Aviation Strategy

Written evidence from Zac Goldsmith MP (AS 35)

Summary

· A third runway at Heathrow would be a noise and air quality disaster and would lead to a serious reduction in the quality of life for hundreds of thousands of London residents.

· If there is a need for a four-runway ‘hub’, as most airport expansion advocates maintain, that is unlikely to be delivered at Heathrow. Indeed even the proposed third runway would be less than full length. The third runway therefore represents a dead-end investment.

· The UK is currently one of the best-connected countries in the world and London remains the top city in Europe to do business.

· We should focus on making better use of London's existing airport capacity through more efficient airport slot allocation and improving the transport links to London’s other airports (such as a Crossrail extension to Stansted) so that Heathrow could shed some of its short-haul and ‘point-to-point’ traffic to concentrate on long haul services to the emerging markets.

· There is something approaching consensus that the independent commission on aviation chaired by Sir Howard Davies should bring forward its timetable so that the Government can make clear its position on Heathrow for the next Parliament ahead of the 2014 London local elections.

Maintaining the UK's international aviation connectivity

1. It is a myth that the UK is falling behind in its international aviation connectivity. According to the Department for Transport: "The UK is currently one of the best connected countries in the world. We are directly connected to over 360 international destinations" [1] . In 2011 there were more scheduled flights from Heathrow to both India (over 5,500 scheduled flights) and China (over 4,500 scheduled flights when Hong Kong is included) than any of its continental rivals. There were also over 1,000 scheduled flights from Heathrow to Brazil. New direct routes are opening up from London to the emerging economies including Heathrow to Guangzhou (China Southern Airways, June 2012) and Gatwick to Beijing (Air China, May 2012).

2. A recent report published by AirportWatch finds that Heathrow is in a class of its own as far as connectivity with more flights to business destinations than any other airport in Europe, in fact more than the combined total of Charles de Gaulle and Frankfurt. The Heathrow pro-expansion lobby try to argue that Paris and Frankfurt enjoy 1,000 more flights per year to the three largest cities in China than Heathrow does, but if you look at Heathrow’s connectivity to China’s cities ranked by GDP rather than population alone, Heathrow is well placed. For instance, Heathrow has 1,938 more annual flights to Shanghai, Hong Kong and Beijing than Frankfurt and 1,426 more than Paris Charles de Gaulle. Furthermore, whilst Heathrow offers non-stop service to 82 long haul destinations, compared with 77 from Paris and 75 from Frankfurt, its lead in the numbers of seats is extremely large: 25 million, compared with 14 and 13 million for Paris and Frankfurt [2] . Heathrow remains the EU’s busiest passenger airport with 66 million passengers handled a year [3] .

3. According to the World Economic Forum Global Competitiveness Report 2011/2012, using available airline seat kilometres as a connectivity metric, only China’s and the USA’s aviation networks are more extensive than the UK. Germany and France are in fifth and eighth place respectively. [4] According to an assessment of the current aviation connectivity of London by the Civil Aviation Authority (CAA), the five main London airports serve more routes than any other European city [5]

4. In addition, London remains the top city in Europe to do business and for business as a whole, other factors such as the strength of the business environment are of greater importance than the size of Heathrow. The World Bank ranks the UK as the market leader for ease of doing business amongst the major European economies. The Financial Times, through its fDi Intelligence Report 2012, ranks the UK as the primary FDI location in Europe. UNCTAD reported 7 per cent growth in the UK’s FDI inflows to reach US$53.9 billion in 2011. It also confirmed the UK as the largest recipient of FDI stock in Europe, and second in the world behind the US, ahead of Hong Kong and France. The level of FDI stock in the UK rose 3 per cent to reach US$1,198 billion [6] .

5. According to UKTI, Foreign Direct Investment in the UK manufacturing sector increased in 2011/2012 by 22 per cent from 2010/11 with existing investors showing their confidence in UK manufacturing with substantial investments from Tata, Nissan, Toyota, Honda, Sahaviriya Steel Industries and Nestlé in 2011/12. China was the third-largest investor in the UK, up from seventh the year before, with investment increasing by over 55 per cent. Examples include the establishment of Agricultural Bank of China’s UK subsidiary, the first step in its global programme, and Huawei [7] .

6. It is important to note that all these foreign companies invested after the Government had cancelled the BAA application for a third runway and a sixth terminal at Heathrow and made clear its opposition to further expansion. These recent investments reinforce the underlying message that the strength of the business environment is of greater importance than the size of Heathrow, and that London remains the "best city in terms of external transport links". These were the words of the annual and influential survey carried out by global property consultants Cushman & Wakefield, The European Cities Monitor. London topped the league table "by some distance from its closest competitors – as the leading city in which to do business" for the 22nd year out of 22 [8] .

How should we make the best use of existing aviation capacity?

7. I recognise that Heathrow is the UK's busiest and most capacity constrained airport, and the importance of securing both Heathrow's hub status and increasing its links to the emerging markets in Asia and South America, but new runways or a new airport are not the answer. We should focus on making better use of London's existing airport capacity and existing runways. After all, if the logic of the pro-expansion argument is followed to its natural conclusion not only should a third runway be added but also a fourth. The solution is a better not bigger Heathrow. This could involve a number of steps:

8. Planes aren’t full. In 2011, the average seat occupancy rate on flights at Heathrow was estimated to be 73% on both departing and arriving flights [9] . More occupied planes mean more people can fly without any rise in the number of flights. Given concerns over the legality and feasibility of introducing a per-plane Air Passenger Duty (APD), I would urge the Committee to consider the alternative proposal for introducing a tax on slots for arriving and departing aircraft.

9. In addition, Heathrow could shift some of its short-haul traffic to concentrate on long-haul services. A large number of runway slots at Heathrow could be usefully allocated to longer-haul business flights - the category deemed most beneficial to the UK economy. According to Department of Transport’s figures, of the estimated 35 million passengers arriving at Heathrow in 2011, almost a third (11 million) were terminating passengers coming off short-haul flights:

     Heathrow Airport [10]

               The estimated number of terminating and transfer passengers arriving from short and long haul routes at Heathrow in 2011 is given in the following table.

Estimated number of arriving passengers

million

Terminating

Transfer

 Short-haul (including domestic)

 11

 5

 Long-haul

 12

 6

 Total

 23

 12

10. While many short haul flights are important to Heathrow’s hub status, and would be less suited to shifting elsewhere, many are simply clogging up the slots that could be better used by intercontinental flights from the emerging markets. The recent Policy Exchange report on aviation stated that "there are many airlines with very few connecting passengers who continue to use Heathrow. The CAA state that the Skyteam airline alliance has just 400,000 connecting passengers a year. With around 300 departures per week from Heathrow this implies about a dozen connecting passengers per flight. Given that some will have more connecting passengers, and some fewer, it must be the case that some have very few connecting passengers at all." [11] Furthermore, given that 66% of passengers arriving at Heathrow are terminating passengers, nearly double the number of transfer passengers, it suggests that they could easily use another London airport.

11. To relieve pressure on Heathrow, and boost its hub status, a priority must be to shift point-to-point tourist flights to non-business places (like Cyprus and Greece which between them take up nearly 2 per cent of slots).These less economically important routes could be shifted to another airport to free up slots for new, predominantly long-haul routes to more economically important countries.

12. London is served by six airports and seven runways; compared to Paris by three airports and eight runways, Amsterdam by one airport and five runways; Frankfurt by two airports and five runways; and Madrid by one airport and four runways. Collectively there is spare capacity. Stansted is only operating at 50% capacity and actively seeking to add more airlines flying to more destinations. Stansted has spare capacity now – enough to handle double the number of passengers it does today and any aircraft from anywhere in the world.

13. Airlines could relocate their operations from Heathrow to Stansted without the need for runway expansion. It has the space, infrastructure and planning permissions in place to serve 35 million passengers a year on the existing single runway - passenger numbers are currently just under 18 million. It is worth noting that the conditions that were agreed as part of the planning process provide a robust and comprehensive package of noise and environmental controls for the benefit of the local community.

14. To enable full use of Stansted, the Government should press ahead with major rail improvement schemes to Stansted. It should also consider improvements to links from central London to Luton and Gatwick, and regional airports near London such Birmingham, London Southend airport and London Oxford Airport.

15. The Government says that the UK Government and Civil Aviation Authority have no role in airport slot allocation processes as EU regulation governs the allocation, transfer and exchange of slots at Heathrow, Gatwick, Stansted and London City airports; and Airport Co-ordination Ltd, as the UK's independent slot co-ordinator, manages slot allocation at these airports. However, Section 31 of the Airports Act 1986 provides the Secretary of State for Transport with powers to introduce air traffic distribution rules (TDRs) relating to airports on the UK, provided that they comply with EU law [12] . If we are to see better coordination between airports, and better use of existing capacity, the Government will need to adopt a proactive role in slot allocation.

16. The European Commission published its "Better Airports Package" on 30 November 2011, which includes a range of legislative proposals, including proposals to amend the EU Slot Regulation, which are intended to help boost capacity, reduce delays and promote quality at Europe's airports. The Department for Transport has already stated that it is "working with the EU, in the context of the Commission’s proposals on reform of the rules on landing slots to secure measures to support UK regional connectivity, such as protecting the provision of air services between Northern Ireland and Heathrow". I believe that the Government should similarly take steps to explore options, within the EU legislative framework, to regulate the distribution of air traffic and allocation of slots between the airports to secure measures that both increase Heathrow’s international aviation connectivity and ensure that slots at Heathrow are used in the way most economically beneficial to the UK. Airlines that are likely to be attracted by the freed capacity would include the various Asian airlines that would be able to acquire a relevant number of slots for the first time and thereby increasing the range of destinations served from Heathrow. I urge the Committee to explore this policy avenue.

How can surface access to airports be improved?

17. The Government says that it recognises the importance of good surface access transport links to airports and the crucial role the public sector must play in their delivery. Customers prefer Heathrow to either Gatwick or Stansted because it is easy and cheap to get to. If surface access transport links to airports were improved, that will allow airlines currently operating at Heathrow to consider moving to another airport. As stated above, Stansted is massively underused, currently by about 50 per cent, and with proper rail links to the City, it would be the natural place for point-to-point flights that do not require transfer passengers to be viable.

18. Steve Norris has argued for a Crossrail extension to Stansted: The Crossrail links east and west London via a tunnel under the heart of London. It joins the City and Canary Wharf to Heathrow and transforms Farringdon and Smithfield. From east of Stratford a 10-kilomietre rail tunnel spur emerging at Fairlop Water and following the line of the M11 could link Stansted directly to Central London. There is the capacity for six trains an hour, more than the Heathrow or Gatwick expresses. Journey times to Tottenham Court Road or Bond Street would be around 40 minutes [13] . A Crossrail extension to Stansted now has the support of the Mayor of London Boris of Johnson: "You could be [up there] just as fast, if not faster, than at Heathrow [14] .

Are the Government’s proposals to manage the impact of aviation on the local environment sufficient, particularly in terms of reducing the impact of noise on local residents?

19. The current 480,000 air transport movement cap was set as a condition of the Terminal 5 planning consent in 2001. A third runway would require an increase in the number of air transport movements allowed at Heathrow. To change or remove the cap would require a planning application [15] . The Labour government constrained capacity at Heathrow with a third runway until at least 2020 to 605,000 ATMs - and full capacity would have been 702,000 ATMs. 605,000 ATMs equates to 125,000 additional movements compared to the current cap of 480,000 ATMs at Heathrow; 702,000 ATMs equates to 222,000 additional movements.

Noise

20. The Government consultation on its draft aviation strategy stated that "The Government’s opposition to the building of a third runway at Heathrow was, and continues to be, determined in large part by a concern about the scale of the noise impacts at the airport" [16] . More than a quarter of all people in Europe who are affected by aircraft noise pollution are under the Heathrow flight path. Estimates for the number of people affected vary from 700,000 to as high as 2 million, depending on the study and the level of noise taken as sufficient to cause a nuisance. A third runway at Heathrow would only increase the scale of the noise impact.

21. Furthermore, as the Environment Committee of the London Assembly highlighted in its report ‘Plane Speaking: Air and noise pollution around a growing Heathrow Airport, March 2012’, of particular concern is the significant contribution to poor air quality made by people using private cars and taxis to get to and from the airport. At the moment almost two-thirds of the 66 million passengers using Heathrow every year travel by car. Once the current redevelopment and construction projects at the five terminals are completed, from around 2014 onwards Heathrow will have the capacity to handle up to 95 million passengers a year. This will clearly have implications for local residents and communities, facing the probable prospect of increased road traffic, even poorer air quality and more noise [17] .

22. A third runway with the accompaniment increase in the number of air transport movements would only serve to compound this impending impact further with the ensuing increased road traffic, poorer air quality and more noise - and a serious reduction in the quality of life for hundreds of thousands of people. The aviation industry has not explained how London is supposed to deal with the estimated 25 million extra road passenger journeys each year to and from Heathrow. It seems likely that such an increase would cause gridlock, with dire consequences for London’s economy.

Air Quality

23. Aviation contributes to nitrogen dioxide pollution near airports through aircraft engine emissions, airport operations and road transport to and from airports [18] . EU air quality limits for nitrogen dioxide (NO2) are not met at Heathrow and the surrounding area. A third runway would lead to 702,000 flights using Heathrow a year, a 46% increase on today, and, as the Government has said, would result in an unacceptable level of environmental damage to the quality of life of local communities. It's self-evident that the lives of two million Londoners would be significantly affected by aircraft noise if Heathrow expansion goes ahead.

24. London already has the worst air quality of any European capital. There were a near-identical number of deaths reportedly from air pollution in London in 2008 as the 4,000 people who died as a result of the Great Smog of London in 1952. Heathrow expansion would undoubtedly make the situation much worse. Given that legal air quality limits are already breached at Heathrow and the surrounding area, the event of a third runway would make compliance impossible.

25. Paragraph 22 of the Environmental Audit Committee’s report on Air Quality stated [19] :

Defra’s consultation for an extension to meet EU NO2 limit values states that Greater London compliance is not expected to be achieved before 2025. [20] EU air quality limits for NO2 are not met at Heathrow and the surrounding area. DfT recognises that aircraft engine emissions, airport operations and road transport to and from airports contributes to NO2 pollution near airports. [21] In the event of a third runway being developed at Heathrow, compliance with NO2 limits would be impossible. The Government has made clear their opposition to a third runway at Heathrow and BAA announced in May 2010 that it had stopped work on a planning application for such a proposal. However, for the Government to make the case that compliance with EU air quality limits throughout Greater London will be maintained beyond 2015, their application for an extension to meet EU limit values, the forthcoming Sustainable Framework for UK Aviation and the forthcoming Aviation National Policy Statement must contain an explicit prohibition of a third runway at Heathrow.

26. The Government’s response to the EAC’s report cited the commitment made in the National Infrastructure Plan (NIP), published on 29 November 2011, that the draft aviation policy framework would "explore all the options for maintaining the UK's aviation hub status, with the exception of a third runway at Heathrow: "The Government has therefore made absolutely clear its opposition to a third runway at Heathrow". However, the fact that the Government has asked the independent commission on aviation chaired by Sir Howard Davies to conclude just a few weeks after the election shows that the Government has no opposition to a third runway at Heathrow proceeding in the next Parliament. Transport Secretary Patrick McLoughlin confirmed this when he said that ‘all options are on the table' in his first major interview in post [22] .

27. The UK has already requested a five year extension to the 2010 compliance deadline for 24 of out of the UK’s 43 air quality zones last year. However, the commission has rejected the request for 12 of the zones on the grounds that the UK had not demonstrated that compliance with limit values could be achieved by 1 January 2015 or earlier (EC Commission decision 25 June 2012). The Government has to demonstrate compliance with the limit values in London by accepting the EAC recommendation and set out an explicit prohibition of a third runway at Heathrow. I urge the Committee to reject the ‘all options are on the table’ approach and recommend that the Government accepts the recommendation of the EAC.

Will the Government’s proposals help reduce carbon emissions and manage the impact of aviation on climate change? How can aviation be made more sustainable?

28. The Government has not made a decision on accepting the recommendations of the Committee on Climate Change in its report, Meeting the UK aviation target-options for reducing emissions to 2050, December 2009. And, the Government has made no assessment of the compatibility of a third runway at Heathrow with the Committee’s recommendations [23] .

29. I urge the Committee to press the Government to make a decision and accept the recommendations of the Committee on Climate Change and undertake an assessment of the compatibility of a third runway at Heathrow with the Committee‘s recommendations.

Do we need a step-change in UK aviation capacity? Why?

30. Relying on capacity at different locations will cater for point-to-point demand and relieve pressure on Heathrow, allowing it to maintain and improve its hub status. This, coupled with improved transport links to Stansted, will create a dual hub, with high value eastern-facing business journeys making use of Stansted, and western facing flights making use of Heathrow. Other suggestions for improving connectivity include proposals for a 15-minute airside high-speed rail link between Gatwick and Heathrow to create in effect one London hub airport over two sites with three runways, with one airport as a terminal of the other, but given its position, extra capacity and the potential to link it to the City by extending Crossrail, Stansted seems to offer the best solution. More point-to-point routes meanwhile could be handled from Gatwick and other airports.

18 October 2012


[1] Department for Transport. Draft Aviation Policy Framework. July 2012. http://assets.dft.gov.uk/consultations/dft-2012-35/draft-aviation-policy-framework.pdf

[2] Frontier Economics. Connecting for growth. September 2011.

[2] http://www.frontier-economics.com/_library/publications/Connecting%20for%20growth.pdf Table 5.

[3] Eurostat . Air passenger transport in the EU27 in 2010 . 14 May 2012 . http://europa.eu/rapid/pressReleasesAction.do?reference=STAT/12/72&format=HTML&aged=0&language=EN&guiLanguage=fr

[4] Department For Transport. Draft Aviation Policy Framework. July 2012.

[4] http://assets.dft.gov.uk/consultations/dft-2012-35/draft-aviation-policy-framework.pdf

[5] CAA. Aviation policy for the consumer.

[6] World Investment Report 2012, UNCTAD.

[7] UKTI. Inward Investment Report 2011/2012. 26 Jul y 2012 .

[8] Cushman & Wakefield. The European Cities Monitor. 2011.

[9] Hansard . Heathrow Airport. 2 July 2012: Column 441W

[9] http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120702/text/120702w0002.htm#12070247001246

[10] Hansard . High Speed 2. 3 October 2011: Column 1387W http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm111003/text/111003w0001.htm#1110033001277http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120903/text/120903w0007.htm#12090412001445

[11] Policy Exchange. Bigger and Quieter – The right answer for aviation. 5 October 2012. http://www.policyexchange.org.uk/images/publications/bigger%20and%20quieter.pdf

[12] Hansard . Air Traffic. 9 July 2012: Column 67W h ttp://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm120709/text/120709w0003.htm#1207104000650

[13] Steve Norris in The Times. Expanding Stansted is the least worst option. 13 September 2012.

[14] Daily Telegraph. Boris Johnson backs new runway at Stansted. 18 June 2012.

[14] http://www.telegraph.co.uk/news/aviation/9339749/Boris-Johnson-backs-new-runway-at-Stansted.html

[15] Hansard . Heathrow Airport. 3 October 2011: Column 1387W h ttp://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm111003/text/111003w0001.htm#1110033001277

[16] Department For Transport. Draft Aviation Policy Framework. July 2012.

[16] http://assets.dft.gov.uk/consultations/dft-2012-35/draft-aviation-policy-framework.pdf

[17] London Assembly. Plane Speaking. March 2012

[17] http://www.london.gov.uk/sites/default/files/Heathrow%20airport%20-%20Final%20version_0.pdf

[18] Hansard , Heathrow Airport Pollution, 23 May 2011: Column 373W http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110523/text/110523w0001.htm#11052329000177

[19] Environmental Audit Committee Air quality: A follow up report. Ninth Report of Session 2010–12. 14 November 2011.

[20] Defra , Air Quality Plans for the achievement of EU air quality limit values for nitrogen dioxide (NO2) in the UK, 2011

[21] DfT , Developing a sustainable framework for UK aviation, 2011

[22] Evening Standard. 'I wasn't made Transport Secretary to push through third runway at Heathrow...all options are on the table'

[22] 27 September 2012. http://www.standard.co.uk/news/politics/i-wasnt-made-transport-secretary-to-push-through-third-runway-at-heathrowall-options-are-on-the-table-8181588.html

[23] Hansard . London Airports. 16 April 2012: Column 55W http://www.publications.parliament.uk/pa/cm201212/cmhansrd/cm120416/text/120416w0003.htm#12041626000294

Prepared 8th November 2012