3. Background Information
4.1 There are some fundamental issues addressed as part of the Consultation
Document. The Government has confirmed its commitment to ensuring that any
long term development is sustainable; that there is a balance to be struck
between social and economic benefits on the one hand and the environmental
effects on the other. However, the issues are complex and decisions in one
area have implications in a much wider European economy. Airports take
considerable time to develop and European capacity has been growing rapidly
such that a number of major European hub airports - Charles de Gaulle (Paris),
Schiphol (Amsterdam) and Frankfurt have available capacity at almost twice the
level of Heathrow.
4.2 The air industry is an important component of the UK economy, 60% of
the South East population will fly at least once a year and airborne inward
tourism is a major part of the UK economy. UK business is international, with
a fifth of all international passengers in the entire world beginning or
ending a journey at a UK airport.
4.3 The economic consequences of either catering for high growth in airport
capacity, or of constraint, are enormous in terms of the UK economy. The job
creation and effects of additional airport capacity could add between
55-80,000 additional jobs in the South East to add to the existing 160,000
jobs at the four major London airports. The regeneration impacts of airport
development on any local economy are likely to be significant.
4.4 Accessibility to key markets is important – currently there is much
more demand for air travel from west of London than from any other part of the
UK.
4.5 Failure to build additional capacity could result in higher costs to
passengers; would be likely to suppress demand for flying (particularly in the
leisure market) and a more dispersed operation of the airport market would be
likely to result in a downgrading of UK airports for international
connections. Regional development and airport growth are considered to be
directly linked.
4.6 At present, demand at Heathrow far exceeds the available slots. This
results in delays, constrained route development and limits international
connections. It is likely this will continue to result in higher costs
(Heathrow is currently more expensive to fly from than European rivals) and
has meant that Heathrow has developed fewer point to point regional links,
than other major European airports.
4.7 At the same time, major European Airports have either expanded their
available capacity or have plans to do so, such that the major competition in
Europe already has capacity at more than twice the level of Heathrow. Most of
the major hub airports in Western Europe have either three or four runways (or
plans to have them) whereas Heathrow has just two runways.
4.8 The benefits of hub airports are:
- that they provide a greater number of destinations served direct;
- the majority of destinations are serviced at high frequencies;
- the number of destinations serviced "one stop" is increased;
and
- Efficiency savings for airlines can be passed onto passengers through
lower fares.
4.9 Concentrating capacity at a large airport in the South East would need to
meet certain key requirements:
- Sufficient customer demand to generate the necessary levels of traffic;
- Proximity to a large number of people who want to fly;
- Good surface access;
- High local attractiveness to business and tourism;
- Adequate airport infrastructure to support the level of demand and to
allow sufficient operational flexibility;
- Presence of one or two major airlines providing a large proportion of
capacity, frequency and destinations in a co-ordinated way.
4.10 There is no doubt that London is capable of supporting at least one large
hub airport.
4.11 The issue relates to whether that should be Heathrow or if it should
be created at another location. Out of a total demand in the South East of 202
mppa (million passengers per annum) in 2015 and approximately 300 mppa in
2030, it is estimated that Heathrow would attract, in an unconstrained
environment, 126 mppa in 2015 and 202 mppa in 2030. Whilst this amount of
growth would be unsupportable, it illustrates the attractive power of Heathrow
to both passengers and airlines and the difficulty of developing another
location.
4.12 In order to meet anything like the demand, Heathrow is considered to
need a third runway with all of the environmental consequences that this would
entail.
4.13 The alternatives, contained in the report, are to expand Stansted to
take on the role of hub operation or, to construct a new purpose built airport
at Cliffe, Kent. There is no proposal to expand runway capacity at Gatwick,
due to the current legal agreement between the Local Authority and the owners,
which prohibits additional runway capacity to post 2020.
4.14 One of the principal issues, therefore, in relation to the forecast
demand is to ascertain if there is support for two hub airports - Heathrow
and/or either Stansted or Cliffe.
4.15 The Consultation Document indicates that demand for slots at Heathrow
is almost insatiable. If one accepts the forecast demand for air travel and
leaves aside any doubts as to whether that will be achieved and how it may be
made up (long-haul international hub connections or short-haul point to point
travel) then if the UK is to maintain its dominant position as the dominant
international air destination, then the issue of hub development has to be
addressed.
4.16 Developing a third short runway at Heathrow could free up slots for
international carriers on the existing main runways, but at what cost to the
environment and to an already overheating economy in that area.
4.17 Limiting development at Heathrow/Stansted and developing an entirely
new international hub airport at Cliffe would be extremely expensive, would
not make the best use of the existing infrastructure and would have major
environmental consequences. It is also likely to be difficult to deliver and
as a consequence would be unlikely to be capable of delivering within 10-15
years, if at all.
4.18 Stansted offers the best option for international hub development, as
it already exists in terms of basic infrastructure and in terms of local
accessibility and could be carried out as a phased/incremental development at
relatively less cost than other options, and whilst all airports have
environmental problems of noise traffic etc, comparatively less than the other
hub options.
Forecast of Demand
4.19 Forecasting demand in a dynamic industry such as aviation is
extremely difficult. Particularly in relation to situations such as September
the 11th; the environmental consequences of aviation travel in
relation to the greenhouse effect; the down turn in travel that could result
if air fares became more realistically priced, etc. Nevertheless, if the
Government have endeavoured to forecast demand over the next 30 years. The
national forecast is for approximately 500 million passenger movements in 2030
with a midpoint forecast for the principal South East airports at a little
over 300 million passengers in 2030 – (current capacity (2000) in the South
East is 114 mppa, current capacity in UK (2000) is 180 mppa).
4.20 However, there is little information in the Consultation Document on
how the Government see this level of growth developing. For example, the major
growth in recent years has been in ‘point to point’ flights by low cost
airlines. Will they continue? Will there be resurgence in premium fare paying
passengers? What percentage of that growth will require transcontinental
levels of facilities? These are important issues which affect the type of
airport development required – ‘point to point’ does not require large
hub style interconnections.
4.21 At least, and to make the best use of existing investment in
infrastructure, the Government should make the maximum use of existing
facilities rather than endeavour to create new capacity for markets that may
not exist in future.
The Development Options
4.22 A substantial part of the study looks at the various options for each of
the main South East airports, as well as possible new airports such as Cliffe.
In addition, other South East airports are reviewed, including Manston. In
view of the level of detail involved, the options considered in the study, and
their implications, are set out in Appendix
I to this report for Members to study.
4.23 The disappointing thing from the point of view of developing Manston
is the level of consideration given to the contribution that Manston could
make to the development of Airport Capacity in the South East. The Council has
never seen Manston as ‘London’s 5th Airport" despite press
comments, by those opposed to Manston, who have tended to exaggerate the
situation.
4.24 Nevertheless, Manston can play a supporting role in meeting some of
the shortfall in capacity, particularly in view of the relatively limited
investment required when compared with other proposals which have been
investigated.
4.25 In that respect, the Council considers that Manston should be
recognised in the White Paper, when it appears, as offering a relatively low
cost (in infrastructure terms) contribution to the development of runway
capacity in the South East, and as such should be encouraged to expand to
accommodate between 6-10 mppa by 2030 and to cater for substantial growth in
freight, whilst recognising the limitations, particularly as a 24 hour
operation.
Freight Development
4.26 If anything, airfreight is developing faster than air
passengers. The emphasis is on the transport of high value goods carried
mostly as belly cargo on passenger aircraft. There is, however, a substantial
trend towards dedicated freight services, which are gradually being pushed out
of the main London Airports. The market is currently dominated by two factors
– the growth in small package/express parcels and secondly the demand for
freight carrying facilities is outstripping the ability of passenger aircraft
to carry freight as belly freight. The main issues for the development of
airfreight business relate to capacity and night time access. Various
scenarios for increasing freight capacity in the South East are put forward in
the strategy, which are directly related to the growth in passenger
throughput. Increased passenger throughput at some airports means less
capacity for freight; hence development of Stansted for passengers reduces the
ability to handle freight. Development of a 24-hour airport at Cliffe,
increases capacity for both freight and passengers at that airport, if built.
Night-time Access
4.27 The express parcel sector currently requires 24 hour
operation so that next day delivery requirements can be met. This is an area
which has seen substantial growth in business, but has consequences in terms
of disturbance of the residents in the area.
4.28 The report suggests a number of ways in meeting demand for night-time
access:
- A new 24 hour runway at either Cliffe or Alconbury (or both);
- Additional use of existing or new 24 hour runways outside of the South
East (East Midlands)?
- A managed change in the market demand such that there are more day time
flights for freight aircraft and fewer night-time movements;
- Use of continental airports which are available for 24 hour use;
- Relaxation of night-time movement caps at existing airports to permit
greater night-time use.
4.29 This last bullet point suggestion is probably the least likely in view of
the growing concern in relation to sleep deprivation for those living close to
airports.