The next UK government must place aviation at the “heart of their economic plan” to jump-start British business and avoid undermining growth, the boss of the UK’s largest airport conglomerate has said.
“If we want to double down on the things we are already good at, then we need to understand what these industries need to fulfil their potential, and it is clear… that strong international connectivity is of critical importance, especially as an island nation,” Ken O’Toole, chief executive of Manchester Airport Group – which owns Manchester, London Stansted and East Midlands Airports, said.
The industry veteran, a former Ryanair director and boss of Stansted Airport made the comments as MAG unveiled a new report into the UK’s connectivity at a Parliamentary reception.
The study from WPI economics found ten traditional sectors typically reliant on air travel are forecast to grow two per cent faster than the national average over the next decade, potentially unlocking £10.6bn in extra economic value. These include financial services, creative industries and real estate.
However, it warned that the rapid growth seen in advanced manufacturing, life sciences, fintech, and advanced digital could be undermined should the UK’s international connectivity weaken in the years ahead.
“That is why we need to accelerate the plan to grow aviation sustainably, so that businesses in these sectors can reap the benefits of having better access to the world through airports in all parts of the UK,” O’Toole said.
“Whoever forms the next UK government must place that at the heart of their economic plan for the country.”
The entire aviation industry faced an unprecedented crisis during the pandemic as passengers numbers fell off a cliff. However, airlines and airports rebounded dramatically last year as Covid-era lockdowns finally lifted and holidaymakers satiated pent up demand.
A number of UK airports are proposing expansion projects, including Heathrow, Gatwick and London City, while airlines are investing heavily in renewable tech to meet looming decarbonisation goals without denting profits.
The Conservative party has pledged to help the aviation sector hit its green milestones without nixing flights, primarily through reliance on SAF, a nascent biofuel technology. It has also given the go-ahead for Heathrow’s long-delayed third runway proposals.
Labour has been more coy on its position. It backs investment in sustainable aviation but has opposed Heathrow’s expansion plans, which it says failed four tests it had set for the project, including on environmental targets.
Subrahmaniam Krishnan-Harihara, a Deputy Director at the Greater Manchester Chamber of Commerce, said: “It is essential for both regional and national economic prosperity that there is continued investment in airport capacity and in establishing new routes.”
“A supportive policy and investment environment will send a strong signal that the UK and its regions remain open for business.”
Both Stansted and Luton were given the green light in 2023 to pursue more modest capacity expansions than the likes of Heathrow and Gatwick.
Stansted boss Gareth Powell told City A.M. in an interview its proposals would be key for the Cambridge-London tech corridor, which is home to companies including Google, GSK, Microsoft and Raytheon.
Harriet Fear, Chair of the business membership organisation Cambridge Ahead, said: “I see firsthand how the companies scaling here, which offer so much promise for the UK economy and are so attractive to international investors, are dependent on air travel. Not least to secure capital, access global talent for their long-term pipeline and support deal flow.”
Fear, who has significant experience in the life sciences sector, said she wasn’t surprised “at all” that sectors in the economy forecast to grow the quickest are “those that are particularly dependent on international connectivity and access to global markets.”