Expand Heathrow or close it says airport

t5 and planesHeathrow Airport has entered the debate over south east aviation capacity with the launch of a new report “One Hub or None”.

Heathrow’s report says that only a single hub airport can provide the connections the UK needs. Chief Executive Colin Matthews says if that is not to be Heathrow, then it should be closed to make way for a new hub.

The report contains research by Frontier Economics which shows the lack of capacity at Heathrow airport is already costing the UK up to £14bn a year in lost trade and this figure could rise to £26bn a year by 2030, showing that an early decision on the hub location is imperative, and that Government indecision is costing jobs and livelihoods, possibly damaging UK plc for the long term.

The report says a hub airport is uniquely valuable to the UK and sets out why two hubs or ideas for a split hub like ‘Heathwick’ – the idea of linking Gatwick and Heathrow with a high speed rail link – won’t work. It concludes that the UK’s connectivity needs can only be met by a single UK hub airport, which means either expanding Heathrow or replacing Heathrow with a new hub airport.

Heathrow say the report “shows beyond doubt that it is impossible for other non-hub airports such as Gatwick, Stansted or Birmingham to close the £14bn trade gap”.

This, they say, is because hubs rely on a ‘home carrier’ to support them. The UK only has one major network carrier, British Airways, who tried a dual hub using Heathrow and Gatwick in the 1990s Since the failure of this experiment, BA has consolidated its operations at Heathrow, because with most of its operations in one place, can reap the synergies of single-hub operation and use the transfer traffic to support routes.

Without a major network carrier at a new, second hub other airlines won’t locate there since they won’t have the home carrier’s short-haul network and transfer passengers to support their long haul operations.

The report points out that a split hub will find it hard to compete with single hubs elsewhere. The best European hubs can transfer passengers between planes in 45 minutes. A link between Heathrow and Gatwick would mean passengers spending 100 minutes moving between planes.

Colin Matthews, Heathrow’s Chief Executive, said: “If anyone was still in doubt about the importance of aviation to the UK economy, today’s report should lay those doubts to rest. We’re already losing out on up to £14bn of trade a year – and that could almost double by 2030. The new work we are publishing today shows that only a single hub airport can meet the UK’s connectivity needs and the choice is therefore between adding capacity at Heathrow or closing Heathrow and replacing it with a new UK hub airport.”

Heathrow operates at 99% capacity. There is no room to fit in new trade routes to the emerging economies which are important for future economic growth. That lack of capacity is affecting the UK’s competitive position. There are 1,532 more flights to the three largest cities in mainland China from Paris and Frankfurt than there are from Heathrow. The UK’s connectivity gap with China has also widened in terms of destinations. UK businesses cannot fly directly to seven destinations in mainland China – Chengdu, Hangzhou, Wuhan, Xiamen, Nanjing, Shenyang or Qingdao – that are now served by other European hubs.

Daily, direct flights bring in twenty times as much trade as routes which are not direct or as frequent. Heathrow say that only a hub airport can provide these links because they use transfer passengers to pool demand from different countries to support direct and daily long haul routes that would not be viable using local demand alone. Point to point airports, which rely on local demand, cannot support these routes.

Heathrow say they welcome the growth of point-to-point and regional airports,  but that the expansion of point-to-point airports is not going to solve the UK’s connectivity problem. As the UK’s only hub airport, Heathrow serves 75 destinations that are not supported by any other UK airport.

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