Economists Question Airport Expansion Plans, Citing Uncertain Benefits

A group of 16 economics professors, transport experts, and academics has written to the UK government, raising concerns about the economic benefits of airport expansion plans, including a proposed £49 billion third runway at Heathrow. The signatories, including Professor Malcolm Sawyer from the University of Leeds and Professor Ozlem Onaran from the University of Greenwich, point out that business travel is in decline post-Covid, with Heathrow's own five-year plan stating that it will not return to pre-pandemic levels. They argue that the economic benefits of expansion are uncertain and that the environmental and health impacts cannot be adequately mitigated.

Key Takeaways:

• The group of 16 economists, transport experts, and academics wrote to the transport secretary, Rachel Reeves, questioning the logic of airport expansion in the current economic climate.
• Business travel is in decline post-Covid, with Heathrow's five-year plan indicating that it will not return to pre-pandemic levels, currently at around 80% of 2019 levels.
• The economists argue that the economic benefits of airport expansion are uncertain and that the environmental and health impacts cannot be adequately mitigated.
• The New Economics Foundation think tank, which coordinated the letter, suggests exploring lower-cost options for business travel, such as better utilization of Channel Tunnel capacity and incentivizing airlines to prioritize higher-productivity routes.
• The proposed expansion of Heathrow, led by chancellor Rachel Reeves, could create "over 100,000 jobs," according to a January speech by Reeves.
• Gatwick's second runway plan supports the government's growth agenda, generating an additional £1 billion per year in regional economic benefits and creating 14,000 jobs.

Statistics:

• £49 billion: The proposed cost of the third runway at Heathrow.
• 80%: The current level of business travel compared to 2019 levels according to Heathrow's five-year plan.
• 100,000+: The number of jobs that the proposed expansion of Heathrow could create, according to a January speech by Reeves.
• £1 billion: The additional regional economic benefits generated by Gatwick's second runway plan.
• 14,000: The number of jobs created by Gatwick's second runway plan.

Sources:

• A letter co-ordinated by the New Economics Foundation think tank, signed by 16 economics professors, transport experts, and academics.
• A speech by Rachel Reeves in January, in which she stated that the proposed expansion of Heathrow could create "over 100,000 jobs."
• Heathrow's five-year plan, which indicates that business travel will not return to pre-pandemic levels.
• A statement from Gatwick, which supports the government's growth agenda and generates an additional £1 billion per year in regional economic benefits and creates 14,000 jobs.