Economic value of night flights

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Client British Airways and Heathrow Airport
Dates 2015
Service(s)Policy & Economics, Regulation & Competition

CEPA undertook a study on the economic value of flights during the night period at Heathrow Airport. In support of this study, CEPA:

i)                    analysed the gross value added (GVA) of night flights to the UK economy; and

ii)                   conducted a cost-benefit analysis (CBA) in line with priorities set out by BA and HAL and quantified the impact of further restrictions on the night time regime as well as impacts on potential additional runway capacity at both Heathrow and Gatwick airports (the Airports Commissions consultation was open at this time).

The first phase of this project updated previous work on the GVA of night flights to the UK economy, including any model refinements that better capture the true GVA of night flights. Alongside this analysis CEPA prepared a report on future economic hotspots for aviation to help guide qualitative research on the importance of night flights for servicing destinations likely to become important.

For the second phase of the project, CEPA undertook a full CBA of further restricting the night flight regime at Heathrow. This analysis followed the Department for Transport’s (DfT) WebTAG methodology where available, and other leading methodologies for quantifying social impacts such as night time noise. This WebTAG methodology is a detailed implementation of the Green Book, including specified parameters and methods for quantifying certain items for the purpose of transport appraisal. This analysis considered a range of different consumers, for example, the value of travel time varies by income level.

The CBA also quantified the impact for different travellers of changes to travel schedules, and impacts arising from the occupation of potential new runway capacity by former night flights at either Heathrow or Gatwick airports, in the event of these expansions going ahead. Analysis also compared European peers, and the advantages to transfer hubs such as Dubai and Istanbul of stronger Heathrow night restrictions.