Thames Estuary Airport dropped: a milestone reached in the eternal debate on UK airport capacity

The 02-Sep-2014 decision effectively reduces the battle to Heathrow vs. Gatwick, and the choices to:

• A new runway at Heathrow, to the north of the existing ones;
• Extension of one of the existing Heathrow runways (the northerly one) to over 6000m, to permit mixed mode operations with aircraft landing and taking off at/from different parts of the runway at the same time;
• A new runway at Gatwick, to the south of the existing one.

See related report: London's Heathrow and Gatwick airports commence the next phase of Davies Commission runway battle

Boris Johnson, the Mayor of London, and his assistant Daniel Moylan, had staked their credibility in this field on convincing the Commission, and ergo central government, of the validity of their 'Blue Sky' plan to provide the UK with a entirely new brown field airport. Less than 50 miles from the city of London, he argued this was in an area where noise pollution would have the least effect of any of the London-based solutions to the airport debate but which at the same time would service the fastest-growing population base in the UK, to the east of the capital.

Comparisons can be drawn with the futuristic new Dubai airport

Comparisons might be drawn with the Al Maktoum Airport/ Dubai World Central project, further details of which were released in the first week of Sep-2014. In that instance the proposal is for an unprecedentedly massive airport and associated airport city that could eventually handle 220 million passengers a year at a first-stage cost of USD32 billion. That is definitely 'blue sky' in the sense that the skies are certainly bluer and more frequently so in Dubai than in London. But DWC differs in that it is already a functioning airport, with further stages in progress.

Mr Johnson is still convinced that the UK needs such an airport to compete with the likes of the multi-runway competition in Europe (and, more pressingly, in the Middle East and West Asia - see table below) and was often quoted referring to other such original thinking that led to the huge expansion of the railways in Britain in the 19th century; the first motorway in the 1950s; and the development of Concorde, et al.

Indeed at times it seemed that it was only Shakespeare that Mayor Johnson wasn't quoting. King Henry V's St Crispin's Day speech before the Battle of Agincourt in Shakespeare's eponymous play would not have been out of place ("we band of brothers..."), particularly as Paris' Charles de Gaulle airport is one of London's biggest competitors for 'hub traffic' in Europe.

Comparison of London Heathrow and Gatwick airports with competitors in Europe and Middle East, also global cities with new airports under construction or planned

Airport	Passengers 2013 (millions)	Number of runways	Pax per runway (millions)	Notes
London Heathrow	72.3	2	36.15	World's busiest two-runway airport
London Gatwick	35.4	1	35.4	World's busiest single-runway airport
UK competitors
London Stansted	17.8	1	17.8	No further (major) infrastructure planned. Draft sustainable expansion plan beyond 35 million ppa under discussion
Manchester	20.7	2	10.35	The only UK primary airport outside of London with more than one runway. No further (major) infrastructure planned
Birmingham	9.1	1	9.1	Runway recently extended to handle intercontinental flights at full load. Potential second runway post-2030
European competitors
Paris CDG	62	4	15.5	No further runways planned. 4th terminal by 2025. Capacity 80m ppa now, 120m ppa eventually
Frankfurt International	58	4	14.5	3rd terminal due by 2021
Amsterdam Schiphol	52.5	6	8.75	No further runways planned. Construction is in form of enhancements to existing structures c. EUR1.25 billion
Madrid	39.7	4	9.92	Only two runways in use much of the time (declining traffic)
Barcelona	35.2	3	11.73	No further infrastructure in the immediate future
Middle East & West Asia competitors
Dubai International	66.4	2	33.2	One runway recently refurbished, caused some diversions over a protracted period. Close to matching Heathrow for numbers of pax per runway but considerably less movements (100k less exactly in 2013) owing to typical aircraft size being larger. Dubai World Central is now open to pax and cargo flights, with one runway and USD32 billion will be spent on expanding it to handle 220 million ppa in the next decade on five runways, together with an attendant 56 sq km 'airport city'.
Doha Hamad	23.2 (at previous International Airport)	2	11.6	Recently opened, no further runway planned. One runway is longest in West Asia. Possible second terminal if Qatar retains 2022 FIFA World Cup
Abu Dhabi	16.7	2	8.35	Midfield terminal under construction, completion due 2018. Master plan envisages a third runway
Istanbul Ataturk	51.3	3	17.1	Potential fourth runway. New airport to be built by end 2018, ultimately with 6 runways
Other major new airports under or pending development
Berlin	26.3 (Tegel and Schoenefeld airports combined, 2013)	3 in total (SXF 1; TGL 2)	8.76	New airport under construction, based on existing Schoenefeld Airport, since Sep-2006 but with immense technical problems. May not now be finished until 2018. Cost has more than doubled to over EUR5 billion
Sydney	37.9	3	12.63	New airport to be built, size and 'type' yet to be decided, construction to commence by 2016. Cost estimated at USD2 billion
Mexico City	31.5	3	10.5	New airport to be built by end 2018 with 6 runways at completion of second stage. Emerging issues with resident bird population. Cost estimate USD9.1 billion

Source: CAPA airports data/Author research

London's Estuary Airport was weighed down by too much baggage

But blue sky or not, the Estuary Airport proposal was weighed down by far too much baggage to get past the scrutiny of the Airports Commission and its chairman, the straight-talking, no-nonsense Mancunian, Sir Howard Davies. It was only put back into consideration on the insistence of the Mayor in Dec-2013 when the original shortlist was announced, without it.

That baggage consisted of, inter alia:

The cosmic cost. The Thames Estuary Airport would have cost at least GBP100 billion and quite possibly up to 50% more than that, taking into account the expense of critical surface transport infrastructure, the closure of Heathrow and displacement of up to 75,000 jobs, possible lawsuits from multinational corporations that have invested in and around Heathrow and so on. And this at a time when there is a complementary debate about the HS2 high-speed rail project and its vast financial demands of GBP50 billion or more. By comparison, anticipated costs at Heathrow (for a new runway) and Gatwick (ditto) are up to GBP18 billion and GBP8 billion respectively;

The legality of closing down Heathrow. An estuary airport would have replaced Heathrow, not support it, or vice versa, that has always been clear. The Mayor recently commissioned teams of architects to come up with plans for housing and commercial estates on what is now 'LHR.' But unlike Manston Airport in Kent, where local councils have been considering taking out a compulsory purchase order (CPO) to prevent its private sector owner from doing something very similar, it is improbable to CPO the world's largest international airport, which is owned by some extremely powerful companies and funds. And even if possible, the upcoming EU-US Transatlantic Trade and Investment Partnership (TTIP), currently being covertly negotiated and likely to be formalised before the end of 2014, will probably slam that door shut forever;

The loss of London Southend Airport, the nearest to the proposed site, another private sector-owned facility and one that would almost inevitably be forced to close;

Who would pay for it anyway? It has never been clear whether public or private sector financing was preferred by the Mayor's office, or a PPP, and there is a feeling that the protagonists were not necessarily of a like mind on the issue. Mayor Johnson was a proponent of the inclusion of Sovereign Wealth Funds in the funding mix (which are already active in the funding of both Heathrow and Gatwick) - probably from China - but such entities insist on certainty and there is no certainty that, for example…

…The birds will leave, won't they? According to the Royal Society for the Protection of Birds (RSPB) - another powerful organisation where airport development is concerned - there are hundreds of thousands of migrating birds in the estuary. They could be asked to move on of course but it is not considered likely that they would co-operate. The RSPB states: "The construction of a Thames Estuary airport would result in an unprecedented level of damage and destruction to a highly protected and internationally recognised coastal wetland, which we do not believe can be adequately compensated for. To land aircraft in a foggy, bird-rich estuary makes it the most unsafe location for an airport in the UK. Bird strike would be up to 12 times more likely here unless draconian clearance of the flocks that make the Thames their home is undertaken, year after year." Moreover…

…It could sink. That is an unlikely scenario and the preferred estuary option would be built on the banks of the River Thames rather than floating in it as many of the alternative proposals suggested. But it adds to the uncertainty, and especially so for the potential investors from Asia, who will be only too aware of problems faced by Japan's Kansai Airport and Chek Lap Kok in Hong Kong. Would any government - the financier of last resort - be prepared to underwrite such an eventuality with public money?

A potential 'conflict': with flight paths for Amsterdam Schiphol's six-runway airport;

Wholly inadequate road and rail access compared with existing competitors and established airports in population centres beyond the southeast of England;

The timetable for construction: Although 15-25 years is not that much greater than the Heathrow proposals, Gatwick's solution could be available soon after 2019;

The location. For a 'national hub,' which the Mayor and his Office have latterly purported the new airport to be, rather than a replacement London airport, it would be situated in the wrong position, too far to both the south and east of the country. For road journeys from the west and north where more of the population is located, it would involve circumnavigating London by the M25, one of the busiest motorways in the UK and prone to long delays throughout the day;

Virtually no support whatsoever from the airlines, or from corporate business and its representatives outside the immediate area in which the airport would be built;

No support from critical organisations such as The London Assembly, which is a counterpoint to the Mayor, which can call him to account, and which is on record as proposing that there is adequate UK airport capacity as it is, a rather unusual viewpoint from a local government body.

This is just a selection of the long list of reasons that lend no support to the project. The Commission's formal take on the matter was expressed as follows:

Following "detailed further study" into the feasibility of an inner Thames estuary airport, the Commission said it had concluded that the proposal has substantial disadvantages that collectively outweigh its potential benefits. Sir Howard Davies said: "We are not persuaded that a very large airport in the Thames estuary is the right answer to London's and the UK's connectivity needs". He continued, "While we recognise the need for a hub airport, we believe this should be a part of an effective system of competing airports to meet the needs of a widely spread and diverse market, like London's."

This statement appears to hint towards a swing in favour of Gatwick Airport's solution, which also identified a competing airport 'constellation' as the optimum one.

Sir Howard continued: "There are serious doubts about the delivery and operation of a very large hub airport in the estuary. The economic disruption would be huge and there are environmental hurdles which it may prove impossible, or very time-consuming to surmount. Even the least ambitious version of the scheme would cost GBP70 to GBP90 billion with much greater public expenditure involved than in other options - probably some GBP30 to GBP60 billion in total. There will be those who argue that the commission lacks ambition and imagination. We are ambitious for the right solution. The need for additional capacity is urgent. We need to focus on solutions which are deliverable, affordable, and set the right balance for the future of aviation in the UK."

Final public consultation is scheduled for autumn 2014

Having received and developed a substantial body of evidence (over 50 long-term solution proposals and over 70 in respect of the short term) that it considered carefully over a number of months before reaching this decision, the Commission will now continue its appraisal of the three shortlisted proposals for additional capacity and will publish the appraisal for public consultation in the autumn of 2014.

Of the remaining options, which is most likely to win the day?

It is very hard to call and just as in the case of the Scottish independence debate (see below) one group has suddenly come up on the rails so that it is almost neck-and-neck as they enter the final straight. For a long time Heathrow was well out in front, supported as it is by the airlines, their alliances, big business and politicians whose constituencies don't lie below the Heathrow flight paths. (Moreover, a new survey of MPs by independent polling company Ipsos MORI shows that 91% of those MPs who back a third runway at Heathrow think it would get parliamentary approval).

But there are indications that the Commission has begun to sympathise with Gatwick's case, which hinges on point-to-point airline operations seemingly beginning to take precedence over hub & spoke operations as operating models go through yet more changes and upheavals, supported by the arrival of new aircraft types such as the B787 and the A350.

And Gatwick's solution is only half the cost of Heathrow's. Both airports have entrenched environmental opposition to contend with (to a degree they have already done so) and it has always been a given that environmental protection would be paramount in any decision, even going back to the Future of Air Transport government White Paper of 2003.

Environmental protection will be a critical issue in the final decision

In case further evidence of that was required, the Liberal Democrats, the 'environmental arm' of the coalition government, published their 2015 general election pre-manifesto this week in which the party commits to "ensuring our airport infrastructure meets the needs of a modern and open economy, without allowing emissions from aviation to undermine our goal of a zero-carbon Britain by 2050."

The manifesto continues: "We will carefully consider the conclusions of the Davies (Airport Commission) Review into runway capacity and develop a strategic airports policy for the whole of the UK in the light of those recommendations and advice from the Committee on Climate Change. We remain opposed to any expansion of Heathrow, Stansted or Gatwick and any new airport in the Thames Estuary, because of local issues of air and noise pollution. We will ensure no net increase in runways across the UK as a whole by prohibiting the opening of any new runways unless others are closed elsewhere." That final statement really shifts the agenda.

If Heathrow is chosen by Davies it does not automatically mean a totally new runway will be built. The private company Heathrow Hub's proposal to lengthen the existing northern runway to enable mixed mode operations off two separate sections has been largely overlooked. Indeed, and this is fascinating, the Ipsos MORI poll mentioned above found that a third runway at Heathrow is the overwhelming choice of MPs from the options left on the Airports Commission's shortlist (58%), compared to 13% for a second runway at Gatwick.

Just 13% think the best option would be to do nothing. That leaves 16%, which presumably voted in favour of the runway extension, but was not even reported by the media. Or perhaps Ipsos MORI didn't even offer it as a choice.

Heathrow Hub's vision of the extended northern runway

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Source: Heathrow Hub website

But it would certainly satisfy the Liberal Democrat's requirement of no net increase in runways as it already 'exists'. Semantics perhaps, but that is largely what politics is about.

The problem is that the proposal isn't supported by Heathrow Airport Holdings itself, which is uneasy about such operations and how the local community would react to them. But that position could change if the alternative to not supporting that proposal if Davies selects it meant that Gatwick would win the day. HAH management would be unlkely just to throw the towel in and concede to Gatwick.

Still time for a last minute twist - but there is no Plan B

There are no certainties and even now there could be a big surprise. The regional (non-London) airports were largely excluded last December but not all of them gave up all hope. Encouraged perhaps by a request for submissions from the Commission for ideas as to how regional airports can continue to play their part in the overall scheme of things, discussions are understood to have taken place amongst several airports to concoct a unified proposal to develop traffic jointly at the expense of Heathrow and thus present a new case for consideration, at the death.

And one should never exclude Boris Johnson, a master political manipulator who does not seem to have given up, even despite missing the shortlist. The reality may be somewhat different. Mr Johnson believes he has the credentials to be Prime Minister and is seeking to re-enter Parliament at the May-2015 General Election, aiming to remain as London Mayor for a short while thereafter if he is successful. (He was previously MP for Henley, an affluent area to the west of Heathrow).

Several constituencies are under consideration but the favourite seems to be Uxbridge and South Ruislip, where Johnson has applied to be a candidate. It will be no shoe-in; he faces tough competition from local candidates. The relevance of this is that, if successful he would be the candidate, and prospective Member, for a constituency that is right next door to Heathrow, an airport he has been threatening to close down for the last two years, putting tens of thousands of his potential constituents out of work.

Of course politics has always dominated this debate. Cross-party consensus when deliberating Davies' various recommendations was demanded from the start but the stance being taken by the Liberal Democrats suggests they are breaking ranks now that an election, in which they might be annihilated, is looming.

Bigger issues will overwhelm the airport debate; Scotland for example

But beyond party politics there are even bigger issues threatening to scupper any positive proposals made by Davies. As CAPA has suggested before the outcome could be swamped by events. At the top of the list is the Scottish Independence vote on 18-Sep-2014.

The 'No' (to independence) campaign was ahead by 22% in the polls only a month ago. One of the latest polls suggests, for the first time ever, that the 'Yes' party is ahead and that the momentum is with it in the final 10 days. This has prompted panic in the British government.

Scottish independence would be a massive upheaval. The mere potential is already causing wild currency swings and reputed cash outflows from Scottish companies to England and elsewhere. It could result in Scotland being unable to use the Pound Sterling (GBP) and having to develop a currency of its own, for which there is no plan, even at this late date. It could mean it being absented from both the European Union (which has already told it that it would have to apply to use the Euro) and NATO.

The implications for the Union (the United Kingdom) and for England and Wales separately, are equally profound. The No campaign, which was not co-ordinated by the three main parties, seems to have been taking a nap from which it might not recover. A yes vote would possibly, quite probably even, lead to the resignation of Prime Minister Cameron and an early election. The Queen is reported to have summoned him and lectured him on the need to save the (her) Union.

There is even the suggestion that the announcement of a second Royal baby for the future King and his wife was made earlier than they wanted in order to try to keep the Scots 'on board' out of sentimentalism. Additional powers for the already devolved Scotland were hastily stitched together, including some extremely generous ones on tax raising, as all three of the main party leaders headed to Scotland at high speed to try to save their bacon. Scotland is truly the only show in town right now.

Whatever the outcome the UK, or what is left of it, faces a period of turmoil. The English regions, where there are nascent separatist movements in place already, will be watching the outcome with great interest, and particularly the effect that the offer of virtually total control over tax and spend has on the result. The English regions with the strongest interest in pursuing a separtist agenda so far are Yorkshire and the Humber, the Northeast (around Newcastle) and Cornwall. Others may follow. They would all want their own airports to be given preferential treatment in any quid-pro-quo.

And even when (if?) it is over, the incoming government must then face up to holding a promised referendum on whether or not to stay in Europe, either with or without Scotland, with a rampaging UK Independence Party (which by then might be the English Independence Party) pulling the strings.

Surprisingly, the Commission did not take into account either the effect of Scottish Independence or of the UK leaving the EU in its deliberations on future airport capacity.

Among all this, if anyone thinks that any serious attention is going to be paid to the Davies Commission's recommendations on the whys and wherefores of laying a few hundred additional metres of tarmac in a field in west London or West Sussex they are going to be disappointed. Or perhaps that is what the government hoped for in the first place?