The EU-US ‘Open Skies’ Agreement: Managing long-term capacity at London Heathrow Airport

Abstract

The EU-US ‘Open Skies’ agreement has liberalised the North Atlantic air transport market between the EU and USA. The agreement has effectively licensed the airlines already operating in the market to increase flight frequencies on existing routes, open new ones and also diversify airfares. In addition, the market has been opened to new entrants, particularly long-distance ‘low-cost’ airlines, which will likely follow their predecessor from the 1970s — Sir Freddie Laker's Skytrain. Such traffic growth will have to be accommodated at both EU and US airports. This paper considers the long-term management of airside and landside capacity at London Heathrow Airport, the largest of the five London airports and the most significant on the European side of the EU-US air transport market. The paper considers the prediction of airport demand in terms of the annual number of air transport movements and passenger volumes; elaborates some alternative solutions for providing sufficient airside and landside capacity; and generates scenarios for the long-term matching of these solutions with the predicted demand. The results suggest reasonable solutions for the long-term management of airport capacity to meet the predicted demand (ie until 2030), while keeping noise and air pollution within the prescribed limits.