Economics

Missing Catalyst:

According to a key representative of the aviation industry, the supposed increase in regional employment is not a major motive to let aviation grow:

‘The air transport industry’s most important economic contribution is through its impact on the performance of other industries and as a facilitator of their growth. These “catalytic” or “spin-off” benefits of air transport affect industries across the whole spectrum of economic activity.’

[ https://studylib.net/doc/8740047/–air-transport-action-group–atag- ATAG 2008 (Air Transport Action Group) pg 6 – An aviation industry sponsored think tank funded, amongst others, by Boeing and Airbus who are the manufactures of the large jets that fly from Southampton]

The economic impact analysis commissioned by Southampton airport for its expansion plans devotes about 3 pages to ‘catalytic’ impact (the other areas being ‘direct’, ‘indirect’, and ‘induced’). https://www.southamptonairport.com/media/4699/the-economic-impact-of-southampton-airport-v1.pdf ].

The Economic Development department at Eastleigh BC [which “..supports the expansion of the airport at Eastleigh (SIAL)].” Describes Catalytic Impact as “much the most interesting of the four areas under review”.

Therefore supporters of airport expansion regard catalytic benefits as key.

Strange then that no data on the catalytic benefits of expansion at Southampton are presented in SIAL’s analysis. A convenient omission?

Does the airport cost us more than it is worth?

Only 32% of Southampton airport’s expenditure (2015 non-wage) is within the Solent region. It spends more than 6 times as much within Greater London (within the M25) as it does in Southampton (2016). Yet Southampton and Eastleigh get most of the airport’s noise and pollution ……and will get more.

Interestingly, the airport’s advertising department have changed the phrasing of its estimated contribution to the UK economy to read ‘local economy’. This misinformation was further spread at the last Airport Consultative Committee in June. The Managing director and chair of the Committee were informed of the error by AXO. The MD has now corrected this in some documents.

Eastleigh BC and Southampton City Council respectively ” supports” and “welcomes” airport expansion. Neither appears to have done a full costs/benefits analysis involving the monetisation of the negative social and health affects before offering SIAL this encouragement [ https://www.gov.uk/government/publications/webtag-tag-unit-a5-2-aviation-appraisal-may-2018 ] and appearing to commit to further support (or failure to object).

For further discussion of the economics of airport expansion and a link to a very interesting paper https://www.cedelft.eu/publicatie/the_economics_of_airport_expansion/1363 .

  • In July 2019 Southampton airport showed a 9% reduction in passenger numbers compared to the previous year. The MD has blamed uncertainty over Brexit for this. However the CAA figures for al reporting UK airports is up by 1%. Southend was up by 41% and Bournemouth’s passenger numbers increase by 28%.
  • The MD of the airport says that aviation is good for the economy. However Lord Deben says “Aviation is likely to be the largest emitting sector in the UK by 2050, even with strong progress on technology and limiting demand. Aviation also has climate warming effects beyond CO2, which it will be important to monitor and consider within future policies.” [Lord Deben, Committee on Climate Change]. Basing an economy on an industry that needs to shrink ic clearly absurd because the economy would also shrink.
  • The MD of the airport says that it is just responding to demand by expanding the airport. Lord Deben says we must all reduced our appetite for air travel. Therefore if we reduce our demand we reduce the need for airport expansion.”Current planned additional capacity in London, including the third runway at Heathrow, is likely to leave at most very limited room for growth at non-London airports” [Lord Deben 2019]

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