Single hub airport needed to connect UK with emerging markets says CBI

THE UK must prioritise a single UK hub airport with spare capacity to capitalise on new growth opportunities, the CBI has said.

It said the strategy was vital if the UK was to open trade routes to the emerging economies of the world and help sustain long-term growth.

In a new report, the CBI said: “With future export opportunities increasingly in emerging, high-growth economies, the CBI urges the Airports Commission to deliver recommendations to solve the UK’s shortage of runway capacity and spark new connections with the export markets of tomorrow.”

It said that building on findings from 2013 that demonstrated that eight new routes to emerging markets alone would generate as much as £1bn a year in trade, the spare airport capacity was vital.

“By drawing on both transfer passengers and local populations, hub airports are best placed to act as a catalyst for these new routes,” it said.

Research by Steer Davies Gleave, for the CBI, shows that from a sample of 15 emerging markets, hub airports serve on average nearly three times as many destinations as point-to-point airports (27 to 8 destinations), while also delivering almost twice as many flights on the routes that are served – 1.5 daily flights from hubs on average, compared to 0.8 from point-to-point.

With the UK’s hub capacity at Heathrow already full, the CBI said the UK was falling behind on direct flights to emerging markets.

The report highlights that by drawing heavily on transfer passengers, the UK’s EU competitors with their own unconstrained capacity are creating connections to new destinations within emerging markets such as Xiamen in China and Recife in Brazil, as well as links to the major markets of the future, like Peru, Indonesia, Taipei and Chile.

Katja Hall, CBI Deputy Director-General, said: “The Chancellor has set businesses ambitious targets for increasing the UK’s exports, and there is simply no way of achieving these goals without upping our game in emerging markets.

“Our analysis last year demonstrated that connectivity is the lifeblood of trade, but it also highlighted that the UK is already falling behind, so every day we delay making a decision, makes matters worse.

“First and foremost, UK business wants action.  There can be no more excuses – we need to see the Airports Commission deliver a strong case for new capacity and a clear schedule for delivery, and politicians to commit to spades in the ground by the end of the next Parliament.”

She said the research showed that while all airports had a role to play in growing the UK’s connectivity, not all airports played the same role.

“While no-one can predict the future of air travel, the track record shows that it tends to be hub airports that deliver the new connections to emerging markets that we desperately need,” she added.

The research concludes that with Heathrow full, the UK is slipping behind in the race for new connectivity.

“It is essential that the Airports Commission delivers a solution that addresses the ticking time bomb of our lack of spare hub capacity, said Ms Hall.

The research demonstrates that spare capacity is important because where a hub becomes constrained, airlines tend to focus on strengthening routes to markets that are already popular, rather than using transfer passengers to spark new routes.