapidly expanding countries to warrant the flights. So what difference would a new runway make?  A new strip of concrete won’t persuade many more Chinese, Indian, Brazilian, Pakistani, Zambian or whaever businessmen to buy British goods.  There are thousands of planes, and thousands of landing slots.  If there is the demand for these flights, only a bit of internal organisations is stopping the airlines and the airports from providing them now. From Heathrow.

The 3rd runway demands are only a self-serving bit of lobbying for expansion for their own profits, by the industry.  With a bit of elaborate myth creation and pandering to national vanity thrown in.

One can see tacit, if not explicit, support being given for expansion elsewhere: e.g. Stansted, Gatwick, Luton; on the lines “let’s try to clear as many of the bucket & spade brigade off as we can to make room for intercontinental movements at Heathrow”.  Even Northolt might find itself a candidate for short-haul stuff to and from Europe.
When in the good Lord’s name will a Government speak the unspeakable: DEMAND MANAGEMENT? 
Mixed-mode is the obvious way to increase capacity – and it does not violate the coalition agreement.  That will make life hell for thousands of over-flown London residents, and will cause a ferocious storm of protest and anger.
A trade-off ? Mixed mode now if BAA drop their demands for a 3rd runway?(and of course come back for that later on!).  I note the silence on possible expansion at Gatwick and Stansted.
Journalists know the report’s figures that £8.5bn and 141,00 jobs will be lost if 3rd runway not built are just not credible. They also know the report is not really news as the argument about 3rd runway has been settled. Backers of the report lose even more credibility when they say that London “will be closed for business” if 3rd runway not built. They should get out more! And so much is made of the union support they have got – just two unions! The reality is that London remains the best-connected city in the world: http://www.aef.org.uk/downloads/Business_Connectivity_Report_August2011.pdf