Manchester Airport reveals vision for its role in creating a Northern Powerhouse

25th Feb 2016

Manchester Airport today outlined its vision how it can help drive the creation of Northern Powerhouse.

Speaking at the opening of the UK Northern Powerhouse Conference at Manchester Central, Manchester Airports Managing Director Ken O’Toole unveiled a new fly-through video showing how the airport will look in 10 years following a £1bn investment.

Subject to securing planning permission, it will see a state-of-the-art terminal building created through the expansion of the airport’s existing Terminal Two building.

Mr O’Toole said the project will give the whole of the North the “global gateway it deserves”.

He added his support to efforts to create a Northern Powerhouse, saying: “It is 18 months since the Northern Powerhouse phrase was first coined by Chancellor – and north west MP – George Osborne and some good progress has been made.

“The importance of a strong and vibrant Northern economy is more widely acknowledged than ever before and there can be no doubt there is increased recognition around the world that the North is both an attractive place to visit and to do business with.”

Mr O’Toole said Manchester Airport now has services to more than 210 destinations, with direct flights to Beijing starting with Hainan Airlines in June. It will boost the UK economy by £250m, he added.

But he said there are things Government can do to fully unlock the potential of the Northern economy.

The UK has the highest levels of Air Passenger Duty in Europe – more than double the rate seen in Germany. It is passed on to passengers through ticket prices.

The tax is deterring airlines from setting up as many long haul services as they are at lot the major European airports.

Mr O’Toole said it was long haul services that are key to long term growth in the UK but South East airports are currently full.

That means Government should not just focus on where a new runway should be built in the South East but on how spare capacity at airports like Manchester could be made use of. Manchester Airport handles 23 million passengers a year but has the capacity for 55 million.

He added: “It follows that the Government should be doing far more than it is to drive the development of air services, and particularly, new long haul services across the country.

“One of the key ways it can do this is ensuring UK aviation taxation policy does not make UK airports uncompetitive against our European and world peers, peers that we compete with daily for the limited aircraft that airlines have to deploy.

“At Manchester Airport, we have worked hard to develop a worldwide route network to be proud of and I have already name-checked the places we now connect to.

“But for all these successes, we are playing catch-up. Growth in long haul seats at our European peers has been two-and-half times the rate seen at Manchester Airport over the past decade.”

He added: “Just imagine the Chinese firm hunting for a location for its new European HQ, which will create 500 high value jobs. One great European city has a direct flight and one doesn’t – where will it pick?

“That is the impact of an anti-competitive tax that encourages connectivity in nation but hinders it in another.”

Mr O’Toole used his speech to propose a reform to APD. He said: “But what more could the Government do in this area to support the Northern Powerhouse and make the north truly competitive globally?

“Short of abolishing APD, there’s an opportunity to offer airlines starting new long haul services an exemption from APD for a period of time something we’ve referred to as an APD holiday.

“This would at no direct cost to the Exchequer provide a huge boost to the competitiveness of UK airports seeking to grow long haul services, and as a result, strengthen global connections right across the country.

“In the long run, the Exchequer would benefit not only from more air services paying APD, but also from the more productive economy that it would help create.”

Connecting the North to the rest of the world is just one part of the equation, however.

Mr O’Toole added there is also a desperate need to get on with connecting the North better with itself.

He gave his backing by the work being done by Transport for the North to create a Northern Powerhouse Rail system, especially high speed East-west rail links.

Talking about the need for high speed rail connections, Mr O’Toole, said: Unless access between the major Northern towns and cities and assets like Manchester Airport is also improved, the North will not fully benefit from our growth.

To draw a comparison, Gatwick Airport sits 30 miles from London and it takes 30 minutes to get there by train. Currently, Manchester is the only city you can get to within 30 minutes of Manchester Airport, which is ludicrous given how close it is to many of the great cities of the North.

“But with that sort of journey time to Leeds, Liverpool and Sheffield, there would be three times as many people able to access Manchester Airport from their front door within two hours as currently do.”

Summing up his speech, Mr O’Toole, said: When we reach our goal of being a 45 million passengers a year airport, the economic benefit we will bring to the UK will be nearly £1bn greater than today and we will support 20,000 more jobs.

“Why wouldn’t you want to unlock that benefit as soon as possible?”