Leading aviation economists have contested the idea that tourism growth should form a key part of the case for Heathrow expansion
Appearing before the transport select committee of MPs last week, former Iata chief economist Brian Pearce insisted: “Tourism is not where I would place the emphasis. Economic growth is built by developing assets and capabilities.”
Asked to explain the link between airport expansion and economic growth, Pearce – now executive director at the Air Transport Systems Laboratory, University College London – said: “I don’t think it’s anything to do with tourism or employment at the airport. It’s asset-creating to help British business.”
New Economics Foundation senior economist Dr Alex Chapman agreed, saying: “Jobs are important in and around the airport. But you don’t build a motorway to create jobs at motorway service stations.”
This was disputed by Chris Cuttle, associate director at Frontier Economics which produced a Heathrow-commissioned report suggesting expansion would boost economic growth. He pointed out: “On the business travel side, air travel is important for face-to-face meetings.”
Cuttle noted there were “almost 13 million business passengers at UK airports last year and they must be doing that for a reason”.
He added that “on the leisure side, holidays are important for well-being and mental health” and argued: “Capacity constraints at Heathrow come at a cost to the UK in general.
“When demand exceeds supply, prices rise, passengers pay more, and [some] passengers can’t fly.”
Cuttle suggested: “The market is telling us it wants more capacity at Heathrow.”
However, Chapman argued: “Clearly, there is a value to leisure passengers. But it’s important to think about what we’re doing to the economy when we encourage this outflow of cash. In 2023, £40 billion flowed out of the economy [in overseas tourism spending].”
“The proportion in the UK who don’t fly has stayed roughly stable at 50%. So, the increase [in traffic] will be in frequent flyers flying more frequently and in non-UK transfer passengers.”
Chapman suggested that arguing ’Heathrow is at capacity and must be expanded’ “is not an industrial strategy”. He said: “If a road is congested, you can build another road. But you could also build a railway.”