Q. Let’s look at some of the arguments Heathrow is making. What of its claim to be the UK’s biggest port?
A. This is a hangover from the British Airports Authority monopoly. If you look at the freight situation, there’s an enormous amount to be said for creating some more competition. Gatwick is the only viable way of doing that.
Q. So is this a legacy issue?
A. A huge market share is impressive from one point of view. However, huge market share is not a great thing from a competition and efficiency point of view.
Q. What about the argument that the centre of economic gravity is to the west of London, not to the south?
A. If you look at the Airports Commission’s analysis and that of the Mayor of London, there is common consensus that the area to the west of London and around Heathrow is severely overheated. There’s tremendous pressure on roads and other infrastructure. There’s tremendous pressure on housing and there are environmental pressures, too. There’s much to be said both nationally and in and around London for more balanced growth.
Q. Another point – isn’t it true to say that transfer passengers are the only way to make long-haul routes financially viable for airlines?
A. That’s an argument of 15 to 20 years ago.
Q. Why is it the wrong argument for today?
A. Western European hubs, including Heathrow, Frankfurt, Amsterdam and Paris, are losing transfer market share rapidly to the hubs in the Middle East. These newer hubs are much better placed geographically for today’s traffic patterns, which are focused on journeys to and from the Far East. The second thing to look at is the pattern of aircraft orders. Airlines are ordering large numbers of aircraft like the 787 and the A350, the so-called hub busters. Those aircraft do not need large proportions of transfer passengers to operate economically.
Q. Are you saying the hub concept is outdated, or that Heathrow is in the wrong place?
A. It’s a bit of both. If you want to base a business on transfer passengers you wouldn’t locate it at the western edge of Europe today. Consider that one of the big transfer flows is from North America to India. The natural stopping-off place was western Europe. But now the 787 and A350 can fly direct. Nobody likes stopping off to transfer – it’s a pain in the neck.
Q. So do these newer aircraft remove the argument about the financial viability of transfer traffic?
A. Absolutely. The 747 and others like it needed transfer traffic in the order of 30 to 40 per cent to be viable. With the 787 and A350 you can easily get by with 10 per cent transfer traffic.
Q. An airport to the west of London will always have better connections to the rest of the country than one to the south. How do you respond to that proposition?
A. I don’t buy that. If you’re in Northern Ireland or Scotland, you’re not going to want to get to London by road and, in the case of Northern Ireland, you’re not going to do it by rail. You’re going to fly, and it’s immaterial whether you fly to and from Heathrow or Gatwick.
On rail, one of the things that most people don’t yet understand is the extent to which Gatwick’s rail connections will be revolutionised by Thameslink. It represents a bigger increase in capacity for us than Crossrail does for Heathrow.
Q. Heathrow has promised to review regional pricing to help boost air links to Scotland. Won’t that be very welcome, from a regional point of view?
A. The Scots are very sensible people. When they see somebody promise a review, they wait to see the colour of their money. And bearing in mind that Heathrow’s charges are the most expensive in the world, you’d need to review them an awful lot to make them competitive.
Q. Business opinion from the likes of the Institute of Directors and the British Chambers of Commerce appears to be weighted against Gatwick. Do you accept that description as fair?
A. Within the business community there is a spectrum of opinion. Within the IoD, for example, the Gatwick support is far from negligible. And if you go to the Federation of Small Businesses and people who are in a start-up or small-business situation – and where they worry about the cost of travel – you’ll find sizeable support for Gatwick.
Q. In addressing all these arguments what part of the Gatwick proposition has been missed?
A. We missed the fact that with the Commission’s projections on traffic and connectivity, the end result for the UK as a whole is much the same, whichever airport is chosen. In other words, the choice of scheme doesn’t really matter in terms of what the original purpose of the exercise was – to deliver the connectivity the UK needs.
At Gatwick, the expansion we have designed is much better able to serve all the different types of airline business models. No matter what it does with a new runway, Heathrow is largely configured for full-service carriers of a traditional type. Gatwick is a more flexible solution.
Heathrow is a big bet on the hub concept – but suppose, as has been the history of aviation, things move on. If you look fifty years ahead, Gatwick presents a much more flexible solution and proves much more robust to market changes in the future than the alternative.
Q. So what, in your view, are the strengths of the Gatwick case?
A. First of all it’s a much more affordable option. We’re into unknown territory with the new government but the one thing we can be sure of is that the public finances will be at least as tight in the next five years as they have been in the last five years. Heathrow is looking for a public subsidy of something between £5bn and £6bn for surface access. There isn’t going to be a great deal of spare money for propositions like that.
The Gatwick project will cost less than half the Heathrow project. Gatwick airport charges will be half the charges at Heathrow. So in terms of being a more affordable proposition, Gatwick is streets ahead. And we have guaranteed that our airport charges will not exceed £15 per passenger.
Q. What about environmental considerations?
A. Heathrow remains a huge challenge in terms of noise impact. Over 300,000 people will be newly affected by significant noise if the Heathrow plans go ahead. That is going to be a huge hurdle for them to get over. And on top of that they still haven’t solved the air quality problem that dates back to 2009. They are still exceeding the legal limit the European Commission has laid down and there’s really no solution in sight for that problem. On those criteria, Gatwick is much more deliverable.
Having said all that, the most important thing is that something does happen.
Q. How hopeful are you that something will happen this time?
A. The problem of aviation capacity is much more pressing than it was 20 years ago. To an extent, we were all rescued by the recession of 2008/2009. If that hadn’t happened, the capacity constraints really would be hurting today. The recession has given a bit of breathing space but Heathrow is nearly full today and we are heading that way at Gatwick.
Q. And do you believe the politicians will make a choice?
A. The likelihood of them making a choice is much higher today than it was even ten years ago. Having set up this commission to make a recommendation, to then flunk the decision and make no decision would be an absolute disgrace.
The politicians we’ve been speaking to in the last couple of years are very aware of this. The airport capacity issue has to be dealt with.
Sir Roy McNulty is the chairman of Gatwick Airport Ltd
To download “Rethinking the Debate on Aviation Capacity”, a New Statesman special supplement created in association with Gatwick Airport, go to tinyurl.com/aviationcapacity
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