Airport Wars: Heathrow versus Gatwick

London’s Heathrow Airport is the only airport in the advanced world serving a national capital which subsists on just two runways – one for landings and one for take offs. And thus which runs continuously at flat-out full capacity. It handles 70 million passengers and 480,000 flights per year, flying to 184 destinations. That’s one plane every 45 seconds. It handled a record 6.34 million passengers in May[i].

But one winter smattering of snow and the planes start to stack. No other equivalent airport operates like this. Amsterdam Schiphol, a major rival, though it has one giant terminal, has six runways. Paris Charles de Gaulle has four runways, of which two are more than four kilometres long. It has been glaringly evident for years that refusal to expand Heathrow has been a break on UK economic growth.

When ranked by passenger traffic, Heathrow is the third busiest internationally, behind Hartsfield Jackson Atlanta International Airport and Beijing Capital International Airport (as of September 2014). Heathrow was the third busiest European airport by cargo traffic in 2013, after Paris Charles de Gaulle and Frankfurt.

What are the options for airport expansion in London?

First option: to build a third 3,500 metre runway at Heathrow to the north-west of Heathrow’s two existing runways.

Heathrow has run a powerful campaign which you will have seen in leading newspapers. They argue that the fastest growing markets in the world are in Asia and South America and that by 2050 nearly half of global GDP will be accounted for by those regions. Direct flights to major destinations in these regions are the key to Britain’s competitiveness. Because Heathrow is a hub, flights to Recife (Brazil) or to Yunnan (China) could carry passengers originating in Oslo or Thessaloniki.

Hubs generate huge numbers of passenger traffic and high-value cargo. (Heathrow shifts more freight than Felixstowe and Southampton combined). Hub airports serve on average three times as many destinations as point-to-point airports, argues the Heathrow campaign. Heathrow, they note, is one of only six in the world to fly to more than 50 long-haul destinations.

The expansion of Heathrow is supported by over 30 Chambers of Commerce as well as the CBI. The Airports Commission estimated that the expansion of Heathrow will boost the UK economy by over £200 billion and will create 180,000 jobs.

Second option: to extend Heathrow’s existing northern runway by at least 6,000 metres to the west, and allowing it to operate as two separate runways. This is the less preferred option amongst the Heathrow supporters but would be a second best, though involving huge additional costs.

Third option: a second runway at Gatwick. This proposal would involve building a new runway, at least 3,000 metres in length, built far enough away from the existing runway to allow its fully independent operation[ii]. Gatwick is the world’s busiest single-runway airport, but unlike Heathrow, relatively few passengers – about 5% – use Gatwick to transfer to other flights, so Gatwick, to the transport cognoscenti, is not a hub but a leading point-to-point airport.

But with a second runway, passenger numbers at Gatwick could rise from about 34.2 million passengers a year to between 67 and 87 million. Gatwick describes its offer as a constellation approach in which London would be served by three main airports, each with two runways. It believes that its case is robust and compelling. The expansion would cost between £5bn and £9bn, and would be financed privately.

The Gatwick lobby has been summarising its argument in ten bullet points[iii]. It’s all on the website, but I have had to express their ideas in my own words as the text is poorly written.

First, the cost of building the second runway at Gatwick is £7.8 billion compared with Heathrow’s £15.6 billion. Unlike Heathrow, a new airport at Gatwick will not require taxpayers’ money.

Second, the expansion of Gatwick will deliver around £90 billion of economic benefit to the UK, because it will generate more traffic and more hub connections to new destinations.

Third, the expansion of Gatwick will deliver two world class airports serving London and the UK, delivering more competition between both airports and within airlines. This will maintain downward pressure on airfares.

Fourth, the expansion of Gatwick will create around 120,000 jobs. Gatwick will provide a fund of £50 million for housing and jobs to help enable local authorities to deliver “local community infrastructure” and it pledges to ensure that local young people will benefit directly from the new jobs.

Fifth, the expansion of Gatwick will create the capacity for more regional flights. It will connect Gatwick with 15 UK regional airports.

Sixth, the expansion of Gatwick will enable passengers to board aircraft in less than 30 minutes from their arrival at the airport (security permitting). And a minimum transfer time between flights of 45 minutes would be attainable.

Seventh, the expansion of Gatwick will enable the airport to reduce charges for airlines. This would equate to a saving of £12 -£15 per passenger.

Eighth, the expansion of Gatwick (and dramatic improvements in transport connections financed by public money) will put 15 million people within 60 minutes of Gatwick Airport. Supposedly, trains to London will run every two and a half minutes.

Ninth, the expansion at Gatwick rather than Heathrow will mean that fewer people will be affected by increased noise pollution. Gatwick’s owners have undertaken to continue to meet all noise and air quality standards. Their long-term aim is a carbon neutral airport – though how realistic that is will require third-party validation.

Tenth, the expansion of Gatwick will offer a compensation package, unmatched by Heathrow, of a 25% premium on top of market value for homeowners directly affected. Plus a £5,000 infrastructure contribution towards every extra home that is built as a result of airport expansion. Plus a £1,000 per year contribution to council tax for local residents affected by noise. (Promises, promises…).

There was a fourth proposal championed by Mayor of London Boris Johnson. This was to build a spanking new mega-airport on a marsh in the Thames Estuary off the Grain peninsula in north Kent – and to close Heathrow altogether.

The great people of Southall were never impressed by the prospect of mass unemployment. And it would have involved creating a massive artificial island in the river and extensive new transport links (motorways, train lines, the lot). It would always have been the most outrageously expensive option, and would have left incoming aircraft stacking up in Dutch airspace. Not to mention the entire area, a malarial swamp until the late 19^th century, is a bird sanctuary.

Fortunately, Boris’s nutty plan was dismissed by the Airports Commission, chaired by Sir Howard Davies, as totally unworkable on 02 September 2014.

The Commission also decided not to shortlist proposals for expanding Stansted or Birmingham, but said there was likely to be a case for considering them as potential options for any second new runway by 2050. That would be made more viable by a fast train link (HS2) between Birmingham and London. A plan to open up RAF Northolt for short-haul civilian flights was also rejected. The RAF’s main base in London is located on the A40 in the London Borough of Hillingdon, about six miles from Heathrow.

On 01 July this year the Airports Commission, chaired by Sir Howard Davies, released its Final Report. It came down in favour of Heathrow. The Government has made clear that there will be a decision before Christmas. It is important that a firm, irrevocable decision be made without procrastination. That is what Ministers of the Crown are paid to do.

Can the powers that be agree on what to do? Not quite yet. Because whichever one they choose, the politicians know that they will ride a tide of vitriolic opposition by local interest groups.

Zac Goldsmith, the Tory MP for Richmond Park and now a leading contender to be the next Mayor of London, who has undoubtedly sincere Green credentials, has said previously that, if the expansion of Heathrow were to go ahead, he would resign as an MP and force a by-election. That would be a political embarrassment for the Conservative government, but one which they could weather. It is said also that three cabinet ministers, namely Justine Greening, Philip Hammond and Greg Hands, each of whom represents constituencies on the Heathrow flightpath, vehemently oppose the Heathrow option. Boris, of course, now MP for Uxbridge, has threatened to lie down in front of the bulldozers.

The argument from pure economics favours Heathrow, which is already a major “hub” airport, over Gatwick, which is a “point-to-point” airport. But the opposition to the Heathrow option, largely on constituency and environmental grounds, is formidable. For a start, it would involve the demolition of 800 homes – almost the entire village of Harmondsworth. Gatwick was always going to be the easier option, politically speaking, though there are big beasts (Sir Nicholas Soames MP amongst them) that will fight that option too.

We can’t take a punt on the direct beneficiary of the upcoming decision, because both airports are privately held. But we can assume that airports, trains, roads and house-building are set to be a major theme of this parliament. Overall, construction companies, engineering firms and house builders look like a good bet. Think WS Atkins (LON:ATK), Balfour Beatty (LON:BBY) and Redrow Homes (LON:RDW). And don’t forget those excellent geezers, the builders merchants, like Travis Perkins (LON:TPK) about which I wrote a few weeks ago.

[i] Evening Standard, Thursday, 11 June, page

[ii]   BBC website, 19/05/2015, at: http://www.bbc.co.uk/news/uk-19570653

[iii] See the Gatwick campaign website.