Brian's Blogs

A third runway at LHR? Don't hold your breath!

I smiled wryly this week when I heard that the CEO of Qatar Airways, Akbar al Baker, had called on the British government to urgently address capacity constraints at London's Heathrow Airport to avoid a 'catastrophic situation' for the country's economy. Al Baker was vocal in his support for a third runway at the world's busiest international airport in order for it to remain competitive with rival European airport hubs such as Paris, Frankfurt and Amsterdam.

In a speech to more than 250 global aviation industry professionals and media at the Aviation Club in London, Al Baker said the third runway debate "was not an option, but a necessity" to overcome the capacity crunch Britain's premier airport was currently facing. "Heathrow is bursting at the seams and has already reached a critical point," he said. "Measures to expand need to be taken soon to avoid a catastrophic situation in the future. The UK government cannot afford to immerse itself in long winded debate and public enquiries. Action needs to be taken now," he added.

I am sure he was preaching to the converted. When I myself used to work at Heathrow Airport all of 25 years ago, people even then were calling for a third runway; but politicians in the UK are renowned for putting off difficult decisions that could cost them votes. And the history of inaction over the past quarter century on this crucial issue has been nothing short of pathetic. Even Heathrow's Terminal 5, which eventually opened in March 2008, took 20 years from concept to reality.

As recently as November 2007, the government of the day started yet another public consultation on its proposal for a, now, slightly shorter third runway and a new passenger terminal, resulting in it announcing its support for the go-ahead in January 2009. The plan was supported by businesses, the aviation industry, the British Chambers of Commerce, the Confederation of British Industry, and the Trades Union Congress.

But there was a general election coming up, and the Conservatives, mindful of their traditional support in the affluent areas under the flight path to the airport, made a manifesto commitment to reject the expansion if they came to power. As a result the plans were cancelled on 12 May 2010 by the new Conservative and Liberal Democrat coalition government.

But now, it appears, the Conservatives have had a change of heart; and in order to get them out of what will obviously be seen as an embarrassing U-turn, they have set up yet another commission - which is not expected to produce its final report until after the next general election in 2015.

It's an emotive issue, naturally; but I have to admit to coming down firmly on the side of a third runway, despite there being many arguments against its construction as well.

On the pro-side, the British Chambers of Commerce have estimated the economic benefits to be £30 billion for the UK economy and have further stated that for every year the program is delayed, it costs the UK between £900 million and £1.1 billion. A third runway could be used to re-instate or improve flight connections to UK cities, several of which have seen their connections to Heathrow reduced or lost over recent years as airlines have reallocated the airport's limited capacity to more profitable long-haul flights. A third runway would also increase Heathrow's resilience to disruption, and so reduce emissions from aircraft waiting to land. Construction itself would provide up to 60,000 jobs, while operating the expanded Heathrow would create up to 8,000 new jobs at the airport by 2030, with multiplier benefits to west London.

On the negative side, it has to be noted that planning permission for Terminal 5 was only secured after guaranteeing local residents that there would be no attempt to build a third runway. There is also room to expand at London's other airports to the north, south and east at Luton, Gatwick and Stansted.

Compare what's going on in Britain to the situation in China where things could not be more different. In July, Li Jiaxiang, director of the Civil Aviation Administration of China, announced his country will build 82 new airports and expand 101 existing ones during the current five-year plan, which ends in 2015. By then, China will have 230 airports, up from its current 182, with most of the new facilities being feeder airports in the central and western parts of the country. As a result around 80% of the population will live within 100 kilometers of an airport.

Of course, China does not have the same stringent – some would say burdensome – planning regulations that the UK has; and my guess is that local people have very little say in being able to oppose a decision, let alone overturn it, when it has been passed at a regional level or higher.

Many would question the wisdom of some of the decisions already reached – such as the plan to build a second airport in Beijing at least 50 kilometers away from Capital International Airport. Surely it would make more sense to expand the existing facilities, instead of building another one on the other side of town. Such a decision would undoubtedly lead to airlines being forced to operate from both airports, thereby increasing costs and reducing flexibility.

That's just what happened in Shanghai, where China Eastern Airlines has had to fly out of both Hongqiao International Airport and Pudong International Airport since 1999. By any business logic, this is absolutely ridiculous.

Nevertheless, according to the Civil Aviation Administration of China, growth in the country's airline industry is six times that of the rest of Asia combined. Last year, China's airports handled just over 620 million passengers, 10% more than in 2010, while passenger growth in August was around 15%, significantly higher than the 7.2% average across the whole region. In fact, excluding China from the figures reveals that the rest of Asia saw capacity growth of just 2.7%.

Domestic airlines are being actively encouraged by the central government to expand into the international market and offer global services, which could well be where the industry's main source of growth will come from in the future. As airlines from other parts of the world look to increase their routes and frequencies into China, competition will become intense. But with the global airline research organization, SKYTRAX stating unequivocally, for instance, that Air China is outperforming Air France in quality terms, it looks like – yet again – Europe will have to wake up to what is happening over on the other side of the world.

Meanwhile, I don't intend to hold my breath on there being a third runway at Heathrow Airport any time in the foreseeable future.

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