25 FEBRUARY 2013

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Article from BTNews 25 FEBRUARY 2013

ON THE SOAPBOX SPECIAL:

Colin Matthews, Chief Executive, Heathrow Airport

There is little doubt that the Government’s decision to appoint an independent panel, the Davies Commission, tasked with identifying and recommending options for maintaining this country’s status as an international hub for aviation, has itself caused controversy.  All manner of ideas and suggestions have surfaced, some with commercial interests, some environmental, and some political.  As noted in BTN last week representations can be made until 19 July 2013, although you can be pretty sure that noises will be heard right up to the publication of the final report, post election 2015.  And a thunderstorm afterwards.

Heathrow is the world's largest international airport and stands to gain or lose the most from the result of Sir Harold and his committee’s efforts.  It is right that Colin Matthews, CEO Heathrow Airport Ltd, puts his case first in Business Travel News.  We welcome contributions by others. 


One hub or none


"The UK has been home to the world’s largest port, then international airport for the past 350 years.  That’s seen the world travel through the UK to reach its final destination and our country become the centre of global service industries like insurance, law and finance.

And our country prospered as a result.  Heathrow is the UK’s only ‘hub’ airport, and has supported our trading position for decades.  As a ‘hub’ airport, Heathrow pools demand from around the UK with that from other nearby countries. By combining local passengers with transfer passengers, Heathrow can support many more long haul destinations than any other airport in the UK.  The UK’s many other airports – such as Manchester or Birmingham – serve important, but different, market needs.  They are not equipped to use transfer passengers to supplement the ups and downs of local demand and so they cannot support frequent, direct links to far-flung economies.  These long haul connections are vital for economic development, facilitating economic growth through trade, foreign investment and tourism.

Yet our country’s competitive advantage will end sometime in the next decade as Heathrow is overtaken by Paris, Amsterdam, Frankfurt or Dubai as the busiest airport for international passengers.  Each of these cities competes directly with the UK for inward investment and jobs.  And being full Heathrow can’t keep up with them.  Unless we act, Heathrow’s relative decline will make the whole of the UK a less attractive place to do business as we fail to offer the range of destinations businesses need.

In setting up its Airports Commission, the Government has recognised that maintaining the UK’s aviation status is critical to economic success.  Some argue that if having one hub is good, having two, say Stansted and Heathrow, must be better.  In reality this will not work.  Splitting the pool of transfer passengers available to fill flights undermines the viability of long haul routes.  Tokyo’s attempt to operate hubs at Haneda and Narita airports saw it slip from 1st to 7th in Asian city connectivity rankings.  Montreal’s attempts to operate two hubs saw one become an expensive white elephant.  And New York, with eight million inhabitants and two international airports, is less well connected to long haul destinations than Frankfurt, whose population is 600,000.  

Heathrow and London Mayor Boris Johnson are often cited as being on opposing sides of the aviation capacity debate.  In fact, we agree on the importance of a single hub.  In October, he said, “There is absolutely no point in simply scattering new runways randomly around.  What this country urgently requires is a hub airport with several runways that will solve the pressing need to increase hub aviation capacity”.

The UK needs a single hub airport and after 50 years of indecision, this is the last chance to take a considered policy decision which sticks.  Understandably there are those who want the Airports Commission to report more quickly than its 2015 deadline.  We would like the Commission to work as speedily as it can, but a considered decision which gains political consensus is more important than a quick decision.  In our view, the Commission must choose between three options: add capacity at Heathrow; close Heathrow and build a new hub airport elsewhere; or do nothing and see the economic prosperity of the entire UK suffer".

Colin Matthews, Chief Executive, Heathrow Airport

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