Meagre benefits from a third runway (Supplementary) [1]

Session date: 
September 8, 2015
Question By: 
Fiona Twycross
Organisation: 
Labour Group
Asked Of: 
Sir Howard Davies (Former Chair, Airports Commission) & Phil Graham (Head of Secretariat, Airports Commission)

Question

Fiona Twycross AM:  In answer to a question earlier, you suggested that Gatwick would not deliver more long-haul flights, but your report’s analysis shows that by 2050 Heathrow will deliver 133 long‑haul routes while Gatwick will deliver 131 and both airports will deliver a total of 405 destinations.

Given your view that a key objective for expansion should be to facilitate new connections or more marginal long-haul routes to emerging markets, is it not the case that both airports actually fulfil this objective?

Answer

Answer for Meagre benefits from a third runway (Supplementary) [1]

Answer for Meagre benefits from a third runway (Supplementary) [1]

Answered By: 
Sir Howard Davies (Former Chair, Airports Commission) & Phil Graham (Head of Secretariat, Airports Commission)

Sir Howard Davies (former Chair, Airports Commission):  Sorry, I am slightly puzzled.  Phil [Philip Graham] will look at those numbers, which I did not immediately recognise, I have to say.

At the moment, Gatwick serves a small number of long-haul destinations, mainly with a leisure focus to them.  That is principally in the Caribbean and so it is leisure and visiting friends and relatives, and some in Florida and one or two places like that in the United States.  Gatwick has over a long period not succeeded in establishing a network of routes to destinations important to business travellers.

We do believe that if you capped Heathrow as it currently is and allowed the only expansion to occur at Gatwick, you will get some additional long-haul routes at Gatwick.  They are not what airlines would prefer to do.  It is quite clear that there is a queue of airlines to get into Heathrow and a number have got into Gatwick first and then, when a slot has become available at Heathrow, have quickly transferred.  Therefore, at the moment, the pattern of demand and the weight of demand are clearly signalling that airlines would prefer to establish new routes at Heathrow rather than Gatwick.  However, if you cap, there would be some expansion at Gatwick.

Fiona Twycross AM:  Can I just let you know where I think the figures are from?  It is in one of the background reports, tables 6.31 and 6.33 in Strategic Fit: Forecasts.  It is one of the background reports.  These are figures from one of the background reports and they were reconfirmed by Gatwick’s response to the final report.

Philip Graham (Head of Secretariat, Airports Commission):  These are the forecasts that have been made of the number of routes that might be generated at national level rather than referring to forecasted routes that would occur at Heathrow or at Gatwick.  This comes back to what Howard was saying previously.  The UK aviation system and the London aviation system is dynamic.  People’s demand for aviation is relatively enthusiastic.  People are generally keen to fly.  People value the travel.  If that demand is unable to be met at one airport, it is possible - indeed, likely - that in many cases routes will be generated elsewhere.  Those will be less convenient.  They will often be planes that have fewer people flying on them and that are less full.  That has an environmental impact.  In many cases, the routes that are established are not necessarily the ones that are most economically beneficial to the country.

Fiona Twycross AM:  Obviously, BAA was broken up due to its monopoly position in the market.  I just wondered if you could comment on whether you think the Competition and Markets Authority will support your proposals, which will effectively hand Heathrow an even bigger market share?  It seems unlikely given that it is going to be an issue in terms of monopoly.

Sir Howard Davies (former Chair, Airports Commission):  We thought about that and we do think that the recommendations are consistent with the Competition Commission’s previous ruling.  The Competition Commission focused on the ownership of the three airports, not on their relative scale.  In fact, in its report, it did anticipate the possibility that Heathrow might expand because that was the Government’s policy at the time, actually.  It noted that even in that context there would be benefits from separate ownership of Heathrow, Gatwick and Stansted.  It did envisage expansion of Heathrow because, as I say, that was the previous Government but one’s policy.  Therefore, we do not think that anything that we are recommending would damage competition.  There would still be a healthy level of competition in the London airports system as a result of the separate ownership, which we think has been beneficial at any rate.