Diogenis Papiomytis, director, aerospace and defense consulting, Frost & Sullivan, considers the consequences of the expansion of London Heathrow Airport, claiming it will have a significant impact on the UK economy and industries dependent on air travel.
The UK government announced this week its approval for the expansion of London Heathrow Airport. Who will be affected by this?
Everyone will be affected, with most stakeholders affected positively. The overall passenger experience, for arriving, departing and transiting passengers, will improve substantially.
The end objective is for the airport to effectively compete in terms of improving the ground experience, with global hub airports in Europe, the Middle East and elsewhere. Airlines will have the extra capacity required to improve their on-time performance, while they are provided with the option to expand their services to/from London Heathrow.
Today that flexibility is simply not available and airlines have to pay high fees to acquire landing slots from incumbents. Regional airports will also benefit, as the airport will be able to accommodate regional flights, thereby offering vital short- to long-haul connections for passengers. Of course, there are stakeholder groups that will be negatively affected, such as residents in the surrounding areas, and competitor London airports.
What impact will the expansion have on the industry?
There will be a significant economic impact on the UK economy and industries dependent on air travel, such as tourism and trade. However, it is difficult to accurately estimate this impact, due to the unknown implementation timeframe. The expansion impact is directly related to airline growth plans and of course the impact of Brexit.
When a new runway is built at Heathrow, how will the travel experience change?
There will be a substantial benefit to the UK traveler. The main driver for the improvement in passenger experience will be the reduction in flight delays attributed to airport congestion. The construction of a new Terminal 6 will also provide additional opportunities for airlines and the airport operator to better serve passengers on the ground.
Where will it leave British Airways, the dominant airline at Heathrow?
It is a mixed blessing for British Airways (BA). On the one hand it will provide them with the extra capacity required to meet future growth plans for them and their IAG and OneWorld partners. However, BA is currently the owner of some very valuable landing slots at London Heathrow and the value of those slots will drop dramatically.
In addition, it gives the opportunity to other airlines, both European and from other regions, to either introduce flights or expand their operations at the airport. However, for BA passengers the longer-term positive effect of competition will help offset any increase in airport charges.
Will other London airports be closed?
The discussion on the possible runway expansion of other London airports has effectively ended. However, there will be no airport closures, since the London Heathrow expansion will serve future traffic growth rather than act as a replacement for other airports.
October 27, 2016
