Jobs Associated with the Airport

Wild speculation

The proponents of massive expansion regularly claim that a growing Airport is vital for the economy at every level from national to local. In particular, it is promoted as the only answer to Luton’s poor economic performance and, by the standards of the south east of England, high unemployment.

Local politicians have throughout asserted that, for each extra million passengers per annum (mppa), a thousand (or more) jobs will be created. LADACAN is not expert in this topic but many of our members are sufficiently numerate to understand that most of these claims are wildly optimistic.

Published predictions

In the studies carried out for the consultation which preceded the White Paper (ATWP, December 2003), the Government’s consultants calculated that between 300 and 400 jobs per mppa would be generated at the Airport. These estimates were based on jobs data from the 1990’s which did not fully reflect the high productivity levels since achieved by the low-cost airlines.

Survey data

The actual growth in jobs at the Airport in the 10 years to 2006, based on Luton Borough Council’s (LBC’s) annual employment survey, has been around 100 jobs per million passengers per annum (mppa). Had the total jobs been predicted in 1997 for 9.4mppa (the passenger throughput in 2006), the prediction would have been for over 20,000 jobs whereas the actual number (using Luton Borough Council's own data) was just 7,700, compared with 7,038 for 3.2mppa in 1997.

The latest estimate of jobs at the Airport (Annual Monitoring Report 2007) puts the total at 8,800, a significant increase over the 2007 figure. However, the increase has been achieved by expanding the survey area to include Wigmore Place so that the new headquarters staff of TUI UK Ltd, which owns Thomson Travel, is included.

Halcrow forecast

A forecast of job growth at Luton was made by the consultants Halcrow for the work on the East of England Plan, the Regional Spatial Strategy (RSS). This used the LBC airport employment survey data for the period 1991 to 2003 to generate a mathematical model which could be used to forecast job creation under various scenarios for growth in air traffic through to 2036. Halcrow applied some adjustments to the raw survey data.

LADACAN re-working

LADACAN has a number of reservations about the validity of the LBC survey data (and Halcrow’s adjustments) as an indicator of employment which is directly related to air traffic at the Airport, but as we have no better information, we have re-run the Halcrow model with the following changes:

a)     We have incorporated the survey data for 2004, 2006 and 2007 into the time series on which the model is based - there was no survey in 2005; and
b)     We have used the Government’s revised forecasts for air passengers at Luton to 2030 published in November 2007.

The original Halcrow model split passenger traffic between low-cost and other airlines. As the Government’s updated forecasts do not split the passenger numbers this way, we have simplified the model so that passenger throughput is aggregated. We have applied Halcrow’s assumptions about growth in aviation labour productivity and their assumed 40-fold increase in air freight tonnage between 2001 and 2036, an unlikely development in both LADACAN’s and the Airport operator’s views.

The graph below shows

• the original jobs data (1991 to 2007; there was no survey in 2005);
• the Halcrow forecast for the scenario involving no expansion beyond the current boundaries; and
• LADACAN’s revised forecast based on more recent actual employment data and the Government’s new passenger forecasts.
• LADACAN’s revised forecast with projected freight traffic to 2030 limited to Halcrow’s forecast for 2005 which was nearly 10 times the actual tonnage handled and nearly seven times that handled in 2007.

The LADACAN forecast shows employment at the Airport growing from the Luton Borough Council estimate of 8,800 in 2007 to just over 10,000 in 2015 and then remaining fairly static. This largely reflects the Government forecast of a peak in passenger traffic at 17 mppa in 2015 and a decline to 16 mppa in 2030. Employment is maintained in the face of productivity gains by the subsequent growth in freight traffic assumed by Halcrow. When more realistic assumptions about freight traffic are made, employment in 2015 is just over 9,000 and declines to just over 6,000 by 2030.

The LADACAN forecast is lower than that produced by Halcrow because

• the extra jobs data for 2004, 2006 and 2007 has reduced the model sensitivity to passenger traffic growth by nearly 20 per cent; and
• the Government’s passenger forecasts peak at 17 mppa whereas those used by Halcrow rise to over 18.5 mppa.

It can, therefore, be safely concluded that expectations of growth in airport-related employment are misplaced and that the number of jobs will remain static over the next 10 years, even if passenger traffic continues to grow. Thereafter, job numbers will decline. LADACAN is continuing to refine these projections and will update its job forecasts as more data becomes available.

Luton & District Association for the Control of Aircraft Noise - site updated 06 July, 2008