Heathrow expansion under fire, again

The government's support for the proposed expansion of Heathrow airport has come under fire for the second time this week, following the publication of a report claiming the economic case for a third runway is flawed and should be subject to an independent review.

The report from the Stockholm Environment Institute (SEI) was commissioned by Friends of the Earth and claims the government's consultation document used optimistic assumptions regarding the price of oil and increased demand for flights to artificially strengthen the economic argument in favour of expansion.

It comes just days after an investigation for the BBC's Panorama programme revealed that airport operator BAA had argued that the development of "green" super jumbos over the next two decades would help ensure the airport could expand without breaching legal limits on pollution and noise levels, despite the fact that no manufacturer currently has any plans for an aircraft with similar credentials to that predicted by BAA.

The SEI report alleges that one of the central planks of the government's case for expansion - that it would provide more flights at cheaper prices - rests on the optimistic assumption that oil prices, currently standing at $130 a barrel, will drop to $53 by 2030.

The report also points out that the government's case for expansion is further strengthened by the dubious assumption that passengers simply changing planes at Heathrow represent a boost to the UK economy, and argues that the government has failed to account for the impact that increased use of rail and video conferencing is likely to have on passenger numbers.

"The government's economic case for Heathrow is fundamentally flawed, based on assumptions which are often highly speculative and biased," said Friends of the Earth's aviation campaigner, Richard Dyer. "If it wasn't for this economic sleight of hand the case for airport expansion would collapse."

He added that the government should now respond to the repeated criticism of the consultation process by appointing an independent commission to examine the economic case for airport expansion.

The government insisted that its economic case remained "robust" and that it had taken higher oil prices into account during the consultation process.

Meanwhile, BAA issued a damning response to the report insisting that it was biased and "completely misunderstands or misrepresents the economic value of Heathrow Airport and the way it operates".

A spokeswoman for the company said the report had seriously underestimated the economic value of transfer passengers. "The report has no appreciation that it is the existence of transfer passengers that makes routes to places in important emerging markets, such as Bangalore and Chennai, actually viable," she explained. "If transfer passengers were removed from the equation, these routes would disappear completely and the UK economy would lose out."

She added that the argument that the emergence of high-speed rail links would reduce demand for flights was a "red herring". "Even if all UK domestic passengers could switch to rail today, the 10 per cent of capacity theoretically freed up would be filled by other demand not currently being met, " she said. "Certainly, the airport would be full again before 2020 when a third runway is due to be completed and long before this theoretical high-speed network could actually be built."