The Government has a laudable aim of providing a business-friendly environment in the UK, indeed of creating the best place to do business, writes John Barrington-Carver.
However, as the International Air Transport Association (IATA) said in February: “With the decision to abandon plans for a third runway, London Heathrow is becoming a secondary hub. Heathrow has two runways limiting its growth compared to other major European hubs with greater runway capacity — Amsterdam has five runways while Paris, Madrid and soon Frankfurt will have four.”
A hub means that long and medium-haul passengers can transfer onto connecting flights for onward destinations. This enables airlines to be able to afford to serve more international routes thus making the country more easily accessible to overseas visitors and business. It also means that the airfreighting of the UK’s precious exports can be more easily achieved to more destinations. However, with Heathrow at 99 per cent capacity and all further London-area airport expansion currently banned by the Government, the UK is already suffering as highlighted above by IATA. There is a broad business and industry consensus that more capacity is vital in the South East, or preferably as close to London as possible, but the political barriers to this are considerable.
Sadly it is already a fact that the choice of Asian city destinations is already much higher at competitor European markets particularly for Chinese cities. As Boris Johnson said in the Daily Telegraph (10 October 2011): “China’s biggest airline, China Southern, does not serve the UK because there aren’t enough slots at Heathrow – which is one of the reasons that it is not as easy for British business people to get to China as it is for our competitors on continental Europe. Every week, there are 17,500 seats on planes bound for mainland China from Frankfurt; 15,000 on planes from Paris; 11,000 from Amsterdam and only 9,000 from Heathrow. It will not be all that long before both China and India have bigger GDPs than the US – and yet we are making it harder for British business people to get to the future megacities from London than from our competitor airports. If you want to fly to Chengdu, Nanjing, Hangzhou, Xiamen or Guangzhou you can get there direct from one of London’s Continental rivals – but you can’t get there from Heathrow.” The reverse is clearly also true for Chinese visitors.
In the crowded home counties around London with the inherent tortuous planning and legal obstacles involved, plus the understandable NIMBY attitude of affected residents and also environmentalists, it could be years before a solution to increase vital capacity is arrived at. As an island nation without a clear and decisive policy to address the UK’s strategic transport needs – both domestic and international – London and the UK as a whole faces the possibility of becoming a financial and business backwater through lack of access and connectivity. In addition, the Government has to face up to the fact that it imposes the highest air passenger duty in the world which seems at odds with its claim to wish to provide a thriving business climate. It is also odd that the UK is taxing both inward and outward tourism when surely we should be encouraging overseas visitors, particularly those from China and other long-haul destination which carry the highest tax level.
If the UK is to be competitive in future, then the Government’s current aviation policy review due out later this year has to face up to and deal with some stark economic and difficult political decisions. If the thorny issue of lack of London area capacity is not grasped and resolved effectively (and as quickly as possible), such a failure will potentially affect everyone in the UK for the foreseeable future. So will the UK’s on-going ability to compete and prosper internationally. It is therefore to be strongly hoped that a “head in the sand” approach, like the ostrich’s, will not be adopted when the policy review is published. Otherwise the prospects for the UK economy getting off the ground are likely to stall and lag behind competitors with better capacity and connectivity.
