Virgin announces new domestic flights

Where's the fabled capacity squeeze?

Richard Branson's Virgin Atlantic will today unveil plans to break into the short-haul market after winning the bidding for 12 pairs of slots at Heathrow.

Those slots will allow it to start flights to Scotland, with regular daily services from Aberdeen and Edinburgh to London. They will being in March, along with the airline's flights between Heathrow and Manchester.

Ridgway, the company's chief executive, told the Financial Times that:

We have fought hard for the right to fly short haul and take a strong challenge to British Airways within these shores.

Just last month, Richard Branson, chairman of Virgin Group, which controls Virgin Atlantic, launched a public campaign for more slots at Heathrow. But the campaign was predicated on Branson's desire, not for flights to Manchester and Edinburgh, but for flights to Hyderabad, Bangalore and Goa. The Guardian's Gwyn Topham wrote, in October:

Virgin Atlantic is considering a break with its go-it-alone history by joining an airline alliance, Sir Richard Branson said as he launched Virgin's new route to Mumbai with a pledge to expand to three more Indian destinations if he can win slots at Heathrow.

Virgin said its investment in India would pass £300m with its two newest A330 aircraft now operating the Delhi and Mumbai routes. Branson said he was also looking at direct Hyderabad, Bangalore and Goa services from Heathrow, although the chances of winning scarce slots in the immediate future seemed slim.

He said finding slots would be tough but "we're going to start campaigning". It would be "part of our campaign for an extra runway to be built at Heathrow", he added.

The fault here does not really lie with Virgin. The extra slots that they picked up in the auction have to be used on the same routes that BMI, the company which used to fly them, operated. If Virgin want to fly more planes to India, then they have to get different rights which allow them more long-haul trips.

Nevertheless, the news puts a different spin on the standard claim that Britain generally – and London specifically, and Heathrow even more specifically – needs greater airport capacity to fly more planes to emerging markets. The problem doesn't seem to be lack of space in the country's airports, but terrible, centralised and backward-looking allocation of that space.

As Zac Goldsmith wrote for this magazine in September:

We need to encourage a shift from air to rail wherever possible. Every week, there are 78 flights to Brussels, 94 to Manchester, 37 to Newcastle, and 95 to Paris. All of these, and many others, can be reached easily by train. With a better high speed rail network, they will be easier still.

Or, as I wrote the month before:

If we want to have more capacity, one really easy thing to do is stop flying from London to bloody Manchester.

Richard Branson dances in India, because he is Richard Branson and he will do what he wants. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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A third runway at Heathrow will disproportionately benefit the super rich

The mean income of leisure passengers at Heathrow in 2014 was £61,000.

The story goes that expanding Heathrow is a clear-cut policy decision, essential for international trade, jobs and growth. The disruption for those that live around the airport can be mitigated, but ultimately must be suffered for the greater good.

But almost every part of this story is misleading or false. Far from guaranteeing post-Brexit prosperity, a new runway will primarily benefit wealthy frequent flyers taking multiple holidays every year, with local residents and taxpayers picking up the tab.

Expanding Heathrow is not about boosting international trade. The UK is only marginally reliant on air freight to trade with the rest of the world. Total air freight traffic in the UK is actually lower now than it was in 1995, and most UK trade is with Europe, of which only 0.1 per cent goes by air. Internationally, as much as 90 per cent of trade in goods goes by ship because transporting by plane is far too expensive. And in any case our most successful exports are in services, which don’t require transportation. So the idea that UK plc simply cannot trade without an expansion at Heathrow is a gross exaggeration.

Any talk of wider economic benefits is also highly dubious. The Department for Transport’s forecasts show that the great majority of growth in flights will come from leisure passengers. Our tourism deficit is already gaping, with more money pouring out of the country from holidaymakers than comes in from foreign tourists. What’s worse is that this deficit worsens regional disparities since money gets sucked out of all parts of the country but foreign tourists mostly pour money back into London. As for jobs, government estimates suggest that investing in rail would create more employment.

As for the public purse, the aviation sector is undeniably bad for our Treasury. Flights are currently exempt from VAT and fuel duty – a tax subsidy worth as much as £10bn. If these exemptions were removed each return flight would be about £100 more expensive. This is a wasteful and regressive situation that not only forfeits badly needed public funds but also stimulates the demand for flights even further. Heathrow expansion itself will directly lead to significant new public sector costs, including the cost of upgrading Heathrow’s connecting infrastructure, increased pressure on the NHS from pollution-related disease, and the time and money that will have to be ploughed into a decade of legal battles.

So you have to wonder: where is this greater public good that local residents are asked to make such a sacrifice for?

And we must not forget the other sacrifice we’re making: commitment to our fair share of global climate change mitigation. Building more runways creates more flights, just as building more roads has been found to increase traffic. With no clean alternatives to flying, the only way to meet our climate targets is to do less of it.

The real reason for expanding Heathrow is to cater for the huge expected increase in leisure flying, which will come from a small and relatively rich part of the population. At present it’s estimated that 70 per cent of flights are taken by 15 per cent of the population; and 57 per cent of us took no flights abroad at all in 2013. The mean income of leisure passengers at Heathrow in 2014 was £61,000, which is nearly three times the UK median income.

This is in stark contrast to the communities that live directly around airports that are constantly subjected to dirty air and noise pollution. In the case of London City Airport, Newham – already one of London’s most deprived boroughs – suffers air and noise pollution in return for few local jobs, while its benefits are felt almost entirely by wealthy business travellers.

Something needs to change. At the New Economics Foundation we’re arguing for a frequent flyer levy that would give each person one tax-free return flight every year. After that it would introduce a charge that gets bigger with each extra flight, cracking down on those that use their wealth to abuse the system by taking many flights every year. This is based on a simple principle: those who fly more should pay more.

A frequent flyer levy would open up the benefits of air travel, reducing costs for those struggling to afford one family holiday a year, while allowing us to meet our climate targets and eliminate the need for any new runways. It would also generate millions for the public purse in an efficient and progressive way.

We have to take back control over an airports system that is riding roughshod over communities and our environment, with little perceivable benefit except for a small group of frequent flyers.

Stephen Devlin is a senior economist at the New Economics Foundation.