Northern Powerhouse at risk unless Government takes action on airport expansion says Heathrow CEO

The Government’s ambitions to transform the North of England into a high growth Northern Powerhouse are at risk unless action is taken on airport expansion warns Heathrow chief executive John Holland-Kaye.

Addressing the International Festival of Business, Heathrow CEO John Holland-Kaye highlighted new research carried out by Frontier Economics. According to the study, the cost of inaction on airport capacity to the economy of the North equates to £710m in lost import/export trade every year.

Study reveals inaction equates to £710m in lost import/export trade every year to the Northern economy

Reacting to the study, the airport believes that if it wasn’t constrained, more passengers flying to and from the UK regions could fly via Heathrow instead of having to fly via another international hub. According to Heathrow, this could help facilitate an additional £1.7bn in trade each year.

Heathrow says it welcomes the continued growth of direct services from airports in the North of England such as Manchester, Newcastle, Liverpool and Leeds including new flights from Manchester to Beijing and Newcastle to New York. However, with the UK’s hub airport at capacity, it believes many people rely on booking connections via hubs in Europe, Istanbul and Dubai to reach long-haul destinations with only one stop.

The study, it says, represents the ‘tip of the iceberg’ in terms of the total cost to the UK through a lack of connectivity to Heathrow from the regions, as it does not factor in the trade that would be enabled as a result of the new domestic connections that an expanded Heathrow could provide.

In addition the research also concludes that domestic hub airports provide around 70% greater frequency of flights to other domestic airports than is offered by international hubs. Therefore Heathrow believes it is better placed than foreign hubs to connect Britain’s regional economies to growth markets.

John Holland-Kaye, Chief Executive Officer at Heathrow Airport, said: “Heathrow is the right choice for a long-term plan to back every corner of the UK. The Government is going to struggle with the foundations of the Northern Powerhouse if a third runway isn’t built to support the region’s existing connectivity. To rebalance and strengthen the British economy, the UK needs a domestic hub airport that can compete with our unconstrained hub rivals abroad, and that’s something only Heathrow can deliver.”

Heathrow has committed £10m to a Route Development Fund, which will provide start-up support for new domestic destinations. It will enable up to five new routes to be established following Heathrow expansion, with routes from airports like Liverpool, Humberside and Doncaster/Sheffield potentially eligible.

James Ramsbotham, North East Chamber of Commerce Chief Executive, said: “We completely agree the lack of decision on Heathrow’s expansion is extremely detrimental to the ambitions of the Northern Powerhouse. As a region in which exports and inward investment are essential to our economy, we need global links and these can only be provided with access to the UK’s hub airport. This will enable us to build on existing connections and exploit new markets across the globe.”