WORLD ROUTES: Is There a New Outlook for London Following Government Reshuffle?

The debate over air capacity in London and the South East of England remains one of the major talking points in the UK aviation business alongside Air Passenger Duty (APD), but has the recent Government reshuffle opened the door to a change of heart from politicians. The decision to replace Justine Greening as Secretary of State for Transport with Patrick McLoughlin earlier this month has, according to many, suggested a possible U-turn in Government and the potential backing of a third Runway at London Heathrow. Justine Greening had strongly opposed such a move to provide more airport capacity in London and the South East.

The new appointment brought an immediate reaction from London Mayor Boris Johnson, who thanks to his media appearances during the London Olympics and Paralympics, has enhanced his profile with voters across the city. He said: "There can be only one reason to move her - and that is to expand Heathrow Airport," he said in a statement.

"The third runway would mean more traffic, more noise, more pollution - and a serious reduction in the quality of life for hundreds of thousands of people. Even if a third runway was built, it would not do the job of meeting Britain's needs. If we are to remain Europe's premier business hub we need a new four-runway airport, preferably to the east of London, that addresses the problem of aviation capacity before it is too late, and business is driven into the arms of our European competitors,” he added.

It is far too early to tell what this political decision will mean. Mr McLoughlin has said in the past that he actually thinks that developing a new airport in the south east was unlikely to be realistic or acceptable and reports suggest that he apparently has been favouring developing regional airports, a move that will be supported in cities such as Birmingham, Leeds, Manchester and Newcastle.

In his first statement highlighting aviation, Patrick McLoughlin has noted the value of international connectivity and the vital role in plays in economic growth. “This Government has made clear that its priority is returning this country to sustainable economic growth and our aviation networks and infrastructure have an important role to play,” he explains.

The UK is an island nation dependent upon its transport links to the rest of the world for its prosperity. The aviation industry in the UK is extremely successful. It is a significant economic sector employing 220,000 directly and supporting many more indirectly and it contributes more than £16 billion of economic output. According to official data, 35 per cent of UK non-EU trade by value enters or leaves the country by aeroplane. Importantly the industry also provides this country with the global connections which our businesses need to sell their products abroad and which inward investors to the UK demand.

“The Government recognises the importance of aviation to the UK,” says Mr McLoughlin. It is taking forward its Civil Aviation Bill to reform the economic regulation of airports to further the interests of passengers and create a better environment for investment. It is implementing the recommendations of the South East Airports Taskforce, including a trial of operational freedoms at Heathrow Airport to improve reliability and reduce delay.

In July the Government published a draft Aviation Policy Framework (APF) for consultation; a framework which will set the high-level policy parameters within which any new proposals for airport development may be considered. The final APF will be adopted by the end of March 2013. Alongside the draft APF the Government has announced a number of short term measures to deliver operational improvements and boost economic growth within existing airport capacity constraints including £500 million towards a western rail link to Heathrow, a review of the UK’s visa regime and the recruitment of 70 additional border staff at Heathrow.

“Today the UK is amongst the best connected countries in the world. Our airports, particularly those in the South East, deliver direct flights to over 360 destinations, including those of greatest economic importance. London has more flights to more destinations than any other city in Europe. More flights to the important trading centres like New York, Hong Kong, and Singapore. The Government is determined to deliver a solution which will continue to provide that connectivity in the short, medium and longer term,” explains Mr McLoughlin.

This is a very difficult debate, but the reality is that since the 1960s Britain has failed to keep pace with international competitors in addressing long term aviation capacity and connectivity needs. The Government believes that maintaining the UK’s status as a leading global aviation hub is “fundamental to our long term international competitiveness,” but it is also mindful of “the need to take full account of the social, environmental and other impacts of any expansion” in airport capacity.

“Successive Governments have sought to develop a credible long term aviation policy to meet the international connectivity needs of the UK,” says Mr McLoughlin. In each case, he explains, the policy has “failed” for want of trust in the process, consensus on the evidence upon which the policy was based and the difficulty of sustaining a challenging long term policy through a change of Government. “The country cannot afford for this failure to continue,” he adds.

The Government has now asked Sir Howard Davies to chair an independent Commission tasked with identifying and recommending to Government options for maintaining this country’s status as an international hub for aviation. The Commission will examine the scale and timing of any requirement for additional capacity to maintain the UK’s position as Europe’s most important aviation hub and identify and evaluate how any need for additional capacity should be met in the short, medium and long term.

In doing so, the Commission, will provide an interim report to the Government no later than the end of 2013 setting out its assessment of the evidence on the nature, scale and timing of the steps needed to maintain the UK’s global hub status; and its recommendation(s) for immediate actions to improve the use of existing runway capacity in the next five years – consistent with credible long term options. The Commission will then publish by the summer of 2015 a final report, for consideration by the Government and Opposition Parties, containing its assessment of the options for meeting the UK’s international connectivity needs.

We have been debating about future growth opportunities at London Heathrow, new runways at London Gatwick or London Stansted and even the concept of a whole new hub airport in the Thames Estuary since around the early 1970s. The problem then, as now, is very simple. No new runway anywhere in the south east will be unopposed. The options will always split debate although many will argue that a single hub airport is vital to Britain's competitiveness and that the only place for it is Heathrow.

The solution is far from clear, but delegates at this year’s Invest & Manage Airports conference at Chelsea Football Club, London, Stamford Bridge on October 18-19, 2012 will get a first-hand insight into the Government’s strategy when Daniel Moyland, Key Advisor on Aviation to the Mayor, Transport for London, will be speaking on London’s airport capacity debate. A not-to-be-missed opportunity for those in the business to meet him and hear his views on one of the industry’s hot topics.