Political inertia over third runway at Heathrow increasing ticket prices, study

Political inertia over the need for a third runway at Heathrow, the UK’s only hub airport, is increasing ticket prices for air travellers, according to independent research by Frontier Economics.

While demand has increased over the years, Heathrow has been unable to add more flights for a decade – pushing up prices. According to the new report by Frontier Economics, passengers travelling through Heathrow are already paying an average of £95 more for a return ticket than they would do if Heathrow had a third runway.

The un-met demand is expected to increase in future, and Frontier Economics estimates that by 2030 the average return ticket price could be £300 less with Heathrow expansion than with a two-runway Heathrow.

Colin Matthews, Heathrow’s Chief Executive, said: ‘This research shows that not building a third runway at Heathrow will add hundreds of pounds to the cost of a family holiday, be a disincentive to doing business in the UK, and increase the cost of the goods and services that are imported and exported through Britain’s most important trade gateway.

‘This additional burden on both the cost of living for families and on businesses is entirely avoidable. The private sector stands ready to invest in the infrastructure Britain needs. Government has it within its power to lower prices for consumers by taking a clear decision to support expansion and end the years of prevarication that are now causing fares to rise and routes to be constrained.’

The Frontier Economics’ study also claims that a third runway will create a greater choice of routes for passengers. Expanding Heathrow could add 40 new direct connections to London in total, with many of those routes going to destinations in rapidly growing economies such as Calcutta, Lima and Mombasa.

Additionally, Heathrow will also work with government and airlines to ensure that expansion delivers improved air links between Heathrow and other parts of the UK including Inverness, Liverpool, Newquay and Humberside, the airport said.

In comparison, adding a second runway at Gatwick would reportedly only add between five and seven new routes, mainly to package holiday destinations.

However, the report argues that there would be even greater benefits to passengers if both Heathrow and Gatwick were allowed to expand, since having spare capacity at both airports would allow the greatest scope for competition.