The role of aviation in growth

Air connectivity plays a vital role in supporting economic growth across the country.

Aviation boosts innovation and the exchange of ideas supporting the UK’s services sector, including financial services, insurance, creative industries, education, and health.

It also underpins the UK’s position as a hub for global trade through air freight, which represented 57% of the UK’s non-EU exports by value in 2023. Air freight is particularly important for supporting export-led growth in sectors where goods are of high value or time critical.

The international connectivity provided by the aviation industry drives investment in the UK, granting global companies access to British markets, and adds billions to the UK economy through tourism. In 2023, overseas residents spent over £31 billion on their visits to the UK.

According to the Department for Transport (DfT) analysis of Office for National Statistics (ONS) statistics, the air transport sector directly contributed £14 billion to UK GDP in 2023 and provided over 140,000 jobs across the UK in 2022, supporting many more jobs indirectly.

The current state of the airport sector

The UK has the third largest aviation network in the world after the USA and China, and London’s airports serve more routes than any other European city. This connectivity is vital to supporting businesses and jobs the length and breadth of the country. The government is committed to securing the long-term future of the UK’s aviation sector and if the UK is to remain competitive as a global leader in aviation, it’s crucial that aviation infrastructure remains world-class.

Capacity constraints are hindering the country’s ability to reap the growth benefits of aviation. Heathrow is the largest airport in Europe by passenger traffic and one of the busiest in the world and is running at nearly full capacity. These constraints increase the risk of flight delays, restrict the scope for competition and lower fares, and can reduce domestic connectivity. They also erode the UK’s hub status compared to foreign competitors.

Historically, the UK’s location and the strength of its existing networks has made Heathrow a key hub in the global aviation system, with large numbers of transfer passengers and travellers for whom the UK is their final destination. Hub airports like Heathrow are crucial in allowing airlines to serve routes that would not be profitable if operated directly, which has expanded the reach of the UK’s network, ensuring direct links to more places including crucial emerging economies and regional airports in the UK.

However, without space to grow, Heathrow could be overtaken by rivals like Amsterdam, Istanbul and Frankfurt, meaning the UK could miss out on unlocking business and trade opportunities. Without expansion, Heathrow’s relative importance globally is likely to decline, with knock-on impacts for the UK economy.

Unlocking airport capacity to boost growth

Since coming into office, the government has already taken steps to unlock airport capacity. London City Airport’s plans to expand to 9 million passengers per year by 2031 have been approved. London Stansted has confirmed an additional £1.1 billion investment into extending its terminal and enhancing the passenger journey, which they expect will double its economic contribution and create up to 5,000 new jobs.

Heathrow Airport is the UK’s busiest and only hub airport. Tackling capacity constraints at Heathrow could help to unlock the benefits that a thriving aviation sector can provide. The 2015 Airports Commission, led by Howard Davies, thoroughly examined the case for airport expansion and different options to deliver it. The Commission concluded that Heathrow was the best option as a major UK hub airport.

According to OAG, a leading data platform for the global travel industry, Heathrow remains the world’s most internationally connected airport. The strength of the demand for travelling via Heathrow has not been diminished by the pandemic, with 2024 being Heathrow’s busiest year ever.

The airport plays a critical role in enabling international connectivity for both passengers and freight: in 2023, Heathrow had international flights to over 240 airports in around 90 countries, with connections across the UK allowing the whole country to benefit from this world-leading connectivity. It also had just under 15 million business terminal passengers and handled 62% of aviation freight by volume – nearly 4 times the next busiest airport for freight.

Supporting an expanded Heathrow

The government is, therefore, determined to end years of uncertainty and delay. It supports and has invited proposals for expansion at Heathrow, including for a third runway. It expects proposals to be brought forward by the summer and is clear that any scheme must be delivered in line with the UK’s legal, climate and environmental obligations.

There are clearly benefits from an expanded Heathrow. These include:

• billions invested into the economy, with the potential to create over 100,000 jobs, according to the current Airports National Policy Statement (ANPS)
• strengthening Heathrow’s status both as a global passenger hub and as the UK’s largest air freight hub by volume
• major benefits for passengers, including lower fares and reduced delays and opportunities for a greater choice of airlines and destinations

It’s important that the government has the right evidence base for considering any expansion plans, including on factors which have changed since Heathrow expansion was last considered.

Following the provision of the expansion proposals, the government will commence a review of the ANPS.

Planning and infrastructure

Designing, approving and building the third runway will take time, running into future Parliaments. The government is however determined to make progress as quickly as possible. This will be aided by reforms in the Planning and Infrastructure Bill to be introduced this spring, which will play a key role in promoting economic growth, unlocking a new scale of delivery for infrastructure across the country. 

This bill will speed up and streamline the planning process and accelerate the delivery of major infrastructure projects, aligning with our industrial, energy and transport strategies.

Airport expansion as part of the government’s wider aviation strategy

The government is committed to ensuring that the economic benefits of airport expansions are delivered in line with our legal, climate and environmental obligations.

It is critical that the government’s wider aviation strategy tackles the carbon and environmental impacts of aviation. That is why the government has taken extensive action to tackle these issues.

This includes introducing a Sustainable Aviation Fuel (SAF) Mandate and committing to a Revenue Certainty Mechanism to spur investment in UK SAF production, creating jobs, growth and a supply of SAF for UK airlines.

It also includes launching the Jet Zero Taskforce to convene the UK aviation sector and providing the Aerospace Technology Institute (ATI) Programme with nearly £1 billion to support the development of new low and zero carbon emission aircraft.

The government is delivering quicker, quieter and cleaner journeys through airspace modernisation, including consulting on designing more direct and efficient flight paths and realising environmental benefits by saving over 12,000 tonnes of CO2 per year.

The government is also setting noise abatement procedures at some larger airports such as Heathrow and is ensuring that the industry reduces its noise impacts. As a result, the area of noise levels deemed to cause significant community annoyance has reduced by up to 40% around Heathrow and there has been a reduction in population exposure of up to 37%.

This is a government that takes aviation seriously and is committed to sustainable growth. Heathrow expansion is an important part of this agenda, enabling us to create more jobs, boost investment and secure the UK’s long-term position as a global leader in aviation.