17 killer facts on the UK airport capacity crunch manufacturers want you to know

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1. We need a model of growth based on more businesses exporting and investing, rather than the narrow foundations of consumption, which has underpinned growth over the previous decade.

2. The UK is still some way off the target set for annual value of exports…

Just £502.6bn in the year to November 2013 against a target of £1 trillion

Net trade was a -0.9% drag on growth over the three months to September 2013, however 55% of manufacturers expect export sales to grow in 2014

3. While business investment is still down on pre-recession levels (although we forecast this to start getting better this year)

There has not been two consecutive quarters of expansion in investment since the first half of 2009 and it remains a quarter down on 2008q1.

4. Manufacturers need to cut export deals in new international markets, face to face meetings are crucial as part of this

Question: To what extent does your company agree that video conferencing, or similar communication technologies/devices, will be able to substitute face-to-face contact for the following business activities in the next five years? (balance of response)

5. Existing markets such as Europe are also very important

6. 47% of UK business investment is accounted for by foreign owned companies

7. For this group the quality of infrastructure provided, such as airports, is the 4th most important consideration when choosing where to invest

8. Despite just 1% of non-EU UK trade by weight going via air, this represents a whopping 38% when compared by value. This is a value to weight ratio of nearly 75 versus sea. (DfT: The air freight end to end journey)

9. The majority of this is high value, low volume manufactured goods such as machinery, aircraft parts and engines (DfT: The air freight end to end journey)

10. Air freight goes in two ways bellyhold (i.e. in the belly of wide bodied passenger aircraft) or by integrated air freight (e.g. companies like DHL and FedEx)

67% of air freight exports by weight, is sent bellyhold

11. Heathrow dominates bellyhold traffic, due to the range and frequency of long haul routes

12. Additionally, 15% of UK air freight traffic is aircraft to aircraft transfers – maximising cargo space on routes and again relying on a range of destinations from a single site hub (for security reasons). The majority of this ‘transhipment' happens at Heathrow.

13. UK trade with China is growing, but Heathrow is basically full. Gatwick, which is also adding routes to China and other destinations, is also approaching capacity

14. Manufacturers view this issue as too important and urgent to take a punt, less than 10% of South East manufacturers back any kind of new London airport, South East manufacturers back expansion at Heathrow (and other London airports)

15. Compared to other ‘global' cities, the UK's major airports are privately owned. ‘Airports will not choose to finance and build additional capacity, a fixed asset, unless they are confident it will be utilised. This also means little need for public money.

16. The Airports Commission recommended expansion at Gatwick or one of two options at Heathrow, which we back.

17. Businesses need certainty on the direction of travel in order to make investments and more effectively plan export strategies. Leadership is now needed from political parties, setting out where they stand on these proposals.


Head of Business Environment Policy

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