My thoughts on the
Runway Capacity Debate
The issue around Runway
Capacity has been discussed
for over 50 years, and yet
remains unresolved. As
I’m sure you are aware,
the Government set up
the Independent Airports
Commission, chaired by Sir
Howard Davies, in 2012 to
explore and recommend
short-, medium- and longterm solutions to the shortage
of airport capacity in the
South East.
The Commission reported in July of 2015
and stated that there is a need for another
runway to be opened by 2030 and that it
should be at either Heathrow or Gatwick;
the regional airports could not supply
capacity needed for the country as a whole.
The Report stated a clear preference
for Heathrow, but played down the
environmental impact of Heathrow’s
scheme whilst over-stating the economic
benefits. It also completely miss-stated a
number of key metrics, for example that
Gatwick might reach 40millionpassengers
by 2024 when that figure was passed in
October of 2015.
On the publication of the Report, the Prime
Minister and the Secretary of State for
Transport both committed to a ‘decision’
on runway capacity before the end of
the year. That ‘decision’ then became a
‘direction’ and in December a statement
was made that the Government needed
to examine the environmental impact of
both sites.
This was triggered by an Audit Committee
report on Air Quality that looked at the
Heathrow proposal and stated that
Heathrow should go ahead with strict
conditions on air quality, noise, operating
hours and contribution to public transport
by Heathrow. When questioned on
these measures, John Holland-Kaye,
the CEO of Heathrow, has stated that
he ‘”expects to do a deal”, but both the
Airport Commission and the Government’s
Audit Committee has stated that these
conditions are non-negotiable.
There is also the matter of cost. Heathrow
requires a tunnel to be built for the M25
and estimates a cost of nearly £6billion.
It will contribute around £1.2billion, but
expects the Government to pay the
rest. On the other hand, Gatwick has
just announced that the first phase of
construction to deliver an operating runway
and terminal facilities by 2025, will cost
just under £3billion and create capacity for
67million passengers.
The airline position on runway capacity
is interesting. Gatwick’s biggest carrier,
EasyJet, had stated they were willing to
operate from an expanded Heathrow, but
have withdrawn that support in light of the
likely ban on night flights as this would be
unprofitable with their operating model.
Heathrow’s biggest airline, BA, has stated
that it is unwilling to fund the expansion
and is looking at other Airports for growth.
In my view, neither wishes to see increased
competition at their home Airport so I think
we can discount their opposition to either
scheme.
What is more important is the view of
growing airlines such as Norwegian, who
are adding destinations to Gatwick’s route
map while carriers such as Cathay and
Emirates see Gatwick as a more than
viable base for operations.
So, what does all of this mean for the
capacity debate?
Heathrow and Gatwick now have a period
of about 6 months to prove that they can
deliver a runway within the conditions set
around air quality and noise. The Transport
Secretary has said a decision will be made
in the summer but, when pressed, didn’t
say which year and would only commit to a
runway being operable by 2030.
Can we wait until 2030 when Gatwick
is likely to be at capacity by 2017 while
Heathrow is full?
The local MPs have all agreed that the
country needs another runway and that
this should be in the South East. In spite of
the economic benefit to their constituents
and to the business community, they
continue to oppose Gatwick and throw
their weight behind Heathrow.
However, as Heathrow is undeliverable
against the conditions set by Sir Howard
Davies and by the Audit Committee, then
what do they expect to happen and how
will they behave should the Government
choose Gatwick? Perhaps they will
threaten to resign their seats across the
Gatwick Diamond in protest.
I am looking to arrange a meeting for
businesses to meet with some of the
local MPs. I’m sure you would like to
understand their point of view and, in
return, I hope to give those MPs some
confidence in the business community’s
support for Gatwick as a vital economic
driver that must be allowed to grow.
Watch this space for more and let me
know if you would like to join that meeting.
B
y Jeremy Taylor
gatwickdiamondbusiness.com
57