One Hub or None
One hub or none
The case for a single UK hub airport
November 2012
Contents
1 Introduction 2 Executive summary 3 What is a hub airport? 4 What is the value of a hub airport to the UK? 5 Why aren’t two hubs better than one? 6 What does the UK require to maintain its hub airport status? 7 Conclusion p1 p2 p5 p11 p19 p29 p33
1 Introduction
We are living through an era of profound change. The balance of the global economy is shifting to the ‘emerging markets’ of the world: places like China, India, Brazil, Russia, Mexico, South Korea, Indonesia and Turkey whose populations and economies are growing rapidly.
At the same time the UK’s economy is burdened by debt and faces the prospect of weak economic growth for years to come. Government is focussing on paying debt back, which will mean less government spending, and in turn will make economic recovery even more difficult. So Britain today is faced with some tough choices about how best to structure its economy for the future. We have to decide the best strategy to create employment and prosperity in the UK. In a world in which Britain has no automatic right to be at the top table and can no longer rely on cheap credit, we must determine the strengths it should develop to rehabilitate the economy. Our history as an island trading nation should give us a clue. We do well in specialist industries that require global mobility - businesses that either need to meet clients around the world, or attract talent from across the globe. Part of our competitive advantage is rooted in the UK having had the world’s largest port or airport on its shores for the past 350 years. This has meant that the world travelled through the UK to reach its final destination. Consequently London has become the centre of global service industries like insurance, law and finance. 350 years of history will end sometime in the next decade when the UK’s hub airport, Heathrow, is overtaken by Paris, Amsterdam, Frankfurt or Dubai as the busiest
The case for a single UK hub airport
November 2012
Contents
1 Introduction 2 Executive summary 3 What is a hub airport? 4 What is the value of a hub airport to the UK? 5 Why aren’t two hubs better than one? 6 What does the UK require to maintain its hub airport status? 7 Conclusion p1 p2 p5 p11 p19 p29 p33
1 Introduction
We are living through an era of profound change. The balance of the global economy is shifting to the ‘emerging markets’ of the world: places like China, India, Brazil, Russia, Mexico, South Korea, Indonesia and Turkey whose populations and economies are growing rapidly.
At the same time the UK’s economy is burdened by debt and faces the prospect of weak economic growth for years to come. Government is focussing on paying debt back, which will mean less government spending, and in turn will make economic recovery even more difficult. So Britain today is faced with some tough choices about how best to structure its economy for the future. We have to decide the best strategy to create employment and prosperity in the UK. In a world in which Britain has no automatic right to be at the top table and can no longer rely on cheap credit, we must determine the strengths it should develop to rehabilitate the economy. Our history as an island trading nation should give us a clue. We do well in specialist industries that require global mobility - businesses that either need to meet clients around the world, or attract talent from across the globe. Part of our competitive advantage is rooted in the UK having had the world’s largest port or airport on its shores for the past 350 years. This has meant that the world travelled through the UK to reach its final destination. Consequently London has become the centre of global service industries like insurance, law and finance. 350 years of history will end sometime in the next decade when the UK’s hub airport, Heathrow, is overtaken by Paris, Amsterdam, Frankfurt or Dubai as the busiest