Airports Commission reveals expansion shortlist

 

Speeded up video from flightradar24.com of an hour of plane movements over south-east England

New runways at Heathrow and Gatwick are among the options that have been short-listed by the Airports Commission for expanding UK airport capacity.

The three short-listed options include adding a third runway at Heathrow, lengthening an existing runway at Heathrow, and a new runway at Gatwick.

The commission, led by businessman Sir Howard Davies, will also consider a new airport in the Isle of Grain in north Kent.

A final report is due by summer 2015.

Sir Howard Davies sets out the airport expansion options

The commission has not shortlisted proposals for expanding Stansted or Birmingham, but said there was likely to be a case for considering them as "potential options" for any second new runway by 2050.

Sir Howard was asked in 2012 to investigate the options for expanding the UK's aviation capacity and try to come up with a plan.

He said the Commission's analysis showed one net additional runway was needed by 2030.

"The capacity challenge is not yet critical, but it will become so if no action is taken soon," he added.

Analysis

There are four interesting elements of today's report.

It's Heathrow-heavy.

It hasn't written off the ambitious, expensive idea of building a new mega-airport on the other side of London in the Thames Estuary.

It misses off Stansted, despite it being picked for expansion by the last government. Stansted lost a lot of passengers in the recession.

It also suggests that we might not need one huge hub airport after all, because all the growth in recent years has come from low-cost carriers. In a nutshell, it makes the case stronger for a bigger Gatwick.

When I first took over the transport job, about two years ago, the government told me straight away that it would not expand Heathrow.

One of the first things the coalition did when it came to power was to cancel Labour plans for a third runway at the airport.

I've gone through my old notebooks and found this phrase written down, "dead and buried".

But after a great deal of lobbying from the airport's owners, other business leaders, airlines and the unions, as well as support from the Transport Select Committee, Heathrow is emerging once again, as a front-runner in the fight to get a new runway.

Sir Howard has set a deadline of 2030. But believe me, there are plenty in the industry - like Willie Walsh at British Airways, for example - who still don't think that in the end, anything will actually ever get built.

The Commission has short-listed the following proposals to investigate ahead of its final report:

  • A new runway at Gatwick Airport more than 3,000m in length
  • A new 3,500m runway at Heathrow Airport constructed to the north-west of the existing airport
  • An extension of Heathrow's existing northern runway to the west to at least 6,000m, enabling it to be used for both take-offs and landings

The Mayor of London, Boris Johnson, has said that putting a new runway at Heathrow would be a "catastrophe".

Following the commission's report, Mr Johnson said he continued to support the creation of the Isle of Grain airport in north Kent.

"A new airport in the inner estuary is the only credible hub option left. By keeping it on the table, Davies is saying you have a choice - between a damaging U-turn or a radical new vision for expansion," he said.

In its report, the Commission calculates an Isle of Grain airport would cost up to £112bn - around five times that of its three short-listed options.

However, it said it would look at it in the first half of 2014, to reach a view on whether the option offered "a credible proposal".

"The overall balance of economic impacts would be uncertain - particularly as an Estuary airport would require the closure of Heathrow for commercial reasons and London City for airspace reasons," it says.

Meanwhile, supporters of Heathrow's expansion say it will be quicker and cheaper than other options and will help to maintain the UK as an international aviation hub.

Heathrow's owners submitted evidence to the commission arguing that a new runway could be in place by 2029, allowing 260,000 more flights.

Start Quote

Keeping the banking system solid and sound looks a rather more important priority than whether or not Heathrow gets a new runway or the London Mayor builds his vast new flying city on the Isle of Grain”

End Quote

Colin Matthews, Heathrow chief executive, told the BBC: "The case for Heathrow is strong. It's important that businesses can get around the globe to where economies are growing.

"We've got Paris and Amsterdam, Frankfurt desperately trying to eat our lunch, they want to have the business that the UK benefits from today."

John Cridland, head of business lobby group the CBI, said that urgent action was needed from the government when the commission's final recommendations were made in 2015.

"It is no longer acceptable to bury our heads in the sand on this," he added.

Heathrow is one of the world's busiest hub airports, handling 70 million passengers in 2012.

Graphic: Expanding Heathrow

But the airport operates at 98% of its capacity.

When the coalition government came to power in 2010, it scrapped the former Labour government's plan for a third runway at Heathrow.

The government said on Monday that it had not ruled out any options when it came to airport expansion in the south-east of England.

Map: Gatwick options Gatwick identified three options for a second runway, but the Davies Commission shortlisted Option 3, which would allow fully independent operation.

On Sunday, Transport Secretary Patrick McLoughlin said that the government would stick to its pledge not to build a new runway at Heathrow before 2015.

He told the BBC: "We will not be building a third runway in this Parliament. We will stick by our manifesto commitment."

 

More on This Story

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    +1

    Comment number 880.

    I still can't fathom why more play hasn't been made regarding Kent International. It already has a large runway from its former military use and, although it's some way outside London, already has HS1 nearby (going into Ramsgate).

  • rate this
    +29

    Comment number 860.

    I thought this was supposed to be a report on UK airport capacity, not London & the South East. Get more flights from regional airports to save half the country having to travel to the gridlocked south east to fly, and you free up capacity for the beloved London hub airport. Airspace is the main problem for the future in the south east, not tarmac!

  • rate this
    +23

    Comment number 713.

    I do not understand why, in such a small country, why we do not consider Birmingham. If the high speed rail link is to go through this will mean that transport from a Birmingham hub to ANY of the major cities will be less than an hour, This is about the same as High Barnet , or Kew/Richmond to central London, Plus Leeds, Manchester, Liverpool etc are all available.

  • rate this
    -26

    Comment number 711.

    Expanding Heathrow should be the only viable option. Heathrow is centrally located (driving distance from most parts of England), and 1 massive hub is much better than 2 big hubs. Gatwick and Heathrow are not exactly next to each other.

    Yes there will be noise issues but Heathrow has created lots of local jobs and therefore people live there.

  • rate this
    +3

    Comment number 586.

    I live under the Heathrow flight path but am all up for expanding Heathrow. What I might lose in peace and quiet, I'm going to gain in convenience when it comes to my holidays. Swings and roundabouts really...

 

Comments 5 of 8

 

More Business stories

RSS

BBC Business Live

  1.  
    MARKET REACTION 07:07: BBC Radio 4

    Mike Amey, managing director and portfolio manage at bond trader PIMCO tells Today he expects the markets to open higher as a result of the Scottish referendum result. "It will be back to the data for our traders and what the Bank of England will do [on interest rates]."

     
  2.  
    MARKET REACTION 06:49: Radio 5 live

    Adam Parsons is in the City at the offices of stockbrokers IG with their chief market strategist, Brenda Kelly. She says the opening of the FTSE 100 might be quite as dramatic as some expect. That's because markets have been predicting this outcome over the last few days. However, she says, it could "break through 6930" which would be a record high.

     
  3.  
    06:42: Via Email Linda Yueh Chief business correspondent

    There are other uncertainties now for Scotland after this vote. But, for markets at least, the big uncertainty that could have lingered for a year and half over the currency and the economy is lessened and sentiment is positive as a result.

     
  4.  
    06:33: Louise Cooper, CooperCity market blog

    "So it's up up and away this morning, the question is how far does it [the pound] go before reality sets back in and other political fears begin to dominate: The rows in Westminster over devolution max which has been promised. The General Election and the UK referendum on EU membership. Party conferences season resumes next week so there will be plenty of headlines to be written about the next set of political risks."

     
  5.  
    CITY REACTION 06:27:

    The Lord Mayor of the City of London, Fiona Woolf has welcomed the outcome of the Scottish referendum. "The proposed enhanced devolution that Scotland will experience while remaining in the UK will enable its national spirit to thrive while our entwined economies and business communities prosper together," the Lord Mayor said.

     
  6.  
    YES CAMPAIGN CONCEDES 06:23: BBC Radio 4
    Scottish first minister Alex Slamond

    Scotland's first minister Alex Salmond has hailed 1.6 million votes for independence. He concedes that "we now know there is going to be a majority for the "No" campaign". Scotland has, by majority at this stage, voted not to become an independent country," he adds. He expects devolution promises to be honoured with "rapid force".

     
  7.  
    ROYAL BANK OF SCOTLAND Via Email Kamal Ahmed BBC Business editor

    With No confirmed as the winner in the referendum, we can expect the Royal Bank of Scotland to say there is now no need to move domicile to London. The bank had prepared for a "Yes" vote by saying last week that it would move its headquarters from Edinburgh. I wouldn't be surprised if Ross McEwan, the chief executive, re-iterated the bank's commitment to Scotland. I am sure RBS's executives are relieved that the upheaval of independence will now not happen.

     
  8.  
    POUND STRENGTHENS 06:12:

    A decisive win for the No campaign could lead to big spike in the Pound. Jeremy Cook, economist at World First says. The obvious risk to the currency markets was a Yes, and that would have caused a big sell off. Now the markets will go back to concentrating on the fundamentals of the UK economy," he adds.

     
  9.  
    SCOTLAND INVESTMENT 06:01:

    Simon Walker, director general of business group the Institute of Directors has given an interview to the BBC. He says he thinks the government will now give the green light to investment projects that had been previously held up because of the uncertainty caused by the independence referendum. He adds the ending of that uncertainty will be positive for business.

     
  10.  
    POUND STRENGTHENS 05:54:
    pound versus dollar

    This chart shows the pound against the dollar over the last month. You can see it dipped to a low of $1.6071 on 10 September. That was after a poll in the Sunday Times showed a lead for the "No" campaign. It is now trading at $1.65. That's a move of 5 cents which is pretty big over two weeks.

     
  11.  
    MARKET UPDATE 05:47: BBC Radio 4

    Asian markets are up nearly 2% overnight BBC business correspondent Linda Yueh, tells Today. The market indications are that the FTSE 100 will open 0.7% higher. That's not exactly a surge but it is a positive reaction.

     
  12.  
    BANK OF ENGLAND 05:42: BBC Radio 4

    Justin Rowlatt is down at the Bank of England for BBC Radio 4's Today programme: He says the lights are on and staff are busy working inside. Although perhaps not quite as frantically as if Scotland was looking on course to vote Yes in the referendum. Bank governor Mark Carney cut short a meeting to fly home overnight. "He may have had a wasted trip," Justin says.

     
  13.  
    POUND STRENGTHENS 05:36:
    Pound dollar

    This chart shows how the pound has faired against the dollar since the polls closed in Scotland on Thursday evening. As you can see it's strengthened from a low of $1.63 to above $1.65, that's its highest point since the start of the month. In currency market terms it's also a huge move in a short space of time.

     
  14.  
    05:30: Ben Morris Business Reporter

    The pound has bounded higher overnight in reaction to the Scotland vote. More reaction through the morning. Stay with us.

     
  15.  
    05:30: Matthew West Business Reporter

    Morning folks. It looks like - with 26 of 32 local authorities now having declared the result of their ballots- that the No campaign is on course to win the Scottish independence referendum. We'll bring you all the reaction from the financial markets and the business community as it comes in. As always if you want to get in touch you can email us at bizlivepage@bbc.co.uk or tweet us @bbcbusiness.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.