Perhaps more than any other nation, the United Kingdom economy moves on planes.
Not only are the commuter hops to Europe vital for bankers, consultants and fashionistas in London, but destinations further afield are yielding more economic fruit.
Last July, for the first time since joining the common market, the majority of U.K. exports went to countries outside the European Union. Emerging markets like Southeast Asia and Latin America played a big role in this shift. The U.S. is also a huge market, and airlines on both sides continually clamor for more trans-Atlantic service.
The U.K. has more aviation capacity than any country other than the U.S. and China, and London alone is served by five airports including Heathrow, the No. 3 airport in the world by passenger traffic.
For these reasons and more, the country is developing a plan to ensure this doesn’t change. Global Atlanta caught up with Transport Minister Simon Burns to discuss how aviation fits into the U.K.’s overall growth plans.
Global Atlanta: We know the arguments for increased aviation capacity, that connections breed economic benefit and keep countries competitive. But how dire is the aviation situation really in the UK and especially in the Southeast? In other words, how much will long-term growth be hindered if this is not fixed?
Simon Burns: Currently the U.K. has excellent aviation connectivity. The five airports serving London offer at least weekly direct services to over 360 destinations worldwide. more than either Paris, Frankfurt or Amsterdam or anywhere in Europe. The United Kingdom has the third largest aviation network in the world after the USA and China.
Although Heathrow is pretty much full, there remains plenty of capacity available at airports serving London, enough for the immediate future.
However, we want to maintain the U.K.’s status as a leading global aviation hub for the long term. It requires long-term strategic thinking and consensus building. The government has recognized this by establishing the independent Airports Commission to examine the options, led by Sir Howard Davies.
Global Atlanta: What role does the U.K. see airports playing in ensuring competitiveness in Europe as places like Paris, Frankfurt and Amsterdam continue to ramp up airport investment?
Mr. Burns: London and the United Kingdom are extremely well served by our airports, who deliver the connectivity U.K. (companies) require. The United Kingdom has maintained its position as a leading place to do business and London’s position as a global city:
- 75 percent of Fortune 500 companies have offices in London
- 100 of Europe’s 500 largest companies headquartered in London
- Aon, the world’s largest insurance broker, announced it will move its head office from Chicago to London
Airports are an important part of that, but so is the rest of government policy. This government is determined to do what it takes to ensure we remain the most competitive country in Europe.
Global Atlanta: It seems that with the HS2, Crossrail and other projects, infrastructure priorities are diffuse and contentious in the U.K. How does aviation capacity – both within the U.K. and the ability to access external markets – fit into the country’s overall plan for keeping its economy moving? How do you tackle rails, roads and runways simultaneously?
Mr. Burns: The government invests in the infrastructure schemes that are in the country’s and economy’s best interest. This can include contentious schemes, but we are determined to take tough decisions where they are needed.
Global Atlanta: What has been the effect of the breakup of BAA, splitting the U.K.’s three largest airports into ownership groups? Do you feel that this is the beginning of a more competitive environment that will benefit travelers and the U.K. economy alike?
Mr. Burns: We support competition as an effective way to meet the best interests of users. I think the record levels of investments we are seeing in our airports supports this.
Global Atlanta: When we were at Gatwick, people were concerned that the government was taking the South East’s success for granted. Those in the north say the South East has gotten too much emphasis in the past. Who’s right from a transport perspective?
Mr. Burns: They are not mutually exclusive. The government supports and works to ensure that airports outside the South East continue to develop and gain new routes, including those to long-haul destinations. We do not take the South East for granted at all, measures such as the Airports Commission show we are determined to secure its success for the long run.
Global Atlanta: How does the Conservative government respond to Heathrow’s argument that the U.K. needs only one international hub? What’s your stance on this?
Mr. Burns: These are the sort of important issues that the Airports Commission needs time and space to fully analyze and develop a robust evidence base on. For this reason I think it is important that I do not pre-judge the commission recommendations.
Global Atlanta: The proposals for the Davies Commission are in. They are extremely varied. Do any of them stick out to you as particularly promising? What do the diversity of plans submitted say about the U.K.’s ability to tackle this issue and remain a key world economy?
Mr. Burns: I don’t want to comment on the proposals as it is for the commission to analyse them. However, I am pleased that so many people have welcomed and engaged with the process.
Global Atlanta: You have promised that the Conservative government will act on the recommendations of the Davies Commission, somewhat allaying fears that all this research and feedback will be wasted. But what will become of these plans if your party is no longer in power after 2015?
Mr. Burns: The commission has within its remit the aim of building consensus and securing cross-party political buy-in. However, you would need to ask the others about their plans!
Global Atlanta: How much funding does the central government lay out for infrastructure projects, and is there any chance of any of these projects moving ahead without money from the government?
Mr. Burns: The government invests in infrastructure schemes where there is a need for it and is supported by good business case. It is for the commission to determine this in relation to the schemes that have been proposed to it. We will then consider the commission’s recommendations including any need for government funding.
Global Atlanta: London’s three largest airports – Heathrow, Gatwick and Stansted – have strikingly different ownership structures. Is this healthy, or is more direct government engagement better?
Mr. Burns: Airport privatization has been a success. It has unlocked huge amounts of investment and transformed the passenger experience.
Global Atlanta: You have often visited smaller airports. Where do they fit into this discussion? Do they have a vital role to play?
Mr. Burns: Smaller local airports play a vital role in allowing people to both access services locally and giving greater choice. It is important that people can access point-to-point services but also connect to a hub from these airports. U.K. local airports have been successful in delivering this, including through connections to mainland European hubs such as Amsterdam.
Global Atlanta: What do you make of developments like Manchester’s Airport City, which seek to utilize the existing assets of an airport to maximize commercial development? Do you see this happening organically at airports like Birmingham or Heathrow, and can you foresee a more centralized model being applied beyond Manchester?
Mr. Burns: Airports often serve as an economic catalyst for their local area. This government has encouraged this by the creation of a number of Airport Enterprise Zones at Manchester as well as Newquay and Cardiff.
Global Atlanta: We know you’re a student of American politics. We are generally seen as due for more transport investment. However, are there any lessons the U.K. could learn from the American experience in aviation, and vice versa?
Mr. Burns: I think it is always healthy to learn from other countries’ experiences. America, for example, led the way on airline deregulation; Europe was able to learn from this.
Global Atlanta: Hartsfield-Jackson Atlanta International Airport is the busiest in the world. Have you travelled here? What do you think of its design and its growth?
Mr. Burns: I have travelled to and through Atlanta a number of times, but have never stayed at the airport long enough to consider its growth and development in any detail. I have noticed the improvements to international arrivals have greatly improved the experience over the last 24 months.