The great airport debate: Do you want to be a hub or a spoke?
15 / 09 / 2016
Will Britain choose to be a hub or a spoke? That was a question posed in a debate about the looming political choice for additional airport runway capacity in the south east of England.
The speaker posing a rhetorical question, at least from his perspective, was Heathrow airport chief executive John Holland-Kaye.
Holland-Kaye was addressing a well-attended conference audience at the Westminster Policy Forum in London, which listened to a wide range of speakers on the next big UK infrastructure decision facing the new Prime Minister Theresa May: A third runway for Heathrow Airport or a second one for Gatwick Airport?
Rather like the June 2016 referendum which saw a UK decision (Brexit) to leave the European Union (EU), the country’s runway debate is also binary: either Heathrow or Gatwick will get the government nod.
The reason is that the independent Airports Commission, under Sir Howard Davies, was asked only to consider the strategic options for a single new runway in the south east, hence the commission’s July 2015 decision to favour Heathrow over Gatwick.
The fact that both Heathrow and Gatwick airports are straining to handle existing traffic was not allowed to complicate things.
May’s predecessor, David Cameron, deferred a final decision and most people expect a government announcement sometime between now and the end of October. It will end 50 years of debate.
The Westminster Forum heard from a variety of expert voices, including environmental specialists, local council representatives, aviation and regulatory authorities, plus the two protagonist airports themselves.
Holland-Kaye used Brexit and the Prime Minister’s leitmotiv “Britain is open for business” to project Heathrow as the natural choice for a UK that is turning towards greater international engagement.
He said: “Leaving the EU means that it’s more essential than ever that we create trading links to the growing markets of the world – and that we control our own trade routes.
“Only Heathrow expansion can do this. And it’s an urgent task, if we are to have a strong and fair post-Brexit economy.”
Holland-Kaye added: “As a hub, we pool demand from across the whole of the UK and Europe. As such, we can support regular, year round flights to long haul emerging markets that just cannot be supported from point-to-point airports.
“We can do this because of cargo, and because of transfer passengers. They fill up planes even at quieter times of the year to make regular flights to long haul destinations viable.
“And pooling demand at a hub will always be the most efficient way of connecting people and things.”
He repeated the point that “the same planes that carry Britain’s exporters around the world also carry their exports – in fact almost 30% of all non-EU exports go by air from Heathrow.
“Anything high value, with a short supply chain or a short shelf life goes by air from Heathrow. Heathrow provides Britain’s trade routes to growth markets, and helps us to be an independent and strong trading nation.”
In a rhetorical flourish, Holland-Kaye asked: “So the real question we face is quite simple.
Which will Britain choose to be – a hub or a spoke?
This idea was later challenged by Nick Dunn, chief financial officer of Gatwick Airport, who forcibly made the point that Gatwick’s second runway would have the same economic outcome for the UK aviation market as a whole, based on Airport Commission figures, but would be quicker to build, at a lower cost, and affect far fewer local residents in terms of noise pollution than Heathrow.
Gatwick will handle 43m passenger this year, a figure that the Department for Transport thought it would reach only by 2024, such has been the rapid development of the hub since it was sold and separated from former-sibling Heathrow in 2010.
There was one fly in the Gatwick ointment, the news that a “hole in the runway” had caused severe flight disruptions the day before. A spin doctor could surely use that as even firmer evidence of the need for a second runway.
In freight terms, Heathrow and Gatwick are unevenly matched. Heathrow handled just under 1.5m tonnes in 2015 and Gatwick 73,000 tonnes. Heathrow expansion is also backed by UK shipper groups such as the Freight Transport Association and many business leaders who value its hub role and long haul connectivity.
Dunn agreed that Heathrow would still be the primary airfreight hub in the UK but argued that a post-second runway surge in long haul routes to emerging markets would put Gatwick in a better position to grow its bellyhold cargo volumes.
Dunn also questioned the basis of the Airports Commission’s figures on the net asset value gain of a Gatwick expansion versus that of Heathrow, suggesting that statistics gained via a Freedom of Information Act request showed that the gain to the UK economy would be £9.1bn from a Gatwick expansion and £5.3bn from Heathrow.
These figures, taken out of the final Airports Commission report at the request of the government, will no doubt form a further strand in any Gatwick legal action to oppose a pro-Heathrow airport decision, should that happen.
There was an element of humour in the presentations by Messrs. Holland-Kaye and Dunn, who did not appear on stage together.
Said Holland-Kaye: “Let me give you an example of how Heathrow serves Britain.
Mexico is a key emerging market. 120m consumers, hungry for British goods and expertise. We should be developing stronger trade links. You can get there from both Heathrow and Gatwick.
“From Gatwick, you can get a seasonal flight to Cancun, the party capital of Mexico − or so I’m told. But at Heathrow you get a daily service, all year round, to Mexico City – the business capital.
“A city the size of London, but growing at almost 5% a year. In fact you can fly with Aeromexico or BA – that’s real competition and choice for passengers.”
Dunn pointed out later that Gatwick is the 12th largest international passenger airport in the world and already has regular long haul services to important global business centres, alongside its low cost carrier airlines.
Trivial point-scoring aside, one member of the audience asked the obvious question: “Why not let both runways be built?”
Yes, Prime Minister?