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Northern Powerhouse will ‘struggle’ without Heathrow expansion

Words: Laura Edgar
Third runway at Heathrow Airport / Heathrow Airport

Capacity constraints at Heathrow Airport mean that the Northern Powerhouse is losing out on £710 million a year in trade because passengers are forced to travel via other international hub airports, says the airport.

Heathrow chief executive John Holland-Kaye has warned the government that its plans to transform the north of England into a Northern Powerhouse with high growth and productivity are “at risk” unless it takes action on airport expansion.

Speaking at the International Festival of Business, Holland-Kaye discussed research by Frontier Economics, a business management consultancy.

The research suggests that the cost of inaction on airport expansion to the economy of the north of England equates to £710 million lost in import and export trade a year. This is based on the first analysis showing that flying via a hub airport outside of the UK, rather than Heathrow, “generates less trade for the British economy”.

Flying by Heathrow could, according to the research, “help facilitate an additional £1.7 billion in trade each year”.

While airports in the north of England are growing, including Manchester and Newcastle, Heathrow helps to “fill in the gaps”.

The airport said the figures represent the “tip of the iceberg” when considering the total cost a lack of connectivity between Heathrow and the regions has on the UK.

Holland-Kaye said: “The government is going to struggle with the foundations of the Northern Powerhouse if a third runway isn’t built to support the region’s existing connectivity. To rebalance and strengthen the British economy, the UK needs a domestic hub airport that can compete with our unconstrained hub rivals abroad, and that’s something only Heathrow can deliver.”

James Ramsbotham, chief executive, North East Chamber of Commerce, agreed the lack of decision on Heathrow’s expansion is “extremely detrimental to the ambitions of the Northern Powerhouse”.

“As a region in which exports and inward investment are essential to our economy, we need global links and these can only be provided with access to the UK’s hub airport. This will enable us to build on existing connections and exploit new markets across the globe.”

More detail about the research can be found here.

Earlier this month, Prime Minister David Cameron promised that the government will decide on whether a third runway will go ahead at Heathrow this summer.

Read more here.

Image credit | Heathrow Airport