THE CASE FOR HEATHROW EXPANSION JANUARY The Case for Heathrow Expansion Page 1

Transcription

1 THE CASE FOR HEATHROW EXPANSION JANUARY 2018 The Case for Heathrow Expansion Page 1

2 Executive summary 1 - Why Britain needs an expanded Heathrow As the country s only hub airport, Heathrow is uniquely placed to connect all of the UK to global growth. This document summarises why expansion at Heathrow is needed and what benefits it can deliver. Heathrow is the largest airport in Europe. With over 80 airlines serving 194 destinations across the world, we connect all of the UK to global growth. Heathrow currently serves 194 routes to 80 countries and is the busiest airport in Europe. As well as being the UK s busiest airport for passengers, we are also the UK s most important port for cargo, with over 100bn worth of imports and exports between the UK and non-eu countries travelling through Heathrow in But Heathrow s runways have been full for over a decade. Airlines have not been able to grow their networks and the UK has fallen behind. Meanwhile, airports in Paris and Frankfurt have grown their connections to emerging markets in Asia and the Americas, benefitting businesses and passengers in France and Germany. A number of key economic sectors and hundreds of thousands of jobs rely on air travel and air freight to be successful. If those sectors are to grow, the Government has decided it needs to expand runway capacity in the South East of England. After the examination of a number of proposals at a number of sites, it concluded that the UK needs to maintain and strengthen its hub capacity. It decided that Heathrow was its preferred site to expand because only Heathrow can deliver the growth and connectivity that Britain needs: The needs case has shown the importance of developing more capacity more quickly, and in a form which passengers and businesses want to use. The Heathrow Northwest Runway scheme is best placed to deliver this capacity, delivering the greatest benefits soonest as well as providing the biggest boost to the UK s international connectivity, doing so in the 2020s at a point when without the scheme 4 out of 5 London airports would be full, with all the problems to passengers this could entail. Revised Draft of the Airports National Policy Statement Expansion at Heathrow would mean unlocking over a decade s worth of pent-up demand. That s why the benefits of a new runway at Heathrow are expected to be so significant. The independent Airports Commission forecast that expansion at Heathrow will create up to 180,000 new jobs, and according to the latest forecasts on passenger numbers, we predict will deliver up to 187bn in total economic benefits across the UK. This document sets out four key benefits from building a new north west runway at Heathrow: 1 We can secure Britain s future as an outwardfacing trading nation Before falling behind, Britain traditionally had some of the best connections to the rest of the world. Expansion at Heathrow, the UK s hub airport,will mean new long-haul routes to rapidly-growing cities in China and doubling our cargo handling capacity supporting businesses across the UK to compete for customers across the globe. (Section 2) 2 We can create growth across the UK Expansion will mean new and better domestic air links and transform Heathrow into an integrated transport hub for coach, bus and rail, with connections to the North, East, South and West. We are also revolutionising the way we construct the terminals, aprons and runway, ensuring that as much as possible is built off site at logistics hubs outside of London and the South East creating jobs in all corners of the UK. (Section 3) 3 We can grow in a way that is fair to our local communities Expansion will create thousands of local jobs as well as new apprenticeships for young people. It will unlock a world-class package of compensation for our local communities and see fewer people affected by aviation noise compared to today. It will see robust measures to tackle local air quality issues and an ambitious plan to make Heathrow the world s first carbon-neutral airport. (Section 4) 4 We can build a world class airport using private finance alone Expansion will allow new airlines to enter Heathrow, meaning new destinations and competition on existing routes. With the right regulatory settlement, we will build world-class passenger facilities affordably, using private finance and keeping airport charges close to today s level. This means expansion will lead to lower fares while improving passenger experience and choice. (Section 5) Taken together, this is why Heathrow expansion is the right choice for passengers, our local community and the whole of Britain. Expanding Heathrow now will secure our country s economic future for the next generation. Heathrow today Heathrow is currently one of the UK s most important assets: Britain s largest port Over 100bn worth of imports and exports travels in the belly-hold of ordinary passenger planes from Heathrow, making us the UK s largest port by value, bigger than the container shipping ports at Southampton and Felixstowe combined. Every day we help British businesses access customers in every corner of the globe. The best airport in western Europe Over the last decade we have invested 11bn to make Heathrow better. New, world class terminals at T5 and T2 have transformed passenger experience at the airport. Heathrow has now been named Best Airport in Western Europe by travellers from around the world for three consecutive years. Britain can be proud to welcome the world at Heathrow. One of Britain s largest workplaces We are not just an airport we are a workplace too. Over 76,000 people work at Heathrow, making the airport one of the largest single-site employers in the country. A better neighbour and employer We have also transformed how we operate, as a neighbour and as a business. We are a living wage employer the first UK airport to be certified by the Living Wage Foundation. All electricity at the airport is drawn from renewable energy sources as part of our ambition to become carbon neutral. And we have reduced the number of homes impacted by aviation noise year-on-year. The need for hub capacity Heathrow s runways are full. We have been operating at 98% capacity for over a decade. This has meant airlines have not been able to grow at Heathrow, choosing instead to fly to other European airports like Paris and Frankfurt. Research shows that direct air connectivity between two countries helps to facilitate greater trade. Because Heathrow s runways are full, Britain has not been able to add as many new routes to growing economies in Asia and the Americas. Meanwhile, countries like Germany and France who have expanded their hub airports have added those connections and today export more goods and attract more tourists from growing markets like China. That has meant Britain losing out to our European competitors in the global race for foreign investment, jobs and trade. If Britain wants to secure its economic future and its status as an international aviation hub, it must expand its hub airport at Heathrow. The Government recognised this need for the UK to maintain its status as an international hub for aviation, and set up the independent Airports Commission in The work of the Commission demonstrated that a number of key economic sectors and hundreds of thousands of jobs relied on quality air connectivity to long-haul destinations. This supported trade in services and goods, as well as inbound tourism. After an extensive and comprehensive analysis of the potential sites for adding runway capacity, the Airports Commission unanimously and unequivocally recommended a new north west runway at Heathrow. Government endorsement Based on this recommendation and the weight of the evidence, the Government backed expansion at Heathrow. They concluded that not only were the benefits of expanding Heathrow greater than expansion at any other airport, there were specific strategic benefits that only expansion at Heathrow can deliver: Expansion at Heathrow will lead to the greatest increase in long-haul connectivity, which key economic sectors rely on most. Continued overleaf >> Page 2 The Case for Heathrow Expansion The Case for Heathrow Expansion Page 3

3 1 - Why Britain needs an expanded Heathrow Expansion at Heathrow would deliver benefits sooner and create more local jobs. Expansion at Heathrow is best placed to serve the rest of the UK, given its multiple existing and possible surface connections to the north, south, east and west. Expansion at Heathrow would deliver a unique boost to UK exports by expanding freight handling capacity at Britain s biggest freight by port by value. The Government also made five observations about how expansion at Heathrow can be delivered to maximise benefits across the UK while minimising disruption to local communities: Expansion is deliverable within air quality limits. Heathrow has committed to industry-leading measures to mitigate air quality impacts and Government will not grant Heathrow permission to expand if a new runway impacts on the UK s compliance with its air quality obligations. Fewer local people will be affected by aircraft noise with expansion than today. There must be a 6.5 hour ban on scheduled flights during the night and predictable periods of respite from aircraft noise during the day. There will be a package of compensation measures for those most affected by expansion. Those people whose homes need to be bought to make way for the new runway will receive the unaffected market value of their home plus a 25% Home Loss Payment, Stamp Duty costs for an equivalent value property and reasonable legal fees and disturbance costs. It will lower passenger fares relative to no expansion. This will be achieved by increasing airline competition and by ensuring future landing charges remain close to current levels. It will benefit the whole of the UK. This should be achieved by engaging businesses across the country in the construction supply chain and strengthening domestic air connections to Heathrow. The evidence is clear: Heathrow, through its long-haul connections and freight operation, supports high-skilled jobs across the United Kingdom. While Heathrow is full, key economic sectors cannot compete with their European counterparts. Expanding Heathrow will deliver new long-haul connections across the globe. This is why expansion at Heathrow will deliver more economic benefits faster than expansion elsewhere. It will also deliver strategic benefits, such as new freight capacity for UK exporters, that cannot be replicated at other airports. That is why we need to expand Heathrow to secure Britain s place at the heart of the global economy. Timeline: Heathrow submits Long-term Hub Capacity Response to Airports Commission 2012 Independent Airports Commission set up by Government Heathrow submits Taking Britain Further Technical Submission to Airports Commission Airports Commission publishes interim report outlining three options Page 4 The Case for Heathrow Expansion Heathrow preparing Stage 1 Consultation Heathrow submits response to Airports Commission s Initial Assessments 2015 The Airports Commission unanimously recommends Heathrow 2016 Government endorses Airports Commission and backs Heathrow third runway 2017 Government consultation on draft National Policy Statement (NPS) The Case for Heathrow Expansion Page 5

4 2 - Securing the UK s economic future Strong connections with global partners and the ability to trade with new and growing markets are vital to securing Britain s place in the world... This scheme [Heathrow expansion] will deliver the connectivity and hub capacity the UK needs to compete with fast growing European and Middle Eastern hubs. UK Government, October 2016 Heathrow is a cornerstone of the UK economy. For 70 years, we have been connecting Britain to the world, driving growth, jobs and new opportunities to every region and nation. Expansion will add new connections to emerging markets in Asia and the Americas as well as double our freight handling capacity helping British businesses compete for customers and tourists in every corner of the world. The Government s decision to support expansion at Heathrow, Europe s largest privately funded infrastructure project, was a clear signal to investors around the world that Britain is open for business. And in delivering expansion, we are building the infrastructure Britain needs to secure its future as an open, outward looking trading nation. Expansion will allow us to create a legacy of skills for future British infrastructure projects and deliver new connections to emerging economies, which is vital for business growth. How will Heathrow expansion connect the UK to growth? Having a thriving hub airport is important in helping Britain to remain competitive in the world. As the UK prepares to leave the European Union, access to the fastest growing markets in Asia, Africa and the Americas will be essential for Britain to boost its trade and maintain its global competitiveness. By creating capacity and unleashing a decade s worth of pent-up demand, Heathrow expansion is expected to deliver up to 40 new long-haul routes, making Britain one of the best-connected countries in the world. Access to these new markets will enable businesses across the UK to benefit from new trading links and a more efficient supply chain. What is a hub airport? Some of the fastest growing markets of the next 50 years will be in Asia, Africa and the Americas, with growth shifting from traditional markets like Europe. That is why the UK s competitors are investing in one particular type of airport more than any other: the hub. Hub airports are proven the world over to be the most effective way to deliver the frequent, direct and secure long-haul connections that businesses and passengers need. By combining freight, direct passengers and transfer passengers, hub airports can fill long-haul aircraft and fly to destinations all over the world that cannot be served by point-to-point airports, which rely on local demand alone. Hub Linking 9 points requires 8 routes Building the right type of airport capacity is vital for the UK s future. Hub airports are unique just six airports worldwide (of which Heathrow is one) connect to greater than 50 daily international long-haul destinations. Heathrow is the UK s only hub airport, and by expanding it Britain will benefit from new routes not viable at any other UK airport. Total non-eu trade value for 2016: Physical Port London Heathrow Southampton Felixstowe Liverpool London Stansted Airport East Midlands Airport Immingham London (inc. Tilbury) London Gateway Manchester Airport Gatwick Airport Other All UK Total (excl EU & CH, Inland Clearance & Low Value) Source: UK Tradeinfo 2016 Total (Exports + Imports) Excl: EU & Switzerland trade, Inland Clearance & Low Value Trade 106.7bn 46.3bn 44.2bn 12bn 12bn 8.9bn 7.7bn 7.4bn 7.0bn 6.3bn 0.8bn 72.9bn 331.9bn How will expansion boost UK trade? Heathrow is the UK s biggest port by value. Over 100bn worth of imports and exports with countries outside the EU (2016) were shipped through Heathrow, most of it in the belly-hold of passenger planes. This helps British businesses Point-to-Point reach customers across the globe. Linking 8 points requires 28 routes Did you know? One of the biggest exports through Heathrow by volume is high quality salmon, worth 222m to the Scottish economy every year. Regular connections from Heathrow allow the fresh salmon to go from the farm in Inverness to Tokyo in just 24 hours. Expansion will give Scottish salmon farmers more cargo capacity and more connections to sell to new customers in new markets. Expansion will allow us to double our cargo handling capacity and create a faster, more efficient supply chain for British businesses to reach their global customer base. It will mean new connections, meaning new markets to sell British products supporting jobs and growth across the UK. How will expansion secure our economic future? Increased international connectivity, new domestic routes and the boost in trade means Heathrow expansion will unlock significant growth across the UK. The independent Airports Commission forecast that expansion at Heathrow will create up to 180,000 new jobs and we predict it will deliver up to 187bn in economic benefits. We do not need to wait for a new runway to open to access these benefits. Significant numbers of new jobs and growth will be unlocked once construction begins. Critically, as technology improves, we can use our existing runways marginally more efficiently than we do today, creating the possibility for up to 25,000 new flights a year. These new flights could add new domestic and long-haul destinations, enabling Britain to capitalise on crucial new market opportunities from as early as Expanding Heathrow will mean expanding the UK s only hub airport. It will equip Britain with the infrastructure it needs to trade with the world and deliver growth across the country. Heathrow is getting on with delivering Britain s new runway and securing Britain s economic future. How expansion will secure the UK s economic future Heathrow is the UK s only hub airport and the UK needs more high value hub capacity, not just aviation capacity. Heathrow expansion will double cargo capacity, helping to boost British trade with the world. Up to 40 new long-haul routes will connect Britain to the fastest growing markets around the world, supporting new opportunities for businesses across the country. There is the opportunity for an extra 25,000 flights on the existing runways, meaning new connectivity is possible from as early as Page 6 The Case for Heathrow Expansion The Case for Heathrow Expansion Page 7

5 3 - Creating growth across the UK The expanded airport will benefit the whole of the UK, not just by creating jobs across the airport s UK-wide supply chain, but by giving even more of the UK access to important international markets by strengthening existing domestic links, and developing new connections to regions not currently served. UK Government, October 2016 Heathrow is a national asset, underpinning trade and tourism for every region and nation of the UK. The decision to expand Heathrow was a decision to deliver new domestic routes and connect more of the country to fast growing markets around the world. No other UK airport connects every region and nation of the UK to the world like Heathrow, a hub airport, can. Through better air and surface connectivity, as well as a supply chain that reaches out to Britain s Small and Medium Enterprises (SMEs), we can ensure expansion creates jobs and growth in every corner of the country. Connecting all of Britain by land and air Heathrow is currently connected to 8 UK airports. Expansion will create the opportunity for new and better domestic flight connections from Heathrow to cities and regions across the UK. We have already taken steps to support domestic routes, with airport charges for passengers flying to UK destinations halved since This change has spurred new airlines to take slots at Heathrow to fly new domestic routes, creating competition leading to greater choice and lower fares for UK passengers. Heathrow expansion is our chance to boost our domestic connections by improving existing routes and adding new ones. To support this we will: Continue to discount airport charges for UK routes. Support airlines that want to start new domestic routes through a route development fund. Support the ring-fencing of slots for domestic use, ensuring that Heathrow will always have space for key UK routes. These measures will incentivise airlines to operate domestic routes by improving the commercial business case for flying them. New and better domestic routes will allow more businesses across the country, from the smallest SME to the largest exporter, to maximise the opportunities of an expanded Heathrow with increased cargo handling capacity, new longhaul connections and a boost to local tourism. An integrated transport hub In addition to improving domestic connectivity, public transport to Heathrow is being revolutionised. Planned new rail improvements will enable millions more people to reach the airport once the new runway is complete and will reduce journey times, making it easier and faster for all of the UK to access its hub airport. These include: A new connection to HS2 via Old Oak Common, transforming journey times from the Midlands and the North. A new connection through the heart of the city to Canary Wharf and east London with Crossrail. An upgraded Piccadilly Line with more capacity, faster journey times and new trains. A planned new rail link to Reading, cutting journey times from the West and Wales by up to 30 minutes. A potential new rail link to the south, meaning South London and the South East will be better connected the UK s hub. With these rail improvements, by 2030, 70% of Britain s population will be within three hours of the airport and over half of all journeys to Heathrow will be made by public transport, playing our part in tackling road congestion and emissions. Potential new routes Existing routes Heathrow expansion to deliver more domestic connections * Potential new routes based on potential new route maps published by easyjet and Flybe Delivering for the whole of the UK The delivery of expansion is a huge opportunity for British SMEs to win contracts for Europe s largest privately funded infrastructure project. We need their expertise and resources to help deliver expansion efficiently. Supporting businesses across the UK SMEs already play a crucial role in Heathrow s supply chain with the airport spending over 1.5 billion annually with more than 1,200 SMEs and suppliers from across the country and in the local communities surrounding the airport. With expansion, Heathrow is looking to grow its network, connecting with new suppliers from all over the UK. To ensure that UK businesses can make the most from the opportunity expansion provides, every year Heathrow holds a series of Business Summits throughout the UK. These events connect SMEs from Cornwall to Scotland to growth opportunities by allowing businesses to network and trade with each other, meet the airport s supply chain and organise meetings with the Department for International Trade to explore exporting opportunities. In 2018, we intend to host a further 10 Business Summits across the UK and will be building SME engagement into our multi-decade construction strategy. Logistics hubs Heathrow will be one of the first major infrastructure projects in the UK to pioneer the large-scale use of logistics hubs aiming to build as much of the project off-site as possible. The hubs will work by pre-assembling components off-site before transporting them preferably and as far as possible by rail in consolidated loads to Heathrow just as they are needed. This method will boost the project s efficiency and cut emissions by transporting components to site in fewer lorries and trucks. Londonderry Belfast International Glasgow Prestwick Belfast City Isle of Man Newquay Inverness Dundee Manchester Liverpool Guernsey Aberdeen Edinburgh Newcastle Carlisle Lake District Durham Tees HEATHROW Jersey Leeds-Bradford Humberside Doncaster Sheffield Norwich Potential new routes Existing routes This innovative approach will help us find and partner more efficiently with British suppliers. The off-site logistic hubs will ensure our building programme is sustainable and resilient. More importantly, it will leave a legacy of construction excellence in communities across the UK for the next generation. We have already started a tender process to identify locations for our four regional logistics hubs. Following a call for expressions of interest, we recently published a longlist of over 60 potential locations. We will visit each of these sites over the coming year to determine which is best suited to our needs and which will leave the best possible legacy for the next generation. Heathrow expansion will provide better regional links, boosting businesses up and down the country. British SMEs will be at the front of the queue to benefit from being part of the supply chain for Europe s largest private infrastructure project. How expansion will create jobs across the UK Heathrow expansion will enable more and better domestic connections (on the ground and in the air), creating jobs and growth across the UK. An expanded Heathrow will connect more businesses in every part of Britain to customers and suppliers across the globe. Our innovative logistic hubs will ensure suppliers from across the country benefit from expansion and will create a legacy of long term construction skills that will help secure Britain s future. Page 8 The Case for Heathrow Expansion The Case for Heathrow Expansion Page 9

6 4 - Expanding sustainably [Heathrow] delivers the greatest economic and strategic benefits to our economy; it strengthens connectivity for passengers right across the UK; it offers a major boost to freight operators; it can be delivered within carbon and air quality limits; and crucially, it comes with world leading measures to limit the impacts on those living nearby. Secretary of State for Transport, October 2016 The demand to fly is growing every year but the impact of aviation is not all positive. We know airports can affect local quality of life and we have a responsibility to those around us to reduce the negative impacts we create. Anyone who cares about leaving a better planet for the next generation recognises we must take bold action on climate change. We, along with our airlines, have made great strides but there is more we need to do. Heathrow is an economic engine for the region around the airport, supporting jobs and growth across West London and the Thames Valley. However, with Heathrow s economic benefits comes some negative impacts on our local communities as well. Expansion provides a unique opportunity to build a longterm and sustainable legacy for our neighbours by improving the local environment, creating new green spaces and generating thousands of new jobs and apprenticeships. We have set out ambitious environmental plans and as we expand we will do so in a way that is fair to local communities too. Our commitments to our neighbours Heathrow is committed to being a better neighbour to our local community. Being a better neighbour means making sure that we minimise the impact of expansion on local communities and making sure that they get the greatest benefits from expansion too. We are already delivering against our commitments to meet or exceed the package of measures recommended by the Airports Commission. We are establishing a Community Engagement Board, under an independent Chair, which will have real influence over how Heathrow meets these conditions. We have also committed to extending the current period without scheduled night flights to six-and-ahalf hours and delivering a substantial increase to our noise insulation scheme. Above all, being a better neighbour means being fair. Which is why those whose homes need to be compulsory purchased will receive 125% of the market value of their home, plus all legal fees and stamp duty costs well above the statutory minimum. We have extended this offer to a further 3,750 properties close to the compulsory purchase zone, offering local residents near to the new runway the option to move to a new home if they wish. This was Heathrow s third runway environmental commitments to its neighbouring communities 6.5 hour night ban on scheduled night flights Legally binding noise envelope Predictable periods of respite for every local community Extending compensation to over 3,000 additional properties 1bn compensation package for local people New independent Community Engagement Board Backing a new Independent Noise Authority Training and 10,000 apprenticeships Growth in accordance with air quality rules Accept Government ban on fourth runway something that was pointed out by our neighbours in an earlier consultation, which we agree is the right thing to do. We will also work hard to improve the land around the airport perimeter. Our vision is to create a positive legacy of better, well-connected green infrastructure, which uses land efficiently to achieve multiple environmental, social and economic benefits. As part of the plans for expanding the airport we would like to take opportunities to improve wildlife habitats, maintain rivers at or close to their natural courses, and deliver wider, multifunctional green infrastructure enhancements for local communities and wildlife. Where we change water courses, our plans will mitigate flood risk and ensure that there is no increase in the chance of flooding affecting local communities such as Colnbrook and Poyle. Ambitious environmental plans We have an ambitious plan to use expansion to make Heathrow quieter, cleaner and greener. Quieter Heathrow We want the area around Heathrow to be a great place to live. We are committed to helping local communities thrive and improving quality of life for all. Heathrow is an international leader in tackling noise pollution. Since the 1970s, the number of flights have doubled but 90% fewer people are impacted by aviation noise. This is because aircraft technology and operating procedures have improved. The noise contour map shows the size of the 57db (Leq) noise contour in 1974 compared to dba contour Leq equivalent sound level of aircraft noise in db(a) averaged over 16 hours (often called equivalent continuous sound level) NNI contour Until 1990, the official index of aircraft noise exposure in the UK was the Noise and Number Index (NNI) London Boundary HIGH WYCOMBE MAIDENHEAD BRACKNELL km 2 By penalising the noisiest aircraft, giving predictable periods of respite, moving the runway westward and mandating steeper approaches so aircraft are higher for longer we can continue to reduce the impact of aviation noise and incentivise our partners (like the airlines) to do the right thing. This is why the Airports Commission said that Heathrow can expand and the number of people affected by noise can be reduced. GERRARDS CROSS SLOUGH UXBRIDGE HOUNSLOW km 2 KINGSTON UPON THAMES LONDON CROYDON Page 10 The Case for Heathrow Expansion The Case for Heathrow Expansion Page 11

7 4 - Expanding sustainably Cleaner Heathrow Air quality in our cities is a major focus in the UK and around the world. We have reduced ground-based NO x emissions from airport activity by 16% over a five-year period. Air quality monitors right next to the airport already meet air quality standards, but those next to the M4 motorway a couple of kilometres away do not. This illustrates that road traffic rather than aircraft is the main contributor to local air pollution. Although most of the traffic on the motorways around Heathrow is not related to the airport (and is already improving thanks to the focus on reducing pollution from the Government, Mayor and our local communities), we still have a role to play. With expansion, we aim to establish Heathrow as a worldleading airport in reducing emissions from all sources of activity, both on and off airport. We are taking various measures to encourage our stakeholders to reduce emissions, such as incentivising suppliers to green their delivery fleets. We re also targeting the conversion of our entire fleet of cars and vans to electric or plug-in hybrid by 2020, with ultra-low emission standards for all airside vehicles to follow by We subsidise local public transport, run the largest car sharing scheme in the world and promote new direct rail links. We want at least half of our passengers to arrive by public and sustainable transport by Greener Heathrow Moreover, as a major international airport, Heathrow has a responsibility and an opportunity to lead the way towards a more sustainable future of air travel for the next generation to enjoy. Which is why we have committed to become a carbon neutral airport, run entirely on renewable energy that delivers zero waste. HEATHROW. Our plan for sustainable growth A THRIVING SUSTAINABLE ECONOMY Largest 100 towns and cities connected to Heathrow by 2030 to create opportunities all over the country and deliver a stronger UK We will publish a roadmap in 2017 that sets out how we can help transition our supply chain employees working at Heathrow Airport to be paid the London Living Wage A WORLD WORTH TRAVELLING An aspiration to make growth from our new runway carbon neutral so that we can protect the planet for future generations to discover and enjoy Establish a Centre of Excellence for sustainability at airports and in the wider aviation sector Power Heathrow with 100% renewable electricity from April 2017, as our first step to operate a zero carbon airport A lasting skills legacy for local young people Heathrow is much more than an airport. It is a community of businesses offering a diverse range of careers and skilled jobs in numerous sectors including aviation, construction, engineering, retail, logistics, communications, planning, security and technology. For everyone who works in those industries, Heathrow offers opportunities for a career, not just a job. We have set up a Skills Taskforce under the leadership of Lord Blunkett, bringing together schools, colleges, universities, unions, local authorities and the voluntary and private sectors to develop an employment and skills strategy. Too often in the UK we make large-scale investments in projects that deliver short-term results which do not benefit and include the wider population, or the long-term needs of the country. There is no more room for lost opportunities. Our national infrastructure projects must go hand-in-hand with learning and training opportunities for the workforce of the future. Lord Blunkett, Chairman This strategy will focus on how expansion can deliver 5,000 additional apprenticeships, bringing the total to 10,000 by A GREAT PLACE TO WORK 10,000 apprenticeships by 2030 to help people develop skilled and sustainable careers Reflect local diversity at every level by 2025 so that we can become a truly great place to work whilst helping local people find careers that can fulfil their potential A GREAT PLACE TO LIVE As part of our voluntary Quiet Night Charter, by 2022 we will seek to at least halve the number of flights on non-disrupted days that operate late after 1130pm Airside ultra-low emissions zone by 2025 to improve quality of life through cleaner air 50% airport passenger journeys made by public and sustainable transport by 2030, supporting no more airport-related cars on the road, so local areas can thrive without increased congestion Why we can expand Heathrow sustainably Expansion will mean fair compensation for our local communities. Expansion will create the opportunity for new local green spaces. It will mean robust, ambitious and transparent plans to make Heathrow quieter, cleaner and greener. Not least, it will mean thousands of jobs and growth opportunities for local people and businesses. Page 12 The Case for Heathrow Expansion The Case for Heathrow Expansion Page 13

8 5 - A world-class airport [We] expect the industry to work together to drive down costs for the benefit of passengers [the] aim should be to deliver a plan for expansion that keeps landing charges close to current levels UK Government, October 2016 Heathrow is a world class airport. Expansion will mean new and current airlines can grow their route networks. It will mean new infrastructure built using private finance, while keeping airport charges close to current levels. That means new connections and greater competition, leading to lower air fares, greater consumer choice and a world-class passenger experience. More choice, connections and competition Heathrow s runways are full, meaning our airlines have been unable to grow, but demand for air travel has continued to increase all the same. Because supply cannot meet demand, airline fares from Heathrow are artificially high. Research by Frontier Economics estimates that passengers travelling through Heathrow are already paying a premium on the cost of their ticket due to constraint. If Heathrow were expanded today, ticket fares would decrease by 23% relative to other London airports as a result of removing the capacity constraint. By 2030, this is estimated to result in a reduction in one-way ticket prices of 64 and 247 for short and long-haul flights respectively. Lots of carriers from low cost airlines like easyjet, great British brands like Virgin Atlantic, and growing airlines from Asia, the Americas and the Middle East have expressed an interest in growing services from Heathrow. Expanding Heathrow will create the capacity for those airlines and others to grow at scale, providing new competition on short and long-haul routes as well as new destinations. This will give passengers a greater choice of routes and carriers to travel with, as well as delivering lower fares compared to no expansion taking place. Did you know? Heathrow is the largest privately funded airport in the world with a track record of financing major infrastructure, including the construction of Terminal 5 and Terminal 2. With an asset base of more than 15bn and almost 3bn in revenues, Heathrow is uniquely well positioned to fund expansion. Our shareholders include three of the world s top five sovereign wealth funds, international pension funds, the world s largest private infrastructure fund and experienced infrastructure partners. Critically, Heathrow has a well-established and resilient financing platform and an investment grade credit rating. Building an affordable and financeable airport In 2016, when the Government selected Heathrow Airport as the preferred location for a new runway in the South East, it made it clear that it expected expansion to be delivered but with airport charges the fee levied by Heathrow on airlines to operate at the airport remaining close to the current levels in real terms. Government also made clear that it expects the expansion of the airport to be financed exclusively by the private sector. We have robust plans to make Heathrow expansion affordable and financeable. We can keep the airport charge affordable by working with our airlines current and new to bring even more growth to Heathrow. The greater the number of passengers, the lower the charge per passenger. We will continue to engage with airlines, passengers and cargo operators to drive down costs in the delivery and operation of the expanded airport while still delivering world-class facilities for passengers. We will look at ways in which expansion can be phased so that terminal capacity is built in line with passenger growth, helping to smooth out spending and therefore the level at which charges are set to pay for expansion. We also want to understand how others have delivered similar projects and at what costs, so we can check that we are building efficiently known as benchmarking. Heathrow is committed to funding expansion exclusively through private finance. To support that, it is important that there is a fair regulatory framework with a return that appropriately recognises the risks of this major private investment. By expanding Heathrow, we can build affordable, privately-financed, world-class infrastructure and create the space for airlines to compete. This will mean lower fares, greater choice and a better experience for passengers. 10,000 apprenticeships Expansion is an opportunity to build a long term, sustainable legacy for our local communities and generate thousands of new jobs and apprenticeships. It is vital that everyone can have their say. UP TO 180,000 JOBS CREATED ACROSS THE UK 2X current cargo capacity 260,000 ADDITIONAL AIR TRAFFIC MOVEMENTS SERVING UP TO 40 LONG-HAUL ROUTES UP TO 40,000 NEW LOCAL JOBS Up to 187 BILLION in economic benefits across the UK Page 14 The Case for Heathrow Expansion The Case for Heathrow Expansion Page 15

9 If you would like a large text or alternative format of this document, please contact us on or send an to us at: info@heathrowconsultation.com There are lots of ways you can contact us and find out more online via our project website call our freephone number: (open Monday to Friday, 9am-6pm) send an to us at: info@heathrowconsultation.com Follow us on For more information on Heathrow expansion and the facts and figures in this booklet, please visit: heathrowexpansion.com Page 16 The Case for Heathrow Expansion