Easing the airport traffic jam

News Analysis: London's air terminals are not going to be able to cope with rising passenger numbers. Can the regions come to the rescue?

LONDON'S AIRPORTS are bursting. A decision on the proposed Terminal 5 at Heathrow is still months away, let alone a start to the building work. Passenger numbers are growing at 8 per cent year. The Government's solution? The country's regional airports.

This week the Government cleared the local authority-owned airports for take-off by relaxing Treasury borrowing restrictions. The airports have been clamouring to be set free, claiming that it would be good for them and their regional economies, and would help to cope with the growth in demand, currently sharply skewed to southern England.

John Reid, the Transport Minister, outlined the Government's thinking, saying the move would pave the way for local authority-owned airports to meet the challenges of the new millennium. "We want to maximise the contribution these airports make to their local economies, and to relieve congestion at airports in the South-east. Giving financially sound local authority airports the power to raise private finance for development work will help us do that," he said.

The move will allow local authorities to raise development capital on the money markets from April 1, enabling them to bring forward expansion plans to cater for growing demand.

Although there are nine council-owned airports, only four are on the Government's radar for next year - Manchester, Newcastle, Leeds/Bradford and Norwich. Two others, Teesside and Gloucestershire, are on the margins of profitability while applications from Blackpool, Exeter and Humberside are considered extremely unlikely by the Department for Environment, Transport and the Regions.

They will be able to expand more quickly than they would have done under the current rules, which allow them to invest their retained profits. This could mean the development of hotel and shopping facilities - all vital for attracting the modern air traveller.

The latest annual report for BAA, which owns seven UK airports including Heathrow, Gatwick and Stansted, illustrates the point. Whereas airport and other traffic charges amounted to pounds 507m, a growth of 8 per cent, retail revenue leapt 45 per cent to pounds 877m.

But BAA, which also owns Glasgow, Edinburgh, Aberdeen and Southampton, is not convinced provincial airports can provide the solution. Des Wilson, director of corporate affairs, said the company had lobbied strongly for the move the Government announced this week, stressing it was not a question of competition. But he said: "This will lead to very little relief for the South-east problem."

He said 80 per cent of passengers for London's airports came from the South-east and would be unlikely to want to travel to northern England for a flight. BAA expects the 95 million passengers at the London airports to double by 2015. "Even if Terminal 5 is approved and Gatwick and Stansted realise the full potential of their runways we won't have sufficient capacity to meet demand."

Manchester Airport believes it can make an important contribution but wants the Government to go further in allowing it to operate commercially. The airport has seen passenger numbers soar by 60 per cent to 16 million over the last six years.

A spokeswoman said Manchester, currently the third largest in the UK, could overtake Gatwick within about 10 years. "The South-east is congested and there is no more space at Heathrow or Gatwick. BAA is pulling forward its expansion plan for Stansted. It is very helpful that the Government has seen the role places like Manchester have to play."

She said regional airports feared that European terminalssuch as Amsterdam, which has seen a growth of between 30 and 40 per cent in the number of UK passengers, would simply suck up the spare demand.

She said Manchester could easily attract more transatlantic airlines once it was able to expand and pointed to the 1 million passengers using shuttle services to Heathrow, half of whom she said were transferring to long-distance flights.

The regional airports want more from the Government. Even under the new rules, Manchester would not be able to invest as an equity partner in projects such as a high-speed transit system. As BAA has shown with its Heathrow Express, such schemes are crucial in attracting passengers.

Even the predicted levels of growth could turn out to be a severe underestimate if the "open skies" pact between the UK and US - currently grounded after a breakdown in talks - ever takes off. This would end restrictions on access to Heathrow for all US carriers.

BAA's Des Wilson said the solution was twofold. First, the green light for Terminal 5 and for a planned pounds 200m expansion at Stansted would allow for another 7 million passengers. Secondly, the Government had to decide whether another runway was needed in the South-east and where that should go.

The Government's thinking will be revealed in its aviation White Paper, promised in the transport White Paper next summer. It will contain a new policy on UK airports, looking 30 years ahead. More importantly it will contain the Government's policy on coping with South-east demand and therefore cannot be published until after the final decision is taken on Terminal 5, something that could still be 18 months away.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Voices
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
News
i100
Life and Style
food + drinkClue: You'll either love them or you'll hate them
News
Howard Marks has been diagnosed with inoperable cancer, he has announced
people
News
newsIf you're India's Narendra Modi, it seems the answer is a pinstripe suit emblazoned with your own name
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project