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U.K.’s Greening to Debate Heathrow Capacity Fix With BAA CEO

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U.K. Transport Secretary Justine Greening
U.K. Transport Secretary Justine Greening. Photographer: Justin Tallis/AFP/Getty Images

March 6 (Bloomberg) -- U.K. Transport Secretary Justine Greening will meet with managers from London Heathrow airport and its airline customers to discuss ways of maximizing capacity at a hub where the government has blocked expansion.

Greening will meet with the Heathrow Leadership Group to explore possible “short-term solutions” to capacity constraints, she said last night in a speech in London to members of the U.K. Airport Operators’ Association. The HLG meets once a month and is headed by Colin Matthews, chief executive officer of Heathrow owner BAA Ltd., according to the airport’s website.

The government will also call for testimony on ways that the U.K. can maintain its air-hub status, Greening said. BAA and British Airways, Heathrow’s biggest user and also represented on the HLG, favor development of the existing airport with the addition of a third runway, something that the government has said it opposes on environmental grounds.

“We are clear that we must look at what steps we can take to make the most out of existing capacity and deliver more capacity in the long term,” Greening said. While she added that solutions must be “sustainable,” she made no mention of the moratorium on adding extra runways at London’s airports.

The latest initiatives are separate to the government’s development of a new policy framework for U.K. aviation, proposals which are due for publication this spring.

Jobs, GDP

Heathrow is Europe’s busiest hub, attracting a record 69.4 million passengers last year and handling 476,197 flights, or 99.2 percent of its 480,000 limit, according to BAA figures.

Britain could lose more than 140,000 jobs and 8.5 billion pounds ($13.4 billion) in annual gross domestic product by 2021 without urgent action to maintain airline connectivity, according to research released today by Oxford Economics and sponsored by Heathrow.

Construction of an alternative hub in the Thames estuary, as favored by London Mayor Boris Johnson, would take a minimum of 25 years and risk the loss of even more positions as traffic moved to Frankfurt, Amsterdam and Paris, according to the report.

U.K. Institute of Directors Director-General Simon Walker said in a statement he backed the study’s conclusions and that the failure to add capacity was “lamentable.” Mick Rix, aviation officer at the GMB labor union, said all options for growth should be considered, including an additional runway at Heathrow.

About 70 business and union leaders urged Prime Minister David Cameron to look again at expanding Heathrow in a letter published March 4 in the Sunday Telegraph newspaper. Cameron’s coalition government canceled plans for a third runway in 2010 amid concern about increasing noise levels for people living directly beneath the flight path.

To contact the reporter on this story: Chris Jasper in London at cjasper@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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