The economics of Heathrow expansion

At the request of HACAN ClearSkies, CE Delft has carried out a study on the economic importance of expansion of Heathrow airport. The main conclusion is that an earlier, highly influential report failed to properly calculate the eco-nomic benefits of expansion and may even have substantially overestimated them. Furthermore, it would have been worth examining the effects of ‘de-mand management’, in the form of internalisation of external costs and restric-tions on slots for short-haul flights. Finally, it is concluded that the issue of in-ternational competition among European hubs is no reason for further cross-country harmonisation of environmental policy vis-à-vis nuisance to local communities. Because the bulk of the benefits also accrue to these communi-ties, local administrators are best placed to make prudent decisions.