Transport Committee report suggests a new hub airport would not be commercially viable

24 January 2013

Commenting on a report released today by the Transport Select Committee, suggesting that a new hub airport for the UK could not be built without taxpayer money, Corin Taylor, Senior Economic Adviser at the Institute of Directors, said:

“This analysis confirms our view that a new hub airport would need substantial public subsidy and probably require the closure of Heathrow. Expanding our existing hub airport would be cheaper, quicker and offer far better rail and road connections to the rest of the country.” 

In a report published in December 2012, the IoD urged a comprehensive overhaul of aviation policy, including the construction of new runways at Heathrow and Gatwick airports.

IoD aviation report: 'Flying into the Future' 

The Transport Select Committee commissioned the economic consultancy Oxera to conduct research into the commercial viability of a possible new hub airport in the UK. Oxera considered various hub scenarios, rather than any of the actual plans which have been put forward. It found that: ‘in all examined scenarios...a new hub airport would not be commercially viable’ i.e. the value of a new hub in terms of revenue once complete would be less than the cost of the construction (including the associated infrastructure). This means it is very unlikely that the project could be undertaken using private finance alone.

ENDS

Contacts for further comments or to arrange interviews:

Mark Wallace
Head of Media Relations
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
+44 (0)20 7451 3263
+44 (0)7764 883 417
mark.wallace@iod.com  

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
+44 (0)20 7451 3392
+44 (0)7814 386 243
Edwin.morgan@iod.com

Notes to editors

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