The boss of the UK's largest group of airports says the UK's global air links are key to achieving the new Chancellor's growth goals
- CEO of UK's largest airports group, Ken O’Toole says the the Government’s new Industrial Strategy should include the aviation sector as a critical enabler for growth
- Mr O’Toole points to research by WPI Economics which highlights that international air routes are key to maintaining current connectivity levels and growth
- Highlights the inter-dependency of these growth goals with achieving the net zero by 2050, by investing in the likes of Sustainable Aviation Fuel (SAF)
Manchester Airports Group (MAG) CEO Ken O'Toole says the Government's new Industrial Strategy should "play to our strengths" and harness the potential of high-value industries like financial services, life sciences and technology.
These sectors are forecast to grow faster than the rest of the economy, making them key to the UK achieving the fastest growth rate in the G7 over the next five years - the ambition laid out by Chancellor Rachel Reeves.
But research shows they are also more reliant on international access for success, especially given the UK's status as an island trading nation. That makes the aviation sector a critical enabler of growth, and something that should be placed at the heart of the Government's economic blueprint for the country.
In an opinion article published today, Mr O'Toole pointed to research from WPI Economics that looked at 10 service industries and found they are forecast to grow at two percentage points faster than the rest of the economy over the next decade - worth £10.6bbn.
He said:
"If it is widely accepted that the Government’s new Industrial Strategy should play to our strengths and harness the potential of exportable services, then its architects must also look at what those sectors need to grow.
"As an island trading nation, we are more reliant on our international air routes than other major economies and if we don’t - as a minimum - maintain current connectivity levels, that £10.6bn could be at risk.
"And if our starting point is the sluggish economic performance we have seen in recent times, then we don’t just want to preserve the global access we already have, but enhance it in order to turbo-charge growth."
Mr O'Toole said there were examples of internationally focussed service-sector businesses surrounding all three of MAG's airports - Manchester, London Stansted and East Midlands. He gave the example of Space Zero, a Manchester-based designer of educational spaces that now trades in multiple global markets.
"Up and down the country, there are hundreds of similar success stories to Space Zero," he said.
"Operating in fields ranging from TV production and advanced digital to financial services and life sciences, they all have one thing in common – exporters of knowledge, skills and services, rather than “things.”
"It is firms in these sectors that will be key to turbo-charging the UK economy and realising Chancellor Rachel Reeve’s ambition to deliver the fastest growth rate in the G7."
The WPI study also showed that the UK is already the second largest exporter of services globally, while Harvard University’s “Global Outgoing Knowledge Index” estimates that if all UK business travel were to stop, the entire global economy would shrink by 1%.
Mr O'Toole added:
"We need the right policy-support to deliver the connectivity these globally-ambitious firms crave, while also hitting our shared net zero target.
"That means making enough Sustainable Aviation Fuel here in the UK, it means investing in high-speed rail connections between cities and airports, and it means developing regional growth strategies that recognise the importance of our links with the world’s most important markets.
"Put simply, playing to our strengths means putting a sustainable growth plan for aviation at the heart of a sustainable growth plan for the UK."
Read the full article here.
Read the WPI report here.