Transport CommitteeWritten evidence from the Mayor of London (AS 104)


1. Aviation plays a vital role at the heart of the London and the UK economy in a world that is becoming increasingly global. Demand for air travel for both passengers and freight is growing fast. We will only be able to meet our long-term connectivity and capacity needs with a new hub airport. To achieve the critical mass of point-to-point and transfer traffic required, this hub must serve London. Building a new hub will maximise the social and economic benefits of aviation, is consistent with the Government’s emissions targets and can ensure the Government meets it environmental objectives. This is why the Mayor of London is calling for one.

2. Government has the critical role in enabling the delivery of a new hub airport. A clear policy framework that provides the right conditions to attract airlines and infrastructure investors could make such a project work. With strong political backing, construction could be undertaken over a challenging, yet feasible 10 years, and a new hub airport could be well established before 2030.

1. What should be the objectives of Government policy on aviation?

1.1 How important is international aviation connectivity to the UK aviation industry?

3. Industries and jobs across the UK are supported by the connectivity offered by a global hub airport located in the UK. This includes but is not limited to, the UK’s aviation industry.

4. A hub airport located in the South East and capable of meeting current and projected demand can bring benefits to the UK aviation industry—and the wider UK economy—across three main areas:

Direct effects—employment generated by the new airport (estimated to be approximately 1 person per 1000 passengers) and economic output (eg at airports),

Indirect effects—employment and activity generated in the industry’s supply chain,

Induced effects—employment and/or economic output created through the household spending of those employed.

5. Aviation plays a vital role in supporting economic growth and can help rebalance both the sectoral and spatial distribution of the UK’s economy.

6. Aerospace is one of the UK’s highest value adding manufacturing sectors. The UK is home to Europe’s largest aerospace industry and the second largest, after the USA, in the world. In 2009, the aerospace sector (both commercial and military) generated turnover of some £22bn and new orders of £32bn,1 and employed up to 100,000 people directly and 220,000 indirectly.2

7. Research and design investment in aerospace (both commercial and military) in the UK in 2009 was £1.468bn. This represents 10% of all UK industry-wide R&D spend.3

1.2 What are the benefits of aviation to the UK economy?

8. Aside from the benefits of the aviation industry described above, international aviation connectivity is vital for London and the UK. London needs to maintain its place at a global aviation connectivity crossroads in order to ensure its “world city” status, giving the UK access to global markets, facilitating inward investment and enabling millions every year to continue to visit—for business, leisure or study.

9. Key to this connectivity is a hub airport—drawing on London’s unique aviation catchment for point-to-point traffic, combined with transfer traffic, to enable a significantly greater range of routes and frequencies than could otherwise be supported. The UK’s existing hub airport, Heathrow, accounts for more than two-thirds of all UK scheduled longhaul traffic. Without transfer passengers, approximately 80% of longhaul routes from Heathrow would suffer a reduction in frequency or be lost altogether.

10. Much of London’s economic success can be attributed to its position at the heart of a global network of “world cities”. Key aviation-reliant sectors have historically located their headquarters in London because of its air connectivity offer. Ready access to business travel is one of the essential factors which allows London and the UK to play their leading roles in the world economy.

11. The UK is the world’s 2nd largest recipient of Foreign Direct Investment (FDI)4 and accounts for half of all European headquarters established by non-European firms between 1998–2009.5 In 2010–11, over 94,000 jobs were created and safeguarded in the UK by foreign companies’ investments.6 Data from the European Investment Monitor suggests London’s share of all UK FDI projects between 1999 and 2009 averaged 33%.7

12. Air freight is also an important element of aviation’s economic contribution. In 2005, freight carried by air accounted for around 25% of the UK’s total visible trade by value8 and 55% of the value of UK manufactured exports to non-EU countries.9

1.3 What is the impact of Air Passenger Duty on the aviation industry?

13. Aviation provides important economic benefits for the UK. In addition to business travel and freight, inbound tourism makes a valuable contribution to the UK economy. However, the social benefits of aviation should not be underestimated—not just the value that millions of Brits every year place on flying away on holiday—but also for those travelling to visit friends and relatives (“VFR”). Britain’s diverse and cosmopolitan population relies on aviation links to keep in contact with every part of the globe and many place immense value on the ability to do so.

14. A detailed assessment should be undertaken to help fully understand the impacts of APD, both economic and social, and the extent to which it is affecting the UK’s competitiveness.

1.4 How should improving the passenger experience be reflected in the Government’s aviation strategy?

15. The Mayor warmly welcome significant recent investment into improving the experience of passengers as they use London’s airports. However, the underlying capacity constraint is the single greatest issue adversely impacting customer experience—typified by Heathrow’s regular delays.

16. The Government must not fall into the trap of making adjustments that free up modest amounts of additional capacity, but that will have substantial negative consequences—for instance the introduction of mixed mode operations at Heathrow, or any relaxation of night flying restrictions. These would be wholly unacceptable because of their effects on hundreds of thousands of local residents.

17. The correct long-term strategy is the provision of a new hub airport—one that can provide the capacity and airport layout enabling the fundamental issues that undermine the passenger experience for so many to be addressed. Only an efficient airport with state-of-the-art facilities, excellent surface access links and sufficient runway capacity on a site with minimal constraints can offer the comfortable, hassle-free experience that travellers expect of a world-class hub.

1.5 Where does aviation fit in the overall transport strategy?

18. Britain is an island and aviation is a largely non-substitutable form of transport. Four out of five trips to and from the UK are made by air.10 The economies of London and the UK depend to a great extent on the available air connections. Aviation is unique in the extent to which it connects Britain to developed and emerging markets worldwide, contributing to our economic growth with links that cannot easily be replicated by other modes.

19. High speed rail can provide an alternative mode of transport for approximately 10% of Heathrow’s flights. For the most part, high speed rail complements, rather than substitutes, hub airport capacity, increasing the airport’s catchment area and so facilitating a wide network of longhaul routes (which, needless to say, cannot switch to rail).

20. Connecting London’s future hub airport to a national high speed rail system will also allow regions outside the South East to share fully in the hub’s global connectivity benefits. This would encourage UK-wide growth in international trade, tourism and investment and offers the potential for strong contribution to rebalancing the national economy.

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

2.1 How do we make the best use of existing London airport capacity? Are the Government’s current measures sufficient? What more could be done to improve passenger experience and airport resilience?

21. Heathrow in particular, as Britain’s existing hub airport, is severely hampered by its lack of spare runway capacity and highly constrained site. This curtails the airport’s operational effectiveness and directly impacts the passenger experience. Delays are too commonplace for what is the main international gateway for London and the UK.

22. Improving Heathrow’s performance must not be done at the expense of local residents who already suffer significantly from the environmental impacts of the airport. Many Londoners are concerned that the tactical measures being employed as part of the ongoing Operational Freedoms trial will have a detrimental impact on their quality of life. The Mayor will study the results of the trial carefully and is calling for it to be conducted in an open, transparent manner and for Heathrow, the DfT and the CAA to not rely solely on the simple measure of complaints received to provide a conclusive barometer of impacts.

23. We cannot rely on other airports around London and further afield to address the long-term capacity challenge. The particular nature of a hub, dependent on building a critical mass of point-to-point and transfer traffic, means that spare capacity elsewhere cannot be used as a substitute. It is true that in the short term, other non-hub airports including Gatwick, Stansted, Luton and possibly Birmingham could help serve a proportion of traffic, effectively “spillover” routes and frequencies which cannot be accommodated at Heathrow. Though sub-optimal and requiring both the full co-operation of airlines and the patient acquiescence of passengers, this could serve as a palliative to London’s connectivity crisis in the short term, while a new airport is built.

2.2 Does the Government’s current strategy make the best use of existing capacity at airports outside the south east? How could this be improved?

24. Demand for international connections is most concentrated in London and the southeast. The London airports handle just under three quarters of all UK inbound tourist arrivals.11 Regional airports have a useful role to play, but not as a substitute for new hub capacity in the southeast. Any redistribution of traffic from the southeast through regional airports would not only result in millions of people travelling significantly further by road and rail to fly but also in a likely deterioration in overall connectivity.

25. Moreover, in such a scenario, much of the key hub passenger traffic would shift, not to UK regional airports, but to rival hub airports elsewhere in Europe, who would willingly assume the connectivity benefits that entails.

2.3. How can surface access to airports be improved?

26. Surface access is key to the attractiveness of an airport and for Britain’s major airports providing sufficient capacity and connectivity, particularly by sustainable modes is key.

27. The Mayor supports improved surface access to airports and the particular role of rail to provide improved connectivity and increased capacity. Nonetheless, it is important to ensure that any investment is commensurate with passenger demand and the future role of the airport and that the airport operator bears an appropriate share of the costs.

28. Investment in surface access should be considered in the long-term context of a strategic plan for UK aviation. High-quality surface access connections will be essential to support a new hub airport, enabling a step-change in mode share and maximising its catchment area, as well as air-to-rail mode shift.

3. What constraints are there on increasing UK aviation capacity?

3.1 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?

29. The Mayor fully agrees with the Government’s draft objective to limit, and where possible, reduce the number of people in the UK significantly affected by aircraft noise. Minimising the number of people affected is best achieved by relocating the UK’s hub to a less densely populated area.

30. The Mayor is responding to the Government’s consultation by asking that serious consideration be given to establishing a new and improved noise metric instead of the current 57LAeq decibel contour as the level marking the onset of significant community annoyance. Night noise and the importance of respite periods must be better accounted for.

31. What is abundantly clear from our research is that no airport in Europe can compare with Heathrow for the severity of its noise impacts on hundreds of thousands of people—accounting for 29% of all the people in Europe affected by aircraft noise. This is only in small part due to its size and is mostly a function of its location in a densely populated urban area. Addressing and managing these impacts poses a very serious challenge given the current scale of airport activity, with no easy solutions available.

32. In addition to noise, other local environmental impacts of airports should not be ignored. Air quality is also important, with emissions not just from aircraft but also from the associated infrastructure and activities emanating from an airport. The consequences of poor air quality can be substantial and should be fully considered as part of any assessment into the impacts of an airport.

33. A recent study by the Massachusetts Institute of Technology (MIT)12 found that Heathrow’s location exacerbates its local environmental impacts. It stated that moving the UK’s hub airport to the east of London would reduce the health impacts of the UK hub by 60–70% (versus a 3-runway Heathrow). This is because of Heathrow’s position upwind of London’s population centres, as well as its extreme proximity to them.

34. In conjunction with significant road-based emissions in the vicinity of the airport, EU limits for NOx are already being breached at Heathrow, subjecting local people to significant health risks.

35. The severity of the noise and air pollution impacts of Heathrow are inescapable and more must be done to address these in the short-term. In the long-term, the only feasible solution is a new hub airport, likely to the east of London, without the severe noise and wider health impacts that plague the local communities around Heathrow today.

3.2 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?

36. The Mayor fully supports the Government’s draft objective to ensure that the aviation sector makes a significant and cost effective contribution towards reducing global emissions.

37. The Government is right to set ambitious targets, and continue its work towards an effective emissions trading regime. It is early days for the current regime and we must acknowledge that, in the UK, we are at the forefront of international efforts to find a workable solution to an extremely difficult problem: striking the right balance between the costs, benefits and environmental impacts of activities across all walks of life.

38. Given the enormous benefits that aviation delivers, ways must be found to address aviation’s impact on climate change while not unduly constraining air travel. Many measures will form part of efforts to manage this. The aviation sector should continue in earnest to pursue improvements in aircraft efficiency, propulsion technology, aerodynamics and making feasible the use of alternative fuels; encouraged appropriately by the Government and the international community.

39. The UK’s Committee on Climate Change has recommended in a central case that UKwide our airports can accommodate in the region of 150 million more passengers per annum by 2050 over current levels—while still adhering to our emissions commitments. This is compatible with development of a new hub airport. This assumes continued, realistic progress in aircraft fuel efficiency and the adoption of more efficient air traffic control regimes.

40. It is worth noting that travel to and from airports can also be a key contributor to the aviation sector’s impact on climate change. Low carbon modes accessing Heathrow only make up a 40% modal share,13 compared to up to 70% at other leading international airports.

3.3 What is the relationship between the Government’s strategy and EU aviation policies?

41. Substantial aviation growth is forecast across Europe and across the globe, as the sector benefits from further liberalisation and increasing competition. If the UK does not have the hub capacity to take advantage of this, we will be left behind and our rivals will benefit from the explosion in global connectivity.

42. The inclusion of aviation in the European Emissions Trading Scheme (EU ETS) is most welcome and the Mayor considers this to have great potential to be an effective mechanism for monitoring, managing and controlling aviation emissions. We must set a clear example, but also remember that caps and limits minimising aviation’s impacts will be most effective when agreed at an international level.

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

4.1 What should this step-change be? Should there be a new hub airport? Where?

43. A hub airport with a step-change in capacity is fundamental to ensuring the global connectivity that the UK needs, now and in the future. The Government’s own forecasts for an unconstrained hub airport predict demand for up to 180 million passengers per annum by 2050—and Heathrow, even if it could be sustainably expanded, could never hope to achieve that. Britain needs a new hub airport of this scale—with at least four runways—if it is to secure future economic growth and prosperity.

44. The unique profile of London and the southeast requires that the UK’s hub airport be located here. The region has a huge, critical mass of inbound and outbound business and leisure travellers, underpinned by a constellation of businesses with an above average requirement for access to global air links.

45. Over the coming 12 months, the Mayor will be assessing, in detail, a number of location options to input into the work of the Davies Commission. While he is disappointed that the Government appears to be requiring the Davies Commission to take three years to issue their conclusions, he hopes that by accelerating his own work programme to develop a credible solution, he can help reduce their timescales.

46. Our initial work suggests that, based on a number of criteria including spatial, environmental and surface access, a location to the east of London would be most appropriate—options include an Inner and Outer Thames Estuary location as well as Stansted.

4.2 What are the costs and benefits of these different ways to increase UK aviation capacity?

47. Part of our work to assess a new hub airport location will examine the costs of various options, as well as the relative benefits. The need to be able to sustain a commercially viable airport handling up to 180 million passengers per annum, means that several sites, both new and existing, can be deemed unsuitable.

48. Government has a fundamental role in enabling delivery of a new airport—setting out a clear policy framework that provides the right conditions to attract the airlines and potential infrastructure investors that will be key to making the project work. Government also has a central role if the considerable development potential of a new hub airport is to be realised—regenerating deprived areas and stimulating the creation of thousands of jobs.

49. The challenge is considerable, but with cross-party consensus, it is not insurmountable. The sterling effort to put on the London 2012 Games demonstrates our potential. There will be costs to address in building a new hub airport and associated surface access links. But there are, and will continue to be, significant costs to the UK’s economy if we erode our connectivity and cede our competitive edge to those economies investing in their futures.

26 October 2012





4. UNCTAD statistics database

5. Inward Investment Monitor, Ernst & Young, 2010

6. UK Inward investment report 2010/11, UK Trade and Investment, 2011

7. Economic Evidence Base to support the London Plan, the Mayor’s Transport Strategy and the Economic Development Strategy, GLA Economics, May 2010

8. Focus on Freight, DfT, 2006

9. The Economic Contribution of the Aviation Industry in the UK, Oxford Economic Forecasting 2006

10. National travel survey, DfT, 2010

11. Passenger Survey Report, CAA, 2007/08, 2008, 2009

12. Air quality impacts of UK airport capacity expansion, MIT Laboratory for Aviation and the Environment, October 2012

13. Passenger Survey Report, CAA, 2011

Prepared 31st May 2013