Heathrow Airport Expansion: Economic and Environmental Impact

This report examines the proposed expansion of Heathrow Airport in London, comparing it to Gatwick Airport and analyzing the economic and environmental consequences. The study investigates the feasibility of expansion, emphasizing the potential for economic growth, job creation, and improved connectivity for the UK aviation industry. It explores the cost-benefit analysis, considering passenger benefits, air passenger duty, and air freight. The report also addresses the environmental impact, including noise and air pollution, and discusses the importance of balancing economic development with community concerns. The analysis highlights the benefits of Heathrow expansion, such as increased capacity and support for long-haul carriers, while acknowledging political challenges and the need for community engagement and compensation plans. Ultimately, the report suggests the Heathrow expansion as the best option for a world-class hub airport, provided environmental and community concerns are carefully managed.

London airport expansion (Heathrow airport):
What happens next

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Feasibility of expansion of Heathrow airport..............................................................................3
Impact on environment................................................................................................................7
Impact on local communities.....................................................................................................10
A balanced approach to expansion ...........................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
The present essay deals with expansion of London Airport: what happens next. It is based
on comparative study of two selected airports of London; Heathrow and Gatwick. The study
reflects that one of these project should be selected in order to ensure economic development of
nation and meeting changing preferences of tourists or visitors (Déniz and Dorta, 2014)..
However, presently these two airports are consumers till their 85% capacity. Accordingly to this,
it can be assumed that they remain occupied during peak times. This aspect create difficulties
aviation industry to satisfy need and expectations of their buyers. The issue is also faced by long
haul in managing their business due to less capacity at biggest airport. However, these long haul
carriers operate their business in accordance with high demand of services in the marketplace.
The selection of airport is based on several aspect which are explained as follows. It
assists researcher to provide the suggestion related to best alternative for the project so that all
activities related to project can be completed in stipulated time span. The studies show that due
to less capacity of current airports fare of air services are increased and aspect of connectivity is
reduced to a great extent. Owing to this, it becomes necessary for government of UK to expand
their project related to airport where customers can get good quality of services. On the other
hand, the expansion of this airport is feasible for economic development of UK. This support
growth of different industries of UK. Owing to this, it becomes imperative fro government of
nation to give approval for expansion proposal of project.
Feasibility of expansion of Heathrow airport
The report of OEF depicts several benefits of aviation industry of country. For example,
gross domestic product for the year was 1.1% in 2004. Also, during that time total 186000
people were employed in the industry. It can be critically evaluated that expansion of Heathrow
consists of several factors such as expensive, highly problematic for construction industry.
Though, the project will be financed by private sector where aviation industry get higher rate of
return and increased flow of production. This aspect tends to increase number of buyers because
after implementation of new project there will be no cancellation of tickets. It has been found
that plan is costly and will give rise to loss of several homes (Jones and Dunse, 2015). At this
juncture proper compensation plan have also been decided which aid to cater need of local
community and provide them relief. However, short-termism is the feasibility problem of plan.
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On the contrary, demand of expansion of Heathrow is at center so that accordingly public can get
quality services. This is because this particular airport is used at its full capacity which create
issues in several aviation corporations to manage their business.
Furthermore, it has been found that Heathrow project is directly linked to long haul links
to new market thereby economic benefit can be derived to a great extent. It has been expected
that project could generate £17bn and increment in gross domestic project by £150 bn over 60
years (Heathrow expansion ‘best option’ but Gatwick runway ‘plausible’, 2016). Not only this
but 70000 new jobs will be created in nation which will again prove to be effective for economic
development of country.
On the other hand, selection of Gatwick was not done due to its focus on short-haul
destinations. Though, this project was required the loss of 167 homes which is more effective
than Heathrow. However, overall benefits of project are greater than other one. Furthermore, the
present project estimated to bring £5.5bn economic profit till financial year 2020-2080 of
aviation industry. Though, there is less number of buyers due to recession but expiry of recession
period will automatically increase demand of aviation services. Presently, less capacity of airport
create barriers for aviation industry to connect with cities of UK. Apart from this, in case
government does not immediate action to increase capacity of airport then it will create
competition of national air industry (Dancey, 2014). However, project seems a bit less feasible
because of estimated impact on environment. The reason behind selection of expansion of
Heathrow is benefits to different parties like customers, domestic organizations and long haul
airlines. It is the well-known fact that selected airport is largest and most valuable in the world
which affect overall economic growth of country.
The studies revealed that more than 70% of freight from long haul is provided by this
present runway of Heathrow. It indicates that expansion will definitely support economy of
nation which in turn prove to be effective for overall nation (Hobbs, 2014). For example,
European competitors like Paris Charles de Gualle and Amsterdam Schiphol can be beaten after
implementation of new project. It is because UK will be become more capable to handle
operation of aviation industry thereby customers will be satisfied by accessing services of local
as well as nation flights.
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The cost benefit analysis of Heathrow airport depicts that total monetised benefits will be
£19.2bn which consists of passenger benefit, air passenger duty and air freight users. Similarly,
total cost of project will be of £13.7bn. Owing to this, it can be said that net benefits of project
will be £5.5bn. It can be critically evaluated that cost benefit analysis of new runway does not
consist information or cost related to agriculture, land and greenfield (Whiteman, 2013).
Similarly, the analysis has lack of potential aspects such as reduction in delay time and
productivity as well as competitive edge. The report is critical on the basis of assumed facts on
which cost and benefits were derived.
The air passenger demand has bee assessed for feasibility analysis of project. Under this,
forecasting has been done on demand using the National Air Passenger Demand model. It was
based on carbon charges imposed by government on airport or aviation industry and fuel cost as
well as duty rates (Lumpé, 2012). Along with that, air fares and economic data are also included
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Illustration 1: Economic benefit

which leads to derive valid conclusion for study. On the other hand, contained demand has also
been analyzed in the light of future capacity constraints.
The feasibility study of airport consists both positive and negative aspect. However,
majority of fact indicate that country can give approval for expansion of Heathrow which leads
to bring economic development (Eriksson and Steenhuis, 2015). This also help in improving
connection between cities of UK so as to create leading position of aviation industry in the
marketplace. The other fact is that long haul carriers can be profited only through expansion of
Heathrow. Owing to this, expansion of this particular runway on Heathrow aid to increase
capacity and support different parties in positive manner. Though plan is not possible to
implement politically but government must initial this plan in order to bring balance in economy
or aviation sector (Morrison and Winston, 2010). However, the concept of community
engagement remain at first priority through which nation can see the potential benefit out of
project. Owing to this, management of project will consider the compensation plan whereby
government can easily complete its infrastructure activities for well being general communities.
Thus, different stakeholders such as shareholders, community, customers and other
related parties are considered at center focus through which appropriate action can be taken to
implement the project on right time. In addition to this, in order to meet expectation of different
direct and indirect parties, management of corporation ensure payment of cost. This leads to
operate or implement the plan by taking into account both positive and negative aspect. In
addition to this, selected airport create diversified route of network thereby both short and long
haul carriers can easily move from one to another place without delay time. This will not
promote customer convenience but to businesses also (Belobaba, Odoni and Barnhart, 2015).
This is because many aircraft are used to depart material from one to another place. For that
purpose also, expansion is the feasible solution to increase network. Apart from this, continuous
development in Heathrow airport like new Terminal 5 provides benefit for entire nation to
increase productivity and attract more buyers.
Furthermore, the proposal of Heathrow expansion should be supported. If it is not done
then UK will loose the business of competitiveness ad tourism. Thus, Heathrow is considered as
the quickest option in order to build a world class hub airport.
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Further it can be said that the expansion will be cost effective. Reason behind this is that,
this airport has good transport links. Therefore, expansion of third runway would be cheapest
way for creating additional capacity. Along with that, Heathrow has an existing well developed
infrastructure which act as a positive factor for the expansion of airport. The company does not
require more investment to be done for the development of new runway and terminal. Thus, this
can be done in a cost effective manner. Furthermore, the expansion of the airport will lead to the
generation of more employment opportunities. It is because this runway will leads to the
generation of 70000 jobs by 2025. Thus, equilibrium can be reached in the economic condition.
Along with that, 40 destinations will be held from Heathrow. These are some of the benefits
which comes out of the expansion of the airport. Therefore, national council can analyze the
proposal and chose to accept as this will also help in raising the economy of UK.
Impact on environment
With the increasing demand in aviation industry it directly impact the overall
environment within UK as with the increase in long haul flights it will directly affect the
environment. It is essential for aviation industry to protect and conserve the environment as it
mainly result in generating noise, air, water and environmental pollution (Blow, 2013).
Therefore, it is mandatory for the aviation sector to consider the health aspect of residing people
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Illustration 2: Cost-benefit analysis

in the surrounding so that they can minimize the negative environmental affect. With the
expansion of UK airport capacity it may result in increasing flow of passenger as well as the
flow of goods and services across the national and international boundaries. In addition to this,
expanding Heathrow airport outcome in connecting the European cities that will further benefit
the overall economy of UK. Despite
However, expansion of Heathrow airport is consider as effective option as it will
positively preserve the environment. According to Graham (2013) with the expansion of
Heathrow airport it will positively impact the environment as with the expansion of airport more
national and international flights will hold their flight on the Heathrow airport (Graham, 2013).
As, it will provide wide space for holding and landing the flights. In addition to this, with the
expansion of Heathrow airport through building third runway at the airport they must prohibit the
scheduling of night flights. Therefore, with the help of prohibiting the night flights on the
Heathrow airport it should positively impact the environment in terms of emitting less pollution
in the air. As, with constant scheduling of flights it will negatively affect the environment and
result in polluting the air.
As per the view of Underhill (2016) expanding the Heathrow airport would also result in
establishing the authority that is an Independent aviation noise authority that basically aims to
establish the standard rights so that they can easily manage the flight paths as well as some other
operating procedures within the airport. Thus, with establishing the aviation noise authority it
will benefit the overall environment within the airport by reducing the noise pollution that is
being created through while landing and taking off the flights. On the contrary, Bowman and
Simons (2011) has also stated that expanding Heathrow airport also have some negative aspect
that is expanding the airport activities will result in increasing emission of carbon that further
impact the overall environment (Bowman and Simons, 2011). Through becoming fuel efficient
aviation industry within UK will reduces the level of carbon emission that further benefit the
overall environment. With emission of high CO2 it will negatively impact the environment and
result in polluting the air that would affect the euro zone. Furthermore, with emitting CO2 will
also result in changing the climate as it result in increasing the temperature that further affect the
overall climate (Tubigi and Alshawi, 2015).
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Furthermore, it has been found that expanding Heathrow airport will also positively
impact the environment by conserving the electricity. For instance; through constructing the third
runway at the airport it may result in prohibiting the night flights therefore, the electricity will be
get saved that will benefit the environment. On the other hand, Bowen (2013) expanding
Heathrow airport also has disadvantage that is it may result in increasing noise pollution as well
as air pollution (Bowen, 2013). As, the increasing the rate of long haul flights will result in
causing high noise pollution in the London area throughout the day. However, the government
has banned the flights over the Paris as it affect the quality of life.
In addition to this Zhu Wang and Hipel (2012) has also stated that with the expansion of
Heathrow airport it will also benefit the surrounding of airport. They must engage in practices
that would building and create the proper surrounding of the airport. Furthermore, with the
expansion of airport it will also develop and improve the transportation system outside the
airport so that customers and individual can easily visits the airport (Zhu, Wang and Hipel,
2012). Thus, improving the transportation system by developing the roads and bridges it will
avoid the congestion situation. However, through diverting the transportation of vehicle it will
reduce the air as well as noise pollution from the locality. Thus, with improving the
infrastructure and surrounding transportation system it result in shifting the mode for arriving the
airport. Thus, the rail infrastructure will also be developed that would remove the congestion of
motor vehicles from the particular area or locality. Therefore, it can be stated that expanding
Heathrow airport will positively impact the overall environment.
As per the view of Ning and Chen (2014) there is negative impact of expanding
Heathrow airport on the environment as it may also result in community or land destruction
(Ning and Chen, 2014). For instance; in order to expand airport it may result in demolishing and
destructing the land or community. Therefore, this will negatively impact the environment as it
abandoned the homes of individual. Destructing the land will result in enabling land pollution
that further affect the environment. Sometimes the green land or the forest area has also been
abandoned to build or expand the airport (Bogicevic and et. al. 2013).
On the other hand, with the expansion of Heathrow airport activities it will focus on
continuous improvement in their performance with reducing its impact on the environment.
However, the main purpose of expanding the Heathrow airport is to heighten their positive
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effects with reducing their impact. However, it will affirmatively support and impact the
environment as it result conserving the environment as it would establish the community
engagement board that would result in affecting their spending that is airport users need to pay
more in compensating the community as well as the overall operation of the airport
(Knippenberger, 2013). In addition to this, with the expansion of airport Heathrow airport need
to agreed with the noise envelop that result Heathrow to abide and stay within the limit that are
stated by the noise envelop. Furthermore, it will also result in not increasing the overall level
within the airport.
Expansion of airport directly result in enhancing the local employment that is airport will
require more manpower within the airport that may serve quality service to the customers
(Mahoney and Wilson, 2014). Moreover, redesigning or expanding the flight paths might
reduces or lower the issues that are related with the pollution that is expansion of the flight
number will minimize the early arrival of the flights as with change in schedule. In addition to
this, it will assist in consuming the energy resources so that afterwards it an be used to preserve
the environment. Therefore, it will not impact the environment condition.
Impact on local communities
The development and expansion of new airport is about the get acceptance from
government of nation (Local community information. 2015). The main motive behind
management of Heathrow to implement new plan with consultation of major parties like
shareholders, customers and other related. Here, main emphasis is laid on maximization of
economic benefit through which management also accountable to manage all environment
related responsibilities (Heathrow putting local community at heart of expansion, 2015). At this
juncture, Airport Operating Centre has been established by airport through which information
related to people and consumers can be come at one place. Here, security aspects has been
increased with inclusion of police ad boarder force so that customers can easily access good
quality of service provided by different aviation organizations (Halpern, 2013). The expansion
project put community at heart where public become ready to expand the airport without any
kind of barriers. For example, new noise insulation where management focuses on reducing
impact of noise on general community. It clearly indicate that people are provided right type of
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services where airline industry can ensure its continuous growth by create unique identity in the
marketplace.
Furthermore, £700 million has been estimated that for homes closest to airport. It will be
ensured that generally community is treated fairly so as to ensure their cooperation and
participation in the process of development of new airport (Fu and Oum, 2014). £3,000 is also
estimated to offer for families or homes away from airport. This offers are subject to regulatory
framework of UK government and their policies so that ethical aspect of corporation be
maintained.
Heathrow airport is situated in a busy area of west London. The part of land where this is
located is the Metropolitan green belt. Expansion of the airport could lead to congested road
networks. It could also involve air and noise pollution. Unsatisfactory public transport may be
another factors which impacts the feasibility of expansion of Heathrow airport. This is because
the commuters may be competing with the airport passengers for space. Therefore, density of
development in the surrounding area may limit the extent to which the airport is to be expanded
(Ivaldi, Sokullu and Toru 2012).
However, it is expected to impact the local communities positively by providing over
100, 000 jobs. Expansion of the airport will require additional workforce to support the increased
responsibilities and facilities. Expansion of the airport will provide employment to the people
living in the surrounding areas. This will further improve the economy of the nation. Presently,
the airport provides employment to more than 76, 000 people. When a third runway is set up,
another 40, 000 jobs will be created in the local communities. Moreover, the expansion proposes
construction of a North West runway (Halpern, 2013). This will minimize the adverse impacts
of noise. As a result of this, more homes as well as important heritage sites will be protected. The
expansion of the airport is also beneficial for the social advantages. With an airport expansion
the social needs can be fulfilled in appropriate manner and provide better taxes to the
government authorities. As per the current report of the airport authorities the number of
passengers at Heathrow airport is increasing day by day. It means the expansion of the Heathrow
airport will assist in meeting key needs of society. Expansion of the Heathrow airport is also
beneficial to increase the economic aspects and attain various opportunities in context of
development. In addition to this, it can be stated that the third runway at Heathrow airport would
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provide a great economic opportunities to the UK. It will provide better jobs to the social aspects
which is beneficial for advancement in development aspects. It will also facilities in
advancement of spending because the creation of job opportunities will motivate people to spend
more. Government authorities are expecting the economic system will have 100 billion pound
advancement. The expansion of Heathrow airport will also provide a better image of city at
international level. The value to the UK of a third runway is driven by stimulating international
trade, foreign direct investment and the local economy. It will also generate the high ratio of
revenue that will generate various benefits for UK. Moreover, the expansion of the airport will
create a new hub for the UK where industries can look forward to expand business (Halpern,
2013). In other aspect, it can be asserted that the pharmaceuticals opportunities in the UK can be
boosted and growth rate can also be improved. It will also generate employment opportunities in
the city by 75000 workers. Air freight is of vital importance as it serves major export industries
such as electronics, telecoms, financial and business services. The expansion of airport will also
provide an opportunity to the organizations to attain better opportunities in the market (Ivaldi,
Sokullu and Toru 2012). Third runway will make easier for British corporate companies to
deliver their products and services in the new emerging market. Number of manufacturing
organizations can also look forward to better import and export opportunities. Biotech industry
can also focus effectively on development factors. Overall GDP of the UK will also be increased
by 26 billion pound by the year end of 2030.
A balanced approach to expansion
There are some of the recommendations imposed by commission or government of UK.
It will help management to implement the project on right time within set time limit. The
balanced approach of expansion consists of some of specific recommendations imposed by
commission or government of UK (Murugadas and et. al. 2015). These need to be considered in
order to expand the new plan. It aids to successfully implement the plan and ensure support from
government and other related stakeholders. Here, extra air traffic movement will be managed in
accordance with suggestion given by government. Similarly, integration of new terminal
buildings will be ensured thereby corporation can easily expand itself. Furthermore, surface
transport will be improved on contentious basis thereby overall risk can be reduced.
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