A major new report published today shows that the UK is more dependent on air freight services compared to most of its EU competitors.
The report, commissioned by Airlines UK and supported by Heathrow Airport, Manchester Airports Group and the Freight Transport Association, shows that while only a quarter of German exports to non-EU countries in value terms are transported by air, for UK exports it is nearly half. Only Ireland ships a greater share of its non-EU exports by air than the UK.
The report calculated the total economic contribution of the air freight sector to the UK economy, and found:
- UK air freight imports and exports were worth £181 billion in 2017
- Air freight services contribute £7.2 billion to the UK economy and support 151,000 jobs
- Critically, looking at air freight’s wider contribution to UK PLC, the study shows that across all sectors of the economy £87.3 billion of GVA is currently dependent on air freight exports, including a very significant proportion of some key industries’ output:
- Pharmaceuticals – £13.9bn
- Computer, electronic & optical – £8.3bn
- Creative arts & entertainment – £5.3bn
The report also shows how vital air freight is to the UK’s regional economies. Whilst less than 2% of London’s production is dependent on air freight services, equivalent figures across some of the UK’s other regions include:
- 9% in the North West (worth 14.9bn)
- 8.6% in Wales
- 7.6% in the East Midlands
- 6.8% in the South West.
Air freight is essential to the transport equipment producing industries in the East Midlands, the North West, the South West and Wales, while pharmaceutical manufacturing in the North West makes very significant use of air freight.
Airlines UK Chief Executive, Tim Alderslade, said: “This report gives us the hard evidence of just how important air freight is to the national economy, our regional economies and to the international trade which will be increasingly important to us as we leave the EU. The upcoming Aviation Strategy must look to how the UK can support its air freight sector thrive, both by creating the conditions to help grow our international connectivity, as well as by recognising where barriers exist and, in particular, the important role and contribution of Night Flights in facilitating cross-border trade”.
The report makes clear that there are real opportunities, particularly for regional airports, arising from improved air connectivity. It cites as an example the fact that the value of exports travelling to China from Manchester Airport has increased by nearly £300 million in the two years since a direct route to Beijing was introduced.
Making the link between connectivity and trade, the report cites how the UK has more freight capacity to the US than any other EU country, ensuring that last year 60% of the UK’s trade value with the US was transported by air (compared to 51% for France and 36% for Germany). By contrast, the UK currently has less capacity to China than either Germany or the Netherlands.
The report also provides a timely reminder of the damaging effects of Night Flight restrictions on UK competitiveness, since the express business model of the major international freight companies is increasingly dependent on being able to ship goods during the night, not least to meet growing consumer expectations of fast delivery.
Aviation Minister Baroness Sugg said: “Air freight is vital to the UK and global economy, delivering jobs across the country and transporting goods to people and businesses. I’m grateful for the work that Airlines UK does to promote the importance of the air freight sector to the UK and our Aviation Strategy will consider how best to support the future growth of this important industry in the UK.”
Lynne Embleton, Chief Executive, IAG Cargo, said: “Air freight is vital for the UK economy as this report demonstrates. The industry is built on speed and reliability – characteristics that helped IAG Cargo carry billions of pounds of UK exports and imports last year including life-saving drugs, fresh produce, essential tech and machinery parts. This supports a wide range of British businesses. As we prepare for Brexit, the Government’s Aviation Strategy must take the value of air freight to the UK economy into account and help the industry grow and further connect Britain to the wider world”.
Nick Platts, Head of Cargo, Heathrow, said: “The UK has always been a great trading nation and Heathrow plays a unique role today in continuing that legacy. As the country’s most valuable port handling over £106bn of trade annually, Heathrow already connects Britain’s businesses with new customers in growing markets all around the world. Our expansion plans are on-track and will see us double our cargo capacity and add up to 40 new long-haul routes. But we can’t be complacent. Policymakers must not underestimate the competitive advantage of Britain’s air freight strength and ensure the right policies are in place that will enable us to keep Britain at the heart of the global economy.”
Tim Hawkins, Chief Strategy Officer, Manchester Airports Group, said: “Air freight plays a critical role in supporting continued growth of the UK’s world class industries. The Government’s new Aviation Strategy is the opportunity to understand the future needs of these industries and the role that key strategic hubs across the UK can play in delivering a global trading network.
“The increasing range of ‘just in time’ express cargo services is appreciated by anyone ordering or sending a package via the internet, and airports like East Midlands and London Stansted have a vital role to play in keeping trade and e-commerce moving. At the same time, growth in long haul bellyhold cargo from airports like Manchester demonstrates there is huge opportunity to drive value directly into the UK’s regions.”
The full report is available here.