Heathrow row ‘costs UK £14bn a year’

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Lack of capacity at Heathrow is already costing the UK up to £14bn a year in lost trade, a report claims.

This figure could rise to £26bn a year by 2030, the report published by Heathrow added.

Heathrow bosses are keen to see a third, extra, runway at the west London airport but this has been ruled out by the Government.

The report said the UK needed one hub airport to compete with Europe.

It added that a dual-hub plan, where two airports would serve as hub airports would not work. The report also ruled out as “unviable” the so-called Heathwick plan, where Heathrow and Gatwick would be joined by a rail link.

Prepared by economics consultants Frontier Economics, the report said: “The choice for the UK is not between two hubs or one, but between one hub or none. Only a single airport can operate as a hub in the UK.

“That leaves three options for the UK Government:

It can do nothing and let the UK fall behind its European competitors at the cost of lost growth and jobs;

It can add additional capacity at Heathrow;

Or it can close Heathrow and replace it with a new hub airport.

The Government has appointed former Financial Services Authority chief Sir Howard Davies to head an aviation commission which will deliver its full report on UK airport capacity needs to ministers in summer 2015 – after the next general election.

Earlier this week, London Mayor Boris Johnson, who favours a new hub airport in the Thames Estuary or expansion at Stansted airport, met Sir Howard.

Mr Johnson put forward his preferences during the hour-long meeting as well as restating his opposition to expansion at Heathrow.

The report will be submitted to the Davies Commission by Heathrow bosses. The report said that Heathrow operates at 99 per cent capacity and that there was no room to fit in new trade routes to the emerging economies which were important for future economic growth.

It added that the lack of capacity was affecting the UK’s competitive position. There were 1,532 more flights to the three largest cities in mainland China from Paris and Frankfurt than there were from Heathrow.

Heathrow chief executive Colin Matthews said: “If anyone was still in doubt about the importance of aviation to the UK economy, today’s report should lay those doubts to rest.

“We’re already losing out on up to £14 billion of trade a year - and that could almost double by 2030.”

He went on: “The new work we are publishing today shows that only a single hub airport can meet the UK’s connectivity needs and the choice is therefore between adding capacity at Heathrow or closing Heathrow and replacing it with a new UK hub airport.”

A Department for Transport spokeswoman said: “The UK is currently one of the best connected countries in the world. Our airport network provides UK citizens and business with the international connections they need to trade, to visit friends and family and to go on holiday.

“Maintaining that is vital to our economy and history suggests that to do so, we will need an agreed evidence base and a high degree of political consensus.

“The strength with which the different options for achieving this are put forward shows precisely why we were right to set up a proper independent review with the timescale to consider fully what is in the country’s interest.”