The Journey of SAP
1972 – 1980, The Early Days SAP with their HQ in Walldorf, Germany was founded in the nearby town of Heidelberg in 1972 by five ex-IBM engineers with a vision...
England is currently one of the best connected countries in the World, and its airport system offers more destinations and a greater number of seats than any other European country. Since the 1940s no new full length runway has been laid down in the South East of England. The only major new runways to have been built recently have been at Manchester and London City. It is predicted that by 2040, the entire London Airport system will be full if no action is taken. Heathrow is currently operating at capacity and Gatwick is operating at more than 85% capacity. With this in mind, a new runway in the South East is needed by 2030 if the UK is to remain Europe’s aviation hub.
In 2012, the Airports Commission was set up with the intention to establish the best airport expansion scheme in the South East. The three schemes under consideration were: a third new runway at Heathrow, an increase to the length of one of the existing runways at Heathrow and a new runway at Gatwick.
The final report, produced in 2015, established that a third new runway at Heathrow would be the best scheme from the 3 schemes presented. Despite Heathrow being selected as the best option by the Airport Commission, there are many positives to choosing Gatwick and it is likely that if not chosen now, it will be likely within the next 30 years.
Why is a new runway needed?
Within the last 12 months, about half of the British population has travelled by air for holidays, business or visiting friends/family. With Heathrow operating at capacity and Gatwick nearing capacity, domestic destinations and low-cost flight destinations are getting priced-out by more profitable long haul routes.
Inbound tourism is worth an estimated £56bn to the UK economy each year, with over £3bn raised through the collection of air passenger duty as a source of Government revenue. In 2013 the aviation sector generated about £12bn of economic output and employed around 116,000 workers – overall, the aviation industry is a great source of income for the country. In 2014, the total value of tradable goods carried through UK airports exceeded £140bn. However, with the global economy shifting from the West to East, it is important that new routes are established with the East and other growing markets, in order to do this a new runway is vital.
A significant impact of an airport operating at maximum capacity is the ability to recover from unforeseen delays/disruptions. Delays and disruptions have a much larger impact on airports such as Heathrow and are much costlier because the room for error is significantly less.
When can we expect a decision to be made?
It has been nearly a year since Sir Howard Davis recommended Heathrow Airport in the Airports Commission’s final report, yet despite this, a decision still hasn’t been made. A pronouncement was expected in the middle of this year, but this was put on hold following the decision to leave the EU. Hopefully by the end of the year we should have a decision made and planning can begin at the selected airport.
Time Scale: Completion 2025
Gatwick accounts for only 11% of the UK’s scheduled long haul flights despite being the second largest long haul airport in the UK. Gatwick is much more established in the short flight market and is the single largest base for the low cost airline sector. The main argument against expanding Gatwick is that it doesn’t have as much of a presence in the long haul flight market. However, it has added 20 new long haul routes to emerging markets such as China and South America in the last year, showing that although Gatwick isn’t as well established in the long haul market, it is able to open new routes easily.
Earlier this year, Gatwick chief executive Stewart Wingate told the Daily Telegraph: “If you look at Gatwick, we have a tiny fraction of the environmental impact of Heathrow, yet you get all of the same economic benefits, all of the same connections to short haul and long haul destinations, all at a cheaper price.”
Prior to David Cameron stepping down, Gatwick’s chairman, Sir Roy McNulty, wrote a letter promising that if Gatwick was chosen, the new runway would be up and running by 2025 – 5 years ahead of Heathrow.
Heathrow – Third Runway:
Time Scale: Completion 2030
Heathrow is the UK’s busiest airport and accounts for a massive 70% of our long haul flights. As mentioned above, Heathrow is running at full capacity at present.
Heathrow boss John Holland-Kaye said: “If Britain wants to be confident, outward-looking and at the centre of the world’s economy, then expanding Heathrow must be a key building block in the Government’s Brexit plan.”
Prior to “Brexit” David Cameron was expected to give the go-ahead for the Heathrow expansion plan. This of course was all put on hold following the decision to leave the EU and David Cameron’s decision to step down as Prime Minister.
The majority of facts and figures used in this blog have been taken from the Airports Commissions final report produced in 2015.