Two independent research studies announced this week confirm that the UK is already suffering economically from lack of runway capacity, particularly in the London area. 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.
The first study gives an international overview which underlines the importance of travel and was conducted by market research firm Penn Schoen Berland on behalf of Marriott International. It included the views of 1,100 global travellers and opinion leaders from eight countries, including the UK, the US, Brazil, China and France. The research revealed that international travel is considered even more important at boosting the economy and breaking down cultural barriers than the internet, TV/movies, or political diplomacy.
The second study, announced on 26th January, was commissioned by the British Chamber of Commerce. It has established what Cheapflights and the aviation industry predicted would happen during the debate about the necessity for a third runway for Heathrow. The study has indeed confirmed that the decline in international flight links to London means the UK is missing out on economic growth opportunities to the tune of £1.2 billion annually:-
- 67% of business leaders in Brazil, China, India, South Korea, and Mexico say that better air connections from their home country to France, Germany and Holland mean they are more likely to do business with those countries rather than the UK
- 92% say direct flights are important to inward investment decisions
- 62% say they will only invest in the UK and 80% say they would trade more with the UK if flight connections were improved with their home markets.
- Two-thirds of directors in Brazil, China, India, South Korea and Mexico said they were more inclined to do business with Britain’s major European rivals because they offered more direct flights.
In a succinct statement John Longworth, Director General of the British Chambers of Commerce, said:
“There is an aviation-shaped hole in the government’s growth strategy. While businesses very much welcome ambitious infrastructure projects like high speed rail, they can’t catch a train to China or Brazil. The UK will miss out on investment and jobs if the government does not act now to improve capacity at our airports, strengthen links between regional airports, and develop more connections to emerging markets. Growth cannot wait. While Britain dithers, our international competitors are forging ahead.”
“Encouraging more trade between UK firms and overseas markets is crucial to the rebalancing of our economy. But while firms are being urged to trade with new partners in emerging markets, they are hindered by the lack of connections to these countries – in turn hurting both inward investment and Britain’s export potential.”
He added:- ‘While businesses welcome the ambition displayed by the Government’s recent announcement on a possible four-runway airport in the Thames Estuary, this so far unfunded project will take 20 years to deliver. (Cheapflights’ Note: It also faces major environmental challenges as well as being located on the UK’s on the site of the UK’s major LNG terminal) More has to be done in the meantime to solve the UK’s capacity crunch, for example by building a third runway at Heathrow.’
Today some 40% (in value) of the UK’s exports go by air; good connectivity is also vital to attracting inward investment, and driving growth in tourism. The Government has the laudable aim of providing a business friendly environment in the UK – indeed of “creating the best place to do business in”. However, its insistence in keeping and indeed again raising Air Passenger Duty this April ‘flies’ in the face of this aim, taxing as it does travel to and from overseas markets and trading partners. Furthermore its lack of provision in its aviation policy for increased capacity ignores history and the fact that as an island nation we need easy access to overseas trading partners. Before the age of international air transport, Britain’s ports and maritime fleets made her an economic world power. In contrast today, we lack the direct flights from Heathrow to the opportunities in the growing (BRIC) economies of China, SE Asia and S. America (Brazil’s economy overtook the UK this year). Thus, as we said previously, the efforts to get the UK economy off the ground are likely to stall and for the UK to lag behind competitors with better capacity and connectivity.
(Image: UggBoy♥UggGirl)
