New Report: Economic Case to close London City Airport
Posted on April 11, 2014
There is a strong economic case to close London City Airport. Come again? There may be an environmental case, but a economic one? That is exactly what a new report published on 10th March by the New Economics Foundation claims will happen if London City Airport closes. Royal Docks Revival: Replacing City Airport, commissioned by HACAN East, shows that, if City Airport were shut down, the land freed up would be able to cater for businesses which produced many more jobs and created a lot more income than the airport does.
The stats are convincing. City Airport contributes £750 million each year to the UK economy. The nearby Excel Centre, which occupies roughly the same amount of space as the airport, contributes £1.3 billion. City Airport employs the equivalent of 1,900 full-time jobs. The proposed Silvertown Quays development, just along the road, estimates it will employ 9,000. Even if that turns out to be an overestimate, the difference remains huge. But the report’s emphasis is more about replacing the airport with community-run businesses rather than with more big corporations.
The closure of London City would not add to the pressure to expand Heathrow or any other London Airport. City only accounts for 2.4% of the traffic at the London airports, easily absorbed by the other airports.
The report received a lot of publicity including being featured on the front page of the Financial Times. Here’s some of the other publicity it received:
The Deputy Editor of the Metro (writing in a personal capacity): http://joeltaylorwrites.blogspot.co.uk/2014/04/is-it-time-for-london-city-airport-to.html
http://www.bbc.co.uk/news/uk-england-london-26965052 – the BBC
http://www.travelweekly.co.uk/Articles/2014/04/10/47616/call-for-london-city-airport-to-close.html – Travel Weekly
http://www.bloomberg.com/news/2014-04-09/london-city-airport-worth-more-as-a-building-site-study-argues.html – Bloomberg which covers financial matters
The link to the full report is below. Below that, the press release. And, below that, a blog by Helen Kersley, the main author of the report.
http://s.bsd.net/nefoundation/default/page/file/195fb39e613cea6c01_ddm6bwubt.pdf
http://www.neweconomics.org/press/entry/close-london-city-airport
http://www.neweconomics.org/blog/entry/why-its-time-to-close-london-city-airport
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Close LondonCityAirport – new NEF report
Posted on April 10, 2014
A new report from the New Economics Foundation (NEF) makes the case for closing London’s CityAirport and redeveloping the site to create jobs, boost local business and build new homes:
- City Airport creates little value – despite occupying 500,000 square metres at the heart of London, its direct contribution to the UK economy in 2011 was £110m – less than a fifth of the nearby ExCeL Exhibition and Conference Centre.
- City Airport costs jobs – the airport has never delivered on initial jobs promises and its safety crash zone limits business development across a 3 mile radius. The extra 1500 jobs from current plans to expand CityAirport compare poorly with the 9,000 jobs expected to result from the nearby Silvertown Quays development.
- Local residents bear all the costs but reap none of the benefits – the average salary of a LondonCityAirport passenger is over £90,000, while 40% of Newham residents earn less than £20,000. 18,000 local residents suffer high levels of noise pollution and poor air quality.
- London transport no longer needs CityAirport – City Airport’s passengers account for just 2.4% of London’s total flight demand, and its numbers could be readily absorbed by Heathrow, Gatwick or Stansted By 2019 Crossrail will allow City workers to reach Heathrow in just 30 minutes.
The need to cut noise, pollution and carbon emissions and tackle economic and social inequalities demands urgent reform of how aviation is managed in our cities. New research from NEF exposes London City Airport as an outdated and unproductive use of precious inner city land and calls for it to be closed at the soonest opportunity.
There are more productive things we could do with London City Airport
The airport represents a missed social and economic opportunity for the Royal Docks area. Alternative developments for the Royal Docks would outstrip CityAirport on economic value. Despite its much larger footprint, the airport’s direct contribution to the UK economy in 2011 (£110 million) is just a fifth that of the nearby ExCeL Exhibition and Conference Centre (£513 million). CityAirport’s own estimates suggest a contribution of £750m per year to the UK economy, but the majority of this is generated through inbound passengers’ spending which would be retained if passengers were directed through other airports.
The airport also punches below its weight on job creation, supporting the equivalent of only 1,900 full-time jobs. In contrast the ExCel is predicted to support 53,000 across the UK by 2017. Only 27% of jobs created by the airport go to local Newham residents, well below the target 35%.
The airport can be closed without loss of transport capacity
Crossrail will vastly improve access to London’s other airports once completed in 2019. Travelling from Liverpool Street to Heathrow will take half an hour, just 4 minutes longer than the journey to LondonCityAirport.
Other London-area airports have capacity to take on City Airports passengers. CityAirport is a niche airport, catering for only 2.4% of London’s total aviation demand. With the exception of Luton, every other London-area airport has enough spare capacity to single-handedly absorb LondonCityAirport’s passengers, although of course in reality the displaced passengers would be spread between them.
The benefits of LondonCityAirport are enjoyed by a small, wealthy minority
The benefits of LondonCityAirport accrue mainly to its wealthy business clientele. Three quarters of inbound journeys end in CanaryWharf, the City of London or the City of Westminster, and the average salary of the airport’s users is £92,000. This contrasts starkly with the deprivation in surrounding Newham, where residents have lowest average incomes in London, 40% earning below 20,000.
The environmental costs of CityAirport land squarely on neighbouring communities. Air pollution is a major problem across London, but Newham is particularly badly affected. Death rates in the borough from chronic heart and lung diseases – commonly exacerbated by air pollution – are among the highest in London.
Significant levels of noise are experienced by 18,000 people around CityAirport. The World Health Organisation recommends a noise level of no more than50 to 55dB for residential areas, but in the Royal Docks area every local school experiences noise at levels of 57dB.
Helen Kersley, lead author and economist at NEF said:
“Given our current dire shortage of homes, as well as the UK’s international commitments to cutting its carbon emissions, we must seriously question the logic of locating an airport on precious inner city land. London City Airport places a significant environmental and social burden on neighbouring communities, and gives back very little in return.”
“Now is the perfect time to think about alternatives. 70% of the world population is expected to live in urban areas by 2050 – London can lead the way in demonstrating how we can reduce carbon emissions, live within our environmental limits, and achieve a fairer distribution of economic benefits.”
John Stewart, Chair HACAN East, said:
“We have no doubt that the replacement of the airport with alternative businesses would benefit the local and national economy. The development of community land trust model of ownership would complement many of the exciting new developments which have taken place in the area in recent years”.
“This ground-breaking report from NEF shows that closure of the airport would not only help residents in East London blighted by noise and air pollution but would bring benefits to the economy. It makes complete economic, social and environmental sense.”
**Spokespeople available for interview**
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Notes to editors
- The New Economics Foundation (NEF) is an independent think tank that specialises in innovative economic thinking –www.neweconomics.org
- The Royal Docks revival report will launch at an event on Thursday 10April 2014 at The Crystal, Royal Docks; 09:00 – 09:30 Arrivals and refreshments; 09:30 – 10:30 Discussion; 10:30 – 11:00 Photos and refreshments
