Heathrow announces launch of New China Routes in boost for exporters
Heathrow today welcomed the arrival of two new direct routes to the Chinese cities: Wuhan and Sanya. Both destinations are a first for direct routes into Heathrow, the connection to Sanya is a first for Europe. These routes will allow for over 6,000 metric tonnes of additional cargo capacity and over 110,000 new seats for passengers travelling to the region – however, due to capacity constraints, European hub airports continue to have a competitive advantage in connecting to China.
- China Southern to launch new direct services to Wuhan and Sanya – yet European hub airports competitors are still flying to 10 more Chinese destinations
- Analysis from CEBR reveals that the value of exports passing through Heathrow has increased by £2.9 billion since Q1 2017 however risks from capacity constraints remain
- For the second year, Heathrow partners with the Department for International Trade’s (DIT) ‘Exporting is GREAT’ campaign to award 20 SMEs grants to support their exporting ambitions
From 30 May, China Southern will launch 3 new weekly services to Wuhan, a mega-city referred to as the “Chicago of China”, before beginning 2 weekly scheduled services to the popular tourist destination of Sanya on Hainan Island on 12 July.
Last year’s services to China via Heathrow contributed £510m to the UK economy, and supported up to 15,000 jobs, according to Frontier Economics. While connections to Chinese cities are clearly valuable to the UK, rival EU hub airports with capacity to connect directly to 10 other Chinese destinations, including mega cities like Hangzhou, Chengdu, and Kunming, are facilitating more trade and investment to their respective countries. The Government is expected to vote on a National Policy Statement on Heathrow’s plans for expansion over the coming weeks. Expansion will allow the airport the capacity to offer up to 40 new long haul destinations, as well as double its cargo capacity – providing the UK with much-needed trade infrastructure at a time when the country is looking to extend its trade relationships outside the EU.
The news of these new routes comes as Heathrow’s Export Climate Index for Q1, carried out by the Centre for Economics and Business Research (CEBR), reveals that the value of exports passing through Heathrow to non-EU destinations increased by £2.9 billion compared to Q1 in 2017. However, the Export Climate Index has also shown growth in passenger numbers remains constant due the capacity constraints faced by Heathrow. Combined with the Index’s evidence that sea freight is declining, there is a risk that British exporters could look for alternative routes via European Hub airports to get their goods and services to long-haul markets.
New route details:
China Southern will fly 3 weekly services to Wuhan (Mon, Wed & Fri) on an A330 (capacity: 218 seats, 3,744 tonnes of cargo) from 30 May. The airline will also fly 2 weekly services to Sanya (Thu & Sun) on an A330 (capacity: 218, 2,496 tonnes of cargo) from 12 July.
Heathrow World of Opportunity Grants Programme returning in 2018
Heathrow and the Department for International Trade’s ‘Exporting is GREAT’ campaign are nonetheless preparing businesses trade opportunities, and have today launched the second annual ‘World of Opportunity Programme’.
This programme will award 20 SMEs with grants worth £2,000 to fund vital trade missions, participation in trade shows or foreign market research. DIT will also provide mentoring guidance from an International Trade Advisor to help their research and missions and promote the competition. A panel of exporting experts including Lord Deighton, Heathrow’s Chairman and Parveen Thornhill, Head of London & Devolved Administrations from DIT will select this year’s winners.
Heathrow’s Chairman Lord Deighton said,“Today’s Export Climate Index results show that UK exporters are making the most of what they’ve got – and doubtless, they are excited about our new Chinese routes, and the untapped trade and investment opportunities these open up.
“Our exporters also know they are at a disadvantage compared to their European counterparts, because Heathrow’s lack of capacity still means we are taking a limited and piecemeal approach to building long-haul trade routes. Heathrow is not only the country’s biggest airport, but also its biggest port by value – it is vital that we expand this key component of our trading infrastructure as we look for export opportunities outside the EU.” – Lord Paul Deighton, Heathrow Chairman
“However, our exporters also know they are at a disadvantage compared to their European counterparts, because Heathrow’s lack of capacity still means we are taking a limited and piecemeal approach to building long-haul trade routes. Heathrow is not only the country’s biggest airport, but also its biggest port by value – it is vital that we expand this key component of our trading infrastructure as we look for export opportunities outside the EU.
“A third runway will better enable British exporters to compete on a global stage, and we urge the Government to table its final National Policy Statement on expansion so that Parliament can vote and we can get on and deliver it.”
International Trade Secretary Dr Liam Fox MP said,“Last year’s World of Opportunity Programme was enormously successful, helping to generate tens of thousands’ pounds of business for SMEs from across the UK.
“There is significant demand for UK goods and services across the globe, and my international economic department is here to support businesses of all sizes as they look to seize the wealth of opportunities available.”
Chinese Ambassador to the UK HE Liu Xiaoming,“I would like to extend my congratulations on the launch of the new air routes this summer linking London Heathrow with two bustling Chinese cities of Wuhan and Sanya respectively. The key to sound relationships between states lies in the affinity between the peoples, which largely stems from mutual understanding.
“I sincerely hope that these new routes will become bridges of mutual understanding and friendship between our two peoples, facilitating travels and exchanges between our two countries and giving fresh impetus to the Golden Era of the China-UK relationship.”
About new routes
There are 10 Chinese destinations served by European airports that are not served directly by Heathrow:
New Heathrow-China destinations in 2018:
Heathrow-China destinations last year:
- Hong Kong
About the Export Climate Index
The full report is available, here.
The eight measures in the export climate index are: consumer confidence of main UK trade partners weighted by share of UK exports; effective exchange rate; purchasing managers index for UK new manufacturing export orders; assessment of export order-book levels; industrial export expectations; oil price; sea port outward unit growth and growth in number of Heathrow flights.
In order to create the index from the eight measures, Cebr calculated how many standard deviations a single data point deviates from its long-run mean for each set of data included in the index. Cebr then applied a scoring system centring around zero. This means, the more standard deviations a data point is below the mean, the lower its score and the more standard deviations is above the mean, the higher its score. This exercise was repeated for each of the components. The individual scores are then combined with equal weighting to create the Export Climate Index.
About World of Opportunity, Heathrow Business Summit and the GREAT campaign
For more information or to apply to the ‘World of Opportunity Programme’, please go to: www.heathrow.com/worldofopportunity
More information about the Heathrow Business Summit Programme can be found at www.heathrowbusinesssummit.co.uk
For more information on the Department for International Trade’s “Exporting is GREAT” campaign please visit: www.great.gov.uk