Frontier Economics

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Heathrow report shows UK risks being cut off from growth by poor trade links

Heathrow has today published a report by Frontier (Europe) as part of its response to the Government’s scoping document on UK aviation policy. The report, “Connecting for Growth”, identifies the importance and value of a hub airport to the UK. It finds that Heathrow is a successful hub airport but, because it is full, new routes cannot be established without squeezing out existing services. This restricts economic growth, and other UK airports are not filling this gap because they do not serve the substantial hub and spoke networks that are needed to make new direct long haul services viable.

More than half of world economic growth will be in Emerging Markets over the next ten years. Airlines operating from other European hub airports are able to establish routes to the fastest growing markets, while these links are not established, and cannot be established with the UK. This matters because it places UK businesses at a competitive disadvantage to French, German, Dutch, and Spanish firms. The report identifies that UK businesses trade 20 times as much with Emerging Market countries that have direct daily flights to the UK as they do with those countries that do not. This leads to a missed trading opportunity for UK firms which we predict  totals at least £14bn over the next ten years.

 

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