Stuck in a holding pattern. Not airline passengers but the UK Treasury, at least when it comes to evaluating the merits of expanding Heathrow or Gatwick airport.
Why, industry experts ask, are officials still fixated on the notion that Britain needs a dominant “hub” airport, complete with Heathrow runway No 3? And particularly when there’s a blindingly obvious alternative 28 miles from central London: an airport in Sussex that could bring similar economic benefits for a fraction of the cost or environmental damage.
One theory? That the Treasury is still steeped in that prize piece of hot air, otherwise known as Sir Howard Davies’ Airports Commission report: a £20 million waste of money that was at least 15 years out of date when it was published in 2015. It set out to “make recommendations which will allow the UK to maintain its position as Europe’s most important aviation hub”, without spotting the key flaw in its thesis: that the hub airport argument had already flown.
• Gatwick passenger numbers up by 7.7 per cent
Real hubs, built on high volumes of people changing planes, are 24-hour operations, ideally suited to the desert environs of Dubai — not densely populated west London. Around 40 per cent of Dubai’s forecast 91 million passengers this year will be the transfer sort, with many of the rest staying only for a day or two before flying on. Yes, a quarter of Heathrow’s expected 82.8 million travellers in 2024 will simply change planes — and transfer traffic can make marginal routes viable.
Yet this should not be its core business and nor should Britain encourage it, given such passengers bring extra noise and air pollution without spending any money here. Direct flights, which travellers prefer anyway, have to be the focus of any UK airports policy. And once you establish that, all logic points to expanding Gatwick over Heathrow.
The short-haul dominated Sussex airport has just reported its half-year figures showing passengers up 7.7 per cent to 19.9 million and back to 90 per cent of pre-Covid levels; revenues 15.2 per cent higher at £488 million; and operating profits up by £30 million to £191 million. Two other figures stood out at an airport shooting for traffic in the low 40 millions this year: that, at £11.93, aeronautical charges per passenger are less than half of Heathrow’s; and that a handling rate of up to 58 aircraft per hour exceeds “any single runway airport by some way”.
Gatwick needs another landing strip. But unlike Heathrow’s former “£14 billion” proposal that involved demolishing 750 homes, diverting five rivers and rerouting all 12 lanes of the M25, Gatwick’s plan is cheap and doable. It’s seeking planning permission to bring its existing northern relief runway into routine use, giving it the potential for 75 million travellers by the late 2030s.
As the airport’s boss Stewart Wingate says of the £2.2 billion plan, “It’s fully in line with the policy of maximising existing capacity”, the same logic behind the government allowing more travellers through London City Airport. On top: “It’s also fully privately financed”, with the airport, sitting on £2.9 billion net debt, backed by two affluent, supportive investors: 50.01 per cent owner Vinci and Blackrock’s Global Infrastructure Partners.
Again, contrast Heathrow, where the shareholder register is up in the air and net debt’s at £16.7 billion. Is a third runway, likely to cost twice previous estimates, even affordable — at least not without bullying the regulator into jacking up passenger charges at what’s already one of the world’s priciest airports?
Wingate hopes to get planning approval by early next year. And should he succeed, London could have enough airport capacity for decades for little cost and a noise impact, Gatwick says, on only 3.5 per cent as many people as affected by Heathrow. Already handling the likes of Singapore Airlines, Air India and Air China, Gatwick could then develop into a proper long-haul alternative to Heathrow. Assuming, of course, the government allows a logical plan to fly.
Broken law
The Institute of Economic Affairs was a big fan of Liz Truss. So, it should know a thing or two about fraudsters, or at least those masquerading as a competent PM. Its latest effort on the subject? A paper from three academics, specialising in economic crime, titled “Replacing the Serious Fraud Office”.
And, no question, there’s room for improvement. A previous boss, Sir David Green, spotted the money-making potential of deferred prosecution agreements (DPAs) but also brought us the Olympus case, which a judge found “inevitably doomed as a matter of law”, and an attempt to bang up former Tesco executives that another judge found “so weak” it was thrown out after eight weeks. His successor, Lisa Osofsky, saw convictions of former Unaoil execs overturned due to the SFO’s failure to disclose key material relating to communications between her and an Unaoil adviser.
• Serious Fraud Office should be replaced after ‘high-profile failures’
Still, it’s questionable whether replacing the SFO with a new Serious Economic Crimes Office, big on “crime prevention” and “alternative justice mechanisms”, including DPAs, “larger fines” and registers for “public shaming”, won’t produce a right muddle.
Yes, fraud convictions may have dived from 12,378 in 2012 to 3,455 in 2022. But most of that’s smaller stuff outside the SFO’s remit. And, whatever the doubts over whether its new boss Nick Ephgrave really can “sharpen” its casework “to bring results more quickly”, organisational upheaval probably won’t help.
Besides, the academics are more on the money with their line that all crime agencies, including the police, found that “investigating complex economic crime is expensive, slow and hugely difficult to prosecute” and that “the criminal courts” aren’t “fit for purpose”. You need to fix more than the SFO to change that.