Transport Committee Select Committees

Order, order, welcome and thank you

so much for coming along today to

answer our questions. Can I ask

yourself the purpose of the

recording to introduce yourself and

to you represent.

I am Jon Holland

Kay, the Chief Executive of Heathrow

Airport.

I'm Emma Hill for, director

for expansion at Heathrow.

The case

for a new Northwest runway at

Heathrow seems primarily to me to be

based on the need to maintain the

UK's hub status. What evidence and

is a specifically evidence is there

to support the assertion that the UK

will benefit from extra hub

capacity?

Thank you madam chair and

thank you for the opportunity to

speak to the committee. This is a

great opportunity to get on and make

sure that as you say, the UK remains

one of the world's great trading

nations by being at a heart of an

aviation network. What is unique

about a hub airport like Heathrow is

that we can develop the long haul

connections to typically business

destinations that the UK needs in

order to grow its economy. That's

not just important for London, it is

important for the whole of the UK

that we connect all of Britain to

the growing markets of the world and

Heathrow as a hub airport is one of

the most successful in the world, we

have long haul services, regular

throughout the year to over 80 long

haul destinations. Until recently be

with the best connected hub airport

in the world until we were overtaken

by Paris and that's evidence of how

the trading benefits that we get

with having a major hub can be

whittled away if we don't invest in

additional capacity because the

airlines that want to come to

Heathrow are choosing to go

elsewhere and they are typically

going to rivals in France. But

Heathrow expansion brings is three

things, first of all more long haul

coming to the growing markets of the

world, over 40 new destinations and

that will make sure Britain remains

of the global economy. Secondly the

opportunity for more original

collectivity to insure insure

important UK markets such as

Inverness, Aberdeen, Belfast

maintain their connections but we

can add connections to places like

Newquay, perhaps to Liverpool,

cities that are disconnected from

the UK hub airport need to be

reconnected to make sure everyone

benefits from the Heathrow

benefits from the Heathrow

expansion. Finally, it's not just

about people, it's also about trade

and export. A third almost of all UK

exports outside the EU go on

passenger planes from Heathrow and

yet many of those routes are at

capacity. If we want to grow the

economy and exports we need to have

more hub connections from Heathrow

and that will help to make sure

Britain remains one of the world's

rate trading nations, long cold

destinations, domestic connectivity

and exports are the key economic

drivers for Heathrow expansion.

One

of the perceived benefits of hub

airports is that it will make routes

viable because you can pull in

transfer passengers to make up those

flights. Can you give us an idea of

what proportion of passengers on the

Saint roof at Heathrow are made up

of international transfer

passengers.

On average transfer

passengers make up about a third of

all of our passengers and on the

thin routes, and for the benefit of

the committee, a thin route is a

less heavily travelled route which

is typically hard to make viable as

a point-to-point route. A good

example of that might be a market

like Mexico City, it's the

commercial centre of Mexico as you

would expect, a city the same size

as London, growing quickly, vital

trading market, and on a route like

that on average there might be

40-50% transfer passengers

throughout the year, on some days it

might be as little as 20-30%, on

Sundays as much as 60-70% but what

transfer passengers do is allow

airlines to provide that service

economically day in and day out

throughout the year and that's

exactly what business travellers

from the UK need so that you can

travel to your destination at any

time to your convenience and get

back again and for Mexico City,

particularly, we have two flights a

day from Heathrow, if you are

travelling on a couple of days time,

you can get to Mexico City with a

choice of different airlines

competing, fantastic service for

British business not enjoyed by

their opposite numbers in Italy or

Poland or many other major European

markets but is a significant benefit

to UK businesses by having a leading

hub airport here.

Would you be able

to send a data showing the

proportion of international transfer

passengers on some of the dinner

routes routes that you have recently

been able to add?

We'd be happy to

do that and I will write the

committee separately on that.

Thank

you. Thank you. All the major cities

are developing direct routes to

other major cities all around the

world. Surely that actually reduces

the number of transfer passengers?

It's an interesting example. What we

typically see happening in global

aviation, long cold destinations,

network carriers that operate from a

hub airport are growing the number

of destinations that they serve, a

good example would be Cathay

Pacific, they recently started a

four day a week service from Hong

Kong to Manchester, fantastic

conductivity for Manchester, exactly

the right thing the UK needs and

that's on the back of I think eight

flights a day directly to Hong Kong

every day of the year from Heathrow.

And what we've been able to do is

help to develop trade via Heathrow

for Manchester businesses that is

now being served directly. It's a

very good thing to have had its not

a substitute for hub connectivity.

Hong Kong is one... Hong Kong to

Heathrow is one of the busiest

routes in the world, it's absolutely

right other city should be able to

develop a connection but I think it

will be a long time before

Manchester has a direct flight to

Manchester City or to some of the

secondary cities in China it

desperately needs to trade with. One

tailback time, Heathrow will be able

to fill in that gap and make sure we

are helping businesses in Manchester

or Scotland or Belfast or the West

to develop.

And are you satisfied

and can you provide sufficient

evidence that the pattern is of

passenger behaviour and business

activity are not going to change

significantly over the next 20-30

years and that you are satisfied the

continuing need for a hub airport?

We are confident in the continuing

need for a hub airport and very

often people talk about the new

planes, the Boeing 787 and how they

will change the economics. Look at

who is buying those, they are mainly

been bought I network carriers

operating out of the hub airports,

people like Cathay Pacific or

Singapore airlines. They are helping

to build the hub because they make

it more viable to have secondary

cities connected and that's what we

need in the UK. The capacity for

more flights from Heathrow to

secondary cities around the world,

cities in China we barely heard of

but will be vital to the growth of

the economy long-term and yes, we

will see a growth in other cities in

the UK having direct flights into

other hubs around the world such as

Hong Kong or Dubai, that figure a

good thing but it does not

substitute for having an expanded

Heathrow because only an expanded

Heathrow will make sure the UK

remains at the centre of the global

trading network and does not come a

spoke to someone else's trading

network.

As an aside, I'm sure when

you mentioned it Newquay and

Inverness earlier you meant to

include Humberside as well.

I did

indeed! I hope that fly beat will

have a chance to speak to the

committee because that's one of the

important UK markets which is not

currently served by Heathrow and

they have mentioned it might be one

they would open up.

Thank you. I

think one of my questions are

specifically about the importance of

hub because in the MPS we see all

three expansion options offer a

comparable boost to passenger

numbers at the London and UK level

and Heathrow offers a marginally

more long haul connection, in 2013

the north-west runway would offer

122 long haul destinations rather

than 117 with no expansion and by 20

5024 rather than 122. That doesn't

seem to suggest you might expect

from a hub, that is only marginally

more long haul destinations, isn't

it?

We correctly have just over 80

long haul destinations, I think

Paris is slightly ahead of us with

86. If we can achieve 120 that makes

you through the best connected in

the world and Britain the best

connected country in the world, that

is a huge advantage for us as a

trading nation.

I understand that

it's just the MPS predictable

hundred and 17 x 2030 with no

expansion, there'd only be an extra

five with expansion.

Without

expansion of what we are likely to

see was laid out with the Airports

Commission he continued reduction by

domestic routes and UK regional

routes being replaced by long haul

routes. That is not the right

solution for the UK, we need to make

sure all of the UK benefits from

conductivity and only Heathrow

expansion can deliver that but I

would just point out the work that

was done in terms of passenger

demand by the TFT takes a

conservative approach to the growth

of passengers, but it clearly shows

is that there is more urgent need of

expanding Heathrow, the growth

demand is there, I can see that

myself. And it shows there is a

significant higher level of

long-haul flying from expanded

Heathrow but what does not take into

account by the economic benefits,

the benefits of freight, inbound

tourism, foreign direct investment

and that significantly understate

the economic benefit of the Heathrow

expansion by over £100 billion,

that's one of the big apps between

the DFT analysis and the work

originally done by the Airports

Commission and just helps to

underpinned the wealth of benefit

that comes to all of the UK with

Heathrow.

But how confident can we

be about that evidence when it

doesn't appear in the MPS and it was

withdrawn as not being sufficiently

edible?

I think the facts, if you

take exports, the facts around that

alone are compelling. Nearly a third

of all UK exports outside the EU

going through Heathrow, the exports

from Heathrow in just 3-4 days is

more the entire annual exports out

of Gatwick Ahmed that gives you a

sense of how we are different

business models. If we want to grow

the export economy we have to grow

Heathrow but none of that value was

taken into account with the DFT

analysis and the desert at the can

for the UK, that is why

manufacturing organisations and

export organisations are supportive

of Heathrow expansion.

Can I talk

specifically about business travel

because within the MPS, the

importance of business travel is

emphasised and that's part of the

strategic case yet when we look at

the numbers under all expansion

scenarios including no expansion,

the demand for business travel is

the same, why?

To give you some

context, the mix of passengers

travelling through Heathrow, around

a third are business, a third are

tourists and about a third are

visiting friends and relatives. And

I think the number she might be

referring to are solely the business

travellers, people as you would

imagine, we are vitally important

for the growth of the UK economy

because very often they are the

exporters doing the business deals

that we are then exporting on the

back. Tourists should not be

underestimated, until recently there

were more foreign inbound tourists

coming to Heathrow and outbound

tourists, that's unusual among UK

airports, most have more people

going overseas for the holidays and

coming back again, Heathrow, we are

the main port of entry for global

passengers humming here to spend

money and that's why the economic

value of tourism which was not

included in the DFT analysis is so

important because bad flight from

Mexico City will have business

people on a comet will have some

people visiting friends and

relatives but it will have a lot of

tourists from the bigger cities in

Mexico coming here to enjoy the

fantastic wealth of facilities here

in the UK and that is hugely

important to our economy.

Business travel has been declining

as a proportion of total travel at

the airport. Would it be fair to

say, do you think, that the Heathrow

expansion is primarily for the

benefit of leisure passengers?

It is a mix of passengers. That is

typically the case on any aeroplane.

You can't from Heathrow,

particularly with long haul, so you

have a Saudi business or leisure

route. Any plane will have a mix of

all of those passengers on board. --

you cant from Heathrow, tickly with

long haul, say you have a seriously

business or leisure route. This is

about as being able to go to a huge

economy like China, some of their

cities, to sell our goods, as it is

for Chinese tourists getting access

to spend many macro in the UK. It is

important we have direct flights

from places like China to motorists

can hear more quickly, the easier we

can make it for them to come to the

UK, the more likely they will choose

here instead of, say, France, which

has had a disproportionate market

share of tourists from China over

the last few years.

Is there evidence to support what

you have just said? In terms of the

forecasting it talks about the

increase of 10 million terminating

passengers per year by 2050, they

are almost all leisure passengers.

Is the evidence supporting what you

have just said?

Yes, I can happily

write to the committee and clarify

that. Inbound terminating passengers

and inbound leisure passengers would

be a very significant part of the

value that the Heathrow expansion

brings for the UK, and will be felt

across the UK and in all the tourist

destinations.

Steve, you wanted to ask something?

As you will be aware, considerable

support for the Heathrow expansion

has come because of the potential

for domestic connectivity, thank you

for specifically mentioning Newquay.

Can you guarantee Heathrow will

offer a minimum number of domestic

connections if the expansion goes

ahead?

At this stage we cannot guarantee a

minimum number of domestic

destinations. The reason for that,

it is not within our gift to all

control. What we can do is make sure

it is economic for airlines to fly

domestic routes, I can talk about

some of the actions we have taken to

do that, and encourage the

Government to change the way that

public service obligation routes

work so we have airport to airport

routes rather than the current city

to city. I think that is important

because for markets like Newquay,

Inverness, whether have a PSL, they

want to make sure it is opening up

the global connections that come

from Heathrow, not just a connection

into London. If I can touch on some

of the things we have done to play

our part in making domestic

connections viable, over the last

couple of years as a result of the

engagement we have had with UK

regions, we have reduced domestic

charges by more than half so that

the charges per passenger come down

from around £30 to around £13, £14,

a significant reduction to provide

better value for domestic

passengers. We have seen the

benefits about, we have seen more

flights added on the Inverness

route, we have seen Floyd B of the

competition and choice on Aberdeen

and Edinburgh. -- we have seen FlyBe

offer competition and choice. So we

have seen a reduction in ticket

prices, which is one of the main

advantages of expansion on domestic

airlines. We have reduced minimum

charges so it is viable for

operators with smaller planes like

Flybe to serve Heathrow routes

economically. I know they have been

very pleased with the performance

they have seen in Scotland.

As you alluded to, some of these

domestic routes are not always

commercially viable or certainly

very lucrative. If new slots are

awarded to airlines and they

effectively owned those slots, what

is to stop them moving on to other

more lucrative routes in the future

rather than the domestic ones?

This is where the piercer routes

need to come in, to make sure that

those routes are kept open. -- that

is where the PSO routes need to come

in. The last time I was in front of

this committee we were talking about

Brexit and what I mean for aviation.

At the moment what is stopping

Government from being able to make

those changes around PSOs is we need

to comply with EU rules. As we leave

the EU there may be more flexibility

to do what is right for the UK and

make sure we can guarantee in

perpetuity that markets like

Newquay, Inverness, Belfast,

Aberdeen have a permanent connection

to the best connected hub airport in

the world. That is important, as you

will know, because businesses

choosing to invest in those markets,

and Inverness is a great example,

need to have a confidence that

whatever happens they can get to

their international basis. In

Inverness, until recently, we had

Johnson & Johnson, a huge medical

company with its worldwide research

base, diabetes research base, in

Inverness, with no easy way of

getting to their base in the United

States. BA have started serving that

route, it is a fantastic connection

and the planes are full. It is a

perfect example of what we need to

do in the long term for all parts of

the UK.

PSOs play an important part

in ensuring that connectivity, but

if those routes supported by the

Government are specific to our

ports, how would you answer the

charge had basically gives Heathrow

and unfair advantage above other

London airports?

If the piercer

routes are specific to Heathrow? I

am sure any of those airports would

love to serve other London airports

as well. -- if the PSO routes are

specific to Heathrow. But forgiving

all parts of the UK the confidence

that they will have equal access to

global markets, I think it is

absolutely right that there should

be airport to airport PSOs in place.

The main benefit from the PSO is

that it offers both certainty and a

reduction in air passenger duty,

which is quite a significant

benefit. I should say that the

discounts I talked about earlier

would guarantee those for 20 years.

We are also planning a £10 million

development fund to help get new

routes up and running. Having worked

with a lot of UK airports we have

developed a support package to make

sure we can get some of these

important routes up and running.

Thank you for that. Thinking about

the economic case, you have touched

on this in previous questions, the

Department's latest appraisals show

there is not much in terms of

economic benefit between the three

schemes. How confident are you in

those latest estimates and how

robust they are from the Department?

They show that they need at Heathrow

is now and urgent. You would have to

run out for another 60 years before

Gatwick starts to offer more value.

I suspect that most of us will be

dead by then and most of our

children will have retired and not

happen benefits of the economic

growth that we need to secure for

their generation -- and not had the

benefits of economic growth.

When I started talking about this

two or three years ago I was talking

about a list of over 30 airlines who

want to operate at Heathrow or

expand at Heathrow, that has grown

longer over the last three years and

there is significant demand to

operate and add connections to

China, Asia, the Americas. As I

mentioned earlier, it opens up the

export growth for UK businesses,

inbound tourism and foreign direct

investment that are not even

accounted for in the latest DFT

assessments.

Merge of this is based

on being up to capacity within two

years. -- much of this. This does

not line up with your projections

and plans for the runway. Can you

say what you're phasing plan is, and

what the timescale is?

It would be

pretty remarkable to get from a

standing start to full capacity

within three years. That is not part

of the plan. Just to remind you,

Heathrow is privately funded, we

have to raise all the money through

shareholders and open markets to

fund the investment and we need to

do that in a very planned way, they

cannot put all the money in up front

against uncertain growth and so we

have to phased introduction of new

capacity. We are planning to add new

capacity to the airport in blocks of

five to 10 million passengers by

building on the existing terminals

that we have today. That allows us

to phase the cost of Heathrow

expansion but it also of course

means we are phasing our ability to

take in new outlines and serve new

markets. The exact speed at which we

do that, we will have to finalise

that as we develop our plans with

the airlines. The new capacity needs

to move in sync with demand. As said

financing there is a very practical

reason for that, to go through that

kind of growth, to get up to full

capacity, that is up to 40,000 jobs

at the airports, a significant

change. We cannot bring are not many

people back quickly, airlines cannot

buy unit of planes that quickly to

get to full capacity, it has to be

planned and phased and it is right

that it is. That means that as the

global economy grows and changes we

can make sure we are adding new

capacity to the markets that the UK

needs to serve.

And I think many of

us understand that, that the two

year timescale is unrealistic. But

would you accept that if there is a

phased approach to reaching

capacity, it lessens the economic

benefit over that time and does not

reach the economic benefits as

quickly as the projections?

We will

deliver the economic benefit as

quickly as we can. The need is

urgent and we need to provide new

capacity as quickly as we can. If I

can break down capacity into the

different parts, a significant part

of the change programme will be

around clearing the land and

building the new runway. Then there

is the terminal capacity and public

transport connections, they tend to

take a bit longer. The new runway

will be in relatively quickly and we

will be building the other aspects

as we forecast demands to come in.

The exact phasing we will end up

with will be something we will plan

together with the airlines and the

CAA, and we will not want to hang

around, but equally we need to be

pragmatic. I am sure you will have

seen comments today from our biggest

customer considering the price

expansion, the more capacity we put

in upfront, the higher the peak

charge would be. So we need to phase

our investment to make sure we can

deliver the challenge we have been

set of close to current charges with

expansion.

It is a slightly complicated answer,

but we will be finalising latter

over the next couple of years. What

is clear is if we want to deliver

the best economic benefit for the

UK, Heathrow expansion is the only

thing to do that.

You have said one of the reasons for

the phased expansion is because of

the uncertainty around demand, yet

previously I believe you have said

the economic benefits of Heathrow

are more certain and other schemes.

What evidence do you have to support

your case that it is more certain

than the benefits of other schemes?

I could point to the over 30

airlines which want to operate newly

at Heathrow, airlines like EasyJet

who want to offer competition and

choice, virgin, who want to expand.

But there are lots of international

airlines who want to operate out of

Heathrow and cannot currently do so,

airlines in China would love to fly

services from primary and secondary

cities in China into Heathrow but

currently cannot. I would expect

there would be an immediate step up

in flights in the very short-term,

and then a more steady of growth. We

will finalise what that looks like

over the next couple of years as we

go through our business planning and

funding process. There is very

significant demand from exactly the

kind of outlines that I think we

would want to see, people who can

offer domestic connectivity and the

connections to the long haul markets

the UK needs.

In answer to a previous question I

think you touched on this, the DFT

approach to the economic case

doesn't catch the full range of

economic and efforts that the

north-west runway would bring, can

you go into that a bit more, what

are the other benefits you don't

think up inconsiderate?

Thank you.

Three main areas, foreign direct

investment, there is direct academic

evidence which shows that further is

a direct flights between an emerging

economy and the UK you get more

foreign direct investment than if

there is an indirect flights. In

simple terms I suppose, if you have

to go through Paris, fly through

Paris to get to the UK from a major

city in China then businesses are

more likely to choose Paris as a

base rather than to go to Bristol or

Glasgow or London. Because it's just

easier to get to. So having that

direct connectivity has a

significant impact on foreign direct

investment and we can see that here

in the UK, when you think of the

number of Japanese and Korean

companies in the 70s and 80s and 90s

who started off with a European base

in the Thames Valley and on the back

of that develop significant

manufacturing bases across the UK

and created significant benefit for

the UK economy, that is what foreign

direct investment looks like an

action and we need to make sure is

the Chinese economy grows and the

South American economy grows, the UK

remains a location of choice for

European basis and we get the

investment on the back of that.

Tourism is touched on earlier, the

same economics, the easier it is to

get to the more likely it is people

will come, if you are a Chinese

tourist and China is I think the

biggest outbound tourism market in

the world, you've only got a week of

holiday, you don't want to be

connecting through Paris and

Frankfurt to get to the UK, you

won't be able to get you want to be

able to get here as quickly as

possible. We want to see the

benefits coming with that in all

regions of the UK and finally

exports, I touched on earlier, the

easier we can make it for British

exporters to get to global markets

the cheaper and quicker it is to

remain in a competitive and global

world, all of those come with

Heathrow expansion and they add over

£100 billion to the assessment that

was made by the DFT.

If the

conductivity benefits are broadly

comparable across the different

options how can the economic benefit

for Heathrow we so much greater?

If

connectivity is the same? The

quality of the connectivity is very

different, so if you look at the

number of additional long-haul

flights that come with Gatwick

expansion compared to Heathrow

expansion at significantly lower,

think about tourism or foreign

direct investment the opportunity is

more limited and if I give you an

example of that. If Stewart Wingate

from Gatwick were here he would tell

you you can fly to Mexico from

Gatwick, you can, you can fly to

Cancun, fantastic if you want a

summer holiday but that is not the

business centre for Mexico nor is it

the place you will get Mexican

inbound investment or inbound

tourism to the UK, that is what we

deliver with two flights a day, day

in and day out. That's a practical

example of the difference of

conductivity we can offer and they

can offer and I've talked about the

difference between exports. The kind

of airlines that serve most other UK

airports including Gatwick are

typically low cost carriers, they

don't have a car go, they want a

quick turnaround, that is one of the

reasons the cargo volume out of

Gatwick is solo. For the network

operators flying out of Heathrow

it's a very different model. Freight

is an important part of the value

chain, particularly on the thin

roots in the early stages of

development, very often freight is

what helps to subsidise the lower

loads in passengers until the red

gets well-established so it's an

important part of the ecosystem.

It's growing fast at Heathrow, over

10% growth in cargo last year alone.

If you think about the UK trading

routes 100 years ago, would have

been shipped around the world out of

Liverpool and London. Today its

planes leaving Heathrow.

OK, finally

on the economic benefits, weren't

the estimates of the wider economic

benefits discredited by the

Department and why do you think...

I

don't think they were at all. I

think the differences between the

Airports Commission work which

showed the economic benefits of up

to £211 billion and the more recent

work that has been done by the

Department for Transport which is

using a more traditional and more

limited model, the benefits for

exports, tourism and foreign direct

investment are clear for us all to

see but they are not taken account

of the DFT model so that model shows

Heathrow is the right answer but it

understates the benefits that only

Heathrow can deliver and the work

that Frontier economics has recently

done shows that gap alone is worth

another £110 billion so on top of

the value that came with the DFT

assessments so significantly

understates the economic value for

the UK.

Can you explain why the DFT

weren't confident enough to put that

in the MPS.

I'm probably not the

best placed person to say that but I

understand the Secretary of State

will come here shortly and he might

be better placed to explain why the

DFT have done what they have done.

The answer remains the same in both

cases, Heathrow is the right answer

for the UK, and in the text in the

national Aussie statement, it

recognises there are significant

benefits to Heathrow expansion that

come from foreign direct investment,

tourism and exports.

In terms of the

total conductivity at UK level it

isn't hugely different from the

figures that are presented in the

MPS between the different schemes

and personal expansion. For example,

the total number of long-haul

destinations served at UK level they

aren't hugely different between

Heathrow expansion and Gatwick or no

expansion.

Just to make a couple of

comments because it didn't occur car

broke down my cargo capability and

as John said very often when it

comes to creating new routes the

things that makes those new routes

economic as the cargo capability but

I just reiterate what John said, it

is the quality of the routes and for

those routes running which is really

critical and that is where the GDP

benefits come from so there are not

just point-to-point routes there are

routes which would bring huge

economic value and I think that's a

differentiating factor.

You are

saying the UK level, the long-haul

destinations served, how am I

missing the quality issue?

I can't

account for what might have been

included in long haul connections

with Gatwick but with Heathrow

expansion we will see more routes to

secondary cities in China, Asia, and

in the Americas than we will have

without Heathrow expansion and we

would have if Gatwick were to expand

and Heathrow were not to expand and

that's because as we were discussing

earlier, the model out of Heathrow

helps to support the thin roots

which aren't difficult to make

viable for point-to-point airports

like Gatwick and I think that's been

borne out by what we've seen at

Heathrow in the last 10-20 years and

the actions of some of the long haul

airlines.

I think we ought to go on

to look at scheme charges.

Just to

go back to one of Steve is

questions. I accept the Department

underestimated the economic benefits

and economic impact of the growth of

Heathrow but I was interested in

what figure of 100 billion, was

it... Impact? How did you calculate

that figure because it's between

3-4% of the UK economy on one

investment in London, that's quite

an extraordinary figure?

We are very

happy to provide you with more

details on that but in effect it's

taking the benefits, the trading

benefits you would get from cargo,

foreign direct investment and

tourism but if you look at that side

of the economic equation as opposed

to the simpler view of passengers,

business or tourists or transfer...

I accept that, I was interested in

the actual justification of the

figure, it's pretty startling.

It's

a value figure over 50 years, it's

not an annual figure, it's a

lifetime... Which is on a comparable

basis to the numbers the Department

for Transport calculated.

Thanks.

David Starkey who is on the

commission fits in with what you

said about facing, suggests it would

be more sensible not to go

straightaway for a 3500 metre runway

but to start with a 2500 metre

runway and wait some time for the

extra 6% capacity that would be

provided by the extra thousand

metres. Do you think that sensible?

No, I don't under is a couple of

reasons for that. One is that one of

the biggest issues for the local

communities is respite from noise

and to guarantee respite from noise

for local communities you have to

have a new runway which can take any

size of playing and that allows you

to have full rotation between the

three runways. So we have to make

sure we deliver the commitment to

that and the respite from noise for

local communities, it is one of the

lives the proposal you describe is

not that different to what was

proposed back in 2009 and was

rejected by the Conservative

government when it came in. And it

just won't work. And that's not even

taking account of the challenges

that would come with extending the

runway at a later phase, once a

runway as operating it's not... And

working at height usage it's not

easy to go back in and add a little

bit more. Full-length runway

straightaway is the best solution.

That's a very clear answer, do you

think generally they should be more

flexibility in the MPS statement?

Particularly around runway length,

we proposed flexibility. -- NPS. It

requires the runway to be at least

three and a half kilometres long, we

would like some flexibility to

validate if that is in the Surrey,

we certainly want a runway which

will guarantee respite from noise,

that will accommodate any kind of

flame that anticipates his correctly

anticipated to operate, the same

time we don't want to take any more

land that we need to or at two costs

that we don't need to so we'd like

to have flexibility around that but

it the NPS says three and a half

kilometres that is what we will

build.

You've launched a

consultation on a cost that's two

and a half billion less than the

Airports Commission costs, 17 points

6 billion, what changes have been

made to get that two and a half

billion out of the scheme?

Strangely

I've been criticised today for

reducing the cost of the scheme

which is a very strange situation to

find yourself in. Since we first

developed our plan for the Airports

Commission which is three or four

years ago now, we have been working

with the airlines to improve

passenger service and to reduce

costs and improve phrasing. And I

should emphasise we're only talking

about options at this stage, we

haven't finalised a particular plan

and that is what we are consulting

on at the moment but the kind of

things we think could yield such a

significant reduction is not having

a new terminal six between our

current northern runway and the new

Northwest runway but instead to

expand our existing terminals five

and two. And from a passenger point

of view that's much easier to

navigate the cars fewer larger

terminals are generally better in

passengers is that lots of small

terminals, it's one of the big

differences between ourselves and an

airport like John F Kennedy in New

York. But it's also means you don't

have to have the baggage system

connectivity and the people movers,

the trains on to get you from one

terminal to another and those are

expensive to put in so by expanding

existing terminals we can save on

the cost of doing that. And the net

saving from those and the terminal

building itself is around two and a

half billion pounds but what we've

also done in getting to that net

figure is to include the full costs

of the changes that we need to make

to the M 25.

The full costs are in

both schemes?

The higher and lower

cost? Only half of the costs were in

the original scheme that we

submitted to the Airports

Commission, since then based on the

feedback from the Airports

Commission we included the full

costs of change to the M25, two and

a half billion pounds is a net

figure on what we've said £3 billion

and added a further £500 million or

so of M25 costs.

What about the

removal of the Lakeside energy and

waste plant?

Yes, it is one of five... Seven,

thank you, Major commercial uses

that we need to displace. It is one

we will need to get on with sooner

rather than later and we are looking

with the owners to make sure we can

provide continuity of use, not just

important for their business but

also for slow and some of the other

local communities that rely on it

for their waste clearance. Including

ours, we use it.

You mentioned the comments this

morning about control of costs and

conditional support for the

expansion for Heathrow based on

cost. Can you make a firm commitment

that landing charges will not

increase, in real terms?

At this

stage I could not. We were given a

challenge by the Secretary of State

to deliver expansion at close to

current charges. We have accepted

that. It would be a mistake at this

stage to make any guarantee around

particular costs. When we would

think about how much work still

needs to happen, that we still need

to go through a development consent

order process, still need to

finalise what the masterplan will be

like based on the consultation we

are currently holding, we cannot

finalise those costs yet. But we

completely get the concern from the

airlines, we need to deliver good

value for money with expansion, we

need to keep prices close to current

levels. If we can do that, by the

way, it would be a remarkable

achievement. If you were to go to

Hong Kong airport, currently going

Puncheon. -- currently going from

two to three run race, their landing

charges will double. If we can keep

ours to what we expect, it would be

a remarkable achievement. I do not

know of any major infrastructure

project in the UK or elsewhere that

the first cost you, but comes down

by £2.5 billion and you can't

innovate without prices going up.

That is a remarkable achievement.

That is fantastic value for money

for passengers but it is not just

about the landing charges that we

should be concerned, we should be

concerned about the enterprise

customers pay for their tickets.

With more competition and trade on

routes into used -- into Heathrow,

the price will come down. If you

want evidence, go to Scotland and

look at what has happened to prices

on Edinburgh and Aberdeen, they were

monopoly routes for BA, now Flybe

has come in offering competition,

prices have come down not by a pound

or two, but by tens of pounds. That

is the value of passengers -- for

passengers in the UK from more

competition.

Further down the line when the

details of the planning application

and costs are more certain, would

you be willing to make a binding

commitment to hold charges?

There

will be a point at which we will be

able to do something like that. The

reason I am hesitant is we're not a

normal commercial organisation, we

are price regulated by the CAA, so

every five the CAA sets our landing

charges. In the later settlement our

landing charges coming down by 1.5%

in real terms, people are seeing

real reductions in the cost of using

Heathrow. That is the way regulation

works at the moment. I completely

understand that some customers are

anxious about how that might work

and want a longer term commitment,

and I have offered to them and offer

again now that we are very open to

having a more commercial

arrangements between others which we

are both happy with without having

to go to the CAA, which is something

we will work on over the next year

or so.

Can I just ask how realistic it is

that you will be able to maintain

landing charges are probably the

same level? You have just referenced

Hong Kong, saying they are doing a

similar sized scheme and their

landing charges are doubled. How can

you be so confident you will be able

to maintain or keep things on track

in terms of cost and keeping the

landing charges that a similar

level?

There are three things that a

change. To give some context, in the

original submission we made to the

Airports Commission, at that time we

were forecasting prices to go up by

three or £4 a passenger. What we

have worked on since then with the

airlines is to reduce the overall

cost of expansion, I talked about

the £2.5 billion over -- earlier, to

improve the phasing so rather than

building big new terminals where you

would have to build or nothing, to

phase it into five or 10 million

passenger blocks. We have become

more confident about the growth in

demand. The combination of those

things allows us to be more

confident that we can deliver

expansion close to current charges.

It is a much better position than I

thought we would be in a year ago

and shows the benefit of working

closely with customers to deliver

what is right for passengers and

right to the UK.

Based on previous expansions, like

terminal five, how did that go in

terms of the final outcome matching

the estimated cost at the start?

Terminal five and more recently

terminal two were delivered on-time

and on budget. Terminal five opening

was messier than we hoped, it gives

a sense that these are very

complicated things to deliver. For

most of the last decade, terminal

five has been rated by passengers as

the best airport terminal in the

world, showing we know what we doing

with building terminals. Everything

we need to do over the last ten or

-- next ten or 15 years, we have

already done in the last ten or 15.

Building the airfield and taxiways

and some changes to rail links and

roadways. We have done that with the

terminal five expansion. We have a

good track record.

Heathrow is usually used as a

benchmark for other major

infrastructure projects in the UK.

Thanks.

Gatwick has spent a huge amount

promoting their second runway, how

much up with spent on promoting the

third runway?

Solely on promoting,

the number I have in mind is £30

million.

There is more than that

that has gone into community

engagement which I would not

consider to be promotion, I would

consider that as being a good,

responsible business.

And we do not

see any of that back.

Thanks. Now I will come to Hugh to

ask about some of the skin delivery

and risks associated.

All the evidence we have heard so

far shows what a complex

infrastructure project this will be.

With that in mind, I wanted to ask

how confident you are at managing to

withstand a legal challenge, which

is bound to arise. With particular

reference to the acquisition and

relocation of property and

infrastructure, the scope and

funding of surfers access to make

the model work, the issues and

safety the complexity of airspace

design and the air quality

compliance and data. -- the scope

and funding of surface access. So

how confident are you you can

withstand that legal challenge and

still deliver by 2026?

Very

confident. We have spent a lot of

time working on this. Our plan has

improved through consultation with

local communities, engagement with

UK regions, businesses and unions

and particularly recently by working

with our lines. As I mentioned, we

are not seeking to do anything in

the next 15 years we have not done

before, so we have a very good track

record in doing this and doing this

well. Will there be legal

challenges? I am sure there will.

There has already been talk about

that. They shouldn't hold up the

overall process and I think it is

important that they should not do

so. What we need to do is provide

people with certainty. The many

people who have been living with the

possibility of Heathrow expansion

for a long time, they need to know

where they stand. I think we owe it

to them to give them certainty as

quickly as we can so they can get on

with their lives. But we need

certainty for the UK economy. Our

biggest port, Heathrow is by some

way our biggest port, it is at

capacity. We are planning for a

world where we will be leaving the

European Union and looking to build

our economic links all over the

world. And the only option for doing

that is Heathrow expansion.

Businesses currently based in the UK

all who want to locate themselves in

the UK need certainty that this is

the right place to back, there is no

better way of showing our confidence

is an outward looking trading nation

than by getting on and expanding

Heathrow.

I appreciate that is the

business case, I am interested in

the legal case. I do not expect you

to detail your affidavit on that

front, but where the committee has

taken evidence, it seems there are

certain statements like no net

increase in traffic which itself is

predicated on the delivery of

certain transport infrastructure

projects. There are also issues

around the numbers of people and

households that would be affected by

air pollution, which did not seem to

stack up when those from the

Airports Commission were challenged.

In a sense, it has somewhat

unravelled in front of this

committee. Surely that will occur as

well in court? Ultimately I would

have thought it would be as much of

a decision in Parliament when it

comes to approving this scheme?

I am

sorry to hear that has unravelled in

front of the committee.

That would

be my opinion.

These are big topics

which I am very happy to go into. If

you take

one of those, no new cars

on the road, which is linked to the

question of air quality, air quality

is really important not just for

Heathrow and London but for the

whole of the UK. We need to make

sure that we are fully complying

with EU our quality standards, which

we will do. -- air quality

standards. We have a triple lock

which will make sure we can do that

and make sure Heathrow expansion

does not delay the UK's compliance

with EU air quality standards. The

first of those is to have a strong

plant with a means that people do

not need to get into their cars. The

issue with air quality is not about

aeroplanes, it is cars on the road.

Where there are issues with air

quality in the local area to the

north of the M4, the vast majority

of cars using the fall are not a

airport related traffic. -- the vast

majority of cars using the M4. Our

plan does not rely on new

infrastructure that is not yet

committed, by which I mean Western

rail access and Southern rail

access. If we take the public

transport upgrades already planned

and is committed to, they represent

a significant increase in public

transport into the airport, not just

for passengers but for people who

work at the airport as well. This

tends to be overlooked, half of the

journeys to the airports are by

people who work here. A significant

proportion of the reduction in cars

on the roads will be by changing the

way in which people who work at the

airport come to work. And we have a

good plan behind that. But we also

have a good plan with public

transport for passengers coming to

the airport. That includes things

like the Elizabeth line which is

coming in, but it also includes what

we're doing with buses and coaches.

We currently have the biggest bus

and coach station in the UK, we will

expand that to make sure we can

serve more markets around the UK.

Just recently we have been adding

Mauritz from Bristol, with the

megabucks coming in, to make sure we

can connect all parts of the UK. --

just recently we have been adding

more Brits from Bristol. We want to

go from 42% of passengers coming to

the airport by public transport by

fifth -- to 50%, which is very

achievable with what is currently in

place. And from people who work at

the airport from 35% to 50%, very

achievable. The change for people

who work at the airport, which will

be a growing number, is backed by

the work we are doing with our

skills and employment commission,

chaired by David Blunkett, which for

the last year has planned how we

prepare kids in local schools to be

the pilots, engineers and

accountants we need in the future.

Kids from local schools can come to

work by bus or bike without having

to get into a car. We have a robust

plan.

Just before I lose the point,

have you just said that even without

Southern and Western rail access,

which at the moment are not fully

committed expenditure, that you will

still be able to meet your pledge to

have no more vehicles?

It sounds like a big claim that if

you look at our history that is

exactly what we have delivered. We

have increased the number of

passengers, the number of important

but we almost had no more cars on

the road and we've seen a 20%

reduction in emissions. We've got a

good track record at doing this, we

have done it before, we will do it

again, we know what interventions we

need and we have a robust plan but

our second lock is that there are

actions we can take that aren't

taken into account yet which show

that which would allow us to control

the more polluting vehicles coming

into the airport. We are consulting

on the moment at the introduction of

an emissions charging plan, it's not

part of our base plan but we want to

hear from local communities and

other users what that would mean for

them and if we were to introduce

that as a way of putting a control

on the kind of vehicles coming to

the airport we know what we would

need to do. But finally, our third

lock is that phase the release of

new capacity to the airport if we

are in danger of not meeting are

quality commitments and that sounds

like a big thing to do but it's only

the law, that is what we will do.

But I should go back to the store

twitches that we were talking about

a triple lock plan with mitigation

that we can use. This is in a

situation where even based on the

forecasts done by the DFT which

themselves are very conservative,

there is not an issue for error

quality, change is already being

planned will allow us to meet air

quality limits, that is the DFT

assessment, the assessment of the

Airports Commission and a our

assessment. So I don't believe we

will need some of those other

measures we propose but we have them

at our disposal if we need them.

Even in the event that you manage to

repel the legal case is it really

feasible to expect that given its

2018 now, we have the Parliamentary

legal process to go through and 2020

six would be a timeline that you

could deliver?

It's completely

achievable and we need to do it,

these are the early years of

Wrexham, we need to be getting on

with it and we have the experience

of doing it and we will get on and

make it happen. -- the early years

of Brexit.

Can I just add part of

the reason we are in this process,

when we were building Terminal five

we ended up in quite a prolonged

contentious process and that is when

the planning act was introduced and

the concept of development consent

order came about and with that comes

a very rigorous and transparent

process that goes through a number

of stages, we have just launched our

first consultation, two public

consultations, people will be able

to contribute to al-Shabaab plans,

three consultations on air space

quality, we will have to file a

development consent order

application which will have with it

a detailed environmental impact

assessment, what I am trying to say

is that the process itself is there

to ensure that the evidence backs up

the application we are making and we

will have to meet certain thresholds

along the way and that is a key

target to reducing the risk. -- able

to contribute to our plans.

We know

the NPS case is predicated on

meeting this target and we know it's

incredibly difficult to achieve, how

concerned are you about your ability

to overcome that?

It's important,

you are quite right, are space has

not unchanged for over 40 years. If

you fly into many airports

especially in the south-east you

will be delayed very often because

of congested airspace and it's

something, if I may say,

Conservative governments --

consecutive governments have put

off. There is a process by which

airspace change happens and it

starts with a consultation to

understand the principles we should

apply, should we try to concentrate

flights over the same area so as few

people are affect it? Should we go

over Boise, busy urban areas or

quiet countryside were fewer people

live, those are important principles

and we are consulting on those. And

for many people concerned about

noise they see this as an

opportunity to get airspace right

because the space that was designed

40-50 years ago was for an entirely

different type of plane, did not

take into account the technology

available, very inefficient and the

space change that we will be

introducing will not just benefit he

threw it will establish the

principles for the whole of the

south-east to change its airspace

and the kind of things that might

come out of that could be the

opportunity to get rid of stacking

that routinely happens over London

and the south-east and would be a

huge benefit for passengers, and

people on the ground who are

affected by that so this is an

opportunity to get things right. And

we want to get as much certainty not

as possible -- certainty as possible

because we want to do that as

quickly as possible.

Again we it not

be another spoke enough wheels as it

were? We know 25,000 landings each

year which go on the wrong runway

alternation so again, if you have

airspace change in the mix as well

is it incredibly difficult for you

to evidence that it won't increase

noise pollution is when you are

already missing the target by 5% and

airspace change throws at all...

It's a great opportunity to get it

right and currently some of the

routes that planes have to fly are

very difficult to be flown with

today's technology. We need to

change that and did something again

we've been putting off for decades,

we need to get on with it. And for

people who've been concerned about

noise in the past it's an

opportunity to have their say on how

things should be done that's never

happened before. The consultation

process we are going through will be

the largest and most open but I

think has ever happened any fur in

the world, this is really pioneering

stuff and it's an exciting

opportunity. Many people who have

been concerned about noise for many

years welcome the fact we are now in

proper conversation about how noise

should be distributed and how we can

minimise the impact of noise on the

ground.

Thank you, chirp. Thank you.

I think we both want to return to

that issue around surface access, we

will come to you.

Thank you. You

mentioned earlier you can achieve a

reduction in the number of people

using their cars based on the

current scheme is committed, what

schemes are committed for a two

runway airport as they stand at the

minute, what additional surface

access schemes would you bring

online?

In terms of real which I

guess is the focus, Crossrail opens

info next year, that will have a

significant impact on connectivity,

if you were coming from Cambridge it

takes half an hour of the journey

time, that's significant, those kind

of changes make it easy for people

to get out of their car and onto

public transport. High-Speed two

will be coming in around the time

the new runway opens and as will be

upgrades to the Piccadilly line,

this is more than doubling the

number of seats on public transport

coming into Heathrow. Of course we

want to go further, we want to see

western rail coming in...

Would you

want that for a two or three

runway... What I am trying to

understand is what schemes are

required to move from a two runway

airport to three and where is the

funding for that? What additional is

required for a three runway?

To be

clear we don't need Southern Railway

or western rail to meet our targets

Indy three runway world. Do I want

to see them in a two runway world?

Absolutely. It's vital that we make

it as easy as possible for people to

get to the UK's airport by public

transport and at the moment if you

are in London or to the East, you

have fantastic connectivity and it's

only going to get better but why

have we not invested in an

integrated rail network that

connects to the west and south as

well? Ideally high-speed two would

be through Heathrow as well, it will

help to connect Manchester as well

but we see it as an opportunity to

have a proper integrated transport

system and two runways or three we

should have western and southern. I

am pleased you like western rail

access, as a south-west MP it would

be good for our economy. There is a

lot of scepticism about you needing

those schemes to manage a two

runway, let alone three, can you

give us an assurance that the

modelling shows that, a lot of

people are sceptical and don't

believe the figures around surface

access that you present? We manage

very well over a two runway world

and we are drawing the public

transport network. On Heathrow

Express alone we had an 8% increase

in people using it and that's

because we have been using price at

a discount to non-business

travellers at quieter times. The

right thing to do and we will keep

on doing that, in fact if I can

advertise, if you are travelling at

the weekend you can book in advance

for £5.50 on Heathrow Express, and

has to value. There is action we are

taking now that helps to drive that

change. Cars fantastic value.

Western rail access, but is going

through their own process, the

development consent order process

starting later this year, that would

open the door for that to be

included in the next period of rail

funding.

It's very difficult to see

how that will be included without a

major fight from the government?

But

I think you could say that about any

project from the government, money

is tight and there is a lot to be

done but what I think anyone in

Network Rail would say is that it is

unlikely you will get to the top of

the list of funding for CP six

without a ride at investment and

that's what we are looking for.

Within the costings we talked about

earlier we included funding going

towards western rail access so we

will make a contribution, there is a

formula that we follow for that that

is in proportion to the forecast

usage by Heathrow passengers and

workers of course. That will help

move western rail of the agenda and

if the Secretary of State is here

it's a great question to ask him

because ultimately it will come down

to him in many ways.

Can I just jump

in for a second? I want to come back

on something you said around the

proportion of people travelling to

Heathrow by car because I think you

said has increased but the figures I

have in front of me, around 60%,

around 2016 it's 61%, hasn't it been

flat, there hasn't been an

improvement in the mode share?

People travelling to airport by

public transport... By car. It would

be the inverse. Significant changes

we are seeing in public transport

use for passengers is where we have

had new capacity come in on rail

schemes, so when Heathrow Express

open but saw a significant change in

nature, 10% of all usage, and that

is increasing at the moment.

It's

people using rail rather than

another form of public transport,

that's not a help if we still have

60%, 61% travelling to Heathrow by

car, if we are concerned about

congestion and air quality?

If we

look over at that period we have

seen an improvement in public

transport Wiltshire -- Road share.

And the people have been getting out

of their cars and you can...

It's

virtually flat in the last ten

years...

It's over 25 years, that

takes into account the introduction

of Heathrow Express which I think

was 15 or 16 years ago, that might

be before the period you are looking

at but I can write to the committee

separately to lay out how that has

worked and if you find yourself in

east London at the moment, it's not

particularly easy to get to Heathrow

if you want to come here. Of

Crossrail Canary Wharf will be a

little over 30 minutes and Stratford

not much more than that, that opens

up Heathrow to the whole of East

London and that of course is a

benefit not just to passengers but

people who work at the airport,

that's a really significant part of

the journey coming into Heathrow.

Interesting, on surface access

visitors it's ten years it stayed

flat, interesting picking up a

question from earlier about landing

charges, for that figure will be

extrapolated against the same 25

year period, it would be interesting

to get those figures.

To be clear,

what has happened to landing charges

over a 25 year period?

People have

seen reductions in the cost of using

Heathrow landing charges. A 10-year

period 25 year period it would be

interesting to see the same figures

against those.

We will be happy to

do that and what that will show this

at Heathrow landing charges declined

before we started investing in

Terminal five and if you tried to

travel through Heathrow before

Terminal five opened you will see

the impact of the underinvestment.

And the increase as we are investing

and then they are coming down again.

Can I ask you about your pledge that

they will not be any greater

landslide truck airport traffic in

terms of today? Is that doable? If

you are looking to double your

freight from expanded capacity, so

more trucks coming in and out and

you are expecting 40,000 extra car

parking spaces to be built, how does

the surface access via, fit with

that pledge of having no more

traffic than you have today?

We are

looking at 40,000 extra car parking

spaces. We all look at providing the

car parking spaces. We won't have

any more car parking spaces with

expansion then we have today, so

that shows we are doing what we said

we would in terms of no more car is

on the road. And if you were to look

at the way freight works and parking

works around Heathrow, it says it

all. It is a haphazard develop

Cummins development. If you were

starting from scratch, you would do

things differently. Rather than

having lots of car parks scattered

around the perimeter, let's build

two big ones here were people need

to be. That minimises the amount of

driving round the airport, makes it

better for passengers, more

efficient use of space, and the same

applies with coracle. If you look at

the journeys freight is making

around the airport, multiple

handling through different

organisations, it is incredibly

inefficient and not competitive for

the way exporters now need to work

when you compare that with Frankfurt

or Amsterdam, who are much more

efficient. So part of the

opportunity here is to simplify the

way freight works in the report.

That in itself will take vehicles

off the road and gives us the space

to have more goods coming in without

more freight movement. This is not

easy to do, none of it is, we

wouldn't be here if it was. We have

a good plan now and are working with

the freight community, planning an

entire redevelopment of the Heathrow

cargo area to give us the capacity

we need.

In the airports commission

study, it mentioned that might be

necessary to introduce a charge for

people accessing the airport of

around £40 per car. If that the type

of quantity you are looking for in

terms of a parking charge?

No, we're

not. As I tried to explain earlier

with our triple lock, this would be

the second level. If we are in the

world we were trying to constrain

high emission vehicles going into

the poet, and it's something we

might look at and are consulting on

at the moment.

The costs of this

work. We heard the previous session

was that the cost for surface access

could be over a larger range. What

is your assessment of what it will

cost?

I can understand why it might

have such large numbers being

bandied around.

I think

10-15,000,000,000 came from

transport for London which was about

all of west London's needs and that

isn't Heathrow's responsibility, it

is clearly something that transport

for London are planning at the

moment. I couldn't comment on

whether those numbers are correct

but I have heard it before. The 5

billion that was referred to by the

airports commission had a

significant chunk to do with the M4

widening. We doesn't he agrees with

the points because we felt the

widening of the key part of an

arterial road which potentially,

already has some air quality issues,

wasn't the right answer, so that is

how we differ from them. From our

point of view, at the moment we have

about £2 billion in our costing four

various aspects of surface access

which includes roads as well as an

estimate for rail. But we don't know

what the cost of these rail schemes

will be, so it comes with a healthy

dose of risk attached because until

we have the final business case for

western rail, which we hope to get

when they file their planning

application early next year, then we

will have a clear idea of the final

cost and final benefit cost ratio,

which for western rail is incredibly

positive, one of the most positive

that has ever been seen for Network

Rail. We will then be able to start

working with that methodology to

understand what our contribution is.

The evidence we've heard as a

committee is quite contradictory at

times in terms of surface access. It

seems that national policy has

changed but the national policy

statement doesn't give much comfort

that surface access improvements

that Heathrow needs much of the

aspirations that you have about 50%

of people by 2030, 50 five by 2040,

it doesn't seem to work but relies

any lot of hope.

At the moment, if

you are coming from large parts of

London or if you're coming from the

Midlands or the north, you either

have a complicated real journey or

get into a car. HS2, Crossrail,

Piccadilly line upgrade all change

that situation for a large number of

passengers. We shouldn't

underestimate the significant impact

that will come in, that's part of

the purpose of making those

investments in the first place, that

people will use them. But will

include people coming into Heathrow.

We don't rely on western and

southern rail access to hit our

target but we think everything we

have seen says there is a good case

and we will contribute towards that.

So you are expecting to contribute

around £1 billion to the surface

access upgrade at the moment.

In

total, we have £2 billion budgeted

for surface access changes. That

includes providing existing roads,

the additional allowance for the

M25, we've absorbed part of the 5

billion for that.

As you've

mentioned the M25, there has been

very little evidence of costing to

do without that we have been able to

see as part of this enquiry. Do you

have robust figures over how much

are building the M25 will be? That

is flashing a big warning light for

myself in particular about how much

it will cost. It seems like it will

cost an enormous amount and the

money doesn't seem sufficient.

We

are confident it is robust and have

been doing a lot of work with

highways England around the scheme

design. We and they have quite a lot

of experience with this. I shouldn't

say that all costings are pinned

down, but the right level of

maturity at this stage of the

process. There is a lot more work

that we need to do. The first thing

to do will be to finalise what the