An economist has warned Heathrow Airport that business travellers vital to its third runway plans don’t exist.
The UK’s busiest airport announced a multibillion-pound investment to expand two terminals last month as it prepares its proposal for a new runway.
Alex Chapman, an economist at the New Economics Foundation, has warned MPs on the transport select committee that demand for business travel is declining, contrary to research commissioned by the Department for Transport (DfT) in 2018, which identified the group as key for growth.
According to Mr Chapman, business use of air travel “hasn’t seen net growth in almost two decades”.
He said in a briefing that business use of air travel “peaked in 2006” and numbers have never returned.
Figures show that since the pandemic, business travellers have declined by 3.9 million (29 per cent) between 2019 and 2023.
Business passengers are often willing to pay far more for air travel than leisure passengers, and airlines are strongly “incentivised to service their needs”.
However, since the early 2000s, the number of corporate air trips taken per million pounds of real GDP has halved from eight to four, according to New Economics Foundation data.
Mr Chapman called the DfT analysis “now out of date” and said that “all of the key indicators, from business passengers to climate, have moved against expansion”, a “fundamental problem” for the airport’s investment case.
In a speech on Wednesday (12 February), Heathrow’s chief executive Thomas Woldbye said: “A third runway is critical for the country’s future economic success, and I confirm we will submit our plans for a third runway to the government this summer.”
He added: “I have no doubt that there is pent-up demand. There are billions of people out there who have not travelled, and we see business travel now coming back.”
Chancellor Rachel Reeves last month threw her backing behind the £20bn infrastructure project in an attempt to kickstart growth in the UK.
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