BAA concerned by capacity constraints

Heathrow owner BAA has issued a stark warning over the economic impact of capacity constraints at the London hub.

The warning came today as the company revealed that the number of passengers using its airports rose by 4.4% to 108.5 million passengers in 2011.

After adjusting for exceptional events in 2010 such as British Airways strikes, volcanic ash and snow disruption, the underlying increase was 0.9%, the company reported this morning.

But BAA said that capacity constraints at the London hub were “tighter than ever”, preventing the launch of new routes to emerging markets.

The airport handled a record 476,197 flights, representing 99.2% of Heathrow’s annual limit of 480,000.

The government has ruled out a new third runway at Heathrow and BAA believes that the UK economy is suffering from the airport being full to capacity.

Airlines are prevented from developing new routes to emerging market destinations such as Manila, Guangzhou and Jakarta while 21 similar destinations now have daily flights from Continental European hubs but not Heathrow, BAA argued.

“This lack of connectivity is costing the UK economy £1.2 billion a year in lost trade,” the company estimated.

“UK businesses trade 20 times as much with those countries we have daily flights to compared with countries that have less frequent or no direct services.”

There was a small rise in passenger figures to and from China, up by just 57,509 (3%) in 2011 – less than the overall increase in passenger numbers.

Paris and Frankfurt already have 1,000 more flights each year to the three biggest Chinese cities than London and almost double the number of flights from Heathrow, BAA estimated.

Claiming that the UK risks falling even further behind in coming years as continental hubs expand further, BAA chief executive Colin Matthews said: “As the UK’s only international hub airport, Heathrow is central to developing our trade links with fast-growing emerging markets. Capacity constraints are damaging the UK economy today when the country can least afford it.

“A new hub airport has been proposed in the South East, but this has a projected cost of £50billion and may take decades to build.

“During this time we would be handing over on a plate the UK’s historic trade advantages to our European competitors.”

BAA’s airports handled more than 8 million passengers in December, an increase of 12.7% on the same month in 2010.

The rise was mainly attributable to the impact of snow in December 2010. After adjusting for the snow, passenger numbers were up 0.6%, better than the underlying performance in October (-1.3%) and November (-1.6%).

Last month was Heathrow’s busiest December ever, with the highest number of passengers at 5.517 million, the highest since June 2011.

Share article

View Comments

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.