Lack of runway capacity could lead to £47 billion being drained from the UK economy

31st Oct 2011
Lack of runway capacity could lead to £47 billion being drained from the UK economy

New research published today by leading economists, FTI Consulting, claims that the ‘do nothing’ approach to runway capacity expansion in the South East “will stifle UK growth” and could result in lost benefits of up to £47 billion over the next 30 to 50 years.

The independent report, ‘A study on the importance of aviation infrastructure to sustainable UK economic growth,’ makes clear that the UK needs to have the potential to connect with emerging markets and warns that “if there is no spare capacity…the UK could be left behind other European countries that have much more capacity.”

The report also says that “the notion that ‘rebalancing the economy’ will occur by stifling investment in the South East is misguided and potentially damaging.” The report argues that because the South East is the ‘engine of the UK, stifling its growth will stifle UK growth.’

It is the view of the economists who undertook the research that “policy makers should reconsider the current stance of no expansion and the safeguarding plans outlined for seven UK airports in the 2003 White Paper.”

Stewart Wingate, Gatwick Airport Chief Executive said: “The report is a timely reminder of the important role aviation plays in supporting economic growth and recovery.


“There is a growing consensus amongst the industry that capacity in the South East is an issue. This is supported by the report which notes the conclusion from the DfT’s own projections that airport capacity at Gatwick and across the South East will fill up by 2030.

“Today, Gatwick operates at 78% capacity so there is room for more flights and we believe we will grow to carry 40 million passengers a year by 2020 with our single runway and two terminals. But Heathrow is already operating at 99% capacity.

“The Government must decide how the capacity issue in the South East is to be addressed but it is clear from the report that if we ignore the need for more capacity in the London airports system, the whole UK economy will suffer.

“It also suggests that passengers will suffer with weakened connections to the rest of the world. Passengers will have to contend with higher costs of travel coupled with a reduction in the choice of travel destinations.

“We support the view expressed in the report that the future aviation policy should review safeguarding plans outlined for the seven UK airports in the 2003 White Paper. We will continue to safeguard land in partnership with local authorities in the event that if Gatwick needs a new runway it would be possible to build one. We have no current plans to do so and are committed to upholding the legal agreement which prohibits the construction of an additional runway before 2019 but the requirement on airports to safeguard land must be upheld.”

Vicky Pryce, Senior Managing Director at FTI Consulting, who led the research and says: “This report demonstrates that aviation infrastructure is important for the sustainable growth of the UK, in particular in connecting the UK with emerging markets. Decisions on whether or not to expand capacity involve a range of considerations, including some such as environmental effects that were not considered by this report. However, our report demonstrates that there is an economic cost that needs to be given serious and appropriate consideration. “

Mr Yosuke Kawakami, Japanese Embassy, was interviewed as part of the research and, speaking in his personal capacity, said “I hope the UK government will re-consider the hold on capacity expansion – it is a real threat to the UK. New business may be turned away and some already here may move

Gatwick Airport included this economic research as part of its submission to the Government’s ‘Sustainable Aviation Policy Framework’ scoping document to help inform the future aviation policy.

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