Updated: Industry reacts to Heathrow expansion
Updated 11.00am, 26/10/2016 The UK Government met confirmed on Tuesday 25th October that the solution to airport under-capacity in the south of England will be the construction of a third runway at Heathrow. Rhenus UK (in favour of the decision)
The news that the government has approved the expansion of Heathrow has been well received by Rhenus UK, a leading international freight forwarder.
Speaking of the move, David Williams, managing director at Rhenus UK, commented: “The approval of plans for a third runway at Heathrow is great news for the British manufacturing industry – and the country’s economy as a whole. Not only will this allow Heathrow to maintain its place as one of the world’s busiest, and important, airports, it will also safeguard local jobs and provide even more employment opportunities across a number of industries in the future. “Indeed, a recent report from consultancy group Quod predicts that the expansion at Heathrow could create up to 179,000 new jobs within the manufacturing sector, 85% of which will be generated outside of London and the South East.
“Already a chief contributor to the UK’s economy, expansion at Heathrow will help the manufacturing sector grow further. Currently, industry equates to 44% of the UK’s entire export market – but there is room for improvement. Reliable transport links and export opportunities to key markets are paramount for this upward trajectory, and a third runway will only add to this.
By alleviating the pressure on other transport links, such as road or sea, an expanded Heathrow will allow the sector to remain strong in an increasingly competitive market. “The government recently announced a number of ambitious targets for British companies, including exporting ?1 trillion worth of goods by the year 2020. For this to be achievable, however, we would need to see serious investment in UK infrastructure – something expansion at Heathrow very much represents.
“As it stands, Heathrow still lags behind Frankfurt, Schiphol and Paris in terms of cargo capacity, but today’s news could help change that. The construction of a third runway at Heathrow should allow exporters to steadily increase volumes to meet the government’s ambitious targets.” “At Rhenus UK, we have significantly increased our air freight tonnage across the past year and ultimately view the decision taken by the UK government as a significant milestone.
The growth of Heathrow will play an integral role in the continued development of Rhenus and the airfreight offering we provide for our valued customers.”
Manchester Airports Group (in favour of the decision) Charlie Cornish, chief executive of Manchester Airports Group, owners of London Stansted, Manchester, East Midlands and Bournemouth airports, says: “Today’s announcement highlights the crucial role that aviation will play in connecting Britain to the world.
Airports up and down the country, including Manchester, London Stansted and East Midlands, will drive economic growth and make a vital contribution to rebalancing our economy over the years ahead. “Manchester Airport will connect the Northern Powerhouse to global markets – boosting the region’s economy by around ?100 billion, far more than any other airport.”
BIFA (cautiously in favour of the decision) The trade association that represents the UK’s freight forwarding and logistics businesses has given a cautious welcome to today’s news that the government has approved a third runway at Heathrow.
Robert Keen, Director General of the British International Freight Association (BIFA), said: “Today’s news appears to be the beginning of the end of years of procrastination over the expansion of UK aviation capacity. “If that is the case, it is long overdue good news for our 1,500 member companies who have been dismayed over the ongoing delay on such a huge issue. “However, we understand that a public consultation will now be held on the effects of airport expansion before the government makes a final decision as part of a national policy statement on aviation, with MPs then voting on that decision in the winter of 2017-18.
“If that is the case, uncertainties remain. Whilst the UK Transport Secretary, Chris Grayling has hinted at an expedited planning procedure, with no reopening of high level arguments, the inevitable legal challenges and the convoluted parliamentary and planning processes that are also likely lead me to doubt that any expansion will be completed by the time that UK aviation capacity is predicted to run out in 2025. “I hope I am proved wrong, but I won’t be booking a ticket for the opening ceremony just yet.”
Colliers International (in favour of the decision)
Upon the news that UK Government has agreed to a new runway at London Heathrow Airport, industrial and planning experts at global real estate advisor, Colliers International, had the following comments:
Len Rosso, Head of Industrial and Logistics at Colliers International commenting on today’s decision said: “While there is certainly a business case for runway expansions at both Heathrow and Gatwick, given the significant investment in Heathrow’s reputation as a globally significant transport hub, today’s decision simply had to be in favour of Heathrow.
“So much time and capital has already been invested at Heathrow and the surrounding area to build the best connections, infrastructure and facilities that, to have chosen Gatwick, the Government would have severely undermined Heathrow’s reputation and status on the world stage. At this time, Gatwick simply cannot maximise the opportunities that a large scale project such as this can bring in quite same way that Heathrow can.
“The outcome is also great news for the future for West London which will no doubt benefit economically from the creation of new jobs and the increased investment and commerce this huge project will bring. Heathrow can already demand the amongst highest rents and land values for warehouse space in the UK, in excess of ?15.50 per sq ft and ?2 million per acre respectively, as occupiers compete for scare space.
We can expect this competition to continue as occupiers adapt to the increased traffic flowing through the airport.
In the short- and medium-term we can expect some disruption, particularly as details of exactly where the new runway will be located emerge, but I am hopeful that the government, the local authority and Heathrow Airport Ltd can work together to find suitable solutions to any displacement.
“The years of delay to get to this point have created a period of uncertainty in the market so I welcome today’s decision that firmly underpins Heathrow future as a truly world-class airport.”
Jonathan Manns, Director of Planning at Colliers International commenting on today’s decision, said: “The Government has long accepted that airport capacity must grow and that this is critical to national prosperity. Evidence suggests that existing airports in South-East England have been performing sub-optimally since the late 1990s and capacity is forecast to be full across each by 2030. Today’s decision to expand Heathrow takes us a step closer to addressing this.
“The extent to which other stakeholders including politicians, community groups and airport operators will protest remains to be seen.
However the Government’s decision also brings other, equally significant, policy questions into sharp focus. Most importantly, the extension of Heathrow will undoubtedly precipitate a review of housing and employment forecasts in West London and the Thames Corridor. Spatial designations, such as the green belt and strategic gap which separates Hillingdon from Slough, will be permanently impacted by construction of a new runway and rail access.
“The decision and its implications are particularly pertinent in light of the London Society’s “Re/Shaping London” White Paper which was released last week.
One possible future for the area around Heathrow could be achieved through designation of a West London Green Web. This would transform land currently defined as green belt to secure a multi-functional green infrastructure landscape, providing new homes and workplaces that are sustainably located to support an expanded Heathrow.”
Institution of Mechanical Engineers (cautiously in favour of the decision) Philippa Oldham, Head of Transport and Manufacturing at the Institution of Mechanical Engineers, said in response to the Government’s approval for a new runway at Heathrow: “This is so near and yet so far.
Without clear view from Government on its support for expansion at Gatwick and Birmingham airports, investors are still unable to take a long-term view on how to future-proof UK airport capacity. “The year of consultation means yet more uncertainty, at a time when we need to be definite about our industrial strategy. We need to use airport capacity in the South East to boost the whole UK economy.
Air freight is an important contributor, with a particularly important role in supporting trade with countries outside the EU. This delay is therefore particularly worrying following the Brexit vote. “It is good that this Government is looking towards developing an integrated transport and industrial strategy.
It is vital therefore that these developments form part of this integrated approach with Crossrail and HS2. “This is a good news story that could be a great news story. For local communities, the expansion of capacity helps support economic growth and employment as well as training and apprenticeship opportunities.
For environmental impact, we well know that new aeroplanes are able to produce far fewer emissions as well as make less noise. A key factor for Heathrow is that Government should look to incentivise electric and hybrid technology to the vehicles that service the airport.”
SEGRO (in favour of the decision) David Sleath, SEGRO’s CEO, commented: “We welcome the Government’s support for a third runway at Heathrow, which gives business confidence that the new Government is serious about infrastructure delivery and maintaining Britain’s position as a global trader.
“As a company, we have been clear from the outset that for Britain to succeed in the global economy, we need more capacity at a hub airport, and Heathrow is the right solution. What’s more, 84% of our customers support this decision. Air cargo accounts for 40% of Britain’s exports by value, and more goods leave Britain via Heathrow than from all other UK airports combined.
“Giving the go-ahead for a third runway would provide a shot in the arm for the many established businesses and SMEs across the UK that rely on access to international trade markets.
“Expansion at Heathrow will allow Britain’s businesses to connect with emerging markets and create new opportunities, demonstrating that Britain really is open for business. We urge the country to come together and do what is right for the nation as a whole, which is to support the delivery of a third runway at Heathrow.” Greenpeace UK (against the decision)
John Sauven, Greenpeace UK executive director, commented: “Is the May government about to repeat the error of the Brown government and assume both the laws of nature and the law of the land can be fudged to allow another runway? “That was the mistake Gordon Brown made shortly before the High Court blocked his Heathrow plan. We stand ready, with four Conservative local authorities, including Theresa May’s own council, to bring a Judicial Review against a green light for a third runway.”
Chartered Institute of Logistics and Transport (in favour of the decision)
The Government’s decision to support the provision of an additional runway at Heathrow should be made into a ‘win-win’ situation for all parties, claims The Chartered Institute of Logistics and Transport (CILT) after today’s announcement. Paul Le Blond, Chair, Aviation Policy Group, CILT says: “The end to uncertainty over airports policy is welcomed by logistics and transport professionals, whichever option they supported, but there can be benefits for all parties, who can now take action to ensure that the decision is implemented in the best possible way for all. “Logistics and transport operators, from airlines to freight companies, should use the opportunities that this decision will bring to plan long-term investments in more sustainable infrastructure, equipment and working practices, in order to create a lower carbon footprint and to meet air quality standards.
“Communities around the airport should seize the opportunities created for employment and for supplying the expanding airport, not just immediately, but over a long-term period, through education, training and entrepreneurship.” Daniel Parker-Klein, Head of Policy, CILT says: “Government must ensure that the benefits of the decision are fully realised. The conditions set by the decision, related to aircraft noise, air quality and road traffic, must be strictly enforced.
This will enable improvements to roads, rail and other infrastructure to be properly planned and investment justified, it will send messages to the aviation industry about the need to continually improve environmental performance, and it will help towards meeting quality of life targets.” Kevin Richardson, Chief Executive, CILT, says: “The whole of the UK must benefit from this decision. As well as the new runway providing better connectivity from the regions to London and then to the world, the Government should publish a draft National Policy Statement as soon as possible so that the UK’s airports and the airlines which they serve can see a clear strategy ahead, local authorities can plan properly for growth and surface access providers can implement the improvements for many of the airports.”
Over many years, CILT has advised Government and the logistics and transport industry by using the expertise of its members, who speak from widespread knowledge but are independent of any particular trade group or business. In particular, CILT has contributed fully to the work of the Airports Commission, as well as to Parliamentary Inquiries and Government consultations.
CILT supported the Airports Commission’s recommendations, both in their Interim Report of December 2013 relating to a range of improvements at a number of airports, in particular to surface access, and also in their Final Report of July 2015 in terms of the recommended option. Freight Transport Association (in favour of the decision)
The decision to increase capacity at Heathrow is the right choice for the UK economy, the freight industry and the nation, according to the Freight Transport Association (FTA) following today’s Government announcement approving expansion.
FTA has forged a detailed campaign highlighting the vital importance of air freight to the UK economy and why a decision backing the Airports Commission recommendation for a third runway is essential for UK importers and exporters who rely on the expansion of Heathrow.
About 40% of UK imports and exports by value are dependent on air freight and the wide range of services provided by Heathrow to access our overseas markets.
FTA therefore welcomes the news announced by today by Chris Grayling, Secretary of State for Transport to give the go-ahead for expansion of Heathrow.
Chris Welsh, FTA Director of Global and European Policy, said: “This is excellent news for the freight and logistics industry and the country. This decision is even more vital in a post-Brexit world where Britain’s capability to expand its trade and ability to compete in markets outside Europe is heavily dependent on connectivity to emerging markets.”
Heathrow is an essential hub of connectivity for passengers and freight, bringing together huge resource, expertise and opportunity in one place.
“Freight and passenger services have a strong synergy at Heathrow. It is the wide diversity of destinations and services which makes it such an attractive proposition for those shipping cargo.
Airlines accepting freight in the belly hold of passenger planes can often make the difference between services being profitable or not,” he said.
FTA has led the freight case for Heathrow and previously outlined the importance of the airport, saying that Heathrow must maintain its position as a world-class hub for UK imports and exports. FTA’s report ‘Sky-high value – The importance of air freight to the UK economy’ played a key part in influencing the Airports Commission recommendation in favour of a third runway at Heathrow. Heathrow Airport has the best connectivity to global markets of any in the UK, currently serving 185 destinations in 84 countries.
Increased capacity will enable goods and passengers to be connected to scores of global destinations and support UK trade.
Welsh added: “Following the referendum vote to leave the EU, this decision is even more crucial to the UK’s position as a leading global trading nation. In line with the Prime Minister’s Conservative Party Conference speech in which she talked about the Government’s vision of ‘a truly global Britain’, we need to look to markets outside Europe, in particular to emerging markets in Asia, South America and the Indian subcontinent. Freight accounts for around 40 per cent of the UK’s imports and exports by value, and high-end manufacturing industries such as pharmaceuticals, automotive manufacturing, mobile telephones and retail are dependent on Heathrow.
“So much economic activity relies upon air freight across the UK – it is critical to economic recovery that the nation can demonstrate it is open for business with a smooth and reliable journey from our international gateways.”
The Association recently wrote to Theresa May’s Cabinet urging members to make a prompt decision in favour of a third runway at the airport to allow the next phase of planning and decision making to begin.
Heathrow Hub (against the scheme, in favour of the location)
Heathrow Hub, the independent proposal to expand Heathrow by extending the northern runway, has responded to the UK Government’s decision to expand Heathrow Airport by building the third runway as the best solution to the UK’s aviation capacity challenge.
Our view is the Government has selected the right location but the wrong scheme. Our proposal is cheaper, simpler, less disruptive and quicker to construct than Heathrow Airport’s 3rd Runway. The decision will result in substantially higher passenger charges and opposition from airlines, passengers and those affected in the Heathrow area.
Anthony Clake, principal investor in the Heathrow Hub scheme, said: “Jock Lowe and the team have done a superb job in developing the extended runway concept during the past 4 years.
They were shortlisted by the Government, have obtained a patent for its design and recognition from the CAA that it is safe. While we have been unsuccessful in our quest to apply the design to help solve the UK’s airport capacity problem, we look forward to promoting our concept around the world.”
Captain William ‘Jock’ Lowe, Director of Heathrow Hub, commented: “Our economy, our national transport infrastructure and our international connectivity will be much improved by the expansion of Heathrow Airport rather than Gatwick. While we obviously believe that our own concept to extend the northern runway remains vastly superior to Heathrow Airport Ltd.’s third runway option, we congratulate John Holland-Kaye and his team.
“We are relieved that the Government has made the correct decision in terms of location.
Heathrow is where the airlines want to be; it’s where the demand is.”
CBI (in favour of the decision) Paul Drechsler CBE, CBI President, said: “The Prime Minister’s green light to expand the UK’s aviation capacity comes as an enormous relief to firms in every corner of the country. “A new runway at Heathrow is really fantastic news, especially as the country has waited nearly 50 years for this decision.
It will create the air links that will do so much to drive jobs and unlock growth across the UK, allowing even more of our innovative, ambitious and internationally focussed firms, from Bristol to Belfast, to take off and break into new markets. “With contracts to tender for, apprentices to recruit and supply chains to build, this decision must be taken forward swiftly, giving businesses the confidence to invest. Our aviation capacity is set to run out as early as 2025, so it’s 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.
“This project should form part of a long-term framework for aviation capacity for the whole of the UK. 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.”
British Chambers of Commerce (in favour of the decision) Adam Marshall, Director General of the British Chambers of Commerce (BCC), said: “Put simply, it’s about time.
Successive governments have prevaricated for far too long in the face of a blindingly obvious need for more runway capacity. Businesses will now want assurances that the final approval process for Heathrow’s new runway will be smooth and swift, so that construction can begin as soon as possible.” “One new runway is not enough to give the UK the aviation capacity it requires to trade the world successfully.
Airports like Gatwick, Birmingham, Stansted, and others with growth aspirations should also get the chance to expand and grow in the future.”
Heathrow (in favour of the decision)
A spokesperson for Heathrow Airport has told the BBC: “We await the full details, but Heathrow stands ready to work with government, businesses, airlines and our local communities to deliver an airport that is fair, affordable and secures the benefits of expansion for the whole of the UK.”