By Marcus Leach

In a speech to business and aviation leaders today (21 November) the Mayor of London has warned the Government that the nation faces increasing economic paralysis unless a new hub airport is built in the southeast of England.

His speech at the Institute of Directors, who have welcomed the Mayor’s leadership of the debate, marked publication of the second of what will be a series of reports examining why more aviation capacity is needed.

The latest report sets out in the greatest detail yet provided why there is an undisputable economic argument that greater aviation capacity is required both by the capital and the whole of the UK. It concludes that a new hub airport should become a pillar of the Government’s planning for economic growth and warns that without one the UK will lose its place at the top table of the global economy.

London is currently one of a handful of leading cities in the world that host a large number of globally oriented financial and business services. The enormous benefits of hosting those services are felt not just in London but around the nation. Those services were attracted by the capital’s aviation links. However the UK’s only hub airport at Heathrow is now running at 98 per cent of its capacity and is now unable to provide services to the destinations demanded by the world’s business elite.

Key to the argument is a lack of links to the developing economies of the Far East. In a recent survey 41 per cent of UK firms were dissatisfied with links to the Far East and South America. With Heathrow operating at close to full capacity it is unable to provide flights to those locations. As a result European rivals with gigantic multi runway airports are stepping in to do so and providing a lure that will attract business away from the UK.

Heathrow currently offers just 9,000 seats per week to mainland China and it only serves two routes. By contrast Frankfurt offers almost twice the number of seats and serves four destinations, while Amsterdam already offers flights to six Chinese destinations. London remains without any direction connection to 12 cities in mainland China that are expected to be among the 25 global mega cities with the highest GDP in the world by 2025.

“London’s historic aviation links have provided the capital and the nation with great riches. However the global economic geography is shifting and distant cities are rocketing up the league tables of global trade. The old order is passing however our airports are unable to serve the young bucks that are set to drive the world forward," The Mayor of London, Boris Johnson, said.

“In the next 15 years 75 million Chinese households will enter the middle classes. It is a phenomenal market and we need our engineers to be able to hop on a plane and build their infrastructure. We need their business leaders to fly in and consult with our contract lawyers. However their business is already being snaffled up by our friends on the continent who chortle at our continued inertia.

“There is no doubt that to do nothing will lead to economic stagnation. The Government must now grasp the nettle and begin serious plans for the multi runway solution that can keep London and our great nation in the premier league of the global economy.”

Figures released by the Department for Transport earlier this year predict that London’s airports will be full by 2030 and any growth beyond that time will have to be accommodated at regional airports. However the Mayor’s new report concludes that developing a hub airport outside the south east would be unworkable. London’s economy has developed over several decades and requires the access to a comprehensive network of flights to be conveniently located. It is thought that the key sectors are sufficiently footloose that they would likely move to London’s great European rivals rather than other parts of the UK.

In the latest report the Mayor makes a clear case to the Government for using the construction of a new hub airport in the southeast to help drive growth and create jobs. The case is even stronger during an economic down turn when aviation growth can offer high economic returns, particularly as the private sector can play an important part in funding the necessary infrastructure while boosting public sector revenues at the same time. However there is also the warning that the Government should bear in mind the length of time needed to plan what would be a series of major projects; and the fact that the longer a hub takes to construct, the greater the negative economic and social impacts will be.

“The IoD welcomes the Mayor of London’s valuable contribution to the debate on the future of aviation. London used to be at the cutting-edge of transport development, but its status as a global hub city is under threat," Simon Walker, Director General of the Institute of Directors said.

"International business leaders coming to the UK, and our members who take British goods and services to the world, have to put up with constant delays and frustrations. More airport capacity is needed now more than ever. We shouldn’t settle for what we have, but need to rediscover the ambition that made this city great.”

Having made the economic case for a new hub airport the Mayor of London’s team are now focusing on the best possible location. The Mayor intends to publish a report next year with possible solutions.

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