London Heathrow’s controversial third runway is cleared for take-off by British MPs… but the big question is will it actually get off the ground?

It has taken a long time coming – many decades in fact – but London’s largest airport and one of the world’s main international gateways, Heathrow Airport, has finally received the green light from British politicians for the construction of a much-needed third runway. But, what does this actually mean? While a massive political endorsement, it actually means very little in fact and critics warn court challenges and climate change rules will delay construction work for years and could ultimately block the project.


Summary:

  • The UK government has won a key House of Commons vote backing the construction of a third runway at London’s Heathrow Airport;
  • A clear majority (415 MPs for versus 119 against) now paves the way for detailed development plans to be drawn up, but it will still be at least eight years until any new runway comes into operations, perhaps later with increased opposition;
  • London Heathrow will witness its busiest ever year in 2018 as it closes in on the 480,000 movements cap and will see annual system capacity grow over 100 million seats for the first year ever, based on published schedules;
  • Despite this growth, The Blue Swan Daily analysis of H1 2018 schedules shows the airport has seen the third slowest rate of year-on-year capacity growth among the world’s top 20 airports.

With the ruling Conservative party already publicly backing the project and its main Labour party rival opposing the project it was uncertain how politicians would vote especially with Foreign Secretary Boris Johnson, MP for South Ruislip and Uxbridge near Heathrow, himself against the project and previously having declared an intent to lie down in front of bulldozers to prevent building works. While the Conservative party MPs were ordered to back the proposal (although some refused to vote and others stood with constituents and went against the order), Labour MPs were permitted a free vote. Ultimately it was a clear win for the project with a 415 to 119 vote with the Scottish National Party abstaining.

But there remains significant opposition to building the new runway on the Heathrow site. Mr Johnson has said he is confident the new runway will never be built, while London mayor Sadiq Khan has immediately announced his plan to launch a legal challenge against the decision, with environmental group Greenpeace UK saying it would join their side. Those opposed to the project claim it could breach air pollution targets and may lead to many houses around the airport to be knocked down to make way for the new runway.

The growth of Heathrow is backed by the business community as being vital for the country if it is to maintain its position as a global nation in a post-Brexit world, but there is a consensus that it has taken far too long to get to the current development stage and planning must be accelerated to deliver the project as timely as possible.

The new runway will ease the capacity constraints that have restricted the growth of connectivity at Heathrow. The airport continues to grow with new destinations, but has been unable to meet the demand of airlines, with many being unable to secure access to the hub airport. It will allow both additional long haul, direct and frequent connections to the fastest-growing global markets as well as adding improved regional connectivity to drive growth across the country.

Heathrow says the approval secures a GBP14 billion private investment for the UK – one of the largest private projects in Europe. It is preparing to hold a second public consultation on the plans approved by Parliament before applying for planning permission to begin works, which it expects to take 18 months. The airport says if it receives planning approval, construction on the third runway could begin in 2021, with an opening set for 2026. Yes, that is correct, another eight years at the earliest!

Currently air traffic at Heathrow are capped at 480,000 movements per year, a figure that the airport will once again almost reach this year, based on published schedules. In fact it is forecast to get close to that level this year than any previous year with almost 479,000 movements schedules for the full year, up +0.7% on last year. Over the same period system seats will rise +1.0% to over 100 million for the first year ever, thanks to the deployment of larger aircraft on routes at Heathrow. In fact, over the past five years the average size of aircraft per departure has risen +7.2% from 194.9 seats in 2013 to 208.9 seats this year.

This data shows that Heathrow is still finding a way to grow despite its capacity issues. However, when compared with its peer airports the constraints are clear to see. Over the first six months of the year the world’s top 20 airports have collectively grown at a rate of +4.2%. London Heathrow has grown just +1.5% and is ranked the 18 fastest growing among these 20 airports ahead of just Tokyo Haneda (+0.5%) and Dubai International (-1.4%).

CHART – All but one of the world’s Top 20 airports in terms of system seats has seen capacity growth during the first half of 2018 versus the same period last year. London Heathrow is among those showing the slowest rate of growthSource: The Blue Swan Daily and OAG

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