UK air passenger forecasts

25th September, 2009

In Jan 2000 the DfT published revised forecasts of air passenger. These forecasts are of crucial importance because they underpin the government’s policy of airport expansion. They also underpin the government estimates of aviation’s greenhouse gas emissions.

AEF has studied the forecasts in detail and concludes that there are signficant flaws. As a result, the government’s aviation and climate policy are being mis-informed.

An Executive Summary of the report follows; see also the full report (Word doc, 12pp).

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1. New forecasts of passenger demand were published by the government in Jan 2009.  This study examines the basis of these forecasts, summarises the forecasts, gives a critique and presents provisional re-forecasts for 2030 and 2050. 

2. The basic approach to forecasting up to 2030 is reasonable, we conclude, but we consider that the forecasts (‘unconstrained’ and ‘constrained’) are about 15% too high at 2030.  We also consider that the error limits, expressed by ‘high’ and ‘low’ forecasts, are significantly under-estimated, thereby suggesting that the forecasts are more accurate and robust than they really are.

3. We show that the airports policy is effectively, at a national level, ‘predict and provide’.

4. A 2030 forecast that is 15% lower means that the extra traffic carried due to new runways at Heathrow and Stansted would be much less than that claimed by DfT.  This would make it far harder to justify the impacts of expansion and would probably turn the claimed net economic benefit into a large loss.

5. From 2030 to 2050 the ‘constrained’ forecasts level off abruptly and, we consider, irrationally.  The government has assumed an about-change at 2030 away from its current predict and provide policy.  We estimate that the DfT has under-forecast by about 26% at 2050, relative to its 2030 forecast.

6. Climate policy uses a 2050 reference point.  Under-forecasting of demand at 2050 is likely to lead to under-forecasting of aviation’s CO2 emissions and other greenhouse gas emissions, thereby mis-informing government policy on climate change.

7.  A key feature of this analysis is that AEF’s re-forecasts use DfT data and virtually no new data.  This means that the reasons for divergence of forecasts are made clear and are not confounded by the use of different assumptions or datasets.

8. We recommend that the January 2009 forecasts are updated forthwith, taking full account of the issues raised here and elsewhere.