Aviation Sector Opportunities Analysis: Heathrow Third Runway Impact

This report analyzes the opportunities for the aviation sector resulting from the development of a third runway at Heathrow Airport in London. It examines factors favoring the airport's expansion, assesses the competitive outcomes of building the third runway, and evaluates the future growth prosp...Read More

ANALYZING VARIOUS OPPORTUNITIES TO
AVIATION SECTOR FROM DEVELOPING THIRD
RUNWAY AT HEATHROW AIRPORT, LONDON

TABLE OF CONTENTS
RESEARCH TITLE.........................................................................................................................1
INTRODUCTION...........................................................................................................................1
Background of the study.........................................................................................................1
Research aim and objectives..................................................................................................1
Research questions.................................................................................................................1
Research rationale..................................................................................................................2
LITERATURE REVIEW................................................................................................................3
Aviation industry....................................................................................................................3
Factors affecting airline decisions..........................................................................................3
Research Strategy...................................................................................................................4
RESEARCH METHODOLOGY.....................................................................................................4
Research design......................................................................................................................4
Data collection methods.........................................................................................................4
Sampling techniques...............................................................................................................5
Data analysis...........................................................................................................................5
LIMITATIONS................................................................................................................................5
TIME SCALE..................................................................................................................................6
REFERENCES................................................................................................................................8

RESEARCH TITLE
Analysing various opportunities to aviation sector from developing third runway at
Heathrow Airport, London.
INTRODUCTION
Background of the study
Aviation industry is one of the major British industries which help the country in
developing on economic and competitive terms. Growth of tourism has enhanced air traffic
effectively by making Heathrow airport as one of the busiest airport in the world (Goodwin and
Lyons, 2010). The airport handled 70 million passengers in the year2012, thus making it a major
hub airport. The airport currently operates at 98% of capacity which is equivalent to major
airports of Europe (Time for a third runway?, 2015). The government has considered the
expansion of airport by building third runway in order to create a favorable impact on the growth
and development of country. The present study has chosen the topic in order to analyze the
impact of airport expansion of economic growth of country (Wei, 2008). It will focus on
developing a deep insight about the opportunities that the nation will develop by building the
third runway in it.
Research aim and objectives
The main aim of current study is to analyze various opportunities to aviation sector from
developing third runway at Heathrow Airport, London. In order to attain the stated aim of study,
following objectives have been developed:
 To analyze the factors favoring expansion of airport.
 To examine the competitive outcomes from building third runway.
 To evaluate the future growth prospects of aviation industry through expansion of
Heathrow Airport.
Research questions
The research question which will help in attaining the objectives of study and fulfill the
research aim will be:
1. What are the factors that favor the expansion of Heathrow airport of London?
2. What will be the competitive outcomes of expanding Heathrow Airport, London?
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3. What will be the future growth prospects of aviation industry by building third runway?
Research rationale
What is the research issue?
Aviation industry is one of the leading factors which contributes in the growth and
development of a nation by enhancing tourism, trade and business opportunities. Heathrow
airport of London was one of the busiest airports in the world which will now expand its airport
by building third runway. The present research study will focus on analyzing the opportunities
that the aviation industry will gain by building a new runway.
Why is it an issue?
Aviation is one of the major British industries which significantly contributes in the
growth and development of economy. The expansion of airport develops additional growth
prospects for the industry and country as well which helps in creating a positive impact on the
overall development of sector. Evaluation of these factors helps in identifying the factors which
help in favoring the option.
Why is it an issue now?
Heathrow and Gatwick airport were two major options which awaited for the expansion
opportunity to be acclaimed by the government of UK. Recently, Heathrow airport expansion
has been considered as a valid option for the same. The report will thus focus on analyzing the
opportunities that the country and aviation industry will gain by expanding Heathrow airport of
London (THE RUNWAY DEBATE FACTS: HEATHROW VS GATWICK?, 2014). This will help
in analyzing the strength of aviation industry and its contribution in the overall development of
nation as well. Increasing market competition has made the topic as a major topic for
consideration.
What could this research shed light on?
The study will analyze various factors which will help aviation segment of country in
gaining effective growth in the future. The strategic models of industry along with the
competitive position with using various theories and models such as growth strategies, Porter’s
five forces model, Ansoff model etc. will be implemented in the study to analyze the
opportunities that industry will gain in the future.
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LITERATURE REVIEW
This section of study deals with collecting facts and figures regarding the topic of study.
Literature review helps in creating in-depth study of the topic and reviews the literature and
researches done in the past in order to attain the set objective for research. This section is
developed with a motive to conduct discussion over existing literature so that insight about the
subject matter can be attained. This is a strong tool for conducting secondary research in order to
gain knowledge and information related to the issues and models mentioned in the study.
Aviation industry
Aviation industry is one of the leading British industries which contributes high in the
growth and development of a nation. According to researches and reports, the aviation
department contributes about £52bn in the GDP of country which is an effective contribution for
the economic development of country (Airport expansion: What happens next?, 2015). Airport is
one of the very significant parts for attaining the effective output for the given sector which helps
the industry in creating high growth and development prospects for the industry. According to
researches, it has been analyzed that aviation sector generates more than 960000 jobs in UK
effectively helps in developing the economy of country (Aviation industry generates £52bn a
year for the UK economy, 2014).
Factors affecting airline decisions
According to Griggs and Howarth (2008), the airline industry of a country focuses on
developing high sales within market in order to create an effective impact on the financial returns
of country. The industry has high potential for developing economy and enhancing the economic
position and competitiveness of a nation (Time for a third runway? 2015). Freestone (2009)
states in the study that factors which influence airline network behavior and financial
performance are size and strength of the local market, airport visit costs, congestion costs,
service levels and access to capacity. These are the major factors that contributes in the decision
making process of industry.
Size and strength of the local market, according to Lei, Yang and Yang (2009), is of the
primary significance to the airline sector as it helps in defining the capacity of segment while
defining the infrastructural capacity for the same. Market proximity, local access and availability
of resources are also some major factors which help in making favorable decisions for the
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authorities that are involved in the process (Paternoster, 2008). Moreover, the cost of operations
is also one of the crucial factors which help in defining the major impact on financial
performance of sector. The airport capacity and congestion cost are considered by the authorities
in order to determine the operating cost of airports and their capability in expanding the business
operations efficiently to gain high profitability. McLay, Lee and Jacobson (2010) states that
traffic rights, peak-hour capacity, short connecting times and network concentration are relevant
to their airport choice behavior.
Research Strategy
Research strategy deals with examining the approach and methodology that the
companies will implement in order to create valid and reliable results for the study. This helps
the researcher in analyzing the approaches and measures to create an ethical approach to gather
the information regarding current study. Hence, there are four types of strategies which include
longitudinal, exploration, case-study and cross-sectional approach. For this research, work
explorative strategy will be used.
RESEARCH METHODOLOGY
The current report focuses on analyzing various opportunities that aviation industry of
UK will gain by considering the plan of expanding Heathrow airport of London. For this
purpose, the researcher will collect significant data and analyze the same in order to gain the
valid result. This section of dissertation deals with outlining the research designs and approaches
that will help in attaining the research aim. It involves the use of theories and concepts which
will help in reaching to a strong conclusion.
Research design
Research design refers to overall strategy chosen by the researcher in order to integrate
various components of study in a logical way. This helps the researcher in analyzing research
problems in a logical way thus, in seeking an effective solution. Present study focuses on
exploring valid reasons and impact of choosing the present topic. Thus, exploitative research
design will be adopted in order to gain the objective of research efficiently.
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Data collection methods
This is one of the most significant parts of research analyzing and methodology where the
researcher seeks effective measures to collect valid and reliable data to gain proper insight of the
topic and issues concerned with the same. Primary and secondary method of data collection is
the common measure chosen for the study. Present study will adopt both primary and secondary
source of data collection. Primary sources of data will be collected from 5 representatives of the
airport authority, 5 officials of British airways and Virgin Atlantic while 5 government officials
will be approached in order to gain valid and reliable data. Moreover, industry reports and past
data of company will be analyzed for the secondary data collection.
Sampling techniques
Sampling is a method in which population of study gets divided into small number so that
data collection can be done in an effectual manner. It focuses on selecting a sample from the vast
population within market in order to create an effective impact on the study. The validity and
reliability of data helps in acquiring effective results for the given study. For the present study,
non probabilistic sampling will be adopted in order to choose a convenient set of sample. In this
context, 5 respondents from each Airport authority, airways company and government officials
will be selected in order to attain handful information from them.
Data analysis
Data analysis adopts qualitative and quantitative techniques to attain the set results. This
helps in simplifying the data in the desired format which helps in attaining the aim of study. The
present study will adopt qualitative technique to analyze the data because open ended interview
questions will provide information in the form of individual perspectives of respondents. This
will thus be analyzed and represented in the thematic form to avail the set objectives for
research. Different themes or patterns will be constructed to structure the research in a well-
developed way and to gain the set results.
LIMITATIONS
Following are the factors that count in the limitation of this study:
 Limited resource availability may restrict the availability of data.
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 Research will demand high cost which will result in limiting the research prospects
within preferred cost.
 Limited time frame.
 Limited data sample data will result in low data availability.
TIME SCALE
The duration of all the activities related with the research is presented with the help of
following Gantt chart.
Sr.
No.
Activities List of activities Weeks Preceding activities
1 A Meeting with supervisor 1
2 B Completion of proposal 1 A
3 C Submission of proposal 2 B
4 D Approval of supervisor 1 C
5 E Review of previous literature 5 D
6 F Collection of data 4 D
7 G Analysis of data 4 E,F
8 H Interpretation of data 3 G
9 I Drafting the complete project 4 E,G
10 J Reviewing the complete project 2 I
11 K Finalizing the project 1 J
12 L Submission of the project 1 K
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Figure 1: Gantt chart
Figure 2: Network Diagram
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REFERENCES
Books and Journals
Freestone, R., 2009. Planning, sustainability and airport-led urban development. International
Planning Studies. 14(2). pp. 161-176.
Goddard, W. and Melville, S., 2004.Research Methodology: An Introduction. Juta and Company
Ltd.
Goodwin, P. and Lyons, G., 2010. Public attitudes to transport: interpreting the evidence.
Transportation Planning and Technology. 33(1). pp. 3-17.
Griggs, S . and Howarth, D., 2008. Populism, localism and environmental politics: The logic
and rhetoric of the Stop Stansted Expansion campaign. Planning Theory. 7(2). pp. 123-
144.
Kuada, J., 2012. Research Methodology: A Project Guide for University Students. Samfunds
literature.
Lei, B., Yang, X. and Yang, J., 2009. Noise prediction and control of Pudong International
Airport expansion project. Environmental monitoring and assessment. 151(1-4). pp. 1-8.
McLay, L. A., Lee, A. J. and Jacobson, S. H., 2010. Risk-based policies for airport security
checkpoint screening. Transportation Science. 44(3). pp. 333-349.
Paternoster, J., 2008. Excellent airport customer service meets successful branding strategy.
Journal of Airport Management. 2(3). pp. 218-226.
Saunders, M. and et. al., 2009.Research Methods for Business Students, Harlow: Prentice Hall.
Wei, W., 2008. A new approach to quantify the benefit to air travelers resulting from airport
capacity expansion. Journal of Air Transport Management. 14(1). pp. 47-49.
Online
Airport expansion: What happens next? 2015. [Online]. Available through:
<http://www.bbc.com/news/uk-19570653 >. [Accessed on 16th October 2015].
Aviation industry generates £52bn a year for the UK economy. 2014. [Online]. Available
through: <http://www.out-law.com/en/articles/2014/november/aviation-industry-generates-
52bn-a-year-for-the-uk-economy-new-study-finds/>. [Accessed on 16th October 2015].
The runway debate facts: Heathrow Vs Gatwick? 2014. [Online]. Available through:
<http://www.gatwickobviously.com/runway-debate-facts-heathrow-vs-gatwick >. [Accessed
on 16th October 2015].
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Time for a third runway? 2015. [Online]. Available through:
<http://www.progressonline.org.uk/2015/08/27/time-for-a-third-runway/>. [Accessed on 16th
October 2015].
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