UECNA seminar on the economics of aviation.
John Steward (moderator): Good evening ladies and gentlemen. We are here tonight because Dr. Alex Chapman, a senior economist at New Economics Foundation, is with us. Dr. Chapman focuses on the economics of climate change, nature recovery and inequality. He supports New Economics Foundation’s just transition and nature recovery programs with quantitative research and policy evaluation.
Previously in New Economics Foundation consulting, he led analysis on the business cases and carbon impacts of major infrastructure proposals and advised the Future Generations Commissioner of Wales on carbon impact assessment of the Wales government budget. Following completion of his PhD at the University of Southampton, Dr. Chapman held multiple research and consultancy positions through which he provided support to decision makers in governments and development banks on adaptation, investment and climate risk assessment. Today he will explain to us why his new report for the NEF argues the fact that airport expansion always benefits the economy of a country. Dr. Chapman, the floor is yours.
Thank you very much for the introduction and it’s nice to see some familiar faces and some new faces. So yeah, thanks. You’ve given a bit of the background I was going to give there anyway. But just for those who aren’t familiar, the New Economics Foundation is a charitable think tank. We have an office in London and in Brussels. I’ve been working there for eight years with the majority of my work ultimately ending up in the space of the economics of air travel. I ended up in this space not by design but perhaps because of what I would see as a gap in the research space, in the market if you like, for an outsider take on the economics of air transport—a space where the economics are dominated very heavily by a small set of consultancies that work on behalf of the airports and quite often governments that are happy to accept the analysis that those consultancies present with them.
So having been through a few planning inquiries and processes here in the UK where we’ve had many airport expansions in recent years, I decided to critically analyze some of the arguments that were being put forward by the industry and collect together the work that we’d done over those years in a report. In this case, that looks across all of Europe at this relationship between air transport growth and economic growth. The report we published in November last year was actually only the first part in a series of what’s likely to be three reports looking at this diverse and complex issue. So I’m going to share a few slides. I don’t want to spend too much time with slides on the screen because I know they can get boring, but we’ll probably take about 15 to 20 minutes with these and then very happy to open up for some discussion. So let me just share my screen.
So I’m going to start in a slightly unusual place here. Instead of starting with my work, I wanted to start with the industry’s. So some of you might be familiar with this report. This is a report that was commissioned by ACI Europe, Airports Council for Europe, and written by SEO Amsterdam Economics, which is a consultancy in the Netherlands that’s slightly affiliated with some academics. It’s not far from the worst of the consultancies that I’ve come across working for the industry. And they produced this study that looks at the economic and social impact of airport and aviation growth across Europe. And you might have seen this headline statistic because it’s spoken about very widely by industry stakeholders: that a 10% increase in direct flights leads to a 0.5% increase in GDP, gross domestic product.
Now of course, many of us would recognize that GDP is not a complete indicator of the health of an economy or a place or even a society, but it is an indicator that we know decision makers and policy makers put a lot of importance on. And so findings like this one are very useful for the industry and their quest to establish that their growth is greater or more important than other social objectives like protecting communities from noise or from carbon emissions.
Now this report, which as I say is widely shared by the industry, does have quite a few important caveats I would say. The first is to say that this relationship that they present is principally derived from connectivity growth that was actually taking place over the period they looked at in southern and eastern Europe more so than northern and western Europe. But when they averaged across Europe, this is the relationship that they found.
However, if you are ever in a process where this report comes up, I would recommend that you jump to page 79, appendix C. Yeah, my job is boring enough that I ended up on page 79 of this report. Because there’s rather an interesting finding on page 79. Now, this table is a very statistics-heavy table. Don’t worry too much about all of the numbers on there. All I want to focus on is the one that’s highlighted in blue underneath model 2. In fact, maybe if I know what I’m doing with this software, I can draw a circle around it. There we go.
Now, this is the relationship that says that direct connectivity drives GDP growth. And this is where they get that 0.5% response to a 10% increase in connectivity. And their model shows here with this little star that it comes with a reasonable degree of statistical confidence. Not the highest degree, which would be three stars, but the statistical confidence is not too bad. They’ve got a 95% chance that they believe in this relationship.
However, if we look over on the right hand side of this table, which to their credit the authors did share—which is why I actually have some respect for them—there’s another relationship here which goes in the opposite direction. This relationship says that passenger numbers within 150 km of a region in Europe produce a minus 0.6% impact on GDP.
Now this is a really interesting finding because how can these two things be simultaneously true? You can have more flights and you’re going to have a bigger economy, but you can have more passengers and you’re going to have a smaller economy. It would seem almost impossible. Now, it may well be—and unfortunately with the nature of statistical relationships like this, we don’t actually know the full explanation—but we might start to hypothesize about why they produce this result.
It could be that it’s actually not about the pure volume of flights or passengers that you put in the air that creates the value from air transport, but the quality of those routes. So for example, if you put on your first flight to a new business destination, say London to Hong Kong, the first time you put on that flight, you’re probably going to create a lot of business activity. But when you’re putting on your 50th flight of the day from London to the Canary Islands to send British residents off on holiday, you may well not receive the same level of benefit that you would have done in the other situation. And that’s my personal explanation as to how they produce this.
But of course, the interesting thing is it has the exact same statistical confidence as the finding over here in model two—one star. But this one on the left got plastered across the news all across Europe and is still plastered across the headlines of all sorts of airport association websites and things like that. This one is absolutely nowhere to be seen. So I suppose it’s not just about the statistics and the numbers you produce, but it’s about what you do with them and what you choose to lift up as part of your story or narrative about the economy and what you choose to hide away.
So for this reason—highlighting that the economics of air transport is actually a lot more complex than just saying more flights means more growth—we wanted to look a bit more into this with our report. So let’s see if we can get into that. Oh no, I’ve still got all the green stuff on there now. I have to try and figure out—here we go. Get rid of that. Sorry. Trying to use this technology.
Right. So what we thought was important was to develop a framework for how you assess the economic impact that goes beyond just the question of does economic growth appear. Yes, that’s an important part of the question. So do you get a positive impact in terms of the indicators that politicians like—GDP, productivity and employment—but also are those impacts usefully distributed? So for example, if you create growth amongst the top 0.1% in society and they make a whole lot of money and nobody else makes any money at all, you might argue that yes, you’ve had growth, but that growth isn’t particularly usefully distributed. And of course vice versa if it’s well distributed.
And then it’s not just incumbent upon us with aviation to justify that there is an economic benefit out there, but also to highlight that it is sufficient to justify all the environmental costs that we’re all very well familiar with. The report that we launched in November really just focuses on the first part of this equation and not parts two and three. Part two will be the next report and is hopefully going to be out just in early summer this year.
Now, what I’ll say now and I’ll come back to later is that part one, which is the focus of this report, is perhaps more relevant as a question of challenge in northern and western Europe than it is in parts of southern Europe, because of course the places that send tourists and passengers experience different economic impacts to those areas that receive those passengers. So it’s important that we understand those place-based differences, which was another aim of our research to make sure that we captured those regional variations.
So this is—I won’t go through all of this. You don’t necessarily need to read it all, but it’s there if you need it. I can share the slides and it’s in the report. This is the actual method that we applied from a statistical point of view. We looked at the period from 2000 to 2023 but we mostly focused on 2000 to 2019 because of the pandemic disrupting things. We looked at 274 regions of Europe, which is not all of them but it’s the vast majority. We had a measure of passenger air connectivity which was based mainly on passenger numbers but did also look at the connectivity those people had with the airport—so how far they were from the airport and how much connectivity there was per person.
And then we established first the correlation, which is to say when passengers go up or down, does GDP go up and down. But then the critical next step, which so many impact assessments don’t do—particularly if you look at a planning application from an airport—is not just to say there’s a correlation but to examine whether there’s causation. Because it could be complete coincidence that the two indicators are both going up because generally speaking GDP does go up and generally speaking passenger numbers have gone up over the years, but that doesn’t mean that they’re actually driving one another. So we tried to look statistically at the issue of causation and establish whether to what extent there was a relationship there.
And finally, the next step in the process was we tried to classify regions across Europe into different groupings to understand which regions of Europe share different relationships with air transport, recognizing that there are differences out there.
So the headline findings from our research, which challenged quite a number of the industry findings that you’ll see—and I would point out by the way that this method was published in an academic journal by an author Felix Pot from the Netherlands and has therefore been peer-reviewed in a very credible journal, which is why we chose to use this method because it has that defense of having been peer-reviewed by an academic publication.
So the headlines were that yes, we do find that a 10% increase in connectivity—in our case passenger numbers—is correlated with a 0.5% increase in GDP per capita. But that’s a correlation. Incidentally, amongst 30 of the regions, which is more than 10%, 11% of the regions that we looked at, that correlation actually was in the negative direction. So more passenger numbers was correlated with a decline in GDP. So we should never assume that everywhere the relationship moves in a positive direction.
But when we start asking the question about causality—what drives what—it got very interesting. So we found that it was only in 37% of regions, just over a third of Europe, where air passenger growth is driving GDP growth. It is a creator of economic flows or of turnover. Whereas in a larger number, 53% of the regions of Europe, we found that the growth of GDP or incomes in the population was driving demand for air travel.
Now that’s really significant because of course when you’re claiming—if you’re saying “I’m going to expand this airport and it’s going to create growth in the economy”—you need the first one. You need to be able to prove that higher passenger numbers actually drive economic growth, not the second one. Because in the second case, all you’re doing is encouraging people to fly and to spend their money on flying. You’re not actually creating any new activity per se in the economy through your expansion.
In 12% of regions we found that there was an argument of a relationship in both directions. You might call that a kind of reinforcing cycle where air transport drives growth and then growth drives demand for air transport. And in 22% of regions we weren’t able to establish any relationship, which maybe is because there isn’t one or maybe because of course statistics is notoriously volatile—it’s based on survey data and we can’t always find exactly what we—we can’t wade our way through all the noise that’s in that data. So that’s the kind of headline finding.
But of course what was particularly interesting was to try to understand where and why these trends were showing up. So there’s a slide there with a bunch of numbers on it. Again, don’t worry about the numbers. If anyone does want to see them, they’re in the report and can go back and look at them. The only thing I wanted to introduce is on the left hand side. What we did is we brought into our equation a whole number of other factors about a local region of Europe—so the population density of that area, the education levels, the type of employment whether it’s in high-tech or low-tech, the unemployment rate, the number of nights being spent by tourists in accommodation, the number of hotel beds so how big the industry actually is, the amount of rail infrastructure, whether it’s an island region.
And what we did is we introduced these variables in so that we could look at how the relationship varied when these variables changed. So how does the relationship vary if you’re an island region or you’re not, or if you’re a very high tourism region or not, or a place that’s very high tech or not. That’s all you need to take from this slide.
And from those parameters, what we ended up doing was clustering Europe into three or four types of region or country. So we initially did it regionally and then I grouped the regions to say which one was dominant in which type of country.
So cluster one, which is principally found in Eastern Europe—Lithuania, Poland, Hungary, Romania, Bulgaria and Greece—is the part of Europe where particularly during the period we were looking at from 2000 to 2019, economic development was a little bit behind where Western Europe is. Air travel capacity is slightly lower, connectivity is slightly lower. And in these regions we found about a 53% chance that air travel growth was actually driving GDP growth and a 59% chance of finding the relationship in the opposite direction, which is moderately high in both directions. So higher incomes are encouraging people to fly and people flying is sometimes driving GDP growth.
And then looking at cluster two, cluster two is the tourism receiving areas, particularly the really mass tourist areas plus one anomaly which is Norway there. Norway was on the boundary between a couple of categories. But Portugal, Spain, France, Italy and Slovakia—again slight anomaly but no statistical process is necessarily perfect. And this is an area where we do see the highest rate of air transport growth driving GDP or financial flows into the country. It’s fairly intuitive that places that receive tourists, money comes in. I’m not here to try and pretend that that relationship doesn’t exist. It does. But we will be unpacking that relationship in our next report because just because there’s money coming in doesn’t mean that everyone is benefiting. So we’ll be looking into that a bit more. But lower demand in those countries for the opposite direction, for people to fly out of the country.
And then clusters three and four that are dominant together in this set of countries—Ireland, UK, Belgium, Netherlands, Denmark, Sweden, Finland, Germany, Austria, Slovenia, Czechia, Estonia and Latvia—all showing fairly similar parameters, which is that the evidence of greater rates of air connectivity or passenger numbers driving growth is very limited, 23 to 28% in those areas. Very limited evidence that adding more passenger capacity will actually create GDP growth. In some of the capital regions—I’ll show you in the map in a second—there’s actually very limited evidence of the other relationship of higher incomes driving growth. So basically we call this saturation. There just isn’t a demand for more air travel.
But then you’ve got this other region three which is very common as well where higher incomes are encouraging people to fly out of the region for outbound tourism, particularly in parts of Germany and the Netherlands and the UK. So that’s not particularly beneficial to the wider economy, but there is demand. And of course that’s important that we clarify that demand does not necessarily mean wider economic benefits. It just means that there is demand if you expand the airport to make use of it.
So let’s make this all a lot easier to understand with a map. So I’ve color coded each of the four groupings. First looking—let’s start with cluster one which is the green one. You’ll see it’s dominated on the right hand side in Eastern Europe here. These are countries where air connectivity is slightly lower, different phase of their development, and we’ll come into exactly how what defines that in a second.
You’ll then see the blue area quite dominant all across southern Europe, particularly where there’s high tourism demand. But interestingly we do need to be a bit cautious about this because there’s often high tourism demand—parts of Norway with high tourism demand, places like Edinburgh, southwest of the UK. Now some of you may be saying, well, not many people fly to the southwest of the UK. And that’s true, and we’ll come back to that in a second. This is mainly highlighting inbound tourism areas, but not necessarily highlighting areas that rely on air transport for that tourism. Only 59% of them we see here are actually heavily reliant on air transport for that growth.
Then we look at the orange and the red areas. The red areas tend to be the capital cities and the areas around them where we see saturation. Basically we’re saying that Paris airport, Schiphol airport, London, the London airports, they’re all so big and they’re so well connected that there isn’t really a case for any need for any more capacity.
And then the orange areas where yes, there is demand for air travel if you build it, but it’s basically just demand to get out of the country to spend your money in another country if it’s cheap enough. If you bring the price of air travel down, people will do it.
I’ll get rid of all the stuff I put on there. Now the final thing that we did in this project, and then I’ll get rid of the slides, was just to try to understand a little bit more as to what was producing these changes. What does it mean to be saturated? What are the trends behind this that are creating these divisions between parts of Europe?
So what drives the divergence between our clusters? Sorry, I know the language is not particularly accessible. Clusters, just the different groupings. So the graph on the left hand side focuses on business air passenger numbers. And this is really critical for those discussions about what airports really do. Because if we look at groups two, three and four—so two being the tourist receiving areas and three and four being the northern and western European countries—we see there’s been basically zero growth or arguably shrinkage in demand for business air travel since 2012. So that’s getting on for 13, 14 years now. Basically no growth. There was a touch of growth in the tourist receiving areas before the pandemic and then that crashed down through the pandemic and hasn’t returned since then.
Only cluster one, remember those Eastern European countries, has seen any growth in business passenger demand. It goes back to that point that the airports in that part of the world maybe are serving a business need, whereas the growth we’re seeing elsewhere is serving principally tourists. So that’s part one of the equation.
And then part two over on the right hand side in this huge table. Again, don’t worry too much about all the numbers. You can come back and look at them later, but it’s simply highlighting the countries that are net recipients of tourism spending and the countries that are net senders of tourism spending. So particularly this bottom grouping here of clusters three and four—almost all of them barring Czechia and Estonia who are a bit close, and Slovenia—are in a huge deficit. They’re sending money out of the country through their airports, not bringing money in. Then your tourism receiving countries of course on the other flip side of that equation—particularly Spain, France, Italy and Portugal which are receiving funds from it. And then our group one in Eastern Europe is kind of in the middle. There’s a bit more variability there basically.
So those are the kind of two key trends that drive what we see. So that’s kind of where we got to on economic growth. As I say, where we’re going to go to next is we’re going to ask, well okay, so we know there’s places that do receive incoming financial flows from air transport. I mean first of all, we’re already saying look, in places like the UK, Belgium, France, Netherlands, it’s really quite hard to justify why some of these major airports are getting such high levels of support for expansion from some quarters.
But we’re going to be looking at those tourism receiving areas next and saying okay, where are the benefits going? Who benefits, who wins and who loses? Is it always better to have more flights or is it more tourism value that we want? Because something we see, for example, is that places like Spain—although more and more people are flying in, they’re staying for shorter and shorter periods of time. So how can we create tourism that is in the interests of local residents and the environment at the same time as helping the economy?
And just to flag why that’s so important to consider on this right hand side, the final graph for you, looking at the incredible variability in how tourism plays out across Europe—these six countries. So this is on the left hand side you see the percentages of the tourism, or is that the accommodation nights that are spent in each of these countries.
So on the left hand side you see Germany where German accommodation facilities like hotels and the rest of it are filled almost entirely, 80% by domestic residents, because there aren’t that many people who come into Germany to holiday. A few do. And then in blue there’s also this small group which come into Germany but from land border nations from Austria, France and other places. And then the final grouping which is everything that’s left is the international visitors.
Contrast that for example moving over to the second in from the right with Spain and you see a very different tourism economy. Perhaps intuitively only 35% of their hotel beds are being filled by domestic residents. Only a tiny proportion, 10%, are being filled by people who’ve come from a land border nation, which in their case would be France or Portugal, leaving more than 50% filled by people who are likely to be flying in from further afield.
But that model is not an inevitability because France and Austria are also major tourism receiving nations and have very different models. So Austria for example has this huge blue bar. They receive very high numbers of tourists but coming from land border nations from Switzerland and Germany and Czechia and others. So this is a model of tourism which enables lower impact transport, it enables rail travel, it enables road transport and other forms.
And over here in the case of France, interestingly, France is a huge receiver of tourism and has a huge tourism economy. But interestingly, and I think this for me was unintuitive, it still remains the case that 70% of their hotel beds are filled by their own residents. They have a great passion for domestic holidaying, something which here in the UK we’ve really lost. There’s a great pride in France for staying at home and going to the Riviera and things. And also a quite decent share, a better share than Spain for example, coming from land border nations including of course the UK through the channel tunnel—arguably not a land border but you know what I mean.
So there’s a question here for us to discuss about what future do we want, do these countries want for their tourism. Does Spain want to continue with this high volume short visit, fly in fly out two three days in many cases, get wasted on the way type of tourism? Or are there other ways to produce value? Can you produce it like Austria does from land transport or can you produce it like France does from the domestic industry? These will be the questions that we’re looking at next. And I think I’ll probably get rid of the slides for now and maybe we can kind of flow into more of a discussion.
[Q&A section]
John (moderator): Alex, thank you very much indeed. As ever, that was absolutely fascinating. Just to say, as I always say, that for myself and for Alex in this case, English is our mother tongue. We speak fluently in English. I can’t speak fluently in any other language at all. So I’m saying to you if English is not your mother tongue, feel free to speak up if you want to, even though the English may be a little bit broken, you’re amongst friends and we’ll help you out. So I think if you’re on camera, just raise your hand if you would wish to speak. If you’re on the phone, it’s more difficult to raise your hand. So just start speaking really and I’ll give you some sort of priority. So who would like to kick off?
You may want to just introduce yourselves. You don’t need to, but you may just want to say when you speak where you’re coming from and that sort of thing. On you go Chris.
Chris: Thank you so much John. I’ve been hearing following remarks from Dr. Alex Chapman. It’s really unfortunate that the world has failed to witness the fact that the airport expansion is contributing less to the economy especially in global south where you find that majority of the people flight even per year liable go up abroad but you find that governments are pushing to expand airports in in disguise of boosting tourism but Dr. Alex Chapman’s explanation. It’s really unfortunate that we need to find out best we can have to phase out of that kind of system and mentality in our leaders.
Here I got funding from stay grounded to do research on mapping of fossil ties in East African universities and we come to realize that a number of corporations are pushing in in education system towards having them dominating the African market because some fighting and to that advantage best they can find themselves dominating the market do washing like long sustainable aviation fuels and other kind of greenwashing tactics. So as in African continent how best are we going to find this integrated this kind of research expanded that we can foster we can push the system change like having transport dominating instead of pushing for aviation airport expansion and so on. So that’s my question to Dr. Alex Chapman. How best are we going to have a system change especially global south where we can have leaders focusing on transport and investing much in airports.
John: Thank you so much Chris. Thank you very much indeed for that. Just if you’re on the phone can you mute yourselves? Unless your conversation is very interesting in which case we all want to hear it. But apart from that—that’s great. Chris, thank you very much indeed. That is a critical question I think isn’t it Alex? How do we actually use this material that you produced to influence people?
Alex: Yeah, thanks Chris. Really interesting thoughts. I mean obviously I’m sorry that this is at the moment a very European focused report. Maybe the next one needs to be the economics of air transport in in the global south or some other region.
[brief interruption – someone asked to mute]
John: If you can just mute yourself if you’re talking apart from Alex don’t you don’t you mute yourself. But yeah thanks very much. Cheers. On you go Alex.
Alex: Yeah. So I think the first thing to think through is what exactly it is that motivates the decision makers who are backing airport expansion and these policies. I mean for many of us I would argue that really the climate risk and the scale of the economic damage that will be done by climate change should be enough. It should be enough for us to challenge the rationale for these decisions. All the stuff I’m talking about really in the scale of what we face it should be irrelevant but it’s not.
And I think if you—I’ve set out here how in parts of the European north and west the case for further economic growth from air transport is really very weak but you still see our politicians, our prime minister and our Chancellor promoting it on the global stage. And I think a key issue here is that when the politicians go to places like Davos, where they go for these world forum events to discuss what they’re going to do for the economy, they spend a lot of time with a certain class of business person, a certain type of investor.
So if you look at who owns these airports, for example, in the case of many of the UK’s airports, they’re owned by the private sector and by private investment firms, sometimes by foreign states investment firms of Singapore and China and Qatar are bought into UK airports. But increasingly also private equity firms like BlackRock, one of the largest private equity firms in the world. And they stand to benefit, profit greatly of course from the expansion of these airports.
And when our leaders are in the same room as them in places like Davos promising them a big expansion sounds good and it isn’t really about the—what matters in those rooms in those corridors of power where decisions get made isn’t the reality on the ground of whether the economic benefits that benefit the people are actually going to materialize. It’s the kind of vibes. It’s the positive vibes of where we’re supporting big business to grow. Which a lot of our decision makers I think are quite swayed by both here in the global north and in the global south.
The only way that we can sort of challenge that is first of all obviously where direct corruption is involved we have to challenge that but invested interests financial interests but we do also have to challenge the economic basics. In whose interests are the economic decisions are being made. And of course I think particularly where tourism is involved there’s still a lot of work to do to exactly break down who benefits from tourism because you see from the mass protests across places like Barcelona and Europe and starting to spread across parts of the global south as well that the tourism industries are often captured by particular interests and very little of the money that flows in is actually left on the ground with the people who are affected. Very very little.
And they do that for example by controlling the assets, owning the hotels, owning the restaurants that the passengers who fly in go to and capturing those within private equity firms’ hands and others. And again that means challenging that but it also means partnering with other groups outside of the aviation sector because of course tourism is impacting many other groups outside of just us with an interest in air transport to shine a light on some of those inequalities. Anyway, I could go on for a long time. It’s a really interesting question, Chris. I hope that’s at least partly useful.
John: It was a—No, you’re right. It was a great question, Chris. Thank you for that.
Al [caller]: Good evening. Nice to see you again, Alex. One thing that makes a difference is all the countries you’ve mentioned are all land countries. We are the only island and the government would say well it’s the only way more or less to actually go from A to B. I mean they actually haven’t made much effort so far to use the channel tunnel to go to many parts of Europe. There are a lot of places that we could go to, we don’t, but otherwise it’s actually ferries and aircraft. So I’m not sure whether from the government point of view those figures would actually impress them. And by the way, I’m living on the site of the Third Runway about three mile from Heathrow airport. Thank you.
Alex: Thanks. Yeah, I mean it’s a valid point. I think it is an absolutely incredible situation where a state would invest tens of billions of pounds in building the channel tunnel and then only run it at about 20% of its capacity. I mean that’s just extraordinary situation that I think can only happen here in the UK maybe. But maybe we can pray that a government will actually fulfill the potential of that type of infrastructure.
But of course I think also with climate change, with extreme heat starting to affect many tourist destinations, extreme flooding starting to affect others, we also have to adjust to a world of less flying and more domestic tourism. Actually last year here in the UK, we had one of our—we had our sunniest year on record in history and yet the number of people who were going on holiday in the UK declined by 6%. How could that be the case? How can we have had the sunniest year on record and seen the number of domestic tourists going down? And that suggests to me that there is a deep failing in government and governance over this issue which other countries will also be exposed to.
You can ask questions about many of the European countries’ focus on their domestic industry. Interestingly, of course, many studies also suggest that domestic tourists are somewhat preferred by local residents who live in and around the infrastructure. So understandably, there’s plenty of Spaniards who are not loving the Brits who go over there and get pissed. Domestic tourists tend to be a bit more sensitive to the surroundings that they operate in. So they leave a more sensitive footprint in the economy and they spend more in small businesses.
So as economies across the world grow stronger and particularly in the global south also grow stronger, I think we do need to ask the question whether we should be telling them to follow the model that we’ve done over the last 20 years or to chart their own path for a more sustainable and ultimately better situation for the local society and local people.
John: Thanks, Alex. Listen, I’ve got a confession to make. I’ve forgotten your first name again.
Herschel: It’s Herschel. But I listen I’ve done this several times on the webinar. So apologies. We know each other very well because he translates for me when I’ve been to Frankfurt once or twice to make speeches and of course I can only make them in English. So a valuable person to me personally and to the movement generally. On you go.
Okay. Thanks. My name is Freedom. My first name.
John: Yeah, that’s right. I’m going to write it down now so I remember it for next time.
Herschel (Freedom): Okay, I changed the wording in on my picture. I just wanted to pick up the question Chris [asked] before. So next Wednesday there is a big event in Frankfurt at the home of mobility. There are a lot of speakers all over Europe from airports, airlines and business line suppliers and they are talking how to improve the situation of airports and airlines in the competition and the surrounding world.
So I was just more motivated. I’ve made an application to join this meeting but I’m a normal person looking around. Though there are these speakers the program is fixed and I just thought I’m very very much motivated to join the meeting and have a chance to give them notice of this important study which you have just seen because the question is we are talking here like in a bubble I think 100% of here our people here we have the same intention, we have the same ideas, we have a lot of information which is aligned and we learn each time on these meetings what is going on on bad things but how can we increase the acceptance of the other side.
So that’s very important Alex and you mentioned it already so this is one of our really weaknesses instead of making very good studies and I like that. I’d like to read that later on. And the question is how can we really improve the situation a little bit? So we cannot change the whole business. And I’m living at the Frankfurt airport around them. It’s the biggest in continental Europe. And the press they say, “Hey, you want to destroy the airport?” Say, “No, we don’t want to destroy the airport. We want to make it acceptable to live around and to have it as a normal heritage which we can accept.”
So I think there is a big question how can we cross the border of our knowledge to the other side. I don’t know whether they don’t want to hear the knowledge or if they have to do that because it’s because of the money. So that’s my question—how can we improve our situation in that respect.
Alex: Thanks. Great question. Lots of really valid points there. So the first thing to say yeah I think that sometimes when you’re in meetings like this there is a tendency to feel oh we’re sort of talking in our bubble. The first thing I would say is people on the call will be part of other groups. They will have their own connections. Some will be connected to local and national politicians or to journalists. So do always use this opportunity to share this research with those groups so that if you’re in your own airport expansion battle you can submit my report into the proceedings and make sure that it gets heard so that we can say look there is another narrative here.
The reality is that the current growth-led narrative is very strong, very incumbent and has established itself over 20 years with links into politicians and endless consultancy studies. So we are in a weak position. But between us we can build legitimacy.
So this last year I gave evidence, oral evidence to two parliamentary committees—the transport and environmental committees of the UK government—and I was able to do that to speak on that level of stage. I also gave evidence by the way to a German parliamentary committee on tourism. In a few weeks I’m going to speak to the Belgian government and likely be speaking to the French government. I’ve presented in the Spanish Parliament.
My legitimacy comes, yes, partly from the quality of my work, but it also comes from people like you saying, “Hey, look at what this guy’s doing.” Whether that’s just on social media. I post everything I do is mostly on LinkedIn these days. If you don’t follow me already on there, follow me on LinkedIn. Share the work I’m doing. Highlight it to people that know because in order to challenge this narrative, yes, it’s an uphill struggle. We have to raise the profile of the counter-narrative.
I’ve done as much as I can to make the evidence as strong as possible. Now we have to get it in front of the eyes of the people who need to see it. And there’s some people out there who are looking and interested to hear a counter-narrative, but it just doesn’t come across their desk. They don’t get to see it. So that’s my sort of optimistic message, I suppose, that we can build something from within these types of groups and circles.
John: Thanks, Alex. Elaine.
Elaine: Okay. Hi. My name is Elaine Miller and I’m the founder of Plain Sense for Long Island. I’m located in Nassau County which is in New York. And the question that I wanted to ask or bring forth is the airports that are hubs where planes are flying in just to make connections. So you have a lot of planes coming in. JFK is one of them, not LaGuardia because they’re basically straight runs. But so we get a tremendous amount of planes coming in and where the passengers are getting onto another plane to fly somewhere else.
So when they’re talking about the growth of an airport you know they want it to grow because they want more planes coming in for those connections. So how does that correlate with your study on the economic growth? How does that correlate when if an airport is used as a hub? And I’m sure I don’t know which ones particularly are hubs in Europe but I’m sure you have them. So you’re having a tremendous amount of planes coming in and the people never leave the airport. They just get onto a connecting flight.
Alex: Yeah. It’s a really good question, one that I get asked a lot. So you saw on the map of Europe I presented those red zones where I talked about saturation where basically from within those regions there was no demand in either direction for air travel. They’re particularly concentrated around the hubs—around Schiphol, Paris, Frankfurt and Heathrow—because those areas in the local area are just not interested. They don’t need more air capacity. Clearly the local people. So not very minimal value gets left in the local area.
And of course with the way with the lack of taxation on air transport, hubs produce even less value for the public because those flights that come in and out, those passengers are not even paying any taxes to the governments for them to invest in public services.
The old original justification for hubs was of course to improve your business connectivity. It was deemed that for example someone in my country in Manchester can hub into Heathrow and then hub onwards to wherever they need to go for business and that was the justification in the US as well. But in the 1980s Heathrow, our hub airport, 50% of its passengers were flying for business purposes. Today it’s 18%. So it’s absolutely collapsed the number of business passengers who are using that hub facility and I would imagine it’s likely moving in a similar direction in the US because of digital communication. The way that we’re all meeting now, it works so well and it gets better all the time.
So what we’re actually starting to see is hubs are becoming ways of sending tourists further afield in greater numbers where the value that that individual gets—often tourists don’t care hugely where they go, right? If you ask, there was a study in the Netherlands that asked exactly how essential is your destination to you as a tourist. A lot of them, they just want to get somewhere with some sun and some good food and that’s about it, right? So through our hub airports, we send them off to Thailand instead of to somewhere closer.
That’s the function of a hub airport these days which is the worst of all worlds because it doesn’t leave any economic value in the area. It absolutely destroys the planet, noisier planes for the local people with so little value. So the hub model I think is increasingly needing to be challenged for that reason but also because in itself it is starting to be challenged by changes in the engineering of the airplanes.
Because it used to be that smaller narrow body airplanes couldn’t go very far. So you needed a big airport to get to your long haul flights. Now the narrow body airplanes can go a lot further. So you don’t necessarily need the hub facility to enable that. So that’s also going to change. So I think it’s time that we challenge that model.
John: Thanks Alex. Vout and then Chris.
Vout: Hi. Vout Laman from near Schiphol airport the hub. But I’m not going to talk about this. I want to thank you for the new variables you introduce, Alex. But I miss a few because I think we in the Netherlands talk much more now about broad prosperity, the whole of variables also how the impact on health etc etc climate and we don’t talk about growth but we talk about reduction.
And we get a new research report done as a council citizens and that will be interesting because that will prove that a smaller airport is not bad for the economy and I think that might be a teaser for one of our next webinars that’s coming up because this report is still under embargo so it’s only on the 27th of February that we can publish it but it sure is possible to have a nice country with a nice economy with a smaller airport and that’s of course also because of the hub function could be reduced.
Alex: Oh, absolutely. I think there’s been some already some great research from the Netherlands talking about the idea of quality over quantity. So you don’t need as many flights. You just need to make sure the ones that you do have are the ones that are needed and most essential. And as I say, what I presented today, my report is only a tiny part of a more complex picture. I was interrogating the claims about growth, but that’s before you consider whether noise, air quality, carbon emissions, and things are—which of course contribute to our well-being are vital to consider as well. And we’ll be looking more at those in future reports.
But I’d be very keen to see your next one. Please, if you don’t already, if you’re not connected on LinkedIn, send it to me on there and I’ll check it out.
Vout: Okay. Dutch, but no problem.
Alex: I these days that’s not a problem. I’ll stick it in a translator. I’ve actually I read Dutch language reports quite regularly these days. Not in Dutch.
John: Okay. Great. Chris, on you go.
Chris: Thank you. Thank you, John. Actually my concern is also on the fact that we have seen governments not only in global south but also global north over there they are giving out I would say minor or incentive and subsidies to the aviation industries. So it could be one of the driver of that kind of expansion of aviation industry and airports.
But also on the other hand that kind of just also goes to the fact that those incentives given to fossil fuel and aviation industries are driving another kind of crisis which are which which is crippling the economy in different parts of the world in the global south where we found that the plastic industry is dominating the market and secondly it couldn’t bend like that and of that you find that the corporations which are fueling that kind of injustice are taking are taking less or meaningless action or step towards mitigating the crisis they are putting on this planet.
So my question could go how can we have a transition when we are having a number of policies being stipulated and with less effective action or less effective steps towards mitigating the vices.
Alex: Thanks Chris. Yeah, I mean the issue about incentives and paying the private sector to come and develop in countries and things like that I find it very questionable. Interestingly countries like Germany long long ago now realized that the incentives and things that they paid to their airports were a complete waste of money. Basically they ended up subsidizing loss-making airports.
In my personal view, I don’t really think there’s much of a reason why any airport should not be publicly owned anyway, given if it is part of our transport infrastructure and it is a major cause of pollution and other damages. It should be in public hands.
The dirty industries of sustainable aviation, so-called sustainable aviation fuels or biofuels alternative fuels and others that are the industry is now pushing in order to just justify its own growth, it’s a very dirty business. It’s a whole other debate we could have another day but it’s obviously absolutely essential that groups do good investigative journalism into what happens over the next few years because what the industry is proposing to do, the volumes of biofuels they’re proposing to produce to sort of justify their own existence could be really damaging to ecological integrity and economies.
It’s an interesting question—it’s not just do we need this thing, but in a world of finite or limited amounts of energy, limited amounts of biological material and land space, not just should we use it, but what is the best use of these resources? What use is in the societal interest? Is it in our interest to sustain the luxury flights of a very small minority with vast amounts of land and energy?
John: Traffic to the chat if you wish to say something. Yes, there’s been quite a lot going on in chat. Anything you identify in particular Elira?
Elira: Not really. There are some comments. Not a question.
John: I think they’re mainly comments, aren’t they? Because I’ve been trying to watch them as we go through.
Elira: Yes.
John: Yeah. Okay. Anybody else want to say a few words?
In that case, I think we’re there. So I’m just going to pass back to Elira in a second, but to thank you very much, Alex. That was really stimulating. If you send your slides to me, I can then pass them on to Vout who’s our web master and they can go on the website. The recording as normal will go up on YouTube and will go up on our website and the other parts of social media hopefully within the next day or two.
Our next webinar, as Vout kind of hinted, is going to be about Schiphol airport and about what the campaigners have been doing there over a 20-year period. So Vout and Matt, who’s also on the call, will lead that and that is on the 5th of March. So that should be really interesting. And it’ll start at our normal time. So that’s it from me. So Elira, do you just want to hand back to you?
Elira: Okay. I want to thank Dr. Chapman for the very interesting presentation that was very useful for us. I hope it was for you too. And I want to say good night to all of you to Europe and to America. Thank you for being with us and we hope to see you at our next webinar. Thank you all. Goodbye.
Alex: Thanks for having me. Goodbye.
This is a machine-generated transcript generated on the fly by Google/Youtube/AI. Accuracy totally not guaranteed. Provided only as a convenience and to help people with disabilities. Caveat lector!