Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK. gatwickobviously.com

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1 Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK gatwickobviously.com

2 Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK Executive Summary Gatwick supports a network of competing airports across the UK to promote connectivity across the whole of the UK, not just through London. Gatwick s proposal for a second runway supports greater overall connectivity for the whole of the UK than Heathrow. For the ten years following the opening of a second runway, Gatwick will establish a marketing support fund of 20 million that can be used to incentivise airlines to introduce new services. The fund can also be used to provide jointly-agreed marketing support to regional development or other tourism bodies in regional England or Scotland, Wales and Northern Ireland for new services.. Gatwick will propose and consult on a change in aeronautical tariff structures to support the growth of national and regional air services and will incentivise inter-airline connectivity. Gatwick will support applications for new Public Service Obligation (PSO) funds for new services. Gatwick will work with Government to explore how local rules might be adapted to safeguard slots for new national and regional services. Gatwick s proposal is affordable, sustainable and deliverable will help deliver lower fares through lower airport charges and greater competition offers a more convenient choice of London airports for passengers, and will help sustain and encourage more services direct from other national and regional airports. Current destinations BELFAST INTernational INVERNESS ABERDEEN EDINBURGH GLASGOW ISLE OF MAN RONALDSWAY BELFAST CITY NEWQUAY/ST MAWGAN Jersey Guernsey Introduction This paper amplifies and builds on Gatwick s support for improved connectivity for the nations and regions of the UK, as expressed in its submission to the Airports Commission. Gatwick is firmly committed to the idea of a network of competing airports within the UK, a network which improves the choice available to passengers from all the nations and regions of the UK as to where they travel from and how they connect to other parts of the world. Such a system would encourage the development of international connectivity from multiple points across the country, and would encourage the growth of independent airports consistent with the demands of their localities, in turn ensuring a wide distribution of the benefits that airports bring to our economy. Nevertheless it is clear that connectivity for the nations and regions can be maintained and improved only if a new runway is built in the London airports system and this has rightly been an important focus for the work undertaken by the Airports Commission. The present position All previous attempts to add a further runway at Heathrow have failed and there remain huge risks to any attempt to do so now. First, the impact of a new runway on mandatory air quality limits would almost certainly make a new runway unlawful. Secondly, the noise impacts of a third runway at Heathrow are likely to prove unacceptable to the hundreds of 2 Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK

3 thousands of residents who would be newly affected. And there are a host of planning, site preparation and construction risks, including rerouting Europe s busiest stretch of motorway, the M25, and putting it in a tunnel, that have yet to be fully evaluated. So there is clearly a very significant risk that a third runway at Heathrow might never be delivered. In contrast, this is the first time a second runway at Gatwick has been seriously on the agenda and this solution can be delivered at an affordable economic cost, and at a fraction of the environmental cost of the Heathrow schemes. Gatwick s contribution to connectivity A second runway at Gatwick would better complement regional aviation than would expansion at Heathrow, as within a competitive system of airports in the UK more passengers would fly direct to and from regional airports, while preserving London system capacity for UK passengers wishing to travel to London or who wish to transfer onto international routes not served by their local airport. For proof of this, one only need to look at the ten scenarios produced by the Airports Commission which describe potential levels and patterns of future traffic in the UK with an additional runway in London at either Gatwick or Heathrow. For example, the headline results of these scenarios demonstrate that a second runway at Gatwick delivers superior connectivity for Scottish airports in terms of air access to the London airports both for people wishing to visit London itself or wishing to transfer in London to another international flight. Connectivity to Northern Ireland is also improved: in the period , expanded Gatwick scenarios lead to an average of 9.35 million additional Belfast passengers compared to expansion at Heathrow (using an average of all ten scenarios) this is equivalent to a difference of 270,000 passengers per year. In addition, scenarios with a second runway at Gatwick, as opposed to a third at Heathrow, Expansion at Gatwick would fly the uk to 440 global destinations and help the uk economy grow Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK 3

4 Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK BY 2050, 15 UK AIRPORTS WILL BE SERVed by gatwick // 4 Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK

5 result in more direct air services from national and regional airports thus giving more people the opportunity to fly direct from their local airport rather than having to transfer in London. Benefits of Competition A second runway at Gatwick would strengthen the existing competitive dynamic evident within the UK aviation market. Empirical evidence (from InterVistas) shows that the emergence of the Low Cost Carrier (LCC) airline model has resulted in significant reduction in airfares across the UK in the past 20 years. It also shows that fare reductions are even greater when airlines compete on a route serving different airports in the same city, e.g. Edinburgh to Gatwick competing with Edinburgh to Heathrow. Fare reductions of up to 40 % can result where both airlines and airports compete, a situation which is more likely to occur with a second runway at Gatwick than with an expansion at Heathrow. Lower costs / Lower fares/ No public subsidy In addition to delivering fare benefits through increased competition, expanding Gatwick is much more cost effective than expanding Heathrow (circa 8 billion at Gatwick versus 16 billion at Heathrow). Costs are important in this debate because the costs of any scheme will ultimately be borne by passengers. It is estimated that airport charges alone at an expanded Heathrow will rise to over 80 for a return trip compared to 30 at Gatwick after expansion. So not only will air fares be higher at Heathrow, it is possible that the viability of some services to and from the nations and regions could be called into question. In addition expanding Heathrow will require some 5.7 billion of taxpayer money whereas expansion of Gatwick requires none. Flights direct from the nations and regions Airports outside London have been very successful in attracting airlines which operate air services directly from their airports (For example, Edinburgh now has 46 services to European cities compared to only 15 in 2004 and both Manchester and Birmingham have established direct flights to China). Expansion at Heathrow will, in all probability, negatively impact on the viability of a number of direct services from national and regional airports. This is because an expanded Heathrow will be an even bigger mega-hub and the airlines using it will have a strong commercial incentive to channel traffic into Heathrow from the UK s nations and regions rather than operate direct services from other airports. The Commission s forecasts show that more people will fly from Scottish and regional airports on more flights with a second runway at Gatwick. More choice / More resilience The majority of passengers flying between Scotland, Northern Ireland, or other regional airports and London are starting or finishing their journey there (that is, they are not transferring onto another flight in London). As such passengers have to travel on to their final destination in London using road and rail services. An expanded Gatwick will result in a geographically balanced system of London airports in which passengers will have more options to travel to the London airport closest to their final destination. Overall journey times will be shorter and costs lower. Expanding Heathrow will further intensify the congestion experienced on West London s road and rail systems and will concentrate more activity into an already densely populated area. Heathrow has already demonstrated that it struggles to maintain its operation at times of disruption. Expansion will only exacerbate the nation s vulnerability to failure at the airport Is Shipley correct? The National Connectivity Task Force was created and funded by Heathrow Airport Limited to assess the benefits to the UK nations and regions of an additional runway in London and to suggest to the Airports Commission how these benefits could be maximised. Unsurprisingly perhaps, the Task Force concluded that expansion of Heathrow would be the best option to generate benefits for the UK as a whole. The Task Force concluded that expanding Heathrow would increase UK connectivity as narrowly measured by passengers travelling from the nations and regions to London to transfer onto other international flights. As such it ignores the significant connectivity benefits of direct services from other airports and the benefits that a network of airports operating around London would bring to connectivity with the capital itself. The Task Force s main assertion is that expanding Heathrow would strengthen its national and international hub status and create capacity which would increase access to Heathrow from other national and regional airports. The Task Force implies that the nations and regions will be better connected to the world via London and principally Heathrow. Direct services from other national and regional airports are only sparingly acknowledged. Indeed the Task Force concludes that for the nations and regions to generate Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK 5

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7 The biggest economic benefit will come from new services direct from the regions, with passengers not having to fly through a London airport to reach their final destination independent routes to other hubs (Amsterdam, Frankfurt, Paris or Dubai) is ill advised and diverts business and wealth away from the UK, although it offers no evidence to support this latter assertion. The Task Force report is at odds with the Airports Commission s conclusion that, in most scenarios, expanding Gatwick will result in more air services and passengers in the UK as a whole (see above). Many in the aviation industry disagree with the Task Force s analysis and conclusions. The Chief Executives of Manchester, Birmingham and Edinburgh airports have disagreed that only an expanded Heathrow can connect our nations and regions with global markets. Their view, as expressed independently by the Chief Executive of Manchester Airports Group is that: The biggest economic benefit will come from new services direct from the regions, with passengers not having to fly through a London airport. What does Gatwick offer the Nations, Regions and Crown Dependencies of the UK? Gatwick expansion offers a solution which is affordable, sustainable and deliverable (it is highly likely that Heathrow s proposal for expansion is none of these things); will help deliver lower fares through lower airport charges and greater competition; offers a more convenient choice of London airports for passengers; and will help sustain and encourage more services direct from other national and regional airports. Our proposal Gatwick Airport Limited has decided that in order to enhance further the benefits to the nations and regions and Crown dependencies, in the ten years following the establishment of a second runway, we will also: Establish a marketing support fund of 20 million that can be used to incentivise airlines to introduce new services. The fund can also be used to provide jointly-agreed marketing support to regional development or other tourism bodies in regional England or Scotland, Wales and Northern Ireland for new services.. Propose and consult on a change in aeronautical tariff structures to support the growth of national and regional air services and incentivise inter-airline connectivity. Support applications for new PSO funds for new services. Work with Government to explore how local rules might be adapted to safeguard slots for new national and regional services. Gatwick Airport, April Better Connected: Gatwick s plan for the Nations, Regions, and Crown Dependencies of the UK 7

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