With future export opportunities increasingly in emerging, high-growth economies, the CBI has urged the Airports Commission to deliver recommendations to solve the UK’s shortage of runway capacity.
Building on 2013 findings that demonstrate that eight new routes to emerging markets alone would generate as much as £1 billion a year in trade, the organisation has issued a report highlighting that by drawing on both transfer passengers and local populations, hub airports are best placed to act as a catalyst for these new routes.
Research by Steer Davies Gleave, for the CBI, shows that from a sample of 15 emerging markets, hub airports serve on average nearly three times as many destinations as point-to-point airports, while also delivering almost twice as many flights on the routes that are served – 1.5 daily flights from hubs on average, compared to 0.8 from point-to-point.
The Airports Commission will report next summer, after the 2015 general election.
Its CBI report comes ahead of a decision on a island airport in the Thames estuary.
The so-called ‘Boris Island’, backed by London mayor Boris Johnson, has been under consideration by the commission, charged by the government on how to expand airport capacity in the UK.
If it decides to eliminate the estuary scheme from consideration, it would be left with three short-listed options for expansion - adding a third runway at Heathrow, lengthening an existing runway at Heathrow, and a new runway at Gatwick.
The CBI report thus appears to favour Heathrow.
With the UK’s hub capacity at Heathrow already full, the UK is falling behind on direct flights to emerging markets.
The report highlights that by drawing heavily on transfer passengers, the UK’s EU competitors with their own unconstrained capacity are creating connections to new destinations within the BRICS such as Xiamen in China and Recife in Brazil, as well as links to the major markets of the future, like Peru, Indonesia, Taipei and Chile.
Katja Hall, CBI deputy director general, said: “The chancellor has set businesses ambitious targets for increasing the UK’s exports, and there is simply no way of achieving these goals without upping our game in emerging markets.
“Our analysis last year demonstrated that connectivity is the lifeblood of trade, but it also highlighted that the UK is already falling behind, so every day we delay making a decision, makes matters worse.
“First and foremost, UK business wants action.
“There can be no more excuses – we need to see the Airports Commission deliver a strong case for new capacity and a clear schedule for delivery, and politicians to commit to spades in the ground by the end of the next parliament.”
The CBI called on the Airports Commission to deliver recommendations that make a strong political and economic case for action in the next parliament, with a clear schedule that delivers spades in the ground by 2020.
The body also wishes the commission to set out clearly the type of capacity required to maximise the UK’s connections with the rest of the world.
The full report can be seen here.