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Heathrow decision spells expansion for UK economy

Posted by: Katherine Garratt 12 Dec 16 - 2:25PM  | Aerospace
Recruitment InternationalAfter nearly two decades of delays by successive Labour and Conservative governments, Prime Minister Theresa May gave the green light to the £16 billion expansion of Heathrow airport earlier this year. Neil Cayley, Lead Consultant for the Aerospace, Defence & Aviation Division, analyses the impact of the decision in Recruitment International.

In October, the government backed the proposal to add a third runway to Heathrow. The long-awaited decision was met with mixed reactions, but has been largely welcomed by the business community. Neil Cayley, Lead Consultant for Aerospace, Defence & Aviation at Jonathan Lee Recruitment discusses the potential impact the third runway will have in terms of skills and jobs.

The expansion of Heathrow has been on the table for nearly a decade, but in the months since the Brexit vote, the case for investment gained momentum. Historically a major hub, Heathrow has 160 non-stop flights but has been overtaken by neighbouring hubs Paris CDG and Amsterdam along with fast-developing airports such as Dubai, all boasting flights to more than 200 destinations. 
Heathrow decision spells expansion for UK economy

With current capacity running at 98%, Heathrow has been limited in what routes and airlines it could accommodate. The third runway will enable an additional quarter of a million flights each year, flying to 40 additional destinations and potentially reducing the fares of flyers.

According to the Airports Commission the expansion of Heathrow will create up to 180,000 jobs, 95,000 of which are in manufacturing including 26,000 jobs in the UK’s ‘Northern Powerhouse’. Its report states that the expansion will bring £211 billion worth of economic benefits to the UK , although other sources say it is more likely to be between £61 billion and £140 billion. Ultimately, it still represents a significant boost to the UK economy, particularly at a time of uncertainty following the decision to leave the European Union.

The creation of 95,000 manufacturing jobs in the UK is substantial and will have a particular impact on the aviation and aerospace sectors. The UK aviation sector currently has a turnover of more than £60 billion, it contributes over £22 billion to our GDP and almost one million UK jobs are directly or indirectly supported by it.

Maintenance, repair and overhaul (MRO) expertise is already in short supply and, with an additional 260,000 extra flights per year that will need support service, demand for engineers to deliver safety critical services and ensure that planes operate at optimum efficiency will continue to grow.

Aircraft engineering is a highly skilled and precise role and high calibre engineers are already difficult to source. Preparation for the future is vital. Skills planning and people development will be as important a part of the success of the airport expansion as the construction and operation. With the shortage of MRO engineers, widely predicted for some years now, it’s imperative that both the government and higher education in the UK addresses the future increase in demand as soon as possible. In addition to the expansion of the airport, there will be investment in other modes of transport.

Proposals show Heathrow’s rail capacity will triple from 5,000 seats an hour to 15,000 seats, and bus links will be improved. This again will mean the creation of jobs, particularly in manufacturing and infrastructure, to deliver these transport upgrades.

Opposition to the expansion of Heathrow argued it was too London-centric and ignored the rest of the UK. However the creation of jobs will not just be in the South East. Research has shown that 24,500 jobs will be created in Wales and Scotland through a third runway at Heathrow , adding more than £18 billion to the economies of those countries alone. Figures show that the expansion could boost the UK economy to make it the fifth biggest in the world.

Capacity to add further destinations will increase the UK’s ability to build trade links with emerging markets in Asia and South America; we trade twenty times more with countries with whom we have a direct air link. This will be vital as the UK develops its own trade agreements and routes once leaving the European Union. The next stage is critical. With Brexit looming, the UK needs to exploit trade prospects and boost its economy, and much of this success hangs on Heathrow being expanded into a fit-for-purpose trade hub for the whole UK. If the experts are right, this is a prerequisite for securing between £61 billion and £211 billion for our economy, but it is essential to act fast.

Skilled people will be a fundamental part of harnessing the full potential of the opportunity, and businesses up and down the supply chain need to start planning and investing in the workforce now in order to benefit from the future prosperity predicted by advocates of this landmark decision.
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