The UK is potentially missing out on billions of pounds in trade due to its lack of flights to the world’s fastest growing economies, according to a new report by the CBI.
The business group claimed in its Trading Places research that the UK could bring in an extra £1 billion in trade per year by adding one daily direct flight to each of the eight major emerging economies - China, India, Indonesia, South Korea, Turkey, Brazil, Mexico and Russia.
The CBI added that the UK was losing out in the race to secure business from these countries due to the lack of hub capacity in the south-east. The government has appointed Sir Howard Davies, a former CBI director general, to look into how to increase this capacity with the current hub Heathrow already effectively full.
Katja Hall, chief policy director at the CBI, said: “Every day we delay expanding our connections, we risk falling further behind our competitors. Firms in high-growth economies are not waiting for us to make a decision before taking their business to countries with much better flight links.
“For too many businesses, our lack of direct connections means selling abroad to the fast-growing markets is simply not a realistic option. Firms need frequent direct flights to the widest range of markets.”
The CBI also urged the Davies Commission to support investment in the improvement of road and rail links to the UK’s main airports as well as looking at solutions for airport capacity.
Davies is due to present an interim report to the government by the end of this year which will examine short-term solutions to the lack of hub capacity. The commission’s full report into the issue is not scheduled to be submitted until after the next general election in the summer of 2015.
Rhian Kelly, the CBI’s director for business environment policy, added: “The Davies Commission must be bold and set out a clear path forward. It needs to provide all of our airports with a sustainable licence to grow, with the ability to link exporters with new opportunities. This means tackling the growth pinch-points in the air and on the ground.
“Without convincing plans on aviation capacity, we risk wasting time circling, while our competitors cruise ahead.”
The CBI has also outlined its own suggestions for how to improve the UK’s airport infrastructure in the coming decades:
Short-Term (by 2020)
Immediate improvements in surface access to UK airports, maximising efficiency for passengers and freight and boosting the catchment area of the UK’s international airports. This should include:
- Pressing ahead with delivery of announced measures such as the western rail link from Heathrow and the station upgrade at Gatwick
- Concerted efforts to address pinch-points in road access to the UK’s network of regional airports including East Midlands, Newcastle and Bristol
Maximising capacity of existing assets if commercially viable, with more flexible “mixed mode” operations at Heathrow.
Medium-Term (delivering in the 2020s)
- New runway capacity in the south of the UK – at Heathrow, Gatwick, Stansted, Birmingham or elsewhere – subject to review of the most feasible option to address current constraints at Heathrow.
- A strategy to increase public transport access to UK airports from 40% to 60% by 2030, supported by new rail links to improve access to key airports such as links to Manchester through a new Northern Hub.
Long-Term (to deliver from 2030)
Explore all options for expanding hub capacity in the South East, including a new airport for London, to meet long-term demand for passenger and freight and support trade growth with new emerging markets. A successful hub must include:
- Sufficient runway and terminal capacity to accommodate future demand projections, domestic flight connections from UK ‘spokes’ and headroom to ensure resilience.
- Excellent connectivity to London and the wider UK transport network, including motorway and high-speed rail links.