Airport Operators Association “UK airports: connecting people, jobs and the economy” The UK Infrastructure and Regeneration Conference UK airport Infrastructure – What happens next? Darren Caplan AOA Chief Executive

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? Content 1)The AOA 2)Background – UK aviation policy 2010 to today 3)Airports Commission 4)Going forward – a bright future, with airports investing 5)Summary / Q&A

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 1) The AOA Aberdeen Belfast International Biggin Hill Birmingham Blackbushe Blackpool Bournemouth International Bristol International Cambridge Cardiff International Carlisle Chester Hawarden City Airport Manchester City of Derry Coventry Cornwall – Newquay Cranfield Denham Durham Tees Valley East Midlands Edinburgh Exeter Gatwick George Best Belfast City Gibraltar Glasgow Gloucestershire Guernsey Heathrow Humberside Isle of Man Jersey Leeds Bradford Liverpool John Lennon London Ashford (Lydd) London City Luton Manchester Metro London (Battersea Heli) Newcastle Norwich International Nottingham Oxford Prestwick Redhill Retford (Gamston) Robin Hood Doncaster Sheffield Southampton Southend Stansted Sywell TAG Farnborough Thruxton Warton

UK aviation is a good thing! 1m jobs / £52bn GDP/ £9bn tax Tourism / exports/ freight / aerospace… Regional and international infrastructure, “connecting people, jobs and the economy” The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 2) Background – UK aviation policy 2010 to today

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 2) Background – UK aviation policy 2010 to today Pre “Better not bigger”, despite… –Economic importance of aviation –UK passenger demand forecasts

Demand for air travel forecast to increase 1-3% a year to 2050 PAX to increase to 315 million in 2030 and 445 million by 2050 (‘constrained’ forecasts) Source: DfT Passenger Forecasts, Jan 2013 The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next?

 Airports filling up Source: DfT Passenger Forecasts, Jan 2013 Point 5.17 The central forecasts suggest that all the South East airports would be at capacity at around 2030 and the larger airports outside the South East from about Introduction, point 14 In the high and central demand cases, a number of other airports are expected to reach capacity over the forecast period including Birmingham, Bristol, East Midlands and Manchester. The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next?

2) Background – UK aviation policy 2010 to today Aviation Policy Framework (March 2013): –“The Government believes that aviation needs to grow, delivering the benefits essential to our economic wellbeing, whilst respecting the environment and protecting quality of life” –“[The APF] sets out the Government’s objectives and principles to guide plans and decisions at the local and regional level”

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 2) Background – UK aviation policy 2010 to today The Airports Commission –set up in late 2012 Airports Commission members Sir Howard Davies: ex UK Financial Services Authority Chair, Bank of England Dep Governor Sir John Armitt CBE: ex Olympic Delivery Authority Chair and ex Network Rail Chief Exec Prof Ricky Burdett, Prof of Urban Studies at LSE / Director of LSE Cities Research Centre Vivienne Cox: ex Chief Exec / Exec Vice President BP Alternative Energy & BP Executive Management Team Prof Dame Julia King: Aston University Vice Chancellor, Committee on Climate Change, aerospace background Geoff Muirhead CBE, ex Manchester Airport Group Chief Exec [left Commission Sep 2013]

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 3) Airports Commission Interim Report, Dec 2013: i.Nature, scale, and timing of steps needed to maintain the UK’s status as an international hub for aviation ii.Recommendations for making better use of the UK’s existing runway capacity over the next five years Final Report, July 2015: i.Options for meeting the UK’s international connectivity needs, including economic, social and environmental impact ii.Recommendation(s) for the optimum approach to meeting needs iii.Recommendation(s) for ensuring the need is met as expeditiously as practicable within the required timescale

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 3) Airports Commission Interim Report, Dec 2013: i.Failing to address capacity constraints could amount over 60 years to: £21-23bn costs to users and providers of airport infrastructure £30-45 billion costs to the wider economy ii.Need for one additional runway in London / SE by 2030 – shortlisted LGW 2 nd Runway, LHR 3 rd NW Runway, LHR North Runway Extension; plus new Isle of Grain hub further assessment iii.Demand case for 2 nd additional runway by 2050 iv.Make better use of existing capacity – ‘Optimisation Strategy’ to improve operational efficiency: Airspace change improvements Package of surface transport improvements to make airports with spare capacity more attractive to airlines and passengers Community engagement – creation of ‘Independent Aviation Noise Authority’ to provide expert/ impartial advice

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 3) Airports Commission Final Report, July 2015: i.Expand LHR through its NW Runway scheme subject to measures Noise –Ban on night flights (11.30pm to 6am) –Legally binding ‘noise envelope’, putting limits on level of noise –‘Noise Levy’ to fund programme of mitigation –Statutory ‘Independent Aviation Noise Authority’ Air Quality –Legal Air Quality commitment, that new capacity will only be released when clear compliance with EU limits will not be delayed Community –Independently chaired ‘Community Engagement Board’, with influence over mitigation and compensation spending –Training and apprentices for local people No 4 th runway

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 3) Airports Commission Final Report, July 2015: i.Expand LHR through its NW Runway scheme subject to measures ii.LGW and Heathrow Hub schemes referred to as credible options iii.Likely sufficient demand to justify a 2 nd additional runway by 2050 with LGW, STN, BHX and MAN airports cited as potential options

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? October 2015: “I don’t hide the challenge. People have strong views. Rightly. But Sir Howard Davies’ Commission has produced a powerful report. And we will respond by the end of the year.” Rt Hon Patrick McLoughlin MP, Transport Secretary 5 October ) Airports Commission

Airports Commission – the AOA Line “The UK needs to compete in both established and emerging markets. This requires excellent aviation connectivity right across the country, ensuring the UK has both vibrant point to point airports and world class hub capacity. The AOA supports all airports that wish to grow and believes in making best use of existing capacity at UK airports. “The AOA welcomes the completion of the Airports Commission’s work and supports the assertion it has already made in its Interim Report regarding the need for both airport expansion and making better use out of existing capacity. Now that the Commission has published its Final Report, the Government should respond swiftly to maintain momentum, remove uncertainty and ensure the UK gets the additional capacity it so vitally needs as soon as possible.” The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 3) Airports Commission

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 4) Going forward – a bright future, with airports investing Heathrow £11bn invested since 2003, with plans to invest £3bn in 2009 to 2014, completing the new T2, constructing taxiways and refurbishing baggage system Manchester £1bn invested to upgrade facilities in next 10 years ‘Airport City Manchester’: 5mn sq ft of office, logistics, hotel, retail, advanced manufacturing space, to compete with airport cities across Europe, including Amsterdam, Frankfurt and Barcelona Gatwick £1bn invested in new and improved facilities, with further £1bn investment to 2020 on capacity, service quality, cost efficiencies, commercial revenue, and compliance Birmingham £200 million package of works, including runway extension, opened in 2014

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 4) Going forward – a bright future, with airports investing Newcastle International Undergoing major departure lounge development, with total investment of £14mn+ Edinburgh £50mn redevelopment of immigration and baggage reclaim facilities, tripling capacity for bigger long-haul aircraft London City Expansion plans given green light in February 2015, currently in planning process €270mn investment to enable 6mn passengers per year (currently 3.7mn) and up to a permitted 111,000 annual flights as a result of 7 new aircraft stands, a parallel taxiway and terminal extensions to the west and to the east Bristol £8.6mn expansion of Eastern Terminal, £24mn investment in West Terminal extension to transform security search, part of overall development plans enabling Bristol to handle 10mn passengers a year (currently 6.4mn) And much more..!

The UK Infrastructure and Regeneration Conference UK airport infrastructure – What happens next? 5) Summary Aviation policy more positive than previous parliament –Aviation Policy Framework 2013 –Airports Commission 2015 Key infrastructure issues –Will Government accept the need for aviation to expand going forward, given economic need and passenger forecasts? –Will Government support the need for new capacity, and measures to make better use of existing capacity (ie. surface access / airspace change)? –Will Government back a planning regime which has a presumption in favour of sustainable development for all airports that wish to grow? Q&A

Airport Operators Association “UK airports: connecting people, jobs and the economy” The UK Infrastructure and Regeneration Conference UK airport Infrastructure – What happens next? Darren Caplan AOA Chief Executive