Businesses call for improved air links to boost exports

Business leaders in Yorkshire have demanded that the Government takes urgent action to boost private sector growth, jobs and exports by ensuring the UK continues to have a successful hub airport providing a gateway to overseas markets.

The call to action follows the publication of new research by leading economic analysts Oxford Economics which demonstrates the vital role that aviation plays in supporting Yorkshire's economy. In particular, the research underlines the importance of access to the UK's only hub airport at Heathrow in connecting Yorkshire's businesses to a wide array of global destinations.

The research, launched today at a summit of thirty leading businesses convened by the Leeds, York & North Yorkshire Chamber of Commerce and BAA, shows that:

 

• One in nine (11%) jobs in Yorkshire depend on foreign investment - and two thirds of these companies can only reach their home market through a hub airport.
• Aviation supports £3.3bn of exports from Yorkshire.
• Foreign tourists spend £417m a year in Yorkshire's economy and account for 1 million visits - 749,000 of whom arrive by air.
• Yorkshire benefits directly from having a global hub in Britain. Capital expenditure at Heathrow brought in £80m for Yorkshire suppliers in 2010. Heathrow directly supports 3,800 tourism jobs in Yorkshire and the Humber.

 

As the UK's only international hub airport, Heathrow is a gateway for international business, tourism and passenger flows to, from and through the UK.  Among crucial growth markets, UK businesses trade 20 times as much with countries with daily flights than those with less frequent or no direct service.   Yet constraints at Heathrow - which is running at over 99% capacity - mean that the whole of the UK is missing out on growing international demand.

Business leaders in the world's fastest growing economies say they are being put off from investing in the UK because of a lack of direct flights, with two thirds of business leaders in emerging economies saying that better air connections from their home countries to France, Germany and Holland mean they are more likely to do business with those countries than the UK.

Heathrow is a hub airport where transfer passengers support network airlines. Without those transfer passengers, direct long-haul connections between the UK and many important business destinations are not viable. Yorkshire's businesses alone cannot sustain demand for daily flights to emerging markets, but by pooling that demand from around the UK and beyond, a hub airport can. 

Mark Goldstone, Head of Business Representation & Policy, Leeds York & North Yorkshire Chamber of Commerce, commented:

'Encouraging increased trade between UK firms and overseas markets is vital to the rebalancing of the UK economy. While firms are being urged to trade with new partners in emerging markets, they are hindered by the lack of connections to these countries, in turn hurting both inward investment and Britain's export potential. This is a real issue for Leeds City Region as we have dozens of members that trade with or aspire to do business with the likes of Brazil, India and China. 

'To support trade and Leeds City Region's economy, it is vital for our firms to be able to make connections to these emerging markets. That means the Government's aviation policy must consider all options that could help our businesses seek new sources of growth. While there are more ambitious long-term projects for aviation that can be examined, in the near term Heathrow must continue to be part of the solution; and if Leeds City Region is not to miss out on trading opportunities members need to see  restoration of a viable connection from Leeds-Bradford International Airport in order to facilitate this further onward connectivity.'

Jose Leo, BAA Chief Financial Officer, said:

'The centre of gravity in the world economy is shifting and Yorkshire and the UK as a whole should be forging new links with emerging markets. Instead, we are edging towards a future cut off from some of the world's most important markets, with Paris and Frankfurt already boasting more flights to the three largest cities in China than Heathrow, our only hub airport.

'These poor trade links have a direct impact on Yorkshire.  Growth won't wait.  New routes from Europe to emerging markets are already being established at other European hub airports and Yorkshire needs the additional jobs and economic growth that new connections would bring.  So whatever the long term aviation solution may be, in the near term we also need a solution which builds new connections from the hub we have at Heathrow.'

Jonathan Riley, Partner, Pinsent Masons, Leeds said: 

'There's no doubt that a lack of routes to established and emerging international markets via Heathrow is an issue for many of our clients in the Leeds City Region.

'We're regularly told by our clients that there are many business opportunities that are currently being missed because those routes are not available.

'There are some success stories: Leeds is hosting the China's Olympic athletes as they prepare for the 2012 Olympics, and Bradford-based architects Robinsons have a hugely successful joint venture in Chengdu province. But for the sake of our regional economies, Government needs to act now - and allow additional airport capacity, to create new connectivity between the UK regions and the wider world.'

 

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