New report highlights a new runway at Heathrow or Gatwick would mean big increases in passenger fees
10th March, 2014
A new report published today by the AEF casts doubt on the feasibility of building a new runway at either Gatwick or Heathrow.
The study, “Who Would Pay for a New Runway”[1] (attached) by Brendon Sewill[2], and published by the AEF[3], shows that a new runway at Heathrow would be likely to mean an increase in landing fees and other airport charges from £19 per passenger to £31. At Gatwick there would be a whacking increase from £8 to £33.60.
Sewill said: “There has been unending discussion of where a new runway should be built. But it seems that no one has stopped to ask who will pay?”
The study points out that the situation today, with each of the main airports separately owned, differs from that in the past, in that the cost of any new runway would fall only on the passengers using that airport.
The choice is simple: a new runway will require the passenger to pay through increased charges or the increase will need to be offset by a public subsidy. A report by KPMG concluded that a new Heathrow runway would need a subsidy of around £11 billion, and a new Gatwick runway a subsidy of nearly £18 billion. But with the Government reluctant to commit public funds, and new EU guidelines ruling out subsidies to major airports, the most likely answer would be a substantial increase in ticket prices which would drive airlines to use other airports.
So, as the study concludes, “If the punters won’t pay, the runway won’t fly”.
Tim Johnson, Director of AEF which published the report, commented:“The high environmental price of a new runway is well known but to this day the aviation industry has argued that the economic benefits would far outweigh it. This report shows that it won’t just be the environment that pays but also either the passenger or the tax payer. A new question arises: Who will actually benefit?”
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Contact:
Tim Johnson, AEF: 020 7248 2223 / 0771 038 1742 / tim@aef.org.uk
Notes for editors:
- The report is available at https://www.aef.org.uk/uploads/Who-would-pay-for-a-new-runway.pdf.
- Brendon Sewill has a degree in Economics from Cambridge. He has been an adviser in the Treasury and to the British Bankers Association (in the days when banks were respectable). He has also been a member of the National Trust Council. Since 1990 he has been chairman of the Gatwick Area Conservation Campaign (GACC) http://www.gacc.org.uk/.
- The AEF is the Aviation Environment Federation – a national organisation working to ensure the aviation industry takes full account of its environmental and social impacts.
Image credit: Dani Sardà i Lizaran via Flickr