Medway Council’s principal interest in the current aviation debate centres around proposals to build an airport in the Thames Estuary, proposals which follow a long line of similar proposals over the past sixty years to build an estuarine airport, all of which have been abandoned.
We believe that it is essential that the Government’s aviation strategy must be based on practicality, affordability and common sense. We accept that to remain internationally competitive, the UK needs to increase aviation capacity now. Building an airport in the Thames estuary, however, would be a costly mistake - costly environmentally, costly for West London and costly for UK plc. Plans for an estuary airport have been made to look attractive by a number of well-designed presentations and smart sound bites, but behind the veneer is a proposal that is ill thought out, ill-conceived and unaffordable.
We welcome the opportunity to respond to the London Assembly’s Transport Committee inquiry into the Government’s aviation strategy. If you would like any further information please feel free to contact me on the contact details provided in our attached letter.
The Case against an Estuary Airport
The Government’s objectives for future aviation policy must combine the need for the UK to remain competitive within the global economy with ensuring that air travel remains accessible for general consumers. Above all the Government’s strategy must be based on practicality, affordability and common sense.
The Government should reject ill-thought out and ill-conceived plans to ‘solve’ Britain’s capacity shortfall by building an airport in the Thames estuary, a plan without any known financial backing, poor connectivity, a disastrous environmental impact and with a disastrous impact on West London.
Britain faces a number of challenges in staying competitive in global aviation, most notably the present threat posed by Schiphol, Frankfurt and Charles De Gaulle Airports. Commentators agree that as a result of our competitors’ growth and a decade of inactivity, the threat posed by other European airports is clear, present and very real. It is this threat that is central to the current debate and to why proposals for an airport in the Thames estuary are not the solution to helping the UK remain competitive.
To remain competitive, there is acceptance that the UK needs to increase capacity now and within the next five years, to take account of both the growth of our competitors and the “lost decade of inactivity”. Recently Daniel Moylan, former Deputy Chair of TFL and adviser to Boris Johnson has claimed that an estuary airport could be built within four years, if there was ‘enough political will.’ These claims are idealistic at best and add little if anything of significance to the pressing debate.
Practicality
Best estimates suggest that an Estuary Airport could be built within fifteen to twenty years, stretching a lost decade to thirty. In thirty years it is highly probable that our competitors will have moved ahead of Heathrow as the premier European hub, making the UK not only uncompetitive in aviation, but also with negative knock on effects for UK PLC, in terms of potential loss of revenue and investment and the loss of at least one hundred thousand jobs in West London owing to the likely closure or at least downgrading of Heathrow Airport.
It is widely accepted that international tourists and businesses alike prefer (hub) airports to be located close to city centres so as to minimise their travel and transit time as far as possible. The Mayor of London, in his recent speech on aviation has admitted that “surface access connections to [a new] airport are a fundamental part of its success” and that any new hub should therefore offer a journey time to central London “of ideally half an hour and no more than 45 minutes ”.
Locating a new hub airport on the Hoo Peninsula or the Isle of Grain in the Thames estuary, as recent research by Tim Leunig for the think tank Policy Exchange shows, would fail to meet any of these requirements as its “wrong location” means it would be “slow and expensive to get to”.
As Leunig highlights, an estuary airport would be accessible by public transport only from a relatively limited number of places. Indeed, current proposals of a 30-minute high speed service from St Pancras every 10 minutes, a 50-minute traditional service on existing tracks from other London stations every 30 minutes and tentative suggestions to build a £20bn semi-orbital railway running across the top of London down to Maidenhead do not offer a convincing solution to the core consideration of accessibility of any new hub airport, both in terms of costs and feasibility.
In addition to the relative inconvenience of a limited number of (public transport) services, an additional consideration to take into account is the likely cost of rail fares to the new airport, currently estimated at more than £70 per ticket. Private journeys by car or cab, moreover, would also have serious implications for the already congested road network in the estuarine area.
The mouth of the Thames estuary is important to the UK’s energy supply, the proposed airport’s proximity to Thamesport, one of the UK’s busiest container ports which unloads one fifth of the UK’s liquid natural gas supplies and poses an inherent risk to a multi-runway airport with low flying aircraft in close proximity. We believe that the risks this presents should be assessed by an independent expert led inquiry before any decision on the construction of a new airport in the area are made.
The area is also home to the EON grain power station, a major investment that would be forced to close down by the construction of an Estuary Airport. Speaking at the opening of the site, the Energy Secretary Edward Davey MP stated that he believed that “airport strategy needs to take into account gas, so it will.”
The Government should consider the impact of aviation on the local environment and our commitment to reduce carbon emissions and continue to work with airport operators and airlines to reduce and mitigate the environmental impact and crucially the noise impacts. They must also work with industry to ensure that they take advantage of technological innovations and design advancements to reduce emissions.
The environmental impact of aviation must be a key consideration in the Government’s aviation strategy and should be a strong factor when considering the feasibility of proposals to build a new hub airport in the Thames estuary. We are of the view that these proposals are incompatible with the UK’s environmental commitments on both national and international levels.
The mouth of the Thames estuary is a site listed under a myriad of international and national designations and special protection areas (Globally - The Ramsar Convention, at a European level - The Habitats Directive (Special Areas of Conservation) and Birds Directive) that the Government has committed to. Not only would each of the designations have to be broken in order for an airport in the Thames estuary to go ahead, the airport would also destroy the habitat for over 350,000 migrant birds that rely on the area for feeding and roosting during the winter. Many thousands more use the estuary as a stop-over as they fly south for the winter and before turning north again for the feeding grounds of the arctic.
Building an airport in the Thames estuary will not only have a negative environmental impact on the prospective site of a new airport, but more widely, would also destroy a significant amount of countryside across Kent. The infrastructure required to build an airport in the estuary would lead to the removal of or significant effect on whole communities (approximately 40,000 people) all of whom would require new homes in the Medway area.
On top of this, the airport is likely to employ approximately 70,000 people bringing new families to the region. Birmingham Airport’s Head of Government Relations, John Morris claims “you would need a city the size of Manchester to support it in an area that already requires five new reservoirs . Housing required at such a significant level is simply not available in Medway. Currently the average number of houses built per year is approximately 750 and there is no evidence or viable solution that has been put forward to suggest where these people are likely to be housed.
The Climate Change Act 2008 committed the Government to a legally binding, long-term framework to tackle carbon emissions. This means a reduction of at least 34 percent in greenhouse gas emissions by 2020 and at least 80 percent by 2050. Any new airport at the suggested size and scale as the Thames estuary proposals is likely to have an effect on the UK’s carbon emissions output. Figures from the Department for Transport (DfT) in their latest UK Aviation Forecast published in August 2011, outline that currently airports and the aviation sector CO2 output is 34 MtCO2 (approximately 5% of the UK’s total carbon emissions) in 2010 and this is expected to rise to 48 MtCO2 by 2030. WWF have suggested that an airport in the Thames estuary is likely to create the single biggest source of CO2 in the UK, even bigger than Drax coal fired power station in Yorkshire.
The Government must make the environmental impact of aviation a key consideration when formulating any future strategy. Both airlines and airport operators have made significant progress on reducing the impact of environmental and noise considerations on existing airports, progress that should be applauded, progress that would be undone if an airport was constructed in the Thames Estuary.
Affordability
A number of commentators have repeated figures of an estimated £20bn for the proposed Foster & Partners’ multi-runway Thames Hub airport on the Isle of Grain and an additional £30bn for the required infrastructure. Financial analysts, however, have questioned the accuracy of these estimates, particularly in light of the projected £9bn cost for only one new runway at Heathrow Airport.
A recent research study by Parsons Brinckerhoff Ltd summarises the cost assumptions as ranging between £40bn and £70bn for a Thames estuary airport, associated infrastructure and the building of a “multitude of new railways lines” connecting the airport to London, but warns that “even the £70bn being discussed is a conservative estimate” . The Mayor of London himself has suggested that the construction cost of the airport would be closer to £80bn.
Parsons Brinckerhoff Ltd point to historical evidence that “large UK infrastructure projects, much less technically complex than this, have suffered considerable cost overruns” - the Channel Tunnel, originally planned at £4.7bn, ultimately costing £9.5bn is only one example of that.
In addition, it is estimated that the planning for a Thames estuary airport would span a period of at least ten years. From a base figure of the estimated £20bn cost, adding 3 per cent construction cost inflation for that period would result in £600m annually increasing the cost of the airport to £26bn even before construction has started.
Analysts have further warned that current cost estimates fail to factor in the current amount of BAA’s £12.5bn debt levels which are a result of the expansion at Heathrow Airport. Should Heathrow close, responsibility for that debt will have to be assumed. Mike Redican of Deutsche Bank warns that it is likely that “the Government will have to fork out an awful lot of money to BAA and others as a closure cost of Heathrow”.
There seems to be widespread consensus that a large part of the required funding would have to be met by public – taxpayer – funding, particularly with a view to the connecting infrastructure investment necessary to support an estuarine airport.
In addition, while it is assumed that private investors will meet the cost of building a new airport in the Thames estuary, analysts have warned that private bond markets prefer safe and secure risks, guaranteed by public investment. Sovereign wealth funds dislike volatile yields and tend to invest in existing infrastructure and Chinese investment is likely to be forthcoming only if construction contracts can be secured for Chinese companies as a result. In addition, recently proposed, more detailed funding models have been denounced by aviation industry representatives.
Proposals to raise in excess of £15bn from landing charges at Heathrow between 2018 and 2028 and the redevelopment of the airport thereafter and offering a controlling equity stake to the Ferrovial-led consortium owner of Heathrow were described as “crazy” by International Airlines Group (IAG) Chief Executive, Willie Walsh. BAA Chief Executive, Colin Matthews, moreover, made clear that BAA’s parent had no interest in the idea of relinquishing the airport in exchange for a controlling stake in a new hub, stating that “to take an interest you have to think it is going to happen, and we don’t think it is going to happen”.
The high capital requirements mean that the financial viability for the project would be threatened if demand proved to be weaker than forecast, or if airlines and passengers simply did not use the airport. Evidence suggests that 90 per cent of airlines that are currently using Heathrow are opposed to an estuary airport and will be reluctant to fly there, arguing in part that they will want to retain their existing investment in Heathrow. This is added to forecasting showing that the financial viability of a new estuarine airport would likely depend on government intervention to try to ensure early take up of new capacity by passengers and airlines.
With little political power to direct aircraft to use any particular airport, encouraging airlines to leave Heathrow will be challenging – unless there is an overwhelming economic advantage in favour of a Thames estuary airport. Calculations to date, however, allow for the conclusion that airport charges in the Thames estuary would be even higher than those currently in place across other London airports and would therefore be not particularly attractive for airlines. Estimates are that landing charges per passenger at a Thames estuary airport could be as much as £60-70 per passenger, as compared to the current £15 landing fees at Heathrow.
Another aspect of this debate, as of yet not given enough consideration is the future of Heathrow, with most agreeing that the construction of a Thames Estuary airport would lead to the closure of Heathrow. Heathrow International provides a total of 114,000 jobs in the local area: one in five people across 9 local authorities in West London rely on the operation of Heathrow for their source of income, either through direct employment within the Airport boundary, through indirect employment with suppliers or because local expenditure of Heathrow employees supports a further 18,600 jobs.
The closure of Heathrow as a result of the construction of a new Thames estuary hub airport could mean that some boroughs will have more than a fifth of their population suddenly without a job. This must be taken into consideration by the Government and by the London Assembly.
Common sense
The proposals to build an airport in the Thames Estuary are simply not sensible. To remain competitive globally we need an airport that can be built in a timeframe that will allow us to remain competitive with our European rivals, that does not have a disastrous environmental impact, that will not require significant taxpayer subsidy and will attract airlines.
The proposals to build an estuary airport fail on each and every one of these criteria and are not a viable solution to the UK’s future aviation needs.
More rational use of existing airport capacity
The Government must view the UK’s airports as a group rather than a collection of single entities. London, for example, currently has six runways (located at five different airports), three of which are being underutilised. Before constructing any new airports or runways, these resources should be maximised.
It is impossible to deny that Heathrow, the UK’s sole hub airport is currently approaching capacity and also impossible to deny that this is having a major impact on Heathrow’s ability to accommodate flights to Brazil, India, Russia and in particular China.
However this is not the case for other airports throughout the UK, or indeed the capital’s airports. Gatwick Airport is currently operating well below its capacity with Stansted operating with space for a further 17 million passenger per annum . Luton Airport, which can be reached from London in a little over half an hour, has potential to accommodate an extra 11 million passenger per annum.
It should also be noted that Gatwick Airport has recently attracted a number of airlines from the emerging nations that will be pivotal to the UK remaining internationally competitive, Hong Kong Airlines, Air China and Korean Air are amongst those major airlines to commit to Gatwick Airport, disproving the view that airlines will not fly into the UK outside of Heathrow.
However, any new strategy from the Government must view the aviation sector as part of an integrated transport strategy, ensuring that airports such as Gatwick and Stansted are not constrained by poor rail connectivity.
It is clear that the UK’s existing airports and runways could and should be used more efficiently to meet the challenges we face. Whilst Gatwick and Stansted Airports have significant spare capacity they are constrained by poor rail connectivity.
The Government should, as a matter of urgency, review the rail links between London and Stansted and London and Gatwick; for example it currently takes 53 minutes to get to Stansted Airport from Liverpool Street Station. A more dedicated and high speed service between London and these two airports would dramatically increase their connectivity and passenger numbers. Improving connectivity, especially with Stansted due to be sold by BAA, would greatly increase Gatwick’s and Stansted’s ability to play their role in a thriving UK aviation industry.
Expand the role of the UK’s regional airports
With the debate focusing largely on the UK’s hub capacity, there is a danger that the Government ignores a small, yet significant potential part of the solution, our regional airports.
Our regional airports are not a solution to the UK’s hub capacity, but they do have a valuable role to play in the future of UK aviation. It is essential that regional airports are not ignored by the Davies Commission, owing to the more detailed discussions over hub capacity. Our regional airports have an enormous role to play in providing point to point services and a key objective of the Government’s policy going forward must be to look at ways of supporting regional airports, potentially looking at measures to incentivise a broader spread of air travel, where practical throughout the UK. These measures could be as simple as improving rail and road connectivity and as challenging as reviewing air passenger duty (APD), to potentially introduce differing levels of APD.
It is also essential that aviation policy becomes a part of a much clearer and more integrated transport system, with an acceptance that rail and road policy is inextricably linked to aviation policy, for example, Gatwick and Stansted Airports are constrained by poor and inefficient rail links.
Manston Airport in Kent provides a clear example of the need for greater support for our regional airports. Recently, KLM Airlines announced that they would begin twice daily flights from Manston Airport to Schipol Airport , highlighting the airports large catchment area. This catchment area is hindered by poor rail links, a constraint that could be easily solved by extending the high speed rail network, a solution that would bring Manston’s spare capacity into play, potentially taking the strain of some point to point flights from London’s busier airports.
The Government must also look to work with the larger regional airports outside of the South East, such as Birmingham International Airport and Manchester Airport to ensure that they can attract a wider range of flights, especially given the impact the High Speed 2 will have on connection times between Birmingham and London.
Conclusion
To remain competitive in global aviation, it is essential that action is taken both to increase capacity at UK airports and to ensure that measures are taken to ensure that existing airports operate to their full potential. We can increase capacity by twenty million through improving our rail infrastructure, a move that would free up valuable space at Heathrow for flights to emerging markets.
The Government must ensure that aviation policy becomes a part of a much clearer and more integrated transport system, a move that is highlighted by constraints placed on a number of our airports including Gatwick, Stansted and Manston.
During the aviation debate to date, a number of proposed solutions have been put forward, from a third runway at Heathrow, to a four runway airport at Stansted, to the proposals to construct a new hub airport in the Thames Estuary. The Davies Commission must view all of these proposals evenly and ensure that any future Aviation Policy is based on practicality, common sense and affordability.
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