News: Letter to PM from Jeremy Taylor, GDB

Posted on 9th June 2016

Rt Hon David Cameron MP

Prime Minister

10, Downing Street

London

SW1A 2AA

 

 

 

20th June 2016

 

 

Dear Prime Minister

 

I am writing on behalf of the business organisations listed below which have a collective representation of 6,000 businesses employing in excess of 100,000 people across the Coast to Capital region.

 

All through the course of the Airports Commission’s work we have collectively lobbied for the next runway to be built at Gatwick.  This view is further supported by residents from across the region (1).

 

We are pleased that your Government understands the need for airport capacity growth and we welcome your commitment to finalising a decision on that growth within this Parliament.

 

We were disappointed with the recommendation last Summer from Sir Howard Davies but were pleased to note that your Government has committed to fully review the Commission’s final report and evidence base before reaching a decision before the end of the year on which scheme Government will support.

 

We will continue to press for you and your Government to ultimately choose Gatwick, as we believe it to be the right choice for the country and for the region.  We feel that the Report from the Commission goes a long way to actually supporting that view as it does state that Gatwick is a credible, financeable and deliverable option, and that its review of economic benefits according to Treasury guidelines regards both Heathrow and Gatwick having comparable benefits. It is critical to bear in mind the constraints that have been placed on Heathrow (2), that are likely to be unattainable.

 

There are other flaws within the Commission’s Report which we would draw to your attention as they undermine the recommendation and cast doubt on the deliverability of a runway at Heathrow in the timescale you have committed to. These include:

 

Traffic forecasts:  The Commission is using estimates of passenger numbers at Gatwick that are out of date.  The forecast used is for 40million passengers by 2024 however Gatwick has just announced a rolling total of just over 41million passengers (3).

 

Routes: The Commission seems to have based the recommendation on providing for long-haul travel to emerging markets which are, without doubt, important.  However, it also states that Europe is where most of the growth will come and also states that Gatwick is best-placed to serve European destinations (4).  Today, Gatwick has flights to 46 of the top 50 business destinations in Europe but is also growing a strong long-haul route network with 20 new long-haul destinations, including China and South America, this Summer (5).

 

Furthermore, while it is accepted that 1 in 4 of Heathrow’s passengers travel on business, what has not been properly acknowledged is that 1 in 5 of Gatwick’s own passengers are regularly business passengers (6).  The Commission has understated the economic impact of Gatwick as those 8million business people are exporting British products and services or are foreign businesses looking to invest or buy from Britain.

 

Competition: When the BAA was instructed to divest one or more Airports, leading to the sales of both Gatwick and Stansted, this was in the interest of fair competition between the Airports (7). However, building a third runway at Heathrow would give that airport an unfair competitive edge over the other London Airports and goes against the findings of the Competition Commission.  This is why a significant proportion of the traffic assumed at a three runway Heathrow is drawn not from new routes, but by pulling traffic away from other airports in the London area and across the Nations and Regions of the UK (8).

 

Noise: A third runway at Heathrow will put 550,000 residents into the 55LDEN noise contour, compared to 22,000 affected by a second runway at Gatwick (9). This appears to have been made light of in the Report and must be closely examined.

 

Air quality:  Gatwick is and has been for many years well within EU and UK limits on Air Quality.  For example, the highest level of Nitrogen Dioxide (NO2) measured independently in 2014 was 28μg m-3 against a UK standard of 40μg m-3 of NO2 (10).  On the day that Sir Howard gave his recommendation, 1st July 2015, Heathrow measured 87μg m-3 of NO2 and seems unlikely to stay within legally binding EU limits (11).

 

Infrastructure costs: The cost of developing surface access to service a third runway will require an estimated £5bn of public funds to provide new roads, road widening, junction improvements and a tunnel for the M25 (12). The Report also references a “Southern rail access to Staines” (13) which appears to be, as yet, un-costed and un-funded.  TfL have estimated the true figure of the necessary transport upgrades should Heathrow expand, to be somewhere between £15billion and £20billion (14).  The large scale public funding, the disruption and the scale of these construction projects must cast serious doubt on their deliverability.

 

Airline and Airport Operations: The future make up of aviation can be questioned and we feel that the role of Hub Aviation has been overplayed.  Yes, it is an important model for some operators at Heathrow, but the rise of Low-Cost travel is likely to continue and so challenge the traditional Alliance and Hub aviation practices.  This has been shown by Norwegian Airlines’ commitment to base 50 long-haul aircraft at Gatwick, should the runway be built there.

 

It is impossible to see how Heathrow will service all airline operating models.  EasyJet has been very vocal in supporting the third runway at Heathrow rather than a second at Gatwick, stating that they would seek to operate from Heathrow (15).  They claim that an increase in landing charges at Gatwick would be detrimental to their business.  However, Heathrow already has the highest landing charges in Europe (16) and these are set to rise to a figure that could be higher than a fare to Malaga.  Furthermore, Low-Cost carriers require a 30-minute aircraft turnaround (17) and the published layout of terminals and taxiways at the expanded Heathrow will not allow for such a quick turnaround. It seems that the true motivation for EasyJet’s support is to compound their dominance of the low-cost market, by making any further expansion in low-cost fares all but impossible.

 

We support the construction of a second runway at Gatwick Airport.

 

Heathrow CEO John Holland-Kaye is right in saying that this debate is not about a strip of concrete; it is about the positive overall economic, environmental and societal benefit to the country and this is best provided by the second runway proposed by Gatwick Airport Limited.

 

Whatever the outcome of the EU Referendum, we would urge to come to a quick decision on Airport capacity and trust that the decision will be to build the country’s next runway at Gatwick.

 

 

Yours sincerely

 

 

 

Jeremy Taylor

Chief Executive

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