Heathrow press releases

29 September, 2016

Heathrow’s Brexit Boost to help make Britain stronger and fairer - faster

Terminal 2

 

  • Heathrow offers a comprehensive plan to get UK regions connected to growth quicker and give all of Britain a ‘Brexit boost’
  • Includes proposals for up to 25,000 more air traffic movements a year on current operational levels, whilst the third runway is being built – adding an additional £1.5bn to the economy between 2021 and opening of the third runway in 2025 
  • Working with Government to ring-fence early capacity for domestic flights and long-haul routes to growth
  • Extending a £10 discount for every departing passenger flying from Heathrow to a UK destination for 20 years
  • New evidence shows Heathrow unlocks nearly £60bn of growth over the crucial first fifteen years of Brexit. Gatwick only offers £4bn of growth in the same period. 

 

The benefits of Heathrow expansion could be delivered four years early, giving the British economy a £1.5bn ‘Brexit boost’ whilst a third runway is built, according to new proposals to be launched on the first day of the upcoming Conservative Party Conference. 

The measures, which are subject to consultation, show that Heathrow could get more British exporters connected to more global growth when Britain leaves the EU by adding up to 25,000 additional movements on the existing runways in 2021, after permission is granted for a third runway.

As well as adding vital extra capacity on existing routes, the end of EU regulation offers an opportunity to ring-fence some of the new slots for “Brexit Boost Routes” including new domestic connections such as Humberside, Dundee, Newquay or Liverpool and new long-haul trade routes to growth markets such as Osaka, Kochi, Wuhan and Quito. 

To help establish new domestic connections, Heathrow is proposing an extension of its existing £10 ‘domestic passenger discount’ for all flights to UK airports until 2037, as long as there is justification and it is deemed to be in the public interest. It will also bring forward its £10m ‘route development fund’ to 2021.

These measures will enable all of Britain to capitalise on new market opportunities in the early months of Brexit, supporting small and large exporters, boosting competition and reducing prices to consumers.  They have been welcomed by airports across the country:

 

Andrew Cornish, CEO of Liverpool John Lennon Airport said:

“Heathrow is the UK’s hub airport. A route there would enable Liverpool to have onward connections to every continent of the globe as well as easy access to London. Liverpool has missed out on this link for over 24 years, not because there isn’t demand but because Heathrow is full. Expansion at Heathrow will create the additional capacity to help secure this important link and ensure we bring tourists and investment into Liverpool from new, growing markets outside of Europe. That’s why Heathrow expansion is the right choice for the North West.”

 

Updated research by Frontier Economics has identified indicative examples of 40 new long-haul trading routes with Heathrow expansion. With more than 30 airlines queuing to operate at Heathrow, only the UK’s hub has the high demand for slots to deliver these economic benefits in the early months of Brexit.

Assuming Brexit occurs in 2020, new analysis by Frontier Economics and evidence from the independent Airports Commission study shows Heathrow would create around £55bn more growth than an expanded Gatwick in the crucial 15 years after leaving the EU, with Heathrow generating up to £60bn in growth and Gatwick generating only £4bn in the same period.  Early flight expansion could also deliver up to 5,000 extra on-airport jobs for local people.

Heathrow will work with airlines to ensure that expansion is delivered cost efficiently. All of Heathrow’s commitments to meet and in most cases exceed the Airports Commission’s conditions, would be protected.

 

Commenting, Heathrow CEO John Holland-Kaye said:

“This Brexit Boost Plan is our commitment to making Britain stronger and fairer for everyone – faster.  It would generate around £55bn more in growth than Gatwick in the early years of Brexit. Our proposals for an additional 25,000 flights a year from 2021 would help businesses and families from Newquay to Dundee benefit earlier from Heathrow expansion, while protecting our commitment to meet and exceed the Airports Commission’s environmental conditions.

Heathrow’s third runway is the only option that can help every nation and region of Britain realise the opportunities of Brexit. The Prime Minister and the Government can now to make the right choice, and back Heathrow expansion.”

 

As the UK’s largest port by value, Heathrow is a unique national asset. It currently handles 29% of non-EU exports by value, compared to Gatwick’s 0.2%.  With expansion Heathrow proposes to double its current cargo capacity, enabling businesses across the UK to increase their exports and realise the opportunities of Brexit.

Heathrow expansion already has the support of small and large businesses right across the UK and is the favoured option of the majority of MPs. According to the independent Airports Commission, a third runway will create up to 180,000 jobs, four times more than Gatwick, and up to £211bn of economic growth.  

 

Mike Cherry, Federation of Small Businesses National Chairman said:

“We have been working with Heathrow on the announcements today, which will be warmly welcomed by small businesses across the UK.  

“Our members have pressed for commitments to greater connectivity to our regions from the UK's hub airport, and so the pledge to ring-fence routes and the prospect of more domestic destinations is a significant step forward. 

“As we face a new post-Brexit world, the new capacity for freight cargo and exports are essential to open up potential new overseas markets for British business.”

  

Chris Davies, Conservative MP for Brecon and Radnorshire said: 

Brexit presents a wealth of opportunity to British businesses and the first few years are critical. Heathrow is our hub airport and our biggest port. If we want to make the most of new deals with growing economies outside of Europe then we’ve got to get on with expanding Heathrow. Today’s announcement means we can get the connectivity we need the moment leave, meaning Britain gets the biggest Brexit boost possible.

 

Roberta Blackman-Woods, Labour MP for the City of Durham said:

“As we face a new post-Brexit world, the new capacity for freight cargo and exports are essential to open up potential new overseas markets for British business.”

“The proposals from Heathrow that will help to boost the vital air-link from Newcastle Airport that connects the North East to the world are to be very much welcomed. 

Connectivity with Heathrow is vital for economic growth and expanding tourism in the North East and is necessary to help our businesses compete globally. The government must acknowledge the link between stronger regional growth and expanding Heathrow and approve the third runway as soon as possible.” 

 

Only Heathrow expansion can make Britain stronger in the world economy, and fairer for everyone by connecting Britain’s cities to global growth at a price airlines and passengers can afford.

 

--Ends--

 

 

Notes to Editors:

Extensive xplaining in full the proposals are  available in the attached downloadable document.

 

Key announcements to be included in the Brexit Blueprint, to be launched on Monday 1 October, include:

 

Additional ATMS

Heathrow has the potential to expand early by adding up to 5% more flights on existing runway infrastructure with no impact to resilience or passenger experience and environmental commitments.  Heathrow could do this by working with Government to add an additional 25,000 traffic movements (ATMs) on current operational levels from 2021, allowing new growth to be unlocked while we get on with building the third runway.

New global trading routes and better, internal, UK connection are essential to making Brexit work.  It would both support the emerging industrial strategy and would create trading links for new trade deals.  Heathrow will work with Government to advocate that the extra flights are allocated to the routes that do the most to make Brexit work for everyone across the UK.

If Government gives the green light to a third runway at Heathrow, it will consult on these early as part of the planning process.  With appropriate permissions granted, the additional ATMs would be released in Q1 2021.

Indicative analysis shows that the additional flights could serve an additional 21 regional/short haul services (potential for 7 new routes, three flights a day or additional services for Inverness and Leeds Bradford and 6 other routes) and thirteen new long-haul destinations at once a day. 

Examples of the likely new long haul routes are Quito, Wuhan, Goa, Katmandu, Kochi, and Kansai (Osaka)

 

Sustainability

In delivering these proposals we would stick by our commitment to ensure that there will be no further cars on the road around Heathrow.  The Brexit Boost Routes would be released to complement existing plans to encourage public transport use, with the full service of Crossrail - as yet another link from Heathrow to across London - coming in 2019, upgraded Piccadilly line services, and the potential Western and Southern Rail Access links all contributing to allow Heathrow to reach its target of 50% of passengers travelling to Heathrow by public transport by 2030.

Heathrow is considering the early introduction of a vehicle emissions charge to coincide with the start of these new additional flights. The proposed charge would only apply to vehicles travelling to and from Heathrow, the money for which would be used to fund local public transport improvements, cycling infrastructure, additional electric vehicle charging points and promoting incentives to switch to electric or hybrid. The cost would be decided closer to the time, if the charge is deemed necessary and subject to local consultation.

Heathrow has already committed to meeting or exceeding all of the tough environmental conditions set out by the independent Airports Commission, when it recommended expanding Heathrow. These commitments are protected.  

 

Route Development Fund

The Route Development Fund was proposed by Heathrow in March 2015 following the report by the National Connectivity Task Force. It will provide airlines with start up support over three years for new domestic routes. The £10m fund – financed by Heathrow – will support as many as 5 new domestic routes and will be available from the point that Heathrow adds new capacity. Eligibility for support will be determined by an evaluation framework to assess applications from airlines, much like the Government’s existing Regional Air Connectivity Fund.  

 

Ring-fenced routes

Heathrow will work with Government and advocate that the early expansion flights should be ring-fenced to provide additional connectivity for internal UK flights or to long-haul trade routes.  These Brexit Boost Routes have the potential to offer up to 21 daily UK internal flights and 13 daily long haul flights.

 

£10 discount 

From January 2017, Heathrow is introducing a discount of £10 per passenger to domestic passenger charges to support affordable domestic routes. Heathrow proposes that, with expansion and as long as there remains a justification for the discount, the discount could continue for the next 20 years or as long as it is deemed to be in the public interest. Once consulted on and if approved, this could extend the current discount which starts in January 2017 to January 2037.

 

Regional connections 

Current regional connections from Heathrow are:

Belfast

Edinburgh

Glasgow

Aberdeen

Inverness 

Leeds

Newcastle 

Manchester

With the early capacity, we would see improved connectivity on existing routes to airports such as Belfast, Inverness and Leeds, and potentially new connections which could include Newquay, Liverpool, Humberside, Jersey, Isle of Man.

 

Cargo

Heathrow currently handles 29% of all non-EU UK exports by value. The airport is operating at capacity and there is limited or no spare space for freight on some key trading routes. Helping to ensure that the UK makes a success of Brexit and more UK exporters are able to send their products to more markets will require increasing the airport’s freight handling capacity to cater for trade growth.   Heathrow’s vision includes new cargo facilities to better handle special commodities such as perishables and pharmaceuticals. Through collaboration with exporters and freight forwarders, we plan to make the cargo process more predictable, more efficient and more affordable, so ensuring UK exporters area competitive.