Business slams ‘dithering’ UK government over runway decision delay
11 / 12 / 2015
Airlines, shippers and business leaders have condemned the British government’s postponement of a decision on UK south east runway capacity expansion for at least six months.
The aviation industry had expected a mid-December decision on whether to push ahead with a third runway at London Heathrow, as recommended by the Airports Commission in May, or to pursue a second runway at London-Gatwick.
Carolyn Fairbairn, director-general of the UK business lobby CBI, said: “Delaying this decision on an issue of critical importance to the future prosperity of the UK is deeply disappointing.
“We urgently need to increase our runway capacity to spur trade growth, investment and job creation. Just eight new routes to emerging markets could boost our exports by up to £1bn a year.
“But by 2025 – the earliest a new runway would be built – London’s airports could already be operating at full capacity and the longer we wait the further we fall behind the likes of Amsterdam and Paris. If we don’t have a new runway up and running by 2030 the cost to the UK will be as much as £5.3bn a year in lost trade to the BRICs alone.”
The Freight Transport Association (FTA) of UK shippers warned the Conservative government that further delay in a decision on a third runway at Heathrow will “damage the UK’s international reputation and discourage investment from overseas”.
Chris Welsh, FTA’s director of global and European policy, said: “Yet another delay in a decision on future investment in airport capacity is damaging the UK’s international competitiveness.
"Approximately 40% of Britain’s imports and exports are dependent on airfreight. The UK’s ability to access existing and new markets is in danger of being seriously impaired by a failure to invest in Britain’s core infrastructure capacity.
“Worse still, as the government dithers, is the damage done to our international reputation and the signal it sends overseas investors who are likely to question the UK’s capability to invest in vital infrastructure required to maintain and enhance the UK’s connectivity.
“Organisations such as OECD and the World Bank have highlighted that Government interventions on infrastructure investment are essential in attaining good connectivity and efficient logistics and are vital components in a nation’s ability to compete in the global economy.”
UK forwarder organisation Bifa was also dismayed over the decision.
Bifa director general Robert Keen said: "Bifa has little doubt that this decision is about political expediency, not environmental matters, which must have been addressed in the work done by the Airports Commission during the three years it took to investigate the issues.
"The UK’s freight forwarding community, which is the engine of Britain’s international trade, needs the Government to stop playing political football with the issue of aviation capacity and make a decision.
"Every week that passes has a direct cost to the UK economy, its international connectivity and reputation.”
IAG chief executive, Willie Walsh, said: “To further delay a decision shows what we have repeatedly said – that party politics takes precedence over what is best for the economy."
The boss of the group that owns British Airways, Aer Lingus and Iberia of Spain, continued: “If a runway is built at Heathrow, there must be a fundamental review of the costs.
"Only around one percent of the £17.6bn is for the actual runway and more than £800m is for a new car park. No wonder Heathrow makes more money than any other airport group in the world.
“Terminal 5 cost £5.6bn in today´s money to build yet the new terminal, which will handle the same number of passengers, is slated to cost more than £8bn. If Britain is to develop new infrastructure, it should be efficient and cost-effective.”
Dale Keller, chief executive of Board of Airline Representatives in the UK, said: “Our airline members are dismayed that the uncertainty and indecision over expanding Heathrow is set to continue into next summer for what appears to be local political reasons, rather than the need for further environmental analysis.
“The Airports Commission spent almost three years and £20m to produce the most detailed independent report of its type ever commissioned. It therefore seems inconceivable that the government has had insufficient time, or a lack of information, to make the decision it long promised.
“The world’s airlines need certainty to invest in the UK and we urge the Government to urgently come to a decision since every week that passes has a direct cost to the UK economy, its international connectivity and reputation.”
Announcing the government’s decision, the secretary of state for transport at the Department for Transport (DfT), Patrick McLoughlin, said: “The case for aviation expansion is clear – but it’s vitally important we get the decision right so that it will benefit generations to come.
"We will undertake more work on environmental impacts, including air quality, noise and carbon. We must develop the best possible package of measures to mitigate the impacts on local people. We will continue work on all the shortlisted locations, so that the timetable for more capacity set out by Sir Howard [chair of the Airports Commission] is met.
“At the first opportunity I will make a statement to the House to make clear our plans.”
The DfT said that more work will be done on environmental impacts and that the government expects the airports to put forward "ambitious solutions".
Heathrow Airport management said that it has "full confidence in its new expansion plan” and pledged to work with government “to deliver Britain the hub capacity it needs within tough environmental limits”.
John Holland-Kaye, chief executive of Heathrow Airport, said: “The Airports Commission, announced by the Prime Minister three years ago, made a unanimous and unambiguous recommendation in July for Heathrow expansion.
“Our new plan will connect the whole nation to global growth while providing opportunities for the local community and making Heathrow the most environmentally responsible hub airport in the world. I am confident we can meet tough environmental standards."
“We have support locally and nationally from politicians, business, trade unions and the aviation industry for Heathrow expansion. Let’s get on and build a better future for Britain.”
Management at rival hub London Gatwick said that the delay is a “defining moment” in the airport expansion debate, adding: “Expansion has always been about the economy and the environment. Momentum is now behind Gatwick as the only legal option for expansion.”
Gatwick Airport chief executive Stewart Wingate said: “This is a defining moment in the expansion debate. There is now a clear choice facing Britain: growth with Gatwick or inertia at Heathrow with an illegal scheme that has failed time and time again.
“We have always maintained that this decision is about balancing the economy and the environment. Expansion at Gatwick would give the country the economic benefit it needs at a dramatically lower environmental cost.
“We are glad that the Government recognises that more work on environmental impact needs to be done. Air quality, for example, is a public health priority and obviously the legal safeguards around it cannot be wished away.”
Wingate continued: “Even Heathrow’s most vocal supporters must now realise a third runway at Heathrow will never take off as the environmental hurdles are just too high. If they want Britain to have the benefits of expansion and competition they should now look to Gatwick.
“Expansion has been in a holding pattern for decades. Momentum is now behind Gatwick as it becomes ever clearer that it is the obvious solution. We will continue to work closely with Government to take forward our plan which is legal, affordable, and can actually deliver for Britain.”