Despite hints of a more levelheaded approach to the regulation of the aviation industry signaled by the upcoming Airports Economic Regulation Bill, the coalition government is off to a poor start in this area of policy. Though anticipated for some time, the government’s recent prohibition of further expansion at three London airports is a poorly conceived decision that will disadvantage Britain, while failing to deliver the environmental benefits advertised by groups concerned with global climate change.
BAA Limited, the private owner and operator of six United Kingdom airports, including two in the London area, had proposed constructing a third runway at Heathrow Airport in order to cope with congestion and passenger numbers that are approaching the airport’s capacity limit. The desire to expand the airport was not without merit. Heathrow, which handles more than 466,000 landings and takeoffs per year and hosts more passengers than all but four other airports in the world, has few runways compared to similarly busy airports. Heathrow’s two runways are operating nearly at capacity, causing delays that interfere with commerce and travel. Airports are vital links for an economy, and the ban on expansion comes at a high price to Britain; research by Oxford Economic Forecasting estimated the annual cost of congestion at the airport to be £1.7 billion, and projected that the construction of a third runway would have generated an additional £7 billion per year in economic activity.
Minister of State for Transport Theresa Villiers has defended the government’s rejection of the plans at Heathrow, as well as that of proposals to build runways at Stansted and Gatwick airports, primarily out of concern that airport growth would adversely affect British efforts to reduce greenhouse gas emissions. Ms. Villiers, however, ignores the possibility that airlines may simply choose to expand routes outside of the United Kingdom, where airports have ample capacity to accommodate more flights. Instead of reducing emissions of greenhouse gases that may contribute to climate change, limits on airport growth in the United Kingdom may simply move business, and greenhouse gas emissions, across the English Channel, trading economic loss for no appreciable environmental benefit. British Airways chairman Martin Broughton raised this possibility when he announced in June that his airline will now focus on expanding at Madrid’s Barajas airport, which has recently finished an expansion of capacity.
As part of the effort to mitigate the effects of freezing airport expansion at a time when demand for air travel is projected to grow dramatically, Ms. Villiers has proposed that new high speed rail links be built to accommodate demand for domestic travel. Yet high-speed rail projects have generally proven to be economically unattractive. Only two high-speed rail routes in the world have not required subsidies from the state, and the United Kingdom’s high-speed train link to Ashford failed to attract sufficient ridership and depends on the British taxpayer for funds
Whereas BAA Limited would have funded the expansion at Heathrow privately, the high speed rail projects that are proposed by the government will be paid for with taxpayer money at a cost far higher than that of the proposed runway expansion. The government’s transport policy effectively calls for replacing an economically sustainable and privately funded method of transportation with taxpayer-funded transportation that will require indefinite support. At a time of fiscal austerity, the government’s plan appears to be a needless and fiscally irresponsible solution to a problem that does not exist.