ANALYSIS: The great runway debate rages in London

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

With the deadline for submissions to the UK's Airports Commission now past, London's three biggest airports have proposed radically different visions for how the city's aviation capacity crunch can be solved.

Heathrow airport is pushing for a third runway either to the north, northwest or southwest of its existing facilities. It estimates this could be built between 2025 and 2029 at a cost of £14-18 billion ($22-28 billion), with space for a fourth runway if needed.

Its status as a hub and the perceived benefits this brings to the UK economy is central to Heathrow's argument for expansion.

In one section of its submission to the Commission, it estimates that some 41% of passengers are transferring. Of these, 32% come from continental Europe.

But it warns Heathrow is "slipping out of the Premier League of Europe's international hub airports" as less constrained competitors such as Paris, Frankfurt and Amsterdam pick up routes to emerging economies such as Brazil, Russia, India and China.

This is costing the UK £14 billion in lost trade every year, it estimates, whereas a new runway would generate an additional £100 billion in trade per year - and tens of thousands of jobs.

Building a new hub from scratch to the east of London would cost some £70-80 billion, take far longer to build and be too far away from central London, says Heathrow - which also rejects the idea of expanding Gatwick airport on the basis that two hubs would not be able to fill aircraft on long-haul routes.

"Gatwick's proposal for three competing two-runway airports in the southeast would not deliver a UK hub with the size and scale to compete internationally or provide the long-haul connectivity on which future jobs and growth depend," argues Heathrow.

It's an argument with which Peter Morris, chief economist at Flightglobal consultancy Ascend, agrees.

"Heathrow is the preferred choice of airlines and passengers, due to the choice of flights and its accessibility to a large catchment area of London. There is a synergy between the point-to-point traffic and the connecting traffic that cannot really be duplicated for one city," he says.

"A sad reality is if Heathrow were to be moved to the east, it would take two decades for the West London economy to recover - very like the docks effect of old."

Gatwick airport has not submitted as detailed a case for expansion as Heathrow, but it presents three preferred options for a new 3,500m third runway, at varying distances to the south of its existing facility. More detailed plans are expected to be set out later.

It believes the importance of hub traffic has been exaggerated, asserting that it only represents 13% of total passengers using London's airports, "while the number of routes which supporters of mega-hubs argue can be facilitated only with transferring passengers is overstated", it says.

It proposes rather that London needs more point-to-point airport capacity and that an expanded Gatwick could be one of a "constellation" of airports serving the city.

"A constellation of airports offers the potential advantage of dispersing aircraft operations over a much wider area than would occur from the intensive concentration and noise impacts from flights over a single locality to a mega hub airport," says Gatwick.

This would provide greater resilience by spreading traffic and preventing traffic bottlenecks if bad weather or other events that could close one of London airports, it adds.

A new runway would also cost a "fraction" of expanding Heathrow, while noise impacts would be "significantly lower" and would be entirely privately funded, it argues.

Stansted airport's owner Manchester Airports Group reckons there is plenty of spare capacity the London facility can use to grow.

The Essex airport handles some 17 million passengers a year, but unlike Heathrow, which is operating at 98% capacity, it could accommodate up to 35 million under current regulatory restrictions and could take up to 40-45 million without additional runways.

But it does press for expansion and outlines the case for an additional runway, either to the northwest of the existing runway - which would increase capacity by between 70 and 80 million passengers a year - or to the east, for a capacity boost of 90 million passengers a year.

An additional runway would generate an estimated £3 billion in economic benefits per annum and 13,000-16,000 on-site jobs.

Unlike Gatwick, MAG presents the option of Stansted replacing Heathrow, by becoming a four-runway hub.

It argues Stansted is a "scalable and flexible solution" to the UK's aviation capacity and can grow incrementally to two, three or four runways. Fewer residents are exposed to noise at Stansted than at other major airports in the southeast; 258,500 at Heathrow compared to 1,250 at Stansted, it says.

In perhaps the most ambitious of all the proposals, MAG presents the airport growing to 140 to 160 million passengers per annum at a relatively small cost of £10 billion and generating up to £114 billion in economic benefits and 60,000 new jobs. "A hub at Stansted would provide sufficient capacity for airlines and alliances to operate all routes and frequencies that they deem commercially viable," it says. "By operating with no capacity restrictions, long-haul route frequencies are likely to be greater than those currently operated at Heathrow and will in turn make further services viable."

Surface access is key to MAG's proposal and it argues that improvements to rail connections and ensuring trains take no more than 30min to get central London would allow the airport to compete effectively with Gatwick and Heathrow. It calls for Crossrail 1 and Crossrail 2 to be extended to Stansted.

While the Airports Commission is not due to its interim report until later this year, Morris believes British Airways' preference will play a key role in the decision making.

"A hub airport needs to offers substantial connectivity between flights, and is usually driven by the presence of a national carrier. Heathrow is clearly BA's choice, and is the long-haul connection centre, so the idea of Gatwick replacing Heathrow, or even being a major hub competitor to Heathrow, is simply not realistic," says Morris.

"A four-runway solution at London Heathrow as per the Policy Exchange proposal, two runways at London Gatwick and a third at Stansted if the company running it wants to build it: all are needed in light of Eurocontrol's study of capacity needs to 2050," he adds.