Two new short briefings from AEF on airport capacity and connectivity – busting some myths
The Aviation Environment Federation (AEF) has recently written two concise briefings, on airport capacity and connectivity. These are timely, since the announcement of the Airports Commission, chaired by Sir Howard Davies. Even since the announcement the flurry of media stories and aviation industry spin and PR on the issue have continued, effectively giving the very strong and persuasive impression that the UK is badly in need of more airport capacity, and in dire danger of not having sufficiently good connectivity. The AEF says in fact, there is no evidence of a crisis in capacity and no urgent need for new runways. Only about 23% of air travel is for business. The great majority of the growth in demand is for leisure. The Government forecasts show that passenger demand could be almost entirely met with existing infrastructure until 2030. There may well be a benefit for certain airlines or airport operators if passengers change plane at a particular (South East England) airport, but there are no great benefits of larger or expanded hub airports or hub capacity for UK passengers.
The Aviation Environment Federation (AEF) has commented on the future work of the new Airports Commission, chaired by Sir Howard Davies. In addition to the comment below, they have produced two excellent short and concise briefings, which are copied below
The AEF says:
One of the first pieces of work of the Commission will “focus on aviation demand forecasting and will be published in January 2013”. AEF welcomes the Commission’s recognition of this and its intent to examine forecasts at the start of its programme.
The government’s forecasts of demand, published in August 2011, shows there will be no significant shortage of capacity in southeast England or the UK as whole, even if no new runways are built up to 2030.
The government forecasts must surely be a central piece of evidence in the Commission’s deliberations.
However, the terms of reference say “[The] overarching objective is to identify and recommend the options for maintaining the UK’s status as an international hub for aviation.”
There is potentially major inconsistency here. The commission could well find that no extra capacity is needed to meet the demand for people travelling to and from the UK and therefore that there would be no adverse economic impact if no new runways were built.
But the requirement to maintain the UK’s hub status could conclude that new runways do need to be built.
The key point about a hub is that it enables people who are not travelling to or from Britain to change plane here. They cause noise and pollution for local communities but generate no wider benefit to the UK economy.” See AEF briefing. “The Great Connectivity Myth”
Airport capacity crisis? What crisis?
Aviation Environment Federation, 12th October 2012
Since the Government announced its policy of opposition to new runways at Heathrow, Gatwick and Stansted, the aviation industry has been working hard to put out the message that there is a crisis in airport capacity in the South East.
Perhaps as a result, much of the recent reporting and political discussion about airports has started from the assumption that we need new runways, asking “if not at Heathrow, then where?”
In fact, there is no evidence of a crisis in capacity and no urgent need for new runways.
New forecasts of passenger demand were published by the Government in August 2011. These forecasts show a massive reduction in expected future levels of demand compared with the heady forecasts produced in 2003. Those forecasts led to the Government’s ‘white paper’ which supported new runways at Heathrow and Stansted as well as a new runway in the Midlands and one in Scotland. Even in 2007 demand was predicted to be 495 million passengers per year (mppa) at 2030, but by 2011 the forecast had fallen to 343 mppa.
Even the latest forecasts are probably still too high because they assume:
- A resumption in economic growth at around 2% pa or above and continuing indefinitely, which is very uncertain
- No increase in oil prices (despite evidence of increasing demand and increasingly difficult and expensive approaches to extraction), and
- A continuation of aviation’s tax exemptions (including no fuel tax and no VAT)
More detail on the forecasts is given on our website (http://www.aef.org.uk/uploads/AEF_Passenger_Forecasts_analysis_1.pdf , which is a detailed report by AEF of 24 pages).
The only airport in the entire country where there is a gap between demand and supply in terms of runway capacity, either now or any time soon, is Heathrow. And despite the recent hysteria about constraints at Heathrow, there is sufficient runway capacity serving London and SE England to continue to meet demand.
The Government forecasts show that passenger demand could be almost entirely met with existing infrastructure until 2030. Even if no new runways were built anywhere in the UK, less than 3% of potential air traffic would be squeezed out. (‘Constrained demand at 2030 is 335mppa, compared with unconstrained demand of 345mppa.)
Do we need to cater for more business travellers?
A key question is whether business travel would be squeezed out. The answer is almost certainly no.
CAA statistics indicate that only about 23% of air travel is for business. The great majority of the growth in demand is for leisure.
Business travel is very ‘inelastic’. This is entirely explicable – a highly paid business person wanting to travel to China to negotiate a multi-million pound deal is not going to be put off because he or she has to take a flight from one airport rather than another or because it is slightly more expensive.
Leisure travel is, by contrast, widely accepted as discretionary and highly ‘elastic’. If a particular trip is not convenient or becomes more expensive, people may chose to spend their money on something else.
For these reasons, the 3% of traffic that would be squeezed out by 2030 if no runways were built would be almost entirely leisure. There would be virtually no loss of business travel and therefore no loss of trade or loss to the UK economy.
There may well be benefit to certain airlines or airport operators if certain airports were expanded (eg Heathrow) or a new airport was built (eg Thames estuary). However, this is a completely different matter to benefits for UK passengers or economic benefits arising from business travel.
Can Government forecasts be trusted?
Government forecasts have recently come in for something of a battering. The aviation forecasts are certainly fallible and have been revised 4 times since 2003 – each time downwards. But they are rigorously produced and improvements to the assumptions have been made over time so the official figures can serve as a useful check against the often wildly exaggerated forecasts by airports, produced to support business plans and please shareholders.
AEF considers that ultimately airports policy should not be determined solely by individuals’ demand for travel but also by society’s demands both for protection from unacceptable noise and air pollution, and for political action to tackle climate change. But even if the Government imposed no new constraints on aviation for environmental reasons, there would be sufficient airport capacity to cater for all aviation demand until nearly 2030.
For more information, please contact:
Nic Ferriday, Air Transport Caseworker: firstname.lastname@example.org
Cait Hewitt, Deputy Director: email@example.com
Aviation Environment Federation, Broken Wharf House, 2 Broken Wharf, London EC4V 3DT
The Great Connectivity Myth
Aviation Environment Federation, 15th October 2012
Since the Government announced its policy of opposition to new runways at Heathrow, Gatwick and Stansted, the aviation industry has been working hard to put out the message that there is a crisis in airport capacity in the South East. In particular it is has been arguing for an increase in hub capacity, either by expanding Heathrow or by building a new airport in the Thames estuary, linking this with the desire to ensure good connectivity with rapidly growing economies, most notably China.
Gathering evidence on the need for a hub airport, or otherwise, will now be a question for the recently established Airports Commission, under Sir Howard Davies.
Meaning of connectivity
The debate on airport capacity often fails to consider what “connectivity” actually means. In its broadest context, it is about how well-connected the UK is to other parts of the world, and about the ease with which businesses can access foreign markets and vice versa. Connectivity can take many forms, including other transport modes such as rail, or transport replacement such as videoconferencing, in addition to air travel. For example, Eurostar and the Channel Tunnel connect the UK to many western European cities, illustrating that the connectivity debate extends well beyond hub airport issues. Yet in the current debate, lobbyists take a very narrow, often misleading, definition, implying that it is only related to direct flights between two destinations.
There will never be more than a very small proportion of city-to-city or airport-to-airport pairs that have direct connections. To travel between the great majority of pairs will always involve a change of plane. This is not always a disadvantage, however. It can lead to a more frequent and cheaper service between cities than a direct low-volume service would because, when a journey involves a change, the individual legs of the journey are typically high frequency, competitive routes. It is already possible to travel from any UK airport to any other airport in the world suggesting that in fact, we have full connectivity.
The Government’s draft aviation policy states one of its aims as ensuring “that the UK’s air links continue to make it one of the best connected countries in the world. This includes increasing our links to emerging markets so that the UK can compete successfully for economic growth opportunities.” But no evidence is presented to suggest that the UK cannot compete if a business traveller has to change plane.
The debate on airports often confuses and conflates connectivity and hub airport issues.
For those passengers flying to or from an airport in South East England, the fact that it operates as a hub as well as a terminating airport is of little relevance. Meanwhile, for those who do not live or work in South East England but want to do business abroad, having a hub airport in the UK is unimportant. There is no generalised advantage for someone flying from, say, Aberdeen to change plane at Heathrow or a Thames estuary airport compared with changing at Helsinki or Hong Kong.
As a hub airport in South East England confers no particular benefit for passengers travelling to/from South East England and confers no particular benefit for passengers travelling to/from other parts of UK, it can be safely concluded there are no great benefits of larger or expanded hub airports or hub capacity for UK passengers. The need for passengers and for the UK economy is adequate terminating capacity.
There may well be a benefit for certain airlines or airport operators if passengers change plane at a particular (South East England) airport. However, this is a completely different matter to benefits for passengers or general UK economic benefits arising from business travel. Similarly, Heathrow’s hub operations may help improve connectivity for people flying between other countries, but this should not be a primary aim of UK aviation policy. Virgin Atlantic, for example, recently announced a new service from Delhi to New York’s JFK via Heathrow, following the success of its Delhi-Newark route which also connected at Heathrow. In direct contradiction of the concept that direct routes are always preferable, Stephen King, Virgin’s general manager in India said: “Our increasing share to Newark shows that passengers prefer breaking the journey in half, stretching their legs and indulging in some duty-free shopping. We’re looking forward to making this new service to JFK a success.”
Finally, attracting foreign passengers to change planes at a hub airport in South East England justifies the selection of larger aircraft which subject communities to more noise and pollution. There is little offsetting gain to the UK economy because, as noted previously, the extra passengers are not actually travelling to or from the UK and therefore contribute little if at all to the UK economy.
The additional routes argument
The argument made by supporters of hub airports is that, by attracting foreign passengers who are not terminating in the UK, they make the demand for potential (direct) routes larger. They can therefore make a route viable which it would otherwise not be. We have seen little evidence to support this claim, however. In fact, while Heathrow’s passenger numbers have steadily increased over time, even under its movements cap, the number of destinations it serves has actually decreased.
For more information please contact:
Nic Ferriday, firstname.lastname@example.org
Cait Hewitt, email@example.com
Another excellent report is:
Available UK airport capacity under a 2050 CO2 target for the aviation sector –a report written by AEF for WWF-UK in July 2011.
Key conclusions are that:
- The Government’s decision to halt runway expansion in the South East is justified, as available airport capacity in the region is already sufficient to meet the maximum levels of future demand that would be consistent with the limits recommended by the Committee on Climate Change.
- A new airport in the South East to further expand capacity, such as in the Thames Estuary, is not necessary.
- Overall, the level of demand growth permissible within the CCC’s ‘likely scenario’ can be easily achieved with existing UK airport capacity.