Airports National Policy Statement Contents

2The case for more capacity

Meeting future demand

11.Airport capacity is determined by the amount of runway capacity and the terminal facilities available to cope with aviation demand through plane and passenger movements. Aviation demand is forecast to increase significantly between now and 2050. Heathrow Airport is already full and other London airports are operating at capacity during peak times. All major airports in the South-East of England are expected to be full by the mid-2030s, with four out of five full by the mid-2020s.21 As airports fill up and operate at full capacity, there is little resilience to deal with any disruption, leading to delays.22

12.It was broadly accepted in the evidence submitted to the Committee that there was a need for additional runway capacity, in particular hub runway capacity.23 We acknowledge there is opposition to this view from affected communities and environmental campaigners. An additional runway and the associated developments to support its use will allow for a step-change in airport capacity and flexibility in the South-East, although it is to be noted that projections suggest that the main increase will be in international transfer passengers, with almost no increase in business use. Not developing this additional runway capacity would result in less choice, more disruption and higher air fares for UK passengers and potential costs in terms of trade opportunities foregone through air freight.24 We accept that there is a case as set out in the Airports National Policy Statement for additional runway capacity, in particular hub capacity. This is on the premise that any expansion is sustainable, consistent with legal obligations and that suitable mitigations will be in place to offset impacts on local communities affected by noise, health and social impacts. The Government should redraft its final NPS, in line with the recommendations set out in this report, to minimise any chance of a successful legal challenge.

The Government’s case for a Northwest Runway

13.Maintaining the UK’s hub status in Europe is the Government’s overriding objective in developing its preference for runway expansion in the South-East of England.25 Heathrow is the UK’s only major hub airport and it is one of Europe’s leading hubs. It has a reputation worldwide as a transatlantic conduit. It is unrivalled in the UK in terms of the density of airlines, connections and transfer passengers. This makes it possible to sustain routes at Heathrow that would not be viable as point-to-point links. The extent of the pent-up demand at Heathrow Airport is unrivalled anywhere else in the UK. The Government believes the connectivity benefits will be greater and realised sooner by a NWR scheme than by the other schemes considered by the Airports Commission. The clear preference of the airlines is to expand at Heathrow, although not at any cost.26

14.Air freight is also critically important to the UK economy. Although only a small proportion of UK trade by weight is carried by air, it is particularly important for supporting export-led growth in sectors where goods are of high value or time critical.27 The time-sensitive air freight industry, and those industries that use air freight, benefit from greater quantity and frequency of services, especially long haul. By providing more space for cargo, lowering costs, and by the greater frequency of services, this should in turn provide a boost to trade.28 Freight is the other major comparative strategic benefit that will be delivered by the NWR scheme compared with the other alternatives. All three schemes would provide increased freight capacity, but the NWR scheme would provide the greatest comparative benefits.29 This was based on the higher growth forecast for long-haul connectivity at an expanded Heathrow, its position in west London, the convenience of its connections to the Strategic Road Network, the opportunity to remodel and expand existing cargo facilities in a more efficient and environmentally friendly way, and the relative density of freight activity around the airport compared with Gatwick.30

15.The Government said the NWR scheme “delivers the greatest strategic and economic benefits”31 The NPS states that the NWR scheme:

16.These strategic benefits are achievable if it is delivered on time and generates the capacity specified in the NPS. We conclude that the Government is right to pursue development at Heathrow and accept the arguments it has made in favour of its preferred scheme. We endorse its approach of using a national policy statement and the planning process outlined in the Planning Act 2008. We conclude that there are valid concerns about the Government approach. In the remainder of this report we set out how the draft NPS should be improved before Parliament is asked to approve a final NPS ahead of designation by the Secretary of State. We recommend that both Houses of Parliament allow the planning process to move to the next stage by approving the Airports National Policy Statement, provided that the concerns we have identified later in our Report are addressed by the Government in the final NPS it lays before Parliament. Without addressing the concerns the Committee has raised, we believe there is a risk of successful legal challenge.

Review of the evidence

Strategic case

17.Heathrow’s strategic importance as a hub needs to be seen in the context of the national picture and judged on the basis of the passenger growth and connectivity benefits likely to be delivered across the whole of the UK. The DfT’s forecasts indicate that the NWR scheme will facilitate a rise in passenger growth, at the UK level, of 63% between 2016 and 2050, compared with a rise of 53% without expansion. This equates to a net increase of 6% or 26 million passengers per annum (mppa) by 2050 compared with no expansion.33 The passenger growth delivered by a NWR scheme is broadly similar when compared for the ENR and Gatwick schemes at 61% and 62% growth respectively; though growth is forecast to occur sooner with both the Heathrow options.34

18.The increase of 26 mppa in passenger growth, at the UK level, from NWR expansion includes an additional 16 mppa international-to-international (I-I) transfer passengers.35 Excluding the I-I transfer passengers, the NWR scheme facilitates an additional 10 mppa terminating passengers36 by 2050 compared with no expansion. When compared with the other options, Gatwick provides the highest growth at the UK level by 2050 (Figure 2).

Figure 2: Terminating passenger growth, by expansion option, from 201637

19.The Government believes the NWR proposal will enable the growth of business travel.38 Business travel is forecast to increase marginally with or without any runway capacity constraints; although induced benefits will be delivered from the wider variety and greater frequency of services deliver by an expanded NWR (discussed below). The passenger growth facilitated by a NWR scheme is accounted for almost entirely by leisure passengers (i.e. those travelling for holiday purposes or those visiting friends and relatives sometimes referred to as VFR) and international transfer passengers (Figure 3). The forecasts also show that an expanded Heathrow will accommodate three times more outbound passengers than inbound passengers.39 These passengers spend their money overseas and represent a “deficit” on the UK’s economic balance sheet;40 although there are positive economic benefits from outbound travellers as elements of several industries in the UK that exist for the primary purpose of serving outbound travellers.41

Figure 3: Net passenger growth, by passenger type, NWR vs No expansion42

20.The NPS states that the NWR scheme is “expected to lead to more long-haul flights and connections to fast-growing economies.”43 The DfT’s forecasts show that, at the UK level, the NWR scheme will offer one more destination overall to emerging and fast-growing economies when compared with no expansion. It will increase the frequency of long-haul connections to fast-growing economies against a no expansion scenario.44

21.The NPS states that, when compared to the other options considered by the Airport Commission, “Heathrow Airport is best placed to provide the biggest boost to the UK’s international connectivity [and] lead to more long-haul flights.”45 It states that the build-up of long-haul services would be quicker at Heathrow.46 The DfT’s forecasts show that at the UK level, the NWR scheme will offer 12 more daily long-haul services in 2050 than would be the case without expansion, nine more than the Gatwick scheme and one more than the ENR scheme (Figure 4).47

Figure 4: Number. of daily long-haul services, at the UK level, by expansion option48

22.In terms of the total number of flights to long-haul destinations, the NWR scheme will offer 12% or 37,000 more flights per year by 2050 than without expansion, and 20,000 and 10,000 more than the Gatwick and ENR schemes respectively.49 The higher frequency and number of services overall is the obvious advantage of the NWR scheme.

Economic case

23.The DfT’s appraisal shows little separates the economic cases of the three schemes. The economic benefits over the appraisal period are now marginally in Gatwick’s favour, which is forecast to deliver £74.1 billion in gross benefits; compared with a Heathrow NWR at £72.8 billion and £61.7 billion with a ENR.50 Once costs are considered, the net economic benefits for the NWR scheme are relatively small at a maximum of £3.3 billion over 60 years and in fact, may be negative if future demand falls.51 The net economic benefits for the other schemes are also relatively small. The draft NPS does not reflect the DfT’s appraisal stating simply that “ … overall the Heathrow NWR scheme is considered to deliver the greatest net benefits to the UK.”52

24.The balance of economic costs and benefits is sensitive to the methodologies and assumptions employed in the appraisal. The DfT and the Secretary of State insisted they had taken a conservative approach in their appraisal.53 We have identified several factors in the appraisal that could increase the risk of a successful legal challenge at a later stage of the planning process. These should be corrected or clarified before the NPS is designated:

25.The benefits and costs the NWR scheme are finely balanced. Even small changes in assumptions or methodology could mean that the monetised costs of expansion via a NWR would outweigh the benefits. There are wider economic benefits that are not monetised as part of the economic case and need to be considered; equally there are several other environmental and social costs that are not monetised and are only assessed qualitatively, including loss of community and quality of life for nearby residents.

26.Perhaps the greatest factor affecting the economic case is deliverability. We were told about several factors that might prevent the delivery of a NWR scheme, including:

27.The economic case of the NWR scheme is grounded on it being delivered by 2026 and at capacity by 2028. These are essential considerations. If the NWR cannot be delivered to the capacity and timeline assumed, because of, say, airfield design pinch points or planning issues, there will be considerable knock on effects to the economic business case of the scheme.63 A two-year delay to the scheme’s delivery would result in £16.3 billion of benefits being removed from the economic case.64 Similarly, there are significant economic costs from not proceeding at this point with the NWR scheme. In making its decision, Parliament needs to consider these opportunity costs, such as additional demand moving to competitor airports in other countries.

Environmental, health and social impacts

28.The DfT’s comparative assessment of the schemes considered by the Airports Commission focuses on the strategic and economic business cases. Limited detail on the relative environmental, health and social impacts of the three schemes is included in Chapter 3 of the NPS. Only one paragraph in the NPS provides a side-by-side assessment of the schemes. It concludes:

… while all three schemes are expected to have a negative effect on impacts such as air quality, noise and biodiversity, the Gatwick Second Runway scheme has a less adverse impact than either scheme at Heathrow.65

29.This limited consideration was justified by the DfT, on the basis that the NPS was a planning document and was “not really the place to set out an extensive discussion.”66 We agree with this but the discussion in the NPS should reflect the weight of evidence, which we summarise in the table below.67 (More detail on these issues is included in the annexes to our Report). It is not clear whether the evidence base supporting the NPS fully reflects the scale of likely impacts of the NWR scheme, particularly in the way the noise impacts have been presented (see paragraph 63).68

Table 1: Summary of the environmental, health and community impacts69

Category (indicator)

Heathrow NWR

Heathrow ENR

Gatwick

Land capture70 (including surface access)

905.9ha

723.8ha

702.2ha

Green Belt Land (including surface access)

694.6ha

521ha

59.6ha

Housing loss

783 (plus up to 289 for surface access)

242 (plus up to 165 for surface access)

167 (plus up to 37 for surface access)

Noise71 (No. of people newly affected by noise at 54dB LAeq,16h in 2030)

92,700

27,200

16,200

Air quality 72 (Population exposed to increased NO2 concentrations)

121,377

100,389

51,326

Carbon (Additional tCO2 over 60 year appraisal period)

308,860,409

259,604,192

121,512,938

It should be noted that the table provides a high-level summary for key indicators. For several indicators, such as health, biodiversity and water quality, the impacts are more nuanced and it is difficult to make an assessment in one headline figure or statement. As such, the table should be viewed in comparison with the supplementary analysis provided in the appendices of the October 2017 Appraisal of Sustainability.73

30.We agree with the Government that the Northwest Runway (NWR) scheme offers the greatest strategic benefits. The scheme will consolidate Heathrow’s hub status, offering a greater number and variety of long-haul connections in the short-term, with a higher frequency than the other schemes considered by the Airports Commission. The scheme would deliver passenger growth that would not be realised without expansion. We accept the Government’s analysis that the economic benefits are broadly comparable across the three schemes and that the Department for Transport’s forecasts show that the NWR scheme’s advantage is more marginal over the longer-term. However, we conclude that in its comparative analysis of the three schemes, in Chapter 3 of the NPS, the Government should give more weight to environmental, health and community impacts. If Parliament is to make an informed decision on the designation of the NPS, members need to be confident that the final NPS reflects the weight of evidence as it is presented in the supporting documents. We recommend that more detail be provided in Chapter 3 of the NPS on the evidence on environmental, health and community impacts and that the Department for Transport’s comparative analysis be expanded to reflect more accurately the balance of impact across the three schemes it compares.


21 Department for Transport, Aviation Forecasts, October 2017

22 Department for Transport, Revised Draft Airports National Policy Statement, p 23

23 There is no single definition of what constitutes a hub airport. Broadly we take the term to mean an airport that airlines use as a transfer point en route to another destination.

24 Q673

25 This is evident in the terms of reference set by the Government for the Airports Commission

27 Department for Transport, Revised Draft Airports National Policy Statement, p 14

28 Department for Transport, Revised Draft Airports National Policy Statement, p 23

29 Airports Commission, Final Report, 2015, p 4

30 Q14; Q73

31 Department for Transport, Revised Draft Airports National Policy Statement, p 32

32 Department for Transport, Revised Draft Airports National Policy Statement, p 21–32;

33 Department for Transport, Aviation Forecasts, October 2017

34 Department for Transport, Aviation Forecasts, October 2017

35 That is, passengers who transfer via a UK airport with their origin and destination outside the UK

36 That is, passengers whose journey begins or ends in the UK

37 Department for Transport, Aviation Forecasts, October 2017

38 Department for Transport, Revised Draft Airports National Policy Statement, p 21; Qq464–65

39 Department for Transport, Aviation Forecasts, October 2017

42 Department for Transport, Aviation Forecasts, October 2017

43 Department for Transport, Revised Draft Airports National Policy Statement, p 21–22

44 A Northwest Runway will offer 11 more flights to newly industrialised countries in 2030 and 7 in 2050 than what would have been offered without expansion.

45 Department for Transport, Revised Draft Airports National Policy Statement, p 31

47 Department for Transport, Aviation Forecasts, October 2017

48 Department for Transport, Aviation Forecasts, October 2017

49 Department for Transport, Aviation Forecasts, October 2017

50 These figures are for the lower range presented in the DfT’s appraisal. We also recognise the point made by the ENR scheme proponents about their ability to deliver a high capacity than is assumed in the appraisal. This is addressed later in the report.

51 Department for Transport, Updated Appraisal Report—Airport Capacity in the South-East, October 2017

52 Department for Transport, Revised Draft Airports National Policy Statement, p 32

53 Qq466–67, Qq476–77, Q488, Q500, Q503, Qq505–06, Q512, Q565, Q568, Q575

54 See Annex A for discussion.

56 See Annex B for discussion.

57 Department for Transport, Aviation Forecasts, October 2017

59 Heathrow Hub Ltd (NPS0087)

60 Department for Transport Revised Draft Airports National Policy Statement, p 28

61 See Annexes F, H and I for full detail on these monetised environmental costs.

62 For full discussion, see Annex D

63 Airports Commission, Business Case and Sustainability Assessment, July 2015

64 Department for Transport, Further Review and Sensitivities Report, October 2016

65 Department for Transport, Revised Draft Airports National Policy Statement, p 28

67 For full discussion, see: Annexes E, F, H and I

68 See Annex H

69 Various technical papers supporting the Airports Commission and/or DfT appraisal depending on which is most up to date.

71 Environmental Research and Consultancy Department, Noise Modelling for the Airports Commission:Compendium of Results, June 2015

73 Department for Transport, Appraisal of Sustainability, October 2017




Published: 23 March 2018