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Heathrow Airport: Finance

Transport written question – answered on 17th March 2008.

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Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

To ask the Secretary of State for Transport what proportion of the likely benefits identified in the Adding Capacity at Heathrow Airport consultation document relate to expected profits for (a) BA, (b) other airlines and (c) BAA.

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

holding answer 14 March 2008

The breakdown of the monetised benefits from each option in the 'Adding Capacity at Heathrow Airport' consultation document' is given in table 4.3 (p79) of 'UK Air Passenger and Demand Forecasts report (November 2007)', available at:

http://www.dft.gov.uk/pgr/aviation/environmentalissues/ukairdemandandco2forecasts/

The following table reproduces the figures for the three consultation document options. The 'producers' row of this table reports the change in airport operator's profits that could result from additional capacity at Heathrow.

'Adding Capacity at Heathrow' consultation: breakdown of transport user benefits by option, NPV, 2006 prices( 1)
£ billion
Option One Two Three
Generated users 9 9 9
Existing users (2) (2) (2)
Freight users (2) (2) (2)
Producers 5 5 5
Government 3 3 3
Carbon -5 -5 -5
Noise (2) (2) (2)
Delay reductions:
Users (3) 1 2
Carbon (3) (2) (2)
Total 12 13 14
(1 )Figures are rounded to zero decimal places

(2) Means a non-zero impact is estimated, but the result rounds to nought at zero decimal places

(3 )Means no impact has been estimated

The current approach to estimating 'producer benefits' does not take into account benefits to airlines of additional capacity over and above the welfare benefits to their passengers. However, the 'Delay reductions' row includes benefits of reduced delay costs to airlines due to additional capacity.

Does this answer the above question?

Yes1 person thinks so

No0 people think not

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