Heathrow or Gatwick, cargo’s quiet voice in the great debate
07 / 12 / 2015
It will all be over by Christmas. Honest.
That is the predicted timeline for the UK’s Conservative government to decide on whether to push ahead with a third runway at London-Heathrow airport, a length of concrete that will not set until 2025 at the earliest.
The other option is to give London-Gatwick a second runway, which could be delivered more quickly and at less cost than its rival, although Heathrow was the favoured choice of the independent Airports Commission, under Sir Howard Davies, which reported in July this year.
The UK aviation industry is still waiting for the Cabinet – the top table of government ministers – to reach their decision. There is talk of a split among ministers, with anti-Heathrow members threatening to resign, while last week’s Parliamentary committee report on the environment preferred Gatwick.
However, an early decision was the opening message from the first speaker at a conference on The next steps for UK airport and capacity and the Airport Commission’s final report, a debate attended by the who’s who of the UK’s aviation scene: the political transport class, government departmental mandarins, pressure groups and airline/airport executives.
Baroness Randerson, House of Lords transport spokesperson for the Liberal Democrats, said that ministers had indicated that a decision would be “taken before Christmas”.
However, the emergency Parliamentary debate and vote on the bombing of Syria by the RAF has delayed the more mundane Heathrow v Gatwick decision-making process, but the baroness was still optimistic that an outcome was on landing approach.
Airfreight did get a mention at the conference: a throwaway comment that it contributes £5bn in annual revenues for Heathrow, while another speaker spoke of diesel emitting trucks transferring cargo to and from Heathrow. Gatwick’s cargo presence was not even mentioned.
For the record, Heathrow handled 1.5m tonnes in 2014, and Gatwick 88,000 tonnes.
This lack of an air cargo voice in the big debates is not unusual, as the discussion around new airport infrastructure often centres on a wide range of passenger related issues and hub connectivity.
Both of these matter, because widebody aircraft with capacious bellyholds on established or emerging trade lanes are an important part of the cargo agenda and key economic components of the airfreight industry.
The broader airports debate at the conference included best economic use of runway capacity, the future need/role of hub airports and their connectivity, expanded transport infrastructure, the role of new technologies to manage crowded airspace, plus the enormous influence of environmental sustainability and aircraft noise mitigation issues.
UK aviation policy, or the lack of it, and the glacial decision-making process on big transport projects were recurring themes throughout the half day meeting.
Louise Ellman, MP and chair of the House of Commons Transport Select Committee, spoke of a “policy gap” and the absence of a UK aviation national policy statement, a missing framework touched upon by business people in the audience who spoke of the “incredulity” of potential investors from China and India who needed to gauge UK government guidelines.
Ellman’s committee published its own report into the question of airport capacity in May 2013 and opted for Heathrow having additional runway capacity but did not put a block on Gatwick getting its second runway at a future date.
In case you are wondering why we cannot have both, it was stated at the conference that the investment cake was not large enough to satisfy both projects, unless the taxpayer was prepared to make a substantial donation.
So, why have we waited so long? Dr Stephen Hickey, of the Independent Transport Commission, said of the UK airport capacity issue: “This debate has been going on for 50 years and the government hoped that the Davies commission would bring consensus, but the debate has not calmed down and any decision will not be the end of the matter. People will continue to fight their corner.”
This view of a litigious landscape post a pro-Heathrow decision was reinforced later when Charles Kirwan-Taylor, corporate affairs and sustainability director for Gatwick Airport, was asked from the floor if Gatwick would mount a legal challenge to that result.
Kirwan-Taylor answered that it “would not need to”, thus implying that others would take up the legal baton against a Heathrow third runway, at the subsequent planning inquiry.
There are plenty of pro-Gatwick stakeholders ready to battle on.
As Hickey said, the arguments have become split between “right and left brain”, in other words between emotional and rational thought: “It is rather a shame that this has become a binary, win or lose, Heathrow v Gatwick debate and not about where we build a bit more tarmac in the south east of the UK.”
Hickey made the point that “connectivity and capacity are not identical” but observed that the hub and spoke model continue to be “at the heart of global connectivity”.
Concorde’s longest serving pilot, Capt. Jock Lowe, spoke in his role as a director of the Heathrow Hub pressure group: “Airlines need to be profitable and for that you need a route and for that you need demand. The world is littered with white elephant airports.”
While not suggesting that Gatwick is a white elephant, Lowe hinted that it was a more of a minnow when compared to big fish Heathrow, with £2bn of passenger fare revenues versus £15bn.
Lowe later added – inter alia – that airfreight revenue increased the Heathrow figure by £5bn, which says much about this whole debate and air cargo’s ‘tail-end Charlie’ position within it.
Lowe made the point that hub airports serve a vital role, giving the example that airlines can serve eight destinations with eight routes via a hub, while the point to point model requires 28 routes to do the same job.
There was also the suggestion that well-connected hub airports attract new routes to emerging markets, nurturing them so that they build up a critical mass for additional point to point services at smaller airports.
Kirwan-Taylor later countered this assertion by saying that a number of Gatwick’s new routes were not currently served by Heathrow and that widebody aircraft are “hub-busters” making point to point routes economically viable.
Kirwan-Taylor said that Gatwick is “the largest single-runway airport in world” with 41m passengers in 2015, compared with San Diego in second place with just 18m passengers. He also said that Gatwick handles 55 air traffic movements per hour, compared with 82 for Heathrow, arguing that his airport is more efficient.
Chris Chalk, aviation practice leader with Mott MacDonald, stated that the current “winner takes all” approach to runway capacity had created polarisation within an industry, resulting in “a war of words and a war of statistics” which had many foreign observers “looking in puzzlement as to why we don’t have a transport policy and can’t get our act together when everybody else can.” A very good question.
Chalk, with a nice comic touch, echoed the thoughts of many when he said: “I hope that this decision does not get kicked into the long grass, although we are mowing furiously”.
Rhian Kelly, director for business environment at the UK business bosses club, the CBI, wanted a decision as “a chance to end this cycle of delay”, arguing cogently that the Airports Commission had “a solid, evidence based approach” and that the government should not “duck the issue” while acknowledging that “it is not an easy decision for the government to make”.
Kelly stated that eight new routes to emerging markets can add £1bn to the nation’s trade and that “demand is outstripping supply”.
Over to you, Number Ten Downing Street.