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Expanding Airport Capacity: Competition, Connectivity and Welfare

Discussion of options for Gatwick and Heathrow

The Airports Commission was set up by the government of the United Kingdom in 2012 to take an independent look at the UK’s future airport capacity needs. It was tasked with setting out the nature, scale, and timing of steps needed to maintain the UK’s status as an international hub for aviation, setting out recommendations on how to meet any need for additional airport capacity by the summer of 2015. Its recommendations are underpinned by a detailed review of the evidence as to how demand is likely to develop and the expected future pattern of the UK’s requirements for international and domestic connectivity.

The Airports Commission asked the International Transport Forum for support in assessing the options with a quantitative analysis of the likely airline responses to capacity expansion. Two reports assessing impacts on competition and connectivity were published in 2014. The present report extends the analysis and deepens the assessment of welfare and competition effects in response to comments from stakeholders consulted by the Airports Commission. It also reviews potential options for steering the development of connectivity in an expanded London airports system.

This report is part of the International Transport Forum’s Case-Specific Policy Analysis series. These are topical studies on specific issues carried out by the ITF in agreement with local institutions.