Following the UK’s vote to leave the European Union (EU), Heathrow Airport head of cargo, Nick Platts insists trading links to growing markets are now more essential than ever, further strengthening the case for a third runway, writes James Muir.
Platts says the result of the EU referendum has not had a noticeable impact on business so far and that Heathrow continues to make its case for expansion to Prime Minister May and local communities.
The government appointed Airports Commission released its report in July 2015 recommending that Heathrow should build a third runway, and the government is expected to formally respond this year.
He tells Air Cargo Week (ACW): “Leaving the EU means that it’s more essential than ever that we create trading links to the growing markets of the world and that Britain controls its own trading routes by expanding Heathrow.”
Platts says Heathrow looks forward to the announcement so it can start the planning process and connect the trading links as soon as possible.
Heathrow forecasts that a third runway would create 180,000 new jobs across the UK and £211 billion ($275 billion) of economic growth. It would also create 10,000 apprenticeships and add up to 40 more long haul destinations.
Platts tells ACW: “Our plans set out how we can do all that and still meet tough environmental and noise limits. Expanding Heathrow is the right choice.”
He points out that Heathrow handles 35 per cent of the UK and Ireland’s trade value and 72 per cent of air cargo, with links all around the world, with some cities served by several flights a day.
Platts says no other airport in the UK can match Heathrow’s network, explaining to ACW: “It is this capacity that has drawn the UK’s air-cargo industry to establish its heart around Heathrow. Shippers and forwarders from all points of the UK can utilise Heathrow’s capacity. Heathrow handles more cargo (by value) in a bank holiday weekend than Gatwick does annually.”
Between January and August, Heathrow has registered year-on-year growth of 1.7 per cent to just over one million tonnes, with every month except March seeing an increase.
North America remains Heathrow’s largest market by weight and Asia is still top for O&D.
The Middle East, Latin America and South East Asia have been growing strongly, which Platts says has partially offset falls to Ireland and Oceania.
Platts says the EU referendum has not impacted Heathrow’s business and it is still aiming for annual growth of 1.5 per cent over 2015.
There have been hints that the peak season could be weak but Platts comments: “We’ll be watching the volumes during Oct/Nov to see if the rumours of a weaker peak materialise but to be honest, I don’t think it will be as bad in the UK as elsewhere in Europe.”
While Heathrow waits for a government decision on expansion, it has other projects underway to make processes more efficient.
It has three key projects in progress, installation of stillage in the cargo area to store over 800 unit load devices, developing an airside facility for transferring cargo between aircraft without returning it to the cargo area and call-forward technology for a more efficient delivery and collection process in the Horseshoe estate.
Platts says: “My colleagues in security continue to review their processes so we can speed up the movement of cargo on and off the airfield.”
In November 2015, Heathrow announced it was to invest £180 million in doubling cargo volumes, and Platts says the plans are going very well.
“I’ve been really impressed with the willingness of the local industry to engage and debate our plans. We’re about to start developing detailed plans and remain on-track for the investment decision by the end of the year.”
Platts is considering the responses for last year’s strategy launch and Heathrow is developing plans for the next regulated period, known as ‘H7’, starting in 2019.
He says Heathrow is engaging with industry to seek input for H7 priorities, commenting: “I’m excited about the future and believe you will see emerge next year a bold plan to continue the transformation of cargo at Heathrow.”
Platts believes it is vital the UK takes advantages of the opportunities Brexit presents, and Heathrow is supporting UK Trade & Industry to grow exports, saying the response from businesses “has been fantastic”.
He is unconcerned about the exchange rate as airlines will benefit from the growth in passenger traffic if the pound weakens, even if currency weakness hits imports.
Platts tells ACW: “We’re unique in Europe and we continue to build on our network strengths. Expansion would allow us to increase the direct access of the world to the UK and for our exporters to grow trade faster than today.”