CBI response to the Department for Transport’s Consultation on the
Draft Airports National Policy Statement: new runway capacity and
infrastructure at airports in the south-east of England
1. The Confederation of British Industry (CBI) welcomes the Government’s Draft Airports National Policy
Statement on new runway capacity and infrastructure at airports in the south-east of England. The CBI is
the UK’s leading business organisation, speaking for some 190,000 businesses that together employ
around a third of the private sector workforce. With offices across the UK as well as representation in
Brussels, Washington, Beijing, and Delhi, the CBI communicates the British business voice around the
world.
2. Aviation is a major UK success story, with the sector creating £52 billion for the UK economy and
supporting around one million jobs.1 In 2015, over 251 million passengers flew from airports in the UK2,
and with nearly three-quarters of its visitors and 40% of its trade by value travelling by air, aviation can
provide the necessary international connectivity for a truly global Britain post-Brexit.3 However, with UK
airports fast approaching full capacity, constraining their potential for further and long-term growth, a
decision on expanding capacity in the South East of the country in particular has long been needed.
3. The Prime Minister’s green light last year to expand aviation capacity in the South East therefore came
as an enormous relief to businesses in every corner of the country. As recommended by the
independent Airports Commission, tasked by Government to identify options to maintain the UK’s
position as an aviation hub, the Government concluded that the proposed north-west runway at
Heathrow presents the strongest case for expansion, and will offer the greatest strategic and economic
benefits for the whole of the UK. The CBI, having consulted widely across its membership, supports this
conclusion. Businesses feel that a thriving UK hub is not only likely to deliver the greatest opportunity to
boost direct connectivity to a wider range of destinations as a result of transfer passengers, as has been
the case to date, but is also essential for the attractiveness of the UK as an investment destination.
4. It’s now more critical than ever that the National Policy Statement is taken forward in a timely way to
allow construction to begin by 2020, and a new runway to be operational before 2030. The expansion of
the UK’s aviation capacity will demonstrate to Britain’s workers, makers, exporters and investors, and to
the rest of the world, that the UK is an outward-looking nation, ready to trade with global partners, old
and new, and to move into a new era of growth, jobs and prosperity. At a time of political uncertainty,
delivering a new runway will signal a timely vote of confidence in the UK’s global economic future, vital
for the UK’s attractiveness as a place to invest and do business. Pressing ahead with key infrastructure
projects like this will provide not only a welcome economic stimulus, but will show the world that we are
well and truly open for business as we negotiate our exit from the EU.
This consultation response argues that:
 The UK’s future prosperity depends on the delivery of additional airport capacity in the South
East
 Expanding the UK’s hub capacity through a new runway at Heathrow is the right decision now in
order to improve connectivity and competition and must be done in the most efficient and costeffective way
1
Oxford Economics, Economic Benefits from Air Transport in the UK. 2014.
http://www.caa.co.uk/uploadedFiles/CAA/Content/Standard_Content/Data_and_analysis/Datasets/Airport_
stats/Airport_data_2015/Table_01_
3
http://www.aoa.org.uk/2017/01/new-aviation-agreements-to-underpin-a-truly-global-britain/
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 This will drive trade and investment, and boost growth right across the country
 Heathrow expansion must be the starting point for more strategic thinking on UK aviation,
maximising existing capacity and ensuring long term needs can be met
The UK’s future prosperity depends on the delivery of additional airport capacity in the South East
5. With the Department for Transport’s demand forecasts suggesting that without action, all of London’s
airports could reach capacity as early as 2025 4, building a new runway in the South East is a key
decision for the long-term future of our economy and country. With new capacity taking up to and
possibly beyond a decade to deliver, all of London’s airports will be close to being full by the time the first
new tranche of capacity comes online. It is therefore crucial we get spades in the ground as soon as
possible to reap the benefits for jobs and growth, precisely when the country needs them most.
6. If the UK does not act now, we could lose out on over £31 billion in trade by 2030 with the BRIC (Brazil,
Russia, India and China) economies, in addition to trade with other emerging markets.5 This is
something UK firms are very aware of, with 46% of firms reporting that they expect to see lost business if
the UK fails to increase its emerging market connectivity, in response to the CBI/AECOM Infrastructure
Survey 2016.6 CBI analysis of the share of new routes over the last two decades from the EU to the
BRIC economies alone indicates that the UK has been pushed back to fourth or fifth position for new
routes to China, Brazil and Russia, trailing behind Germany and France, and at times the Netherlands
and Spain.
Expanding the UK’s hub capacity through a new runway at Heathrow is the right decision now in
order to improve connectivity and competition, and must be done in the most efficient and costeffective way
7. The independent Airports Commission determined that building a third runway at Heathrow presented
the best option to meet the capacity needs in the South East with the widest benefits for the UK, and the
Government has clearly set this out as its preferred option. Business supports this conclusion, and would
like to see timely progress made in delivering it. While the Commission acknowledged there are clear
benefits to other expansion plans, new hub capacity is essential if we are to ensure that we provide the
best possible level of connectivity and competition to the established markets that form the bedrock of
our trade currently alongside developing new long-haul connections.
8. In its 2014 report, The nub is the hub, the CBI made the case for new hub capacity at a single location,
which a new runway at Heathrow provides. Analysis of growth patterns from hub and non-hub airports in
the last two decades demonstrates that both airport operating models have grown strongly7, and it is
clear that both are vital to supporting growth in the connectivity that underpins UK trade. However, while
all airports have a role to play in delivering better connectivity for the UK, they cannot all play the same
role, and new hub capacity is essential if we are to ensure that we provide the best possible level of
connectivity to the established markets that form the bedrock of our current trade, alongside developing
new long-haul connections.
9. A primary benefit of hub expansion is the ability to develop a wider range of long-haul routes to
destinations where there is marginal demand to make a route viable, using transfer passengers in order
4
Department for Transport, UK aviation forecast. January 2013.
Ibid
6
CBI/AECOM, Infrastructure Survey 2016. September 2016.
7
CBI, The nub is the hub. September 2014.
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to reach the threshold of viability sooner. On average, hubs serve 3 times as many emerging market
destinations as non-hubs.8 For airlines to offer new routes, airports need sufficient capacity so both can
growth their operations in a sustainable way that suits the demands of their passengers and their
business model. CBI research demonstrates that spare capacity is important because where a hub
becomes constrained, as it is at Heathrow, airlines tend to focus on strengthening routes to markets that
are already popular, rather than using transfer passengers to develop new routes.9 The viability of flights
is further reliant on air freight and, given Heathrow’s position as the UK’s biggest freight port by value,
plans for expansion to include a doubling of freight capacity at the airport are welcomed by Britain’s
exporters.
10. Heathrow expansion should be completed in the most efficient, affordable way to ensure that business
users get the maximum benefits of increased connectivity and at the lowest possible cost to passengers
and industry. The UK aviation market must continue to be globally competitive and the Government
through the NPS should help airlines and Heathrow to work effectively together to complete the scheme
in a timely and efficient manner. Businesses want to see an NPS that balances the need for the proper
assessment of expansion plans to ensure practical and commercial viability, with the flexibility that
ensures that expansion can be delivered, with the maximum benefits at the lowest cost. Firms highlight
the need to ensure that an expanded Heathrow links with and complements transport and wider
associated infrastructure, and seek an NPS that facilitates this.
11. The CBI welcomes the package of measures to mitigate the impact of airport expansion on the
environment and affected communities, but reiterates the need for a balanced approach which takes
consideration both of environmental and local concerns with delivering the maximum benefits that can
come from expansion. Businesses particularly highlight the importance of early morning arrivals for
connections to emerging markets and air freight. Further assessment and industry engagement is
therefore required on the proportionality of night flight restrictions and their possible economic impact,
ensuring that they do not undermine hub capability and the full utilisation of newly created capacity.
This will drive trade and investment, and boost growth right across the country
12. Creating new routes to emerging markets will open doors to trade, boosting growth, creating jobs and
driving investment right across the country. Independent research conducted by Steer Davies Gleave for
the CBI’s 2013 report, Trading Places, highlights that with the right direct air links, trade will follow,
creating a virtuous circle of activity. The analysis demonstrated that on average an additional flight to a
high growth market boosts trade by as much as £175,000. This means that for each and every daily
route between the UK and an emerging market economy, UK trade could receive a shot in the arm of as
much as £128million a year – or an additional £1billion a year from eight new routes alone. 10
Furthermore, the CBI’s Unlocking Regional Growth report highlighted exports as one of four drivers of
productivity, with a clear cyclical relationship whereby firms with higher productivity are more likely to
export and, in turn, exporting, by exposing firms to the pressures of foreign markets, makes them more
productive.11
13. It is important that all parts of the UK are able to tap into the export potential of Heathrow’s status as an
international aviation hub through domestic flights. Heathrow’s domestic connections have suffered as it
has reached capacity, with the number of domestic routes to Heathrow having fallen from 18 in 1990 to
8
CBI, The nub is the hub. September 2014.
Ibid
10
CBI, Trading Places. February 2013.
11
CBI, Unlocking regional growth. December 2016.
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just 8 today. Therefore the airport’s proposed six new domestic routes alongside a commitment to the
safeguarding and development of existing routes – to Aberdeen, Belfast City, Edinburgh, Glasgow,
Inverness, Leeds Bradford, Manchester and Newcastle - are welcomed by firms, given their economic
importance to the areas they serve and the whole of the UK.
14. In turn, greater connectivity across the country to international markets makes the UK a more attractive
place to invest. Indeed, access to export markets, the quick movement of talent around the world to
where it is needed and close contact with international investors all drive businesses toward locations
with the right international connections. This makes thriving airports with access to a range of global
hubs of importance to all regions. With 85% of multinationals saying they invest in countries where they
can get easy access to emerging markets, the whole of the UK can expect to reap the benefits of
Heathrow expansion12.
15. In addition to connectivity benefits, a new runway at Heathrow will create jobs and increase prosperity
throughout the UK. The Airports Commission estimates that the construction, maintenance and running
of a new runway could create as many as 5,000 apprenticeships and up to 94,900 manufacturing jobs –
and the benefits would be felt right across the UK through supply chains, in businesses small, medium
and large. It will jumpstart many careers, transforming the next decade of British construction, and
strengthen businesses across the country.
Heathrow expansion must be the starting point for more strategic thinking on UK aviation,
maximising existing capacity and ensuring long term needs can be met
16. The bold decision to expand capacity at Heathrow must not be the end of the debate, and should be the
start of a broader discussion to enable a thriving network of airports in the UK. A hub airport, capable of
growth and increased capacity, together with concerted action that supports the development of a
network of point-to-point airports delivers the most wide ranging aviation benefits. This model will provide
increased connections to the greatest mix of markets and destinations at the most affordable cost for
business and the public alike.
17. A long-term aviation strategy is therefore needed, and must be made a priority for the new government.
The Government needs to ensure that the conditions are right to allow all UK airports to thrive, providing
competition on routes that are popular enough to facilitate point-to-point connections and ensuring the
whole of the UK’s long term capacity needs are met. There must be a continued assessment of demand
forecasts and the level of capacity required to futureproof the UK’s connectivity, learning lessons of the
past, and ensuring decisions about future capacity needs are taken in a timely manner.
18. An aviation strategy should also seek to address the key pinch points on the ground, as well as in the
air. Importantly, the future of aviation must be viewed within a fully integrated transport system. In
response to the CBI/AECOM Infrastructure Survey 2016, faster road and rail access to the UK’s airports
was ranked as the highest priority for improvements to aviation services, with 70% of firms calling it
‘critical’ or ‘important’13. This point was further echoed in the CBI’s Shaping Regional Infrastructure
report, coming up as a recurring theme across the English regions. 14 Good connections to airports are
an essential driver of passenger demand, and the larger the catchment area of an airport, the greater the
chances of creating viable flights. This highlights surface access to airports as a crucial issue to tackle.
19. All future aviation policy decisions must be taken with the holistic view of improving the UK’s
connectivity. As an early part of this, the CBI welcomes the consideration of reforms to UK airspace
12
CAA, Passenger airport preferences: results from the CAA passenger airport survey. November 2011.
CBI/AECOM, Infrastructure Survey 2016. September 2016.
14
CBI, Shaping regional infrastructure. April 2016.
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policy and the separate consultation being undertaken on this. Businesses are keen to see Government
support for the delivery of the Civil Aviation Authority’s Future Airspace Strategy in line with global
recommendations. This will enable UK airspace to handle forecast levels of traffic and take advantage of
modernised airspace infrastructure and technology, in which UK firms are world leaders. The
modernisation of airspace will allow airports and airlines to maximise capacity both before and after
expansion, bringing timely growth to both aviation and the UK economy. The development of airspace
policy must be done with the greatest economic and environmental impacts in mind, delivering a
sustainable future for UK aviation alongside the wider aviation strategy.
20. The CBI will engage fully in the process to develop an aviation strategy which meets our long-term
capacity needs and works for all parts of the country.
CBI Infrastructure and Industries Directorate, May 2017
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