Airport expansion will not deliver the growth the government wants
The economic impact of airport expansion in the south-east
29 January 2025
Air transport has an important footprint in our economy, supporting thousands of jobs across its supply chains. At the same time, it plays a key role facilitating valuable tourism, trade, migration, study and research, family connections and work opportunities. But recognising the current contribution of air transport to the UK is not the same as justifying further growth in air traffic volumes. The UK is one of the best-connected countries in the world, and London regularly tops lists of the best-connected cities in the world. Yet, as with most economic relationships, at some point the UK will experience diminishing returns and addition of new airport capacity will no longer deliver the economic benefits it once did. There is very strong evidence that we have already reached this point.
Academic research, including a report commissioned by the Department for Transport (DfT), identifies two key predeterminants of growth (or as termed in the literature “wider economic impacts”):
- The generation of net additional air travellers for business purposes
- The generation of net positive tourism to a country or region (i.e. an increase in tourism that more than compensates for any increase in outbound tourism)
Further expansion simply fails to meet these tests. In addition, experts highlight the importance of considering the impact on flows of spending at the macroeconomic level and their impact on economic stability and regional inequality. In this domain the UK also presents unique vulnerabilities linked to its significant current account deficit and large travel spending deficit.
Image: iStock
