OREANDA-NEWS. The UK risks dropping out of the premier league of international connectivity - that’s the stark warning Heathrow CEO Colin Matthews gave to the Airports Commission today. Mr Matthews told an oral hearing of the Commission that the current situation with five European hubs is unlikely to last, as airlines continue to consolidate and rival airports in Europe and the Middle-East expand to compete for vital transfer passengers.

Mr Matthews explained that Heathrow is one of only six airports in the world with regular, direct connections to more than fifty long haul destinations - four of which are in Europe. But he warned that airlines are consolidating into fewer and larger carriers, which are then concentrating their operations at fewer and larger intercontinental hubs. In Europe it is highly questionable whether all current hubs will survive.

As the network airlines become more concentrated at hub airports, so does the transfer traffic. Transfer passengers brought in by an airline’s short haul network are used to support long haul routes. As an example, on the Heathrow - Dallas route last year, passengers came from 7532 different combinations of start and finish points. Without transfer traffic, regular and direct long haul routes to all but a few tourist destinations become unviable and the home country loses out on the jobs and economic growth that come with links to other economies. Economic estimates suggest the UK is missing out on GBP 14bn of trade each year because of its lack of hub airport capacity.

But there is a limited pool of transfer passengers, and international network airlines are competing fiercely for them. Hub airports in continental Europe and beyond are expanding rapidly, as they attempt to suck transfer passengers from rivals such as Heathrow and support their own network carriers. Heathrow’s four European rivals have either committed to, or are developing, plans for enough runway capacity to serve an average of around 700,000 flights a year, nearly 50% more than Heathrow’s current limit of 480,000.

Recent analysis by the OECD noted that the capacity constraints at Heathrow mean London is already “under-performing in long-haul connectivity relative to its local market”, indicating that Heathrow could be operating to at least 20 more long-haul destinations, given the size of London’s metropolitan population.

Colin Matthews told the Commission that the UK still has one last chance to keep its status as a leading international hub. He told the hearing that despite Paris and Frankfurt being set to push Heathrow into third place in Europe within a decade, London is still in a prime position for global aviation, has strong local demand from a large and global city and is home to one of the world’s most important network airlines and alliances in the shape of BA and oneworld. Indeed, with additional capacity, Heathrow could be providing regular direct connections to 40 more long-haul destinations by 2030, particularly to long-haul emerging market destinations that are important for economic growth.

Mr Matthews added that any move away from the current hub airport model was extremely unlikely, dismissing suggestions that point-to-point and hub models could be integrated, or that low cost carriers could move into long haul markets.

Heathrow CEO Colin Matthews said:

“These straightened economic times have triggered a global economic race, with both companies and countries competing fiercely. If the UK does not want to be left behind by its foreign rivals, it must have the connectivity to compete and trade on the world stage. That connectivity can only come from a single hub airport in the right place for taxpayers, passengers and business. Only Heathrow can meet all these demands.”