Does the economic case favour a new runway at Heathrow, Gatwick or elsewhere?

Heathrow (LHR) is the busiest airport in Britain and third busiest globally with an average of 73 million passengers travelling through the site each year from planes which arrive/leave every 45 seconds going to 184 destinations across the world. The UK economy is experiencing a decline in growth rates e.g. the rate on the 1/1/2007 was +2% as compared to -4% on the 1/1/2009. Unemployment has also fallen as a result of firms having cut back their workforce to retain optimum profits e.g. the rate was just above 5.5% on the 1/1/2007 rising to 8% by mid-2009. This fall in economic strength calls for a third runway at Heathrow as it would increase growth through greater demand and provide more jobs to reduce unemployment and increase national output e.g. the construction of the runway could produce up to 60,000 jobs and in the longer term, up to 8,000 more jobs could be made available at the airport by 2030. However the proposal, which was introduced in December 2006 by the Labour government (and eventually scrapped on the 12th May 2010 by the coalition government) has its drawbacks including negative environmental impacts such as increased noise pollution and air pollution, not to mention the fact many people may have to be relocated e.g. those in the village of Sipson (700 houses) which lies on the northern perimeter of Heathrow. Overall, the economic case doesn’t favour a third runway at Heathrow airport.

An important reason to install a new runway at Heathrow would be due to its ever-increasing demand and limited capacity e.g. on average, 73 million people use the airport each year (almost 1/3 of all UK passengers at all airports) whereas only 9.6 million use Luton airport every year and 5.9 million use Bristol airport. Moreover, 99% of Heathrow’s capacity for air travel is consumed however only 59% of Luton’s capacity is used. Heathrow is simply at ‘full capacity’ and the forecast rise in demand to double in a generation (estimated 211 million using UK airports in 2010 rising to 315 million by 2030) will only increase the stress of this aviation infrastructure. Also, the limited space means that the airport is more likely to be susceptible to congestion of planes and therefore run less efficiently meaning it may make less profit.

Another reason to introduce a third runway at Heathrow would be that it would help increase UK growth rates. As talked about earlier, the rates have fallen and recently it has been the slowest quarterly growth for two years at 0.3% (2015 Q1). The construction of the runway would open up around 60,000 more jobs and up to 8,000 more permanent jobs in Heathrow by 2030. So the proposal would bring about a fall in unemployment (mainly in West London and also the nearby construction industry) and rise in national output. As Heathrow put it in an advertising stint: “the road to economic recovery isn’t a road. It’s a flightpath.”

Expanding Heathrow with a new runway is seen as the greatest short-term decision to sustain Britain’s aviation competitiveness with prominent rivals such as Amsterdam Schipol airport and Paris Charles de Gaulle. Adding the extra runway would also be “quicker and cheaper” than creating a whole new airport in the UK, says Heathrow.

On the other hand, the proposals to introduce a third runway may not be as great as it comes with the increase in environmental impacts such as noise pollution e.g. the Department for Travel says that up to 725,500 people may be affected by a rise in noise pollution. Furthermore, the rise in emissions from this expansion would make Britain’s CO2 emissions targets difficult to reach, especially since Heathrow already produces 50% of UK aviation emissions according to the Department for Travel. A recent report by the Greater London Authority suggested that the expansion of Heathrow would lead to a breach of the 2010 Nitrous Oxide regulations.

People may have to be relocated especially in surrounding areas such as the village of Sipson which holds around 700 houses and so this may give rise to fierce resistance e.g. protests and/or riots and even if people comply – high relocation costs may occur making the project seem rather unattractive and the process of relocation may take a while too. According to Sir David King, former chief scientific adviser to the government, the third runway will only end up as a “white elephant.”

A planning agreement for the recently built Terminal 5 was safeguarded by promising nearby residents that there would be no effort to construct a third runway so an expansion would breach this contract. Also, even if the runway proposals were accepted, the great length of time to build the new runway may mean that it wouldn’t have a significant effect on British economic recovery. Transport infrastructure struggles around Heathrow and the extra demand will only cause further congestion, gridlocks and possibly extra costs for re-routing some journeys of public transport.

There are alternative solutions to a third runway at Heathrow e.g. London Mayor Boris Johnson believed this was a perfect occasion to restart and suggest a new airport in the Thames Estuary where the planes would arrive and leave over water, decreasing the consequence of noise pollution and the airport could also function 24/7.

In conclusion, the economic case does favour a new, third runway at Heathrow to a limited extent as it will increase employment (specifically West London), secure further future employment with an expanded infrastructure, help cope with increasing aviation demands and thereby help increase growth and real GDP. However, there are high costs due to such proposals including legal battles, public compensation and relocation costs and costs for the possibility of breaking emission regulations. A lengthy construction time frame may render the project inept in regards to helping recover the UK’s economy and the third runway may cause increases in pollution(s). There are also many other, possibly more beneficial alternatives such as the Thames Estuary airport which holds an advantage of producing less pollution (especially noise). So overall, the economic case doesn’t favour a new, third runway at Heathrow airport.

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Sources:

news.bbc.co.uk makewealthhistory.org fullfact.org
wikipedia