By Updesh Kapur/Doha

Britain’s long-running plans to give its aviation industry a big shake-up and make it the most competitive in Europe, if not the world, faced a new twist this week.
The global air travel industry is an increasingly competitive environment with airlines jostling for passenger and cargo business – and airports too playing a vital role in this dynamic sector.
Growth forecast show unprecedented demand for air travel over the next 15 years. Aircraft manufacturer Airbus predicts global air travel will more than double from currently 2.9bn to over 6.9bn by 2029.
In Britain, there have been ongoing calls by business leaders and parliamentarians for better airport infrastructure to cope with rocketing demand. And Britain wants to maintain an edge over other nations in a sector that relies heavily on the creation of super aviation hubs than on just airlines flying from one point to another.
The calls have never been so vocal than now as rival European hub airports in Paris, Frankfurt and Amsterdam are going through significant infrastructure improvements to fight for a bigger slice of the global air travel market.
At the heart of the UK aviation debate is airport capacity in southeast England, long argued to be the engine and gateway to Britain’s economic prosperity.
London Heathrow, one of the world’s busiest airports, remains the premier UK entry point handling around 70mn passengers a year, a third of which uses the facility to transfer onto other flights. Airlines fly to almost 200 destinations worldwide from Heathrow.
London Gatwick, a 45 minute drive further south, handles less than half the annual passenger figures of its close rival – 33mn flying to 200 destinations worldwide. Gatwick holds the mantle of world’s busiest single runway airport. Only 5% of its passengers transfer to other flights.
The biggest difference between the two: Heathrow has two runways while Gatwick operates only one. Furthermore, Gatwick has the advantage of allowing take-off and landings in the middle of the night while Heathrow has a late-night curfew.
Heathrow is said to already be operating at 98% capacity with a current limit of just under 500,000 flights a year. Plans which could double the number of passengers at Heathrow to more than 140mn by 2050 would make it busier than any airport in the world.
Gatwick by comparison is set to reach its capacity by 2020. An additional runway, according to the airport operator, will help boost annual passenger capacity up to 87mn.
Two years ago, the British government set up the Airports Commission, tasked with probing the capacity constraints and finding the best solution to resolve the problem. The Airports Commission stated there is a need for one additional runway in southeast England by 2030. Sixteen years is a long way off.
Bearing in mind the urgency for more capacity outlined above, expansion will be needed much, much earlier.
The Airports Commission is currently considering three options: a third runway at Heathrow, an extension to an existing Heathrow runway or a second runway at London Gatwick.
In its deliberations, the Commission has to consider the vitally important environmental issue very carefully – pollution, noise disruption, displacement of residents through destruction of property – to make way for a new airstrip.
It recently dropped considering an impractical option of a brand new four-runway airport in the Thames estuary east of the capital, an idea touted by London Mayor Boris Johnson. Dubbed ‘Boris Island’ this $75bn concept was seen as a non-starter due to the prohibitive high costs, tremendous environmental concerns and huge impact on the established aviation industry at both Heathrow and Gatwick.
Observers see Heathrow as the answer for expansion simply because of its strong existing infrastructure. However, the battle against anti-Heathrow growth will be a long one if indeed this airport is chosen for the expansion. The airport in west London is bordered by a highly populated urban centre.
Gatwick, too faces an uphill task. Its rural location is what environmentalists will want to maintain and not turn the airport into an even busier 24-hour operation.
The Airports Commission has begun a 12-week consultation process involving all parties – airlines, passenger groups, lobbyists, local authorities, political parties and local communities – before delivering its final recommendation after next May’s general election in Britain.
But this week it provided an alarming update on the three shortlisted options.
Whichever runway option is chosen, the additional cost above the budgeted amount would be anything between $3bn and a whopping $6.5bn. This represents a 33% increase on Heathrow’s original budget and 26% on Gatwick’s.
Some seriously high figures and the big question is, for which most observers will already know, who is going to pay for the increase?
Ultimately, it will be the end user – the passenger – who bears the brunt of any such increase.
The cost of air tickets will rise significantly. Passengers will also have to bear the rising cost of the dreaded air passenger duty (APD), a government tax on flights departing the UK.
Depending on the distance to be flown and class of travel, the APD introduced 20 years ago, starts as low as $21 and rises to $295. A tax implemented in 1994 for the privilege to fly out of the UK.
Britain’s APD is the highest in the world and shows no signs of easing. On average, the UK air passenger duty is five times higher than the remaining countries in Europe who still charge the tax.
The Commission believes passenger user charges may have to rise by up to $45 per person to fund expansion at either Heathrow or Gatwick.
The UK APD currently generates just under $5bn in receipts for the British treasury, a figure that is estimated will rise to $6bn within four years.
The projected rise in cost of the runway options and frequent increases in the deadly air passenger duty have already sent shivers through an industry watching carefully which option the Commission will opt for.
Heathrow has already warned that Britain was in danger of losing its crown to Holland as home to Europe’s biggest airport for international air traffic if the capacity issue is not resolved soon.
With an industry worth $76bn to the UK economy and supporting almost 1mn jobs, the figures could be at serious risk if airport growth is constrained by failure to adequately address the congestion issue.
In simple terms, lack of airport infrastructure improvements will hurt the UK economy as more passengers choose to fly via other airport gateways in Europe and elsewhere.
According to the Commission’s analysis, Gatwick’s plan to add a second runway is the quietest and easiest to deliver. But, expanding Heathrow is seen as more likely to deliver a bigger boost to the economy, and create more jobs as it is Britain’s premier gateway employing hundreds of thousands of people.
Regardless, the Heathrow versus Gatwick battle will continue to be a hot contest over the next few months: the pros and cons debated by the respective airport chiefs in the run up to the Airports Commission Summer 2015 decision.
Gatwick has already stated that the proposed multibillion dollar runway expansion would involve no complex construction and will be funded privately, not from taxpayers’ money.
Heathrow, however, argues it has to be the favoured option because the airport handles over 25% of Britain’s exports compared with less than 2% at Gatwick. And only Heathrow is able to compete at an international level with a far greater number of long-haul points already served compared with Gatwick’s offering.
Whatever happens, all eyes will be on the government’s finance chief George Osborne early next month.
He will deliver the anticipated annual budget and, once again, the aviation industry will hope for the sake of passengers that he reduces or freezes the air passenger duty. A rise however cannot be ruled out.
The government needs to view aviation in a bigger context. The travelling public cannot continue to be penalised for using infrastructure that is a country’s powerful economic asset.

- Updesh Kapur is a PR & communications professional, columnist, aviation, hospitality and travel analyst, social and entertainment writer. He can be followed on twitter @updeshkapur