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Aviation contributes to the UK economy and enriches the lives of citizens by providing frequent flights that connect with numerous destinations important to business and all parts of civil society.
"Hub" airports have a particular role in delivering air connectivity because they can serve additional destinations at a higher frequency than other airports. Airlines based at a hub airport capitalise on demand from both passengers in the airport's local catchment area and transfer passengers. The latter includes those flying in from less well connected parts of the UK. Transfer passengers therefore help to feed demand for onward destinations and some air services rely on this pooling process to remain commercially viable. Regular flights to a wide range of global destinations are therefore only viable from a hub airport.
The UK's hub airport is of great importance to all parts of the nation as it plays a unique role that cannot be adequately fulfilled by a non-hub airport. For this reason we conclude that it is imperative the UK maintains its status as an international aviation hub.
Demand for air travel across the UK is forecast to increase and aviation should, in our view, be permitted to grow. While we have no reason to doubt the overall analysis of national demand, there are questions remaining about the long-term forecasts. For example, they may not take into account factors such as the impact of HS2.
We recognise there is a specific capacity problem at Heathrow Airport. It is the UK's only hub airport, it has been short of capacity for a decade, and it is currently operating at full capacity. Furthermore, there is a lack of capacity to meet demand during peak hours across all airports within the south east. We believe it is impractical to suggest that Heathrow's problems could be resolved by shifting commercial flights deemed to be of a "specific" type (for example, leisure flights) to another airport. Moreover, demand could not easily be switched between different geographical locations.
Therefore, we accept there is a clear need for greater capacity at the UK's hub airport and have looked at three main strategies for addressing this problem: building an entirely new hub airport, linking existing airports by high-speed rail to form a split-hub, and expanding one or more existing airports.
There are significant challenges associated with building a new hub airport to the east of London as well as significant potential impacts on wildlife habitats in and around the Thames estuary. It is unclear how many people would be affected by noise from such a new hub airport as both it and the surrounding community grew. We do not believe a new hub airport should be built at this time: as research we commissioned showed, it will not be commercially viable without significant public investment in new infrastructure; it will only be viable if Heathrow closes as a commercial airport; and the closure of Heathrow would, in our view, be unacceptable.
We also reject the split-hub concept as passenger transfer times would be highly uncompetitive compared to those at other hub airports overseas.
Looking at expansion of one or more existing airports, we note Gatwick's vision for a second runway and encourage the airport's operator to develop a robust business case. However, on their own, new runways distributed across a number of airports will not provide a long-term solution to the specific problem of capacity at the UK hub airport. We conclude that expansion of Heathrow is necessary and recommend that the Government permits this to happen.
While British business overwhelmingly favours this option, we acknowledge the very real environmental concerns expressed by residents living in the vicinity of Heathrow. People affected by noise from an expanded Heathrow must be adequately compensated so we recommend that the Government and the aviation industry develop a comprehensive nationwide approach to noise compensation. We would also like the Airports Commission to assess what conditions may realistically be applied to an expansion of Heathrow in order to mitigate noise pollution.
Bluntly, we consider that the current situation is unsustainable and that a third runway at Heathrow is long overdue. Depending on the position of future runways, a fourth runway might also be viable. The four-runway proposal (west of Heathrow's existing site) has merit, particularly as relocated runways could reduce the noise levels currently experienced by many people affected by the flight path. We call on the Airports Commission to assess the feasibility of this proposal.
We also looked at the role played by airports outside the south east. We recommend that the Government take a more active role in promoting these airports, from which passengers either travel directly to their final destination or access additional destinations via a hub airport. We call on the Airports Commission to assess the impact of introducing an unrestricted open skies policy outside the south east to help these airports secure new direct services. We also recommend that the Government investigate whether it should protect slots at Heathrow for feeder services from poorly served regions.
We note the significant problems that exist with surface connections to major airports. We call on ministers to develop a coherent strategy to improve rail and road access to the UK's major airports. We conclude that Gatwick and Stansted—currently served by congested commuter lines—should each be served by a dedicated express rail service. We note that Heathrow will shortly be served by Crossrail but is not yet on the main national rail network. Although we acknowledge that a western rail access to Reading and the Great Western network has been announced. Heathrow should, if it expands as we recommend, be served by the new High Speed 2 rail network.
As part of this inquiry we also considered taxation. We recommend that HM Treasury conduct and publish a fully costed study of the impact of Air Passenger Duty (APD) on the UK economy. If such a study produces clear evidence that APD has a negative effect on the UK economy and Government revenue, APD should be significantly reduced or abolished. We also recommend that the Government conducts an objective analysis looking at the impacts of differential APD rates for different airports. Finally, we recommend that an APD holiday be introduced for a 12-month trial period for new services operating from airports outside the south east.
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