Luton and District Association for the Control of Aircraft Noise

Jobs Associated with the Airport
Wild speculation
The proponents of airport expansion regularly claim that growing airports are vital for the economy at every level from national to local. A report by economist Brendon Sewill, “Airport jobs:false hopes, cruel hoax”, thoroughly debunks this claim.
Expansion is still 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 assert that, for each extra million passengers per annum (mppa), a thousand (or more) jobs will be created. More recently, the head of planning at Luton Borough Council has claimed each additional million passengers will generate 700 jobs. LADACAN is not expert in this topic but many of our members are sufficiently numerate to understand that 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.
Jobs estimates
The actual growth in jobs at the Airport in the 8 years to 2009, based on Luton Borough Council’s (LBC’s) annual employment survey, has been around 70 jobs per million passengers per annum (mppa). The Annual Monitoring Report (AMR) estimated that there were 7,200 jobs at the Airport in 2009. The latest report (AMR 2010) raised this to 8,200 but this is based on a completely different estimating procedure so is not comparable with the previously published figures.
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, 2007, 2008 and 2009 into the time series on which the model is based - there was no survey in 2005 and, as noted above, the 2010 data was derived by a different method; and
b)     We have used the Government’s revised forecasts for air passengers at Luton to 2030 published in January 2009 and August 2011.
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
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the original jobs data (1991 to 2010; there was no survey in 2005);
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the Halcrow forecast for the scenario involving no expansion beyond the current boundaries;
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LADACAN’s revised forecast based on more recent actual employment data and the Government’s 2009 passenger forecasts;
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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;
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LADACAN’s revised forecast with freight traffic restricted as above and the Government's 2011 passenger forecasts.
The LADACAN forecast shows employment at the Airport growing from the Luton Borough Council estimate of 8,200 in 2010 to 8,600 in 2015 and then remaining fairly static. This largely reflects the Government forecast of a peak in passenger traffic at 17 mppa in 2020. 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 8,500 and declines to just under 6,000 by 2030.
The LADACAN forecast is lower than that produced by Halcrow because
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the extra jobs data for 2004, 2006, 2007, 2009 and 2009 has reduced the model sensitivity to passenger traffic growth by nearly 20 per cent. If the input data for the model is restricted to that since 2001, the decline in employment is even more marked which suggests that productivity has increased more sharply than assumed by Halcrow; and
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the Government’s 2009 passenger forecasts peaked at 17 mppa whereas those used by Halcrow rose to over 18.5 mppa.
The Government’s forecast of passenger traffic at Luton published in August 2011 shows much slower growth than that published in 2009 with the result that our latest forecast (in red) shows a steady decline in employment at the Airport over the next two decades even if there is investment to raise the Airport’s capacity.