3 September 2014

  |  CBI North East


Aviation capacity boost will be benefit to region

With the North East’s positive net balance of trade, the future of UK aviation is of profound importance to our region.

This column appeared in the Journal on Wednesday 3rd September 2014

We as a country have put off deciding for long enough, and with Sir Howard Davies’ Airports Commission set to report back next summer, once the General Election has been and gone, it is time to decide on our course of action and get ready to implement it.

While air links with the developed economies of North America and the EU are rated as good by four in five businesses, only two in five are satisfied with links to Brazil and China. With the make-up of the world’s economy changing, and set to change further in the coming years, the UK’s economy will fall behind if we do not adapt and make sure our businesses have the links to emerging economies enjoyed by their competitors in other countries.

A previous CBI paper, Trading places, demonstrated a virtuous circle between new flights and trade; new flight routes boost trade, which in turn fuels demand for those routes. If the case for increased capacity is made, we must now turn our attentions to how best to introduce new capacity – and it is this question which a new CBI paper, The Nub is the Hub, sets out to answer ahead of the all-important Davies Report.

There is likely to be the greatest benefit to the UK’s economy from boosted aviation capacity being concentrated at a hub. Business is clear that a hub is not only the best way to ensure new routes are offered, but also that it is essential to ensure the UK remains attractive as a destination for inward investment.

The latest CBI-KPMG infrastructure survey shows that nearly half (49%) of all businesses consider the availability of air connections with emerging markets as either critical or important in their choice of investment location.

A hub is not the whole answer, and we need the Airports Commission to flesh out an aviation strategy that will maximise connections in all parts of the UK, including the North East.

But as demand forecasts set out in the Commission show, not only will the UK require one new runway in the south-east by 2030, a second additional runway is likely to be required as early as 2050.

This being the case, we must avoid another damaging investment hiatus in our airport infrastructure and a blow to business confidence by learning the lessons of the past.