No evidence that expanding UK airports will deliver economic growth
- 2 days ago
- 2 min read
The government's Climate Change Committee has questioned the economic benefits of airport expansion, saying that there is no evidence to support the assertion that aviation is essential to the UK economy. Recent work from the New Economics Foundation reinforces that position and similarly questions the lack of evidence - see the press release here
The truth is that UK aviation is a largely leisure-based industry has delivered little benefit to the UK economy for a very long time in spite of what the aviation industry claims.
By encouraging households to spend more money on travel abroad instead of in foundational sectors, the government could be undermining its growth targets. After inflation, total per-household spending has changed little over the past two decades. Meanwhile, household expenditure on travel abroad has surged, rising 70% over the prepandemic period, displacing expenditure in other more productive domestic sectors.
Figures show that spending on domestic holidays fell by 21% between 2022 and 2024, meaning losses of £3bn for the sector. The UK’s coastal regions saw the biggest impact, with domestic holiday spending falling by 30% (£1bn) over this period.
Meanwhile, although inbound visitor spending also increased during this period, data suggests this was concentrated in London and was not enough to offset the loss at a national level.
Business use of air travel has collapsed and the UK is sending three times as many tourists out of the country as it is bringing in, resulting in a net loss of many billions of pounds of local spend from the UK economy. This loss of local spend is damaging to businesses that absolutely depend on UK citizens spending the money they earn here in the UK.
Remember that Newcastle Airport is primarily a leisure facility with over 80% of passengers flying out on holidays, city breaks, weekends away and to visit family and friends - the loss to the regional economy is significant and damaging.
So, what's the benefit to the region of making this worse by expanding passenger and flight numbers?