Munich Airport is planning to build a third runway. Several reports claim that this will have beneficial impacts on the Bavarian economy.
CE Delft has reviewed these reports and has identified several errors. The most important errors are:
- The projection of passenger demand are exaggerated. In particular, the assumptions in the fuel-efficiency improvement of aircraft are too optimistic, the income elasticity of demand it too high and the price elasticity of demand is too low.
- As a result, it will take much longer for the third runway to become profitable.
- In addition, there is considerable scope at Munich to accommodate more passengers by using larger aircraft. Currently, Munich has fewer passengers per aircraft than most comparable European airports.
- The economic impact assessment only analyses the benefits and not the costs. Hence, it is impossible to tell whether the investment in a third runway is worthwhile.
- The economic impact assessment double-counts some benefits
- The economic impact assessment fails to recognise that creating additional demand in a region that is already doing well leads to pressure on prices and wages, rather than creating new jobs.
Because of these errors, the claims that the third runway will have positive economic impacts is unfounded.