John Grant - Executive Vice President at OAG

11 November 2013 - TTG Digital

Sir Howard Davies, chairman of the UK Airports Commission, recently warned that any solution based on recommendations made to solve the UK’s airport capacity crunch will take at least 10 years to come to fruition, including the addition of a third runway at Heathrow. This should come as no surprise - after all, new runways do not spring up overnight, especially in this part of the world.

By 2023, however, the world will be a different place in terms of airport capacity. Even if we do solve this capacity conundrum, it will likely be a case of too little, too late, if Heathrow hopes to maintain its standing in the top 10 (let alone the top three) airports in the world in terms of seat capacity.

Our analysis, based on average growth rates of scheduled seat capacity in the past five years, reveals Heatrhrow’s impending fall from grace. For a number of years, the top tier of the seat capacity table has remained consistent, with Heathrow sitting comfortably in third position, while Atlanta and Beijing have jostled between first and second. In as little as five years’ time, Heathrow will drop into eighth position, its scheduled seat capacity increasing by a mere two million, from nearly 95 million to just over 97 million.

To put this into context, Beijing will have increased its seat capacity to nearly 150 million in the next five years, securing its place at the top of the rankings. Dubai and Jakarta will reach second and third place respectively. In 10 years, Heathrow will have dropped 12 places into 15th position, with 100 million scheduled seats per annum. By 2023, the new world-leading airports in terms of scheduled seat capacity will be Jakarta in third place, Istanbul in second place and Dubai still top with 260 million seats.

This is not the whole story, though. Interestingly, Heathrow will be the only western European airport in the top 20 in 2023, which is welcome news for Britain. Indeed, 12 of the top 20 airports for seat capacity will be located in Asia, with Latin American airports also figuring highly in the rankings while North American airports fall down the table.

Of course, market demand drives increases in seat capacity and this is influenced by complex factors. In emerging economies, there is strong political and social impetus to develop the necessary infrastructure, coupled with fewer legislative restraints and less demand for land. The changes to the top five airports over the coming years represent a step-change in the dynamics of aviation capacity around the world, reflecting where power is growing and the emergence of a two-speed global economy.

That’s not to say that Heathrow’s waning importance globally has always been out of our hands: it is inertia and a lack of forward planning over recent decades that have left us in an impossible situation.

The real shame here is that by default and by not competing we have lost our highly valuable position. Ultimately, it will be our economy which pays the price. Job creation in the aviation space will inevitably lose out, but reverberations will be felt across all areas of the industry, and impact international investment.

John Grant - Executive Vice President at OAG

This article appears on TTG Digital