Aviation: Finance

Transport written question – answered on 5th February 2008.

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Photo of Paul Beresford Paul Beresford Conservative, Mole Valley

To ask the Secretary of State for Transport what proportion of the net economic benefit, as in paragraph 1.16 of the UK Air Passenger Demand and CO2 Forecasts 2007, of new runways at (a) Stansted and (b) Heathrow would accrue to (i) UK and (ii) non-UK residents.

Photo of Jim Fitzpatrick Jim Fitzpatrick Parliamentary Under-Secretary (Department for Transport)

holding answer 31 January 2008

The breakdown of the monetised costs and benefits from additional capacity at Heathrow and Stansted is given in tables 4.2 and 4.3 (p78-79) of UK Air Passenger Demand and Forecasts (published 2007). The following figures are drawn from these tables.

Breakdown of costs and benefits from additional airport capacity, Net Present Value (NPV), 2006 prices
£ billion
One additional runway at
Stansted (2015) Heathrow (2020)
Generated users 15 9
Existing users (1) (1)
Freight users (1) (1)
Producers 2 5
Government 4 3
Carbon -3 -5
Noise (2) (1)
Delay Reductions
Users (2) (2)
Carbon (2) (2)
Total benefits 18 12
Infrastructure costs 4 7
Net benefit 14 5
(1) A non-zero impact is estimated, but the result rounds to nought at zero decimal places. (2) No impact has been estimated. Notes: 1. Figures are rounded to zero decimal places. 2. Heathrow figures are based on "option 1" from the "Adding Capacity at Heathrow Airport" consultation document, and assume the midpoint of the range of infrastructure costs. 3. The base case for the Stansted option assumes no new runways, while the base case for the Heathrow option assumes an additional runway opens at Stansted in 2015.

The "generated users" benefit measures the benefit to extra passengers of additional capacity. The following table further breaks this down between UK and non-UK residents.

Breakdown of "generated user" benefits from additional airport capacity, NPV, 2006 prices
£ billion
Stansted Heathrow
UK resident 10 6
Non-UK resident 5 3
Total 15 9
Notes: 1. Figures are rounded to zero decimal places. 2. Heathrow figures are based on "option 1" from the "Adding Capacity at Heathrow Airport" consultation document, and assume the midpoint of the range of infrastructure costs. 3. The base case for the Stansted option assumes no new runways, while the base case for the Heathrow option assumes an additional runway opens at Stansted in 2015.

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