What if Davies got his sums wrong……

by John Stewart

The Airports Commission recommended a third runway at Heathrow largely on the basis of the economic benefits it would bring to the country.  However, over the last few weeks evidence has emerged that the economic case for a third runway is much less convincing than it may have appeared.

What strengthens the argument is that much of this evidence, whilst unearthed by Gatwick Airport and others, is contained in the report of Airports Commission itself.

We now know:

  • The number of domestic airports linked to Heathrow will fall from 7 to just 4.
  • A 3rd runway will provide no more than 12 additional long-haul destinations by 2050

The case for a new runway at Heathrow always rested on the fact it would significantly improve connectivity to the emerging economies of the world and that it would connect more UK airports to Heathrow.  The facts suggest otherwise.  Indeed, a second runway at Gatwick would add 10 new long-haul destinations at a fraction of the cost to the taxpayer.

We also now know:

  • The £147 billion the Commission said a 3rd runway would bring to the national economy over 60 years is likely to be way too high.

Its own experts Professor Peter Mackie and Brian Pearce told the Commission that the method of modelling used by consultants PwC, which produced this figure, faced “a number of difficulties” and was about three times higher than traditional estimates.

Using the more traditional modelling methods, and assuming carbon trading is in place, the benefits of a third runway over a 60 year period fall to £69 billion.  A second runway at Gatwick would bring in just over £60 billion.

But, if the costs of the disbenefits (such as noise and emissions) and the costs of delivering the third runway are included, the economic benefits fall to £11.8 billion over 60 years.  The Commission admits Gatwick would be close behind at £10.8 billion.  (Gatwick Airport believes this is an underestimate as it argues the Commission has underestimated the number of passengers it would attract).

A recent report from the Aviation Environment Federation puts the benefits of a third runway even lower as it believes the Commission hasn’t fully factored in the costs of climate emissions.

But, even on the Commission’s own figures, the economic benefits of a third runway at Heathrow could be much less than has been commonly assumed.

Food for much thought for the cabinet committee which is assessing the Commission’s recommendation.    

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