Conclusions and recommendations
Growth in demand
1. Growth in demand for air travel is inevitable. The UK is currently well connected to the rest of the world but there is no room for complacency at a time when the UK's hub airport is faced with increasing global competition. Building greater capacity—in the form of new runways, terminals, or airports—takes time. It would therefore be prudent to acknowledge the long-term upward trend in demand for air travel and act now to maintain the UK's international standing in aviation. We set out our recommendations on how this should be achieved later in our report.
(Paragraph 27)
2. While forecasting is inherently uncertain we have no reason to doubt the overall analysis of national demand. There are, however, questions remaining about the long-term forecasts. We welcome the Airport Commission's discussion paper on aviation demand forecasts and hope that the Commission will address some of the anomalies we have identified. We note that it is important that the drivers of hub demand are better understood as this will help to identify the extent to which hub demand might be relocated.
(Paragraph 35)
Dealing with the impacts of growth
3. Aviation can and should be permitted to grow. Despite existing spare capacity, demand could not easily be switched between different geographical locations. We therefore consider that an increase in capacity will be necessary to accommodate sustainable aviation growth. We recommend that any future plans for increased aviation capacity take into account progress on global initiatives to deal with emissions.
(Paragraph 40)
4. Stacking of aircraft, particularly over London, generates unnecessary emissions. We recommend that NATS carry out modelling work to identify the extent to which stacking might be reduced if an additional runway is built at Heathrow. This work should be reported to the Airports Commission, ahead of its final report.
(Paragraph 42)
5. We recommend that airport operators develop action plans to reduce air pollutants that are generated by vehicles travelling within airports. These should include a timeline for the introduction of low carbon airport vehicles, including aircraft towing vehicles. We note that many airports already produce surface access strategies setting targets for reducing the number of staff and passengers travelling to and from airports by car. Where air pollutants exceed EU limits Government should draw up plans to ensure that EU limits are met.
(Paragraph 44)
6. Aircraft noise is an annoyance to a large number of people. We note that airlines value an aircraft's environmental performance and that new aircraft are quieter than their predecessors. Aircraft manufacturers should continue to develop quieter aircraft and, to facilitate this, we recommend that the Government seek to influence global noise standards through its involvement with the International Civil Aviation Organization. Airports should encourage airlines to take older, noisier aircraft out of service at the earliest possible opportunity.
(Paragraph 51)
7. We urge the Civil Aviation Authority immediately to review existing flight paths and landing angles to reduce noise pollution, especially over London.
(Paragraph 52)
8. People living in the vicinity of airports must be properly compensated—for example through the provision of noise insulation—for the noise annoyance they experience, especially when growth in Air Traffic Movements at a given airport result in the level of noise they experience increasing significantly. We recommend that the Government and the aviation industry develop a comprehensive nationwide approach to noise compensation. As part of this work, an assessment should be made of the minimum standards of compensation that are acceptable, and of the costs and benefits associated with providing different types of compensation to those experiencing different levels of noise (for example, 55 dB Lden and 57-63 dB LAeq16h). We consider that this work should be carried out in parallel with the work of the Airports Commission so that the compensation package is clearly defined by the time the Commission makes its final recommendations.
(Paragraph 53)
The case for capacity at the UK's hub airport
9. The UK's hub airport is of great importance to all the regions of the UK. It plays a unique role in connecting the country to the rest of the world—a role that could not be adequately fulfilled by a non-hub airport. It is imperative that the UK maintains its status as an international aviation hub.
(Paragraph 56)
10. 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 in the south east. There may be some scope to shift small business aircraft to designated business airports. However, this will have limited impact. The vast majority of aircraft movements at Heathrow are commercial flights, which carry a mixture of leisure passengers, business passengers and cargo. It is therefore impractical to suggest that Heathrow's capacity problem can be resolved by shifting commercial flights of a "specific" type (for example, leisure flights) to another airport. Furthermore, we note that airlines make decisions on where services operate based on commercial reasons. We also note that some non-hub airports may have a role to play in providing flights to emerging markets
and that the HS2 rail project offers the potential for other airports such as Birmingham and East Midlands to attract more passengers from London and the South East. For example, with HS2 the rail journey time from central London to Birmingham airport will be less than 40 minutes, not dissimilar from journey times to the main London airports. This, however, is not a substitute for increased hub capacity.
(Paragraph 33)
11. Any increase to capacity at the UK's hub airport must address the need to improve airport resilience, particularly in the event of bad weather, but this should not restrict the overall benefits derived from increasing runway capacity.
(Paragraph 57)
Option1: A new hub airport to the east of London
12. While there is some support for a new hub airport to the east of London we note that there are significant challenges associated with such a development. These include: designating airspace in an already crowded environment, mitigating birdstrike, and dealing with environmental challenges such as potential future sea-level rise and the risk of flooding. There are also potential impacts on habitats in and around the Thames estuary to take into account. Furthermore, uncertainty remains over the number of people that would be affected by noise from a new hub airport as both it and the surrounding community grew.
(Paragraph 66)
13. We reject the proposal for a new hub airport east of London, in part due to the challenges described above, but primarily on the following bases:
- a new hub airport will not be commercially viable without significant public investment in new infrastructure, as shown by the research we commissioned;
- a new hub airport will only be viable if Heathrow closes as a commercial airport;
- a new hub airport will increase passenger movements from centres of population, potentially generating more carbon emissions as passengers have to travel further to and from the terminals; and
- the closure of Heathrow would, in our view, be unacceptable due to the impact on the local economy and the huge disruption caused by the potential relocation of businesses and individuals in the vicinity of Heathrow.
We are also unconvinced that the aviation industry—which would ultimately pay for using the new hub through airport charges—would support a new hub airport at the level of costs which are likely to be required. It should not be assumed that all traffic would automatically transfer from Heathrow to a new hub as many passengers, particularly those with journeys originating in or destined for west London, might choose to use Gatwick, Birmingham, Bristol, Cardiff, Exeter or Luton airports instead, even if that meant connecting through a hub airport overseas.
(Paragraph 67)
Option 2: A split hub airport
14. We conclude that a split hub would not be a viable solution to the hub capacity problem and we reject these proposals.
(Paragraph 68)
Option 3: Expansion of existing airports
15. We note that since the change in ownership, Gatwick has attracted new long-haul services and is keen to compete with Heathrow. We note Gatwick's vision for a second runway and we encourage the airport's operator to develop a robust business case to demonstrate the role that a two-runway airport could play in increasing airport competition. 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.
(Paragraph 72)
Our conclusions on the expansion of Heathrow
16. The current situation is unsustainable. A two-runway hub airport is not adequate for the needs of the UK. We have considered the options put to us and on the basis of the evidence we have heard we recommend that the Government allow Heathrow to expand. Heathrow is the jewel in the crown of international aviation and we believe that a third runway is long overdue. British businesses are overwhelmingly in favour of this option. An expanded Heathrow might require improvements to surface access that would build on existing infrastructure and we make recommendations on this subject later in our report.
(Paragraph 76)
17. We note the concerns that a third runway at Heathrow may not be sufficient to meet long-term increases in demand. However, we do not believe that question can properly be addressed until we can more accurately predict the long-term changes in demand resulting from factors such as HS2 in rebalancing the economy and making airports in the Midlands more accessible, and from the potential of additional capacity at other airports such as Gatwick. This, however, does not remove the real need for a third runway at Heathrow to address capacity constraints in the foreseeable future.
(Paragraph 77)
18. We acknowledge the very real environmental concerns that have been expressed by residents living in the vicinity of Heathrow. People affected by noise from an expanded Heathrow must be adequately compensated and our recommendations on noise compensation are set out in paragraph 53.
(Paragraph 78)
19. 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.
(Paragraph 79)
20. We have also considered the proposal to build new runways at Heathrow 3 km to the west of the existing site. While there is currently not much detailed information on this proposal we believe that it has merit, particularly as relocating the runways could reduce the noise annoyance currently experienced by people affected by the flight path. We recommend that the Government also consider the option to expand Heathrow to a four runway airport to the west of the existing site. We recommend that the Airports Commission assess the feasibility of this proposal and its implications on noise levels.
(Paragraph 80)
21. We welcome changes to operational procedures at Heathrow that will make the airport more efficient and more resilient. Some changes, such as the introduction of mixed-mode operations, may help in the short-term to address the capacity problem. However, mixed-mode operations are inherently undesirable because they deprive local residents of periods of respite from aircraft noise. We recommend that the Government consult residents in the vicinity of Heathrow airport and others affected by noise under the flight path before any final changes to operational procedures are introduced.
(Paragraph 82)
Surface access to airports
22. Surface connections to major airports in the south east are poor. Road access to each of these airports is far from optimal. In terms of rail access, Gatwick and Stansted are on already congested commuter lines. Heathrow is not yet on the national rail network (with the exception of the limited Heathrow Express rail link which connects to London Paddington), although it will shortly be served by Crossrail
and a western rail access to Reading and the Great Western network was announced in July 2012. Our view is that Gatwick and Stansted should each be served by a dedicated express rail service that is fit for purpose.
(Paragraph 85)
23. While the Government has identified the need to improve railway links to major airports as one of its strategic priorities for Control Period 5 it does not go far enough in setting out exactly what its strategy is. In preparation for the next control period, we recommend that the Government develop a coherent strategy to improve road and rail access to the UK's major airports. As part of this, an assessment should be made of the surface access requirements from the growth of aviation, and in particular, the changes to surface access infrastructure that will be necessary if Heathrow expands. The Government should ensure that the service requirements of major UK airports are incorporated into future rail franchise agreements with rail operators Also, if as we recommend Heathrow is allowed to expand, the Government must ensure that the High Speed 2 rail network serves Heathrow.
(Paragraph 86)
Airports outside the south east
24. There is a potential role for local authorities and Local Enterprise Partnerships to ensure that there is robust research on demand for new routes and to ensure that this is communicated to airlines.
(Paragraph 88)
25. We recommend that the Government take a more active role in promoting airports outside the south east, however, this seems to be at odds with the DfT prioritising the views of British based airlines who have objected to new international routes to our regional airports.
(Paragraph 89)
26. We welcome the Government's moves towards further liberalisation of air service agreements. However, we question whether the current approach goes far enough in reducing the barriers faced by airports outside the south east that are trying to secure new routes and still leaves the door open for UK airlines to restrict access by claiming unfair competition.
An open skies policy which allowed airlines from foreign countries to land and pick up new passengers to a third destination would make some routes commercially viable which they would not be on a point-to-point basis. There are arguments for the introduction of an unrestricted open skies policy outside the south east, covering both point to point services and fifth freedom rights, and we recommend that the Airports Commission assess the impact that such a policy would have.
(Paragraph 93)
27. Transferring through overseas hubs provides customers in regions outside the south east with connectivity that they cannot at present achieve through the capacity constrained UK hub airport. We hope that as capacity increases at the UK's hub airport, connectivity between London and other UK regions improves. In the short-term, the Government should investigate whether it would be possible—within the framework of current European regulations—to protect slots at Heathrow for feeder services from poorly served regions.
(Paragraph 96)
28. We are disappointed to hear that the CAA proposes to increase charges for non-designated airports, particularly given that we were previously assured that the CAA was looking to reduce its costs and burden to industry. We consider that higher charges for these airports risk making them less attractive to airlines if passed on or, more likely, impact on their ability to operate profitably. We recommend that the CAA reconsider the need to impose these charges.
(Paragraph 99)
Air passenger duty
29. We recommend that HM Treasury conduct and publish a fully costed study of the impact of APD on the UK economy. We would, in particular, like to know what the Government's view is of the PwC conclusion that abolishing APD would pay for itself by increasing revenues from other sources. If such a study produces clear evidence that APD has a negative effect on the UK economy and Government revenue, we recommend that APD is significantly reduced or abolished.
(Paragraph 105)
30. There are complex issues and vested interests to be taken into account in any consideration of the merits of differential rates of Air Passenger Duty. We recommend that the Government carry out an objective analysis of the impacts such a policy might have. On the other hand, we see merit in the concept of an APD holiday and recommend that this be introduced for a 12-month trial period for new services operating out of airports outside the south east. After this time, the DfT should assess the extent to which it has led to the development of new routes.
(Paragraph 106)
31. While we accept the need to devolve responsibility for Air Passenger Duty (APD) in Northern Ireland, we do not support further devolution of APD at this stage as it may have negative impacts, for example, in the north of England.
(Paragraph 107)
Our concluding remarks
32. It is immensely disappointing that a decade after the publication of the 2003 White Paper and the then Government's decision to support a third runway at Heathrow, the UK is still faced with the unresolved problem of aviation capacity. Following decades of policy papers, inquiries, taskforces, and commissions, it is the lack of a long-term cross-party political strategy for aviation that is principally to blame for the very real danger that the UK could lose its status as an international hub for aviation.
(Paragraph 108)
33. We have heard evidence from the main players in aviation and many other interested parties. We have found that there is a clear need for greater capacity at the UK's hub airport. Our view is that a new hub airport should not be built at this time. A split hub is not a viable option.
Although high speed rail connections within the UK and to the near continent, if properly connected to our main airports, present opportunities to achieve a modal shift from domestic and short-haul international flights, thereby releasing additional capacity for long-haul routes. A third runway at Heathrow is necessary to meet existing and future demand that can be reasonably predicted. Longer term, further work is required to assess whether further expansion at Heathrow, potentially via a new airport to the west of the current site, is required. We recommend that the Airports Commission obtains this information so that an evidence-based decision can be made.
(Paragraph 109)
34. It is less than ideal that the Airports Commission is working to a protracted timetable, with a final report not to be produced until after the 2015 General Election. We could complain that this is yet another example of important decisions on aviation being kicked into the long grass, but instead we challenge the Commission to use this opportunity to, once and for all, provide a robust and independent evidence base for future decisions. It is our hope that the Commission will produce an evidence base that is widely accepted across the political spectrum, and clear recommendations for action. The challenge for the post-2015 Government will be to quickly get to grips with the recommendations of the Airports Commission and not seek excuses for further delay.
(Paragraph 110)
| 
