Skyways to economic growth
14 October 2016
Fifty kilometres north of London, deep in the English countryside, Luton airport serves 15 million passengers a year – up 15 per cent in just one year.
It is one of five airports in the London area – alongside Heathrow, Gatwick, Stansted and London City – making London the busiest ‘multi-airport’ market in the world.
That makes London an obvious place to look for insights as we plan the new Western Sydney Airport. When it opens in the mid-2020s, Sydney too will become a ‘multi airport’ market.
Last week I visited Heathrow, Gatwick and Luton airports. On the same trip I visited two leading Asian airports - Singapore’s Changi and Korea’s Incheon – and Amsterdam’s enormous Schiphol airport.
The strongest impression from these visits: airports everywhere are experiencing continuing strong growth. Low cost carriers are driving traffic, as the aviation sector is liberalised around the globe. Business travel continues to grow.
And leisure travel is rising strongly – particularly as very large countries like India and China get wealthier. At Changi, visitor arrivals from China are up more than fifty per cent in the first half of this year.
Another clear lesson: governments everywhere have a clear focus on the economic importance of their nation’s airports. Changi generates around 7 per cent of Singapore’s GDP.
Airports are major jobs generators: Heathrow for example provides 25 per cent of the jobs in the communities around the airport.
The Dutch have built up Schiphol Airport over many years: its share of traffic to and from Europe significantly exceeds the Netherlands’ share of Europe’s population.
Korea’s Government invested billions to build the massive new Incheon Airport, reclaiming land from the sea to create a 56 square kilometre site.
A particularly important insight, as we plan for Western Sydney Airport, is that maximising the economic benefits goes well beyond the airport site itself. It is vital to plan to attract appropriate businesses to locate near the airport.
As well as building Incheon Airport, the Korean Government is building a brand new city across the bay, Song-do. This has six foreign universities as well as domestic ones, and significant manufacturing facilities, for example for pharmaceutical products which are exported around the world.
At Changi they are planning a new runway and the massive new Terminal 5, on some 1000 hectares of land reclaimed from the sea. The plans include extensive commercial office facilities – targeted at businesses that will value an airport location.
At Heathrow they cite the economic clusters located around the airport, in sectors like pharmaceuticals and technology.
One more important lesson: successful airports put a lot of time and effort into community engagement.
This will be a priority as we develop our plans for Western Sydney Airport; recently I announced that we will form a community consultation body, the ‘Forum on Western Sydney Airport.’
Western Sydney Airport will be a vital economic and social asset, for Western Sydney and for the nation.
Of course it will not be as big as many of the airports I visited – but as Luton airport demonstrates, you do not need to be a city’s main airport to be thriving and vibrant.
This article originally appeared as "Skyways to economic growth" in the Daily Telegraph on 14 October 2016.