Howard Davies, whose “Airports Commission” decided a Heathrow 3rd runway was needed and justified, now says it no longer is
Back in 2015, Sir Howard Davies chaired the Airports Commission, which had been given the task – by George Osborne – of making the case for a 3rd runway at Heathrow, so the Conservative government could press ahead with it, once they were out of coalition with the LibDems, who opposed it. Sir Howard had financial connections which might be considered to make him biased towards the airport. In July 2015 the Commission produced its report, recommending Heathrow’s 3rd runway, as a way to meet anticipated air travel demand in the south east. Now, with the impact of the Covid pandemic, and Heathrow struggling with 72% fewer passengers in 2020 than in 2019, Sir Howard has admitted that no extra runway is now needed, nor will it be for some time. In 2015 he believed there was an economic case for it, and spending up to £18 billion on the expansion. Now, even with the cheaper planned scheme at about £14 billion, he has said: “I would have to redo the numbers to see if the economics made sense.” The whole Airports National Policy Statement was based on building a 3rd Heathrow runway, on the recommendation of Sir Howard Davies, before deciding on airport policy for the whole of the UK.
Heathrow expansion thrown off by pandemic
By Graeme Paton, Transport Correspondent (The Times)
June 16 2021
A third runway at Heathrow may no longer be needed because of a collapse in the number of people travelling by air, according to the head of a government review into airport expansion.
Sir Howard Davies recommended the expansion at the airport in west London as part of the Airports Commission report published six years ago.
The commission said in July 2015 that an additional runway would deliver jobs, make long-haul routes profitable and boost the economy.
However, yesterday Davies admitted that the pandemic now raised serious doubts over the expansion.
Asked by LBC radio if a new runway was needed, he said: “Not at the moment, quite clearly. Heathrow would be delighted to fill the two runways it’s got just at the moment and it’s nowhere near it.”
The new runway is intended to boost Heathrow’s capacity by 50 per cent, allowing it to handle up to 280,000 extra flights a year. However, it recorded a 72.7 per cent reduction in passenger numbers last year, dropping from 80.9 million in 2019 to 22.1 million.
Davies, chairman of NatWest Group, said that the pandemic had dramatically changed people’s working patterns and trust in video-conferencing technology, meaning far fewer people would now travel for business.
The intervention was seized upon by opponents of the two-mile runway which is expected to be built at an initial cost of about £14 billion. The scheme has already been thrown into huge doubt in recent years. Theresa May’s government backed the plans in 2018 based on the Davies recommendation, triggering a lengthy planning process.
The Court of Appeal ruled in February last year that the government’s backing was unlawful because it failed to take account of climate change commitments. This was then overturned by the Supreme Court in December.
However, Boris Johnson refuses to endorse the plans. Heathrow itself has now admitted that the plans have been put on the back-burner pending its recovery from the pandemic.
Davies insisted that if a new runway was needed in the southeast it must still be at Heathrow. However, asked if he was still in favour of the project, he said: “I would have to redo the numbers to see if the economics made sense.
A Heathrow spokeswoman said that “demand for aviation will recover from Covid and sufficient hub airport capacity to support a global Britain will be required”.
Comment by the No 3rd Runway Coalition:
Third Runway no longer needed
The former Chair of the Airports Commission, Sir Howard Davies is no longer convinced that
an economic case can be made for Heathrow Expansion.
When asked yesterday by Nick Ferrari on LBC (1) whether he was still in favour of the project, Sir Howard said: “I would have to redo the numbers to see if the economics made sense.”
Indeed, the Department for Transport’s own analysis (2) consistently revised down the
economic benefits assessed by the Airports Commission and highlighted that any delay to the project may eliminate any such benefits all together.
Many campaigners have long called on the Government to review the Airports National Policy
Statement in light of delays to the project and increasingly stringent climate targets.
Paul McGuinness, Chair No 3rd Runway Coalition said:
“It is remarkable that the leading advocate of Heathrow’s expansion now doubts that an
economic case can even be made for the project. This is before one considers the noise, air
pollution and carbon impact the project would have. For the sake of the many communities
who have long feared it, the time has surely now come for the government to rule out
Heathrow Expansion, once and for all.”
H5GPX3/ from 00:45:20
2. DfT (2017) Updated Appraisal Report https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653879/updated-appraisal-report-airport-capacity-in-thesouth-east.pdf
For more information, contact:
Rob Barnstone on 07806947050 or firstname.lastname@example.org
Paul Beckford on 07775593928 or email@example.com
How Heathrow’s new runway would be funded, (higher landing costs, more costs to taxpayer) – all unclear
Heathrow’s plans for a 3rd runway, and associated building, are due to cost the airport at least £18 billion (not including unexpected over-runs and engineering problems etc). Heathrow now wants the right to make airlines and passengers contribute to any unexpected higher costs. The CAA controls the amount Heathrow can charge airlines. Heathrow has asked the CAA to factor in a huge array of risks from building the 3,500 metre runway across the M25 into the charges it is allowed to claw back from carriers. Heathrow keeps insisting its landing charges would remain close to current levels, aviation experts said there are few credible alternatives to charging users more. IAG believes the huge construction costs will lead to charges doubling to landing charges per passenger, from about £40 now to £80 for a return ticket. Heathrow is mainly owned by overseas investors. As well as higher than expected costs of construction, there are risks such as lack of interest from airlines in taking up the new landing slots; financial markets turning against the airport, leading to a downgrade of its credit rating; higher debt costs; and politics. There is real fear that if the Heathrow expansion project was allowed, the costs – many £ billion – might fall on the taxpayer – if the enterprise becomes a bit of a white elephant. The Airports Commission and DfT have said little about this massive risk to the public finances.
Independence of Airports Commission questioned over Howard Davies’ role in Prudential, which recently bought more Heathrow property
Campaigners against a 3rd Heathrow runway have questioned the independence of the Airports Commission and its chairman, Howard Davies. It has been revealed that he is a board member of Prudential, an insurance group which invested in property near Heathrow, just months before the Commission recommended a 3rd runway. He chairs its risk committee, which reviews and approves group investment policies as well as advising the board on risks in the company’s “strategic transactions and business plans”. The Guardian reports that Prudential embarked on a £300m spending spree on properties around Heathrow, just as the commission prepared to deliver its final report, on 1st July. Prudential has an asset management business, M&G. In 2013 it bought the Hilton hotel at Terminal 5 for £21m and an earlier investment with planning permission for a large hotel close to where the proposed 3rd runway would be built. In May and June 2015 M&G bought more property including cargo depots and a business park a short distance from Terminal 4. Howard Davies also, till September 2012, advised the GIC (Singapore), which owns 11.2% of Heathrow. The Teddington Action Group say Davies’ links with Prudential undermines the impartiality and credibility of the Commission’s recommendations.
Heathrow third runway unanimously recommended by Airports Commission, but with conditions
The Airports Commission has recommended that a 3rd runway should be built at Heathrow, but only if it can meet stringent conditions on noise and air pollution. Those conditions should include a ban on night flights, legally binding caps on noise and air quality – and legislation to rule out ever building a 4th runway [unlikely to be effective?] .The Commission has said their view was “clear and unanimous” that Heathrow’s plan was the strongest case for a runway, delivering the greatest strategic and economic benefits, and they hoped the conditions would make the airport a “better neighbour” than today. The conditions are: – A ban on all scheduled night flights from 11.30pm to 6am….- No fourth runway – the government should make a firm commitment in parliament not to expand further. Davies states: “There is no sound operational or environmental case for a fourth runway.”….- A legally binding “noise envelope”…..- A noise levy on airport users to compensate local communities…. – A legal commitment on air quality (details to be announced, compliant with EU limits)…. – A community engagement board to let local people have a say…. – An independent aviation noise authority to be consulted on flightpaths and operating procedures at airports….- Training and apprenticeships for local people. The government must now decide whether to act on the recommendation – by autumn, or before Christmas.
A third runway at London Heathrow airport will never fly
Philip Stephens (Financial Times Columnist)
You need not be a cynic to suspect policy-based evidence-making
Britain’s Airports Commission has done what was expected of it. It has called for a third runway at Heathrow. You do not have to be a cynic to suspect policy-based evidence-making. Unkind souls might call the report an establishment stitch-up. Never mind. Its conclusions are destined for the long grass. The pity is that money, time and energy will be wasted on a debate that can have only one outcome. Forget the commission’s expensively deceptive cost-benefit analyses. The runway will never be built.
Heathrow is in the wrong place — on the wrong side of the capital, more precisely. Its flight paths run directly above some of the city’s most densely populated neighbourhoods. Some 750,000 people — a full 28 per cent of those across the entire EU whose lives are blighted by aircraft noise — are unlucky enough to live near London’s largest airport.
Britain’s Supreme Court has ruled that air pollution levels around Heathrow — most dangerously, nitrogen dioxide — already breach the legal limits. To add another 250,000 flights a year to the present 470,000, with the concomitant increase in road traffic, is simply unimaginable.
For all the £20m spent on the report, it is still not certain that London actually needs a new runway. The city already has seven spread over six sites, as good as any serious competitor in Europe, and much of the capacity remains unused. Air traffic projections are notoriously unreliable. Only a fool would gamble tens of billions of pounds on a flimsy prediction that London may be short of capacity by 2030.
The case made by Heathrow management that London’s reputation as a centre for global business depends on the airport upgrading its “hub” status by handling more transit passengers is flimsy at best. The proportion of business passengers has been falling — from 38 per cent at the turn of the century to 30 per cent last year. More than two-thirds of those who pass through the airport are tourists. To slot in more flights for business leaders to the booming cities of China, Heathrow has merely to cede to Gatwick or Stansted a few bucket-and-spade routes to Mediterranean resorts.
The importance of transit customers is overstated. The growth in air travel has been in point-to-point flights by smaller, fuel-efficient aircraft. And, unlike Frankfurt or Amsterdam, London is the final destination for the vast majority of air travellers. Heathrow counts 36 per cent of its passengers as in transit but across the capital’s airports the figure falls to below 15 per cent.
As it happens, Heathrow is a terrible advertisement for Britain. Beyond the superficial glitter of Terminal 5, much of the site comprises a series of down-at-heel sheds bursting at the seams with lucrative (for the airport operator) shopping concessions. Those unfortunate enough to arrive at, say, Terminal 3 can only shake their head in wonderment that one of the world’s pre-eminent cities can be content with such squalor. Delays and disruption are endemic. Of the dozen flights I took in and out of Heathrow in the past two months, I counted only two that left or arrived in time.
The cost to the public purse is prohibitive. The commission guesses at a price tag of £18bn or so for the runway, with another £5bn-£6bn for the necessary improvements to surface transport to cope with the extra passengers. Transport for London has suggested the latter figure could end up as high as £20bn. That may be an overestimate. But, whichever way you look at it, British taxpayers would have to pay a massive subsidy to the shareholders of Heathrow.
So why has Heathrow fought so hard for a new runway? Easy. It wants to stifle competition. The airport is a cash cow, but slightly less so since the Competition Commission forced it to divest ownership of Gatwick. London’s second airport has been transformed by the break-up, but a third runway, the Airports Commission acknowledges, would divert back to Heathrow traffic from London’s other airports. The owners would regain a near monopoly.
What London needs are better surface connections between the other airports and faster rail and road routes into the capital. Heathrow will soon benefit from Crossrail. Rather than spend billions diverting the M4 and M25 motorways around Heathrow the government should be investing in surface connections to Gatwick and Stansted. If, as is possible, capacity does come under strain, it would be much cheaper and faster to add a second runway at Gatwick.
Politics will combine with logic to doom a third runway. David Cameron, the prime minister, does not have the majority to take the legislation through parliament. The heavyweights in the Conservative party opposed to expansion are led by Boris Johnson, the London mayor, and his would-be successor, Zac Goldsmith. They are backed by several members of the cabinet and by many local Tory MPs.
So this is one of those moments in politics when a prime minister can marry principle with pragmatism. “No ifs, no buts, no third runway”, the prime minister promised a few years back. He was right.