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Journal of Transport Geography 35 (2014) 6474

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Journal of Transport Geography


journal homepage: www.elsevier.com/locate/jtrangeo

Spillover effects of the development constraints in London Heathrow


Airport
Sveinn Gudmundsson a, Stefano Paleari b, Renato Redondi c,
a

Toulouse Business School, ESC Toulouse, 20 Boulevard Lascrosses, 31068 Toulouse Cedex, France
University of Bergamo, Dept of Engineering, Via Pasubio 7b, 24044 Dalmine, Italy
c
University of Brescia, Dept of Mechanical and Industrial Engineering, Viale Branze 38, 25123 Brescia, Italy
b

a r t i c l e

i n f o

Keywords:
Heathrow Airport
Congestion
Spillovers
Regional development
Development constraints
Multiple airport regions

a b s t r a c t
In this article we assess the growth impact of London Heathrows development constraints on other airports in the UK. To test the relationship we use a two-stage methodology yielding an estimate of a congestion spillover effect. Our data are passenger trafc from 1990 to 2012 containing both intercontinental
and European air trafc. For intercontinental air trafc, our results show high congestion spillover effect
between Heathrow and Gatwick airports, and signicant but lesser effect to Stansted airport. We also nd
signicant congestion spillover effects from Heathrow to the spatially more distant Manchester and Birmingham airports, showing the extensive spatial impact of Heathrows development constraints. For
European air trafc, controlling for low-cost air carrier growth, only two airports show signicant congestion spillover effects: Gatwick and London City Airports. Illustrating that low-cost carriers do not operate
from Heathrow, so its limitations cannot affect the predominant low-cost air trafc in other airports. The
novel methodology we present in this paper can be applied to congestion research in general to assess
regional and modal spills within networks.
2014 Elsevier Ltd. All rights reserved.

1. Introduction
Development constraints of hub airports have grown dramatically in the last few decades, becoming a major public policy issue.
In Europe, airports inability to expand capacity due to regulatory
restrictions, land planning constraints and environmental concerns
(Upham et al., 2003) plagues airlines by reducing availability of
landing and take-off slots. One solution is to increase capacity in
the most congested airports. However, progressively policy making
involves the examination of alternative solutions such as demand
management through pricing mechanisms (Nombela et al., 2004),
and make better use of less congested secondary airports (Caves,
1997; DfT, 2003).1 Alternative solutions involving curtailed growth
of congested hub airports raise important questions on system scalability and ow of spillover demand within multiple airport regions
(MARs) and further apart within the general air transport system.

Corresponding author. Tel.: +39 030 3715645; fax: +39 02 700529452.


E-mail addresses: s.gudmundsson@wanadoo.fr (S. Gudmundsson), stefano.
paleari@unibg.it (S. Paleari), renato.redondi@ing.unibs.it (R. Redondi).
1
Air China, Korean Air and Emirates complement their Heathrow services with
operations from Gatwick due to lack of capacity out of Heathrow (CAPA, 2013). Etihad
and Emirates operate ights from Manchester to their hubs in Abu Dhabi and Dubai
connecting the airport to a vast network of intercontinental ights.
http://dx.doi.org/10.1016/j.jtrangeo.2014.01.011
0966-6923/ 2014 Elsevier Ltd. All rights reserved.

Scalability is the ability of a system, a system of airports in our


case, to handle growth by, (i) adding physical capacity, (ii) enhance
efciency, or (iii) shift supply between nodes (Bonnefoy and Hansman, 2007). Physical capacity can be added through new runways
and airports (Bonnefoy et al., 2010). Efciency can be increased
through: innovative capacity enhancing operational procedures
(Tether and Metcalfe, 2003), higher load factors, and larger average
aircraft sizes (Givoni and Rietveld, 2009, 2010; Pels et al., 2003).
Most important in the context of this present paper is how the
supply of ights and passenger demand shift from a congested
hub airport to secondary airports2 or airports of next largest cities
with spare capacity and demand (Derudder et al., 2010; OConnor,
2003).
Heathrow airport has substantial development constraints, frequently under review by policy makers with input from various
stake-holders. To put the problem in perspective, in the summer
of 2013, London Heathrow Airport allocated 10,260 air transport
movements per week on average to various airlines while the
capacity was 9569 movements (ACL, 2013). In other words, the airport is limited by its runway capacity of 90 movements per hour
rather than other capacity restraints such as air trafc control
2
Another type of a trafc shift would be to debank a hub airport to make a slot
demand more even over the day (Bonnefoy and Hansman, 2007).

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

limitations (Gelhausen et al., 2013). Increasing the size of the airport by adding a runway is one remedy (Janic, 2004), but subject
to residential dislocation (HRW, 2013)3 and environmental concerns (Yim et al., 2013). Another option frequently aired is to build
a new airport East of London (Oxera, 2013) and to add runways at
secondary airports (Griggs et al., 1998; MAG, 2013; Mawson,
2000).4 These long-term solutions, if implemented, do not address
the immediate demand problem at Heathrow, thus, calling for better
understanding of Heathrows congestion spillover effects to secondary airports in the background of both potential supply-side, and demand-side solutions.
A spillover effect is a secondary effect that follows from a primary effect in a system, and may be removed in time or space from
the primary effect (Bondi, 2000). Heathrows capacity constraint is
a primary effect having secondary effect on growth at other airports. Spillover effects from congestion in airports have received
limited attention in academia. Brueckner et al. (2010), in their research, focus on measures of substitutability as evidence of competition spillovers across airports. Competition spillover effects arise
when route competition affects fares at different airports, suggesting, if the effect is strong, that affected routes are at least partial
substitutes and therefore part of the same airport grouping.
Whereas understanding competition spillovers helps the policymaker analyze post-merger (or alliance) implications on airport
groups (competition spillover ties), our research on congestion
spillovers helps the policy-maker analyze how airport development constraints affect airport groups (congestion spillover ties).
Indirect treatment of the subject has occurred in research focusing on airport choice (Gelhausen, 2009, 2011), the scalability of
networks (Bonnefoy and Hansman, 2007) and hub formation in
the presence of spatial constraints (Barrat et al., 2005). Although,
we have gained important insights from these studies, little work
has paid attention to the size of airport congestion spillover effects
using aggregate data. A contributing factor to this scarcity in the
literature is lack of a suitable methodology permitting such analysis. Our research, using a novel approach, focuses on isolating and
quantifying these effects.
Our contribution is to show, i.e. (i) that congestion spillover effects exist across different spatial levels in the UK demonstrating
the wider scaling effects of airport development constraints; (ii)
that spillover growth (segregated from other growth) can be estimated using a novel approach (Bekaert et al., 2005; Christiansen,
2007; Koulakiotis et al., 2009); (iii) that the magnitude of the congestion spillover effect can be quantied for any relevant airport;
and (iv) that the novel methodology can be used to perform trend
analysis of the congestion spillover effects.
The remainder of the paper is composed as follows. Section 2
covers the research background where we discuss airport leakage,
scalability and spillovers. Section 3 covers methods and analysis, in
which we introduce current demand at relevant airports, their
spare capacity, and a model to estimate airport congestion spillover effects. Section 4 describes the data. Section 5 presents the results. Finally, Section 6 concludes the paper.

2. Congestion spillover effects and scalability


In this section we discuss the background to congestion spillover effects generated by development constraints at Heathrow
Airport. First we will cover the role of leakage across airport regions. Second we will show the link between leakage and the scalability of the air transport system. Third, we will explain the
3
Residential properties lost could range from 850 to 2700 depending on runway
location.
4
Airports frequently named for expansion are Gatwick, Stansted, and Birmingham
airports.

65

effects of congestion spillovers on leakage and its role in the scalability of the air transport system.
2.1. Leakage
Leakage takes place when passengers choose out of region airports for their ights (Elwakil et al., 2013; Fuellhart, 2007; Suzuki
et al., 2003). Using this denition switching between airports in the
London region would not be considered leakage as the switch takes
place within what is considered a single region or market. However, switching between Birmingham or Manchester airports to
one of the London metropolitan airports would be considered leakage. We can also consider it leakage if a passenger originating in
Manchester connects to an intercontinental ight in Frankfurt opposed to Heathrow Airport, we can term this transfer leakage.
Leakage usually ows from airport regions with fewer services to
airport regions with more services or from regions with high airfares to regions with lower airfares (Elwakil et al., 2013). If a passenger has no suitable intercontinental services in his or her
airport region, leakage to other more distant airports is predictable.
So if intercontinental air services increase in one airport region it
can be seen at least as a partial substitution for a better connected
airport in another region. For example, if intercontinental services
increase at Manchester airport fewer passengers in that region
need to go to Heathrow Airport (or some other airport) for intercontinental ights. Thus, increased substitute services in previously underserved regions, reduces leakage to other better served
regions.
However, substitution can also take place within a MAR in a vibrant way (Fuellhart et al., 2013). For example, Gatwick airport
may see increase in the number of intercontinental ights that
overlap with Heathrow and emerge as a substitute airport for Heathrow. Since this substitution takes place within the same MAR we
do not consider it leakage. In addition, substitution can take place
both for departure airports and destination airports (Fuellhart,
2007). For example, some nal destination passengers to London
may be indifferent between Gatwick and Heathrow, so in the mind
of the passenger substitution can occur based on some other choice
criteria such as airfares (Fuellhart et al., 2013). Another possibility
is, instead of a substitution airport, a specialized airport emerges,
in which case certain class of intercontinental services become
dominant, such as the African continent from Gatwick in the
1960s to date. In other words, leakage, substitution and specialization play a role in how the air transport system scales.
As service offers increase at secondary airports outside MARs,
some passengers face more choices than before. The options available to passengers constitute a choice set and decisions are inuenced by different criteria in part dened by trip purpose
(business or leisure). Air travel choice behavior research has focused on both passenger preferential choices between airports in
multiple-airport regions (Blackstone et al., 2006; Fuellhart, 2007;
Fuellhart et al., 2013; Hess and Polak, 2006a,b; Pels et al., 2001,
2003; Windle and Dresner, 1995) and in single airport regions
(Leon, 2011; Suzuki et al., 2003, 2004). Airport choice criteria usually cluster into: (i) airport access time, (ii) daily ight frequency,
(iii) ground access costs, (iv) airfares, (v) airline preference (frequent yer programs), and (vi) on time performance.
Research looking into demand leakage from small airport catchment areas to international hub airports (Leon, 2011; Lian and
Ronnevik, 2011; Suzuki et al., 2003, 2004) has found linkage with
choice factors such as fares, number of destinations offered, and
airline preference. However, out of region leakage appears strongly
associated with leisure ights opposed to business trafc (Gelhausen, 2011; Suzuki et al., 2003) and also airline preference (Leon,
2011). What is more, passengers in single airport regions have
higher access time tolerance than individuals residing in MARs

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S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

(Leon, 2011; Suzuki et al., 2003). For this reason, if any reverse
leakage was to take place, high-speed rail connections (see Givoni,
2007; Givoni and Banister, 2006) need to exist to bring less congested and less constrained distant airports closer in time to a
metropolitan market like London.
Based on what we have covered in this section it is clear that
the level of leakage from single airport regions is related to potential demand if substitute or specialized services emerge. Although,
tolerance for longer access times may be higher among passengers
in a single airport region the propensity to switch may be high if a
substitute service is offered with lower access time. For this reason
leakage and congestion spillover effects are closely linked and act
in combination (greater spillover reduces leakage) to reinforce
the secondary airport leading to potential changes in demand patterns within the air transport system.
2.2. Scalability
Because of the high external costs of adding capacity to major
hub airports (Humphreys et al., 2005; Nombela et al., 2004; Yim
et al., 2013), scaling the secondary airport system is increasingly
eyed for growth in policy circles (Caves, 1997; DfT, 2003). The network analysis literature provides an important perspective on the
ability of the air transport system to scale with increased demand
(Barrat et al., 2005; Bonnefoy and Hansman, 2007; Bonnefoy et al.,
2010). This stream of research shows, whereas much of the growth
in secondary airports has been derived from low cost airlines, that
development constrained hub airports, if not expanding, will spill
intercontinental ights (i.e. long-haul ights) to secondary airports, reinforcing network dispersion (OConnor, 2003).
However, the ability to add new capacity in air transport systems varies greatly between different world regions. Europe and
USA tend to have a similar propensity to use existing airports to expand capacity in multi-airport regions, about 80% in both cases,
while Asia and Latin America have added secondary airports
mostly as green eld developments, in 90% and 80% of cases
respectively (Bonnefoy et al., 2010). Thus, the ability of air transport systems to scale differs between world regions, with Europe
and the USA facing particular constraints. Measuring the scalability
of the existing air transport system without new airport construction is therefore of particular interest in Europe and the USA.
Following from this, by dividing airports into categories, primary (more than 20% market-share) and secondary (1%20% market-share), in a MAR, Bonnefoy and Hansman (2007) found that the
US air transport system was scalable only at the secondary airport
level. Similarly, Barrat et al. (2005) show that when there are spatial constraints in national air transport networks the formation of
secondary airport hubs is favoured. Other research using different
methodologies, for instance Sismanidou et al. (2013) also conclude
that secondary hub airports will play greater role in trafc dispersion; and similarly, Caves (1997) nds that airports in secondary
cities will have increasing role to play in the future, by providing
an important source of competitive service that should be taken
into account before embarking on building new airports.
All of this research covered so far points to the broadening of
global linkages between cities (OConnor, 2003) as more choices
are likely to be offered from secondary airports. Although the fastest growth has been in the parallel network (secondary to secondary airports) because of low-cost airlines, development
constraints in hub airports, will also lead to congestion spillovers
to the parallel and the semi-parallel (secondary to hub airports)
airport networks. Thus, we can conclude from this section that
spillover effects from congested hub airports are likely to affect,
at least partially, the scalability of the air transport system by
increasing the variety of air services in some secondary airports
(i.e. increase dispersion of intercontinental air services).

2.3. Spillovers
Congestion spillover effects, leakage, substitutability, specialization and the scalability of air transport systems are related in
an important way. Congestions spillover effects from hub airports
can augment substitutability of secondary airports for intercontinental services, and/or they can increase specialization if the spillovers involve particular type of operations. Congestion spillovers
may reduce leakage to the hub airport (or other hub airports if
transfer leakage), and most importantly, congestion spillover effects can facilitate growth of the semi-parallel and parallel air
transport systems when hub airports are capacity constrained.
From a regional economic stand-point these ows matter. More
comprehensive service offerings in secondary airports boosts regional economic development benets (Percoco, 2010; Cohen
and Morrison Paul, 2003), not only for the general population,
but also to attract and reinforce international business in the regions. Such economic spillover relationships have been extensively
examined in the context of the infrastructure-economy relationship (Tong et al., 2013; Moreno and Lpez-Bazo, 2003) lending
an important economic dimension to spillover effects from hub airports. Although these regional economic impacts are not the subject of this present paper, their assessment, especially in the
absence of major capacity enhancement at a hub airport, depend
partially on the quantication of congestion spillover effects to
other airports.
One such study (Gelhausen, 2011) isolates the impact of capacity constraints on airport choice and simulates the future spillovers
to other airports. The study suggests that loss of personal welfare
stemming from congestion is minimized by a rational economic
adaptation to the capacity constraint. Hence, the constraints are reected in pricing and integrated into the choice behavior of travellers. However, the study leaves substantial uncertainty as to the
estimates of congestion spillover effects as it does not use aggregate data of a congested airport but rather hypothetical scenarios
drawn from responses to survey questions. Thus, in order to fully
understand spillovers from capacity constrained airports, it is necessary to use historic aggregate data and segregate between different trafc categories (e.g. domestic, low-cost, intercontinental,
etc.).
When considering Heathrow airport we presume spillovers of
European trafc and intercontinental trafc but not low cost trafc
as low cost operators do not operate from Heathrow. So if the spillover trafc ows to other London airports it augments either substitutability or specialization of the receiving airport in the context
of intercontinental trafc or European trafc by full-service carriers, but not low cost carriers. In other words, congestion effects
augment substitutability (at other airports) if the spill replicates
existing operations (city pairs) in Heathrow, or similarly increases
specialization if the spill removes specic operations from Heathrow (e.g. all African routes, or all short-haul routes, etc.). In this
context we assume that if the spill ows to more distant airports
like Manchester or Birmingham we can consider it as leakage of
air transport movements (ATMs), or ATM leakage. We, therefore,
separate between ATM leakage and passenger demand leakage
that do not, necessarily, ow in the same direction.
From what we have covered so far, we know that intercontinental passenger demand leakage is primarily from regions with
poorly connected airports to the London airports (e.g. Heathrow
or Gatwick). While, when congestion spillovers of intercontinental
ATMs to secondary airports reinforce substitute services elsewhere
in the London MAR, they also leak to other airports in the UK. Congestion spillovers therefore strengthen the intercontinental parallel and the intercontinental semi-parallel point to point networks
and lessen demand leakage to the London MAR (not necessarily
the other way around unless specic conditions are present like,

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

specialization and high speed rail connections). For intercontinental passenger demand leakage to be greatly reduced, the secondary
airport must emerge as a substitute for the hub airport in terms of
intercontinental city pairs served.
If, however, the secondary airport emerges as a specialist, leakage will not be reduced to the same extent, but reverse leakage is
then more likely to take place. For example, if Manchester airport
serves West African destinations, a world region not served well
by Heathrow, some demand may leak from the London MAR to
Manchester. We already mentioned the concept of transfer leakage, although not the subject of this present paper, it can also play
a role as regional demand can circumvent the hub airport and leak
to other hub airports (Frankfurt, Paris, Amsterdam, Dubai, Abu
Dhabi, etc.). Based on the discussion so far, congestion spillover effects from hub airports can reinforce trafc growth in secondary
airports which successively reinforces their attractiveness, reinforcing further trafc growth (Hansen and Du, 1993).
In this section we discussed the relationship between hub airport spillovers and growth in the intercontinental semi-parallel
and parallel air transport networks. As this section reveals little
work has been done on how to quantify congestion spillovers from
constrained hub airports. Our paper makes an important methodological contribution addressing this issue, now explained in the
next section.
3. Methods and analysis
This paper proposes a methodology to test the presence of congestion spillover effects induced by the limitations in Heathrow to
other airports. The approach we employ is borrowed from nance,
and normally used to test whether volatility in one market is transmitted to another market (Bekaert et al., 2005; Koulakiotis et al.,
2009; Christiansen, 2007). The modeling is composed of two
stages: In the rst-stage equation we estimate Heathrows intercontinental passenger trafc and the residual; and in the secondstage equation we employ the residual as the spillover variable.
In both stages we use Ordinary Least Squares (OLS) regression to
carry out the estimations. In the present research we quantify
the impact that the development constraints of London Heathrow
Airport have on trafc in the London airport system and elsewhere
in the UK. The underlying hypothesis is that passenger growth in
the extended multi-airport system is, at least partially, dependent
on passenger growth at Heathrow. In particular, we expect to nd a
negative relation between expansion at Heathrow and other airports, approximating the spillover effect.
Table 1 reports the number of movements5 from 1997 to 2012 in
Heathrow and other major European hub airports. The table shows
that London Heathrow had the highest number of movements in
1997. However, movements increase only by 10% from 1997 to
2012, against more than 20% increase in other comparable hub airports. For example, movements at Frankfurt airport increase by
23% and at Paris Charles de Gaulle airport by 24%. These numbers
point to Heathrows potential growth if there were no development
constraints.
Even if London Heathrow is the major EU hub that has grown
less in terms of movements, it does not prove that it is congested.
To address the question if Heathrow is congested, we develop an
index of spare capacity (SC) for the European hub airports using
the following equation:

SC Index

"
#
365 X
22
X
MAX MOV  Mov
t1

i5

where MaxMOV is the maximum number of movements per hour


5

One movement is either a landing or a take-off.

67

registered in the year and Mov is the total number of movements in


the year, from Table 1. The index is the difference between the maximum yearly capacity, obtained by summing all maximum hourly
movements from 5 a.m. to 10 p.m. for each day, and the number
of actual movements over the year. It can also be dened as the
yearly number of spare slots. This measure is raw in the sense
that no attempt is made to rank or rate the attractiveness of spare
slots to airlines according to time of the day or some other considerations. In other words, some airport slots, available at unattractive times of the day, may only be used by airlines as last resort.
In the case of Heathrow, spare capacity is greatly depending on British Airways offer, which alone accounts for more than 48% of its
scheduled movements in 2012. So, changes in its operations, schedules or efciency levels would signicantly affect congestion levels
in Heathrow, in particular during peak hours.
Table 2 shows the SCindex for major hub airports in Europe, from
1997 to 2012. The index for London Heathrow decreased by 40%
from 1997 (SCIndex = 169,596) to 2012 (SCIndex = 101,042). By 2012,
London Heathrow had the lowest SCindex by far among major European hub airports. Compared with Paris Charles de Gaulle, which
has a similar number of movements per year, the SCIndex of Heathrow is 35% lower. Interestingly, Frankfurt in 2008 had the SC
(SCIndex = 111,529) identical to that of Heathrow (SCIndex = 111,661).
However, due to a capacity expansion effective in 2012, SC at
Frankfurt increased substantially (SCIndex = 164,846), reaching a
similar SC as Paris Charles de Gaulle, while SC at Heathrow continued to decrease. Based on this analysis, development constraints at
Heathrow are increasingly relevant both in absolute terms and
with respect to other major European hub airports.
In view of what we have covered so far the major difculty in
testing our hypothesis is that passenger trafc at other airports
also depends on factors unrelated to constraints at Heathrow. For
example, over the last two decades, a major source of growth has
been related to the expansion of low-cost carriers. Other airports
in the London area, such as Stansted, Gatwick and Luton, beneted
the most from this trend leaving trafc at Heathrow relatively untouched. Consequently it is not readily evident that other airports
serving the fast growing low-cost segment can absorb Heathrows
un-accommodated demand for long-haul ights. We therefore calculated SC in 2012 at the secondary airports and discovered a large
variance among the airports.
Beginning with the predominantly low-cost trafc airports,
the lowest spare capacity was at Liverpool (SCIndex = 38,811) followed by Birmingham (SCIndex = 65,266), Luton (SCIndex = 96,269),
then Stansted (SCIndex = 117,583), and nally London City
(SCIndex = 165,904). The airports named so far are unlikely to contribute much to the scalability of demand for intercontinental
ights due to both the predominant type of airlines and low SC.
However, London Gatwick (SCIndex = 120,429) and Manchester
(SCIndex = 175,515) are the two secondary UK airports having substantial long-haul services and the largest SC. Overall, the numbers
tell us that, at least in terms of Gatwick and Manchester there appears to be some SC in the UK airport system, while SC has reduced
substantially in most other airports due to growing low-cost trafc.
We do not, in our analysis, measure the ability of the various airports to expand capacity in comparison to Heathrow Airport, an
important scalability factor as previously mentioned. However,
increasing runway capacity at Heathrow can affect spillover to
other airports with resulting slowdown in growth.
We consider separately intercontinental trafc and European
trafc, for two reasons: First, London Heathrow, with respect to
the other major European hubs, serves mostly intercontinental
destinations; second, since low-cost trafc growth concerns
mainly intra-European trafc, the congestion spillover effects from
Heathrow on intercontinental trafc at other airports is more
straightforward to detect by separating the two types of trafc.

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S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

Table 1
Total movements (000) at European hub airports from 1997 to 2012. Source: Airport Statistics; Notes: AMS = Amsterdam Airport; CDG = Paris Charles de Gaulle Airport;
FRA = Frankfurt Airport; LHR = London Heathrow Airport; BHX = Birmingham Airport; LCY = London City Airport; LGW = London Gatwick Airport; LPL = Liverpool John Lennon
Airport; LTN = London Luton Airport; MAN = Manchester Airport; STN = London Stansted Airport.
Major European Hub Airports

UK Secondary Airports

Year

AMS

CDG

FRA

LHR

BHX

LCY

LGW

LPL

LTN

MAN

STN

1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

349
377
394
415
416
401
393
403
405
423
436
428
391
386
420
423

396
429
468
509
515
502
506
516
514
533
544
551
518
492
507
491

392
416
439
459
456
458
459
477
490
489
493
486
463
464
487
482

429
441
449
460
458
460
457
470
472
471
476
473
460
449
476
471

80
88
98
108
111
112
116
109
113
109
104
103
94
85
84
84

32
37
41
49
54
53
48
53
61
66
77
84
67
60
61
64

227
240
245
251
244
234
234
241
252
254
259
256
245
234
245
240

25
25
25
30
31
33
39
40
49
48
46
44
42
43
46
36

37
44
51
56
56
55
58
64
75
79
83
86
75
69
72
72

146
162
169
178
182
178
192
208
218
213
207
191
162
149
158
160

82
102
132
144
151
152
169
177
178
190
192
177
156
143
137
131

21

24

23

10

100

45

94

10

60

Growth % 199712

Table 2
Index of spare capacity SC (000), calculated from Eq. (1), for major European hub airports and UK secondary airports from 1997 to 2012. Source: Elaborations from Airport
Statistics.
Major European Hub Airports

UK Secondary Airports

Year

AMS

CDG

FRA

LHR

BHX

LCY

LGW

LPL

LTN

MAN

STN

1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012

235
205
202
218
216
213
196
213
222
191
191
213
211
191
206
186

143
113
118
149
155
150
171
131
132
143
182
189
177
172
138
156

85
97
97
131
108
100
112
114
93
94
103
112
126
119
127
165

170
165
142
155
163
135
151
121
136
150
132
112
136
146
113
101

74
96
133
146
125
173
120
115
117
102
75
90
98
64
59
65

101
104
99
112
126
152
132
146
163
163
152
159
187
176
156
166

110
83
85
90
91
89
88
45
46
56
95
80
102
120
122
120

16
9
6
14
13
11
17
47
44
45
41
31
39
56
47
39

29
23
21
31
31
26
53
35
67
64
47
57
61
74
102
96

104
91
84
114
116
102
82
134
129
128
141
132
117
137
171
176

63
83
101
98
160
114
116
122
114
114
131
134
111
99
99
118

Change % 199712

21

95

40

12

64

149

229

69

86

Notes: AMS = Amsterdam Airport; CDG = Paris Charles de Gaulle Airport; FRA = Frankfurt Airport; LHR = London Heathrow Airport; BHX = Birmingham Airport; LCY = London
City Airport; LGW = London Gatwick Airport; LPL = Liverpool John Lennon Airport; LTN = London Luton Airport; MAN = Manchester Airport; STN = London Stansted Airport.

Eq. (2) shows the regression for estimating intercontinental trafc


at Heathrow.

INT
INT
INT
PAX INT
LHR;t a0 PAX LHR;t1 a1 DPAX AREA;t eLHR;t

The number of intercontinental passengers at Heathrow at year


INT
t, PAX INT
LHR;t depends on trafc volume at year t1, PAX LHR;t1 , and on
the growth in intercontinental passengers registered in year t in
the geographical region of relevance, DPAX INT
AREA;t , i.e. the region in
which the spatial impact of constraints in Heathrow are most likely
to be felt. As a rst approximation, we assume the London area.
However, in the case of intercontinental destinations, as there
could be leakages from other more distant areas to London Heathrow, the relevant area may be much larger, so we enter the Manchester and Birmingham areas to test if more distant spatial effects
are found. If the congestion spillover effect is successfully identied by the model, it will also conrm the validity of the reference
region.

The rst-stage equation provides an estimation of the intercontinental trafc in Heathrow in the considered period, from 1990 to
2012. However, we are mainly interested in its residual term, eINT
LHR;t ,
which represents the extra-growth of intercontinental passengers
at Heathrow which remains unexplained by the model. It will be
employed as the spillover variable in the second stage of the model, which is reported in Eq. (3).
INT
INT
INT
INT
PAX INT
AIR;t b0 PAX AIT;t1 b1 DPAX AREA;t b2 eLHR;t eAIR;t

The dependent variable is the number of intercontinental passengers at a generic airport AIR (e.g. London Stansted, Gatwick, Luton, or even Manchester and Birmingham) at year t. The model is
similar to that employed in the rst stage, with the addition of
the spillover variable, eINT
LHR;t which is the unexplained growth in
Heathrow. The spillover effect induced by the constraints in Heathrow to the generic airport AIR, is successfully identied when
the coefcient b2 is negative and statistically signicant. So, if Heathrow trafc underperforms, due to its limitations, the other regions airports will grow faster and vice versa.

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

69

The same two-stage procedure may be employed also for estimating the congestion spillover effect in the case of European trafc. However, given that the presence of low-cost carriers
signicantly contributed to the growth of European trafc especially in the London airports of Stansted, Gatwick and Luton, their
effects must be added into the models. Eqs. (4) and (5) respectively
show the rst and second-stage equations for detecting the congestion spillover effects in the case of European trafc.
EU;FSC
EU;LCC
EU;FSC
PAX EU
LHR;t a0 PAX LHR;t1 a1 PAX LHR;t1 a2 DPAX AREA;t
EU
a3 DPAX EU;LCC
AREA;t eLHR;t

EU;FSC
EU;LCC
EU;FSC
PAX EU
AIR;t b0 PAX AIR;t1 b1 PAX AIR;t1 b2 DPAX AREA;t
EU
EU
b3 DPAX EU;LCC
AREA;t b4 eLHR;t eAIR;t

We separated the effects of the European trafc operated by


full-service carriers (FSC) from that generated by low-cost carriers
(LCC). While the former is expected to be more relevant to explain
trafc growth in Heathrow, the latter is expected to be more
important for the other airports in the London area. However, the
basic idea to test congestion spillover effects remains unchanged.
The residual term of Eq. (4), eEU
LHR;t , is the extra-growth of European
trafc at Heathrow which remains unexplained by the model.
When considered as an independent variable in Eq. (5), the congestion spillover effect is detected when its coefcient b4 is negative
and statistically signicant.
4. The data
Although development constraints at Heathrow may cause trafc leakage to other European hub airports and even the MiddleEast, in the present research we are concerned with UK airports
as a relevant group for analysis. Although trafc leakage to other
countries can motivate policy decisions the policy scope rests limited to UK airports and their capacity development. The purpose of
our research is not to identify relevant airport groupings but rather
to determine the signicance of spillover effects to other airports in
the London MAR and the spatial scope of the effects elsewhere in
the UK. The CAA (2011) Passenger Survey (supplementary stated
preference question) asks passengers in Heathrow Airport to identify alternative airports that were considered for current ight. The
survey identies passenger preferences regarding alternative airports, and therefore pinpoints potential substitute airports under
conditions of curtailed growth. With regard to the survey, in our
analysis we include all London airports, the most distant airport
with substantial frequency, Manchester, one low frequency airport,
Liverpool, and one higher frequency airport midway between Manchester and London, Birmingham. By excluding all low frequency
airports, except one, we end up with a group of 7 airports out of 12.
This study uses annual destination data covering the London
airport system (Gatwick, London City, Luton and Stansted), Manchester, Liverpool and Birmingham from 1990 until 2012. The data
contains scheduled passengers for both European and intercontinental destinations. Passenger trafc from UK airports is taken
from the UK Civil Aviation Authority (CAA, 2012a) route level reports. The low-cost market shares in single airports, the variables
required in Eqs. (4) and (5), are obtained by employing the OAGs
airline schedules database. It includes daily schedules for the
majority of airlines, with details on several ight features, such
as operating carrier, airports, departing and arrival times, offered
seats and aircraft types.
We consider total trafc, including both passengers departing
from UK airports and connecting passengers through UK airports,
obtained from the CAA. Since several UK secondary airports already offer intercontinental and European ights, they may also at-

Notes:; LGW=London Gatwick Airport; LHR: Lond Heathrow Airport;


LTN=London Luton Airport; STN=London Stansted Airport;
MAN=Manchester Airport; BHX=Birmingham Airport.
Fig. 1. Intercontinental passenger trafc from selected airports, 19902012.

tract more connecting passengers from the capacity limited


London Heathrow. In fact, 8.3% of international trafc in London
Gatwick was already connecting in 2011, according to the CAA
2012 Passenger Survey Report (CAA, 2012b). Another reason for
taking into account connecting passengers is that development
constraints may cause loss of connecting passengers in London
Heathrow and a gain of origin passengers ying from other UK airports. For example, it is possible to y from Manchester to London
Heathrow and then to connect to intercontinental destinations.
However, as Manchester airport increases its international offer,
more passengers may choose direct ights from Manchester rather
than a connection ight through Heathrow.6

4.1. Intercontinental trafc


Fig. 1 shows trafc to intercontinental destinations from airports in the London area and from Manchester airport. Heathrow
shows a steady increase from 13.4 million passengers in 1990 to
36.5 million in 2012. In Gatwick, intercontinental trafc peaked in
2000 and then decreased due to a decision by British Airways to
concentrate hub trafc at Heathrow. So Gatwick trafc increased
from 2003 to 2007 to 10 million passengers and then went down
to 6.2 million passengers in 2012. The third and fourth airports in
terms of intercontinental trafc are Manchester and Birmingham
which registered intercontinental trafc of 4.4 and 1 million
passengers respectively in 2012. The other two airports in the
London system, offering intercontinental ights, are Stansted
and Luton, with the latter having substantially lower passenger
trafc.
The upper part of Table 3 reports the 12 major intercontinental
passenger ows from London Gatwick in 2012, their average
growth rates in the 19902012 period and overlapping with
Heathrow. Interestingly, the major ow to the USA decreased
signicantly from 1990 for two main reasons. First, the decision
by British Airways to concentrate its hub trafc at London
Heathrow. Second, after the Open Skies Agreement between the
6
Passengers from the North West of England embarking on intercontinental ights
from Heathrow, can of course also use other modes of transport: bus, train or a car.
7
The agreement was signed on April 30, 2007 and became effective on March 30,
2008. Phase two was signed in June 2010.

70

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

Table 3
Intercontinental passenger trafc, average annual growth and overlapping of intercontinental trafc between Heathrow Gatwick, and Heathrow Manchester Airports.

Passengers

CAGR

Overlapping with Heathrow

Region

2012

19902012 (%)

1990 (%)

2000 (%)

2010 (%)

2012 (%)

Gatwick Airport
USA
Caribbean Area
North Africa
Middle East
Central America
Canada
Far East
Indian Ocean Islands
West Africa
Atlantic Ocean Islands
Near East
Indian Sub-Continent
Intercontinental trafc

1,393,395
1,299,157
1,258,970
624,864
611,315
462,243
196,730
157,199
84,826
82,009
50,828
43,595
6,292,241

4.4
6.5
5.4
5.9
11.5
0.4
6.8
8.4
5.4
132.0a
3.9
4.6
0.5%

71
100
97
96
0
100
95
83
89
0
100
28
84

29
75
40
92
0
100
0
44
64
0
100
12
57

92
52
31
100
21
100
0
100
18
0
3
10
69

81
29
72
100
0
100
64
100
15
0
100
1
70

Manchester Airport
USA
Middle East
North Africa
Central America
Indian Sub-Continent
Canada
Caribbean Area
Far East
Atlantic Ocean Islands
Near East
West Africa
Indian Ocean Islands
Intercontinental trafc

1,256,894
1,230,472
742,891
348,139
271,796
161,190
140,398
101,894
73,675
42,734
28,864
7585
4,407,118

3.4
29.8
8.4
10
6.9
0.1
3.6
1.3
34.2
3.3
6
1.4
6.0

100
100
100
0
100
100
100
100
0
100
100
0
86

45
100
26
0
78
96
100
94
0
100
0
69
65

89
100
18
0
81
100
58
100
0
99
0
100
73

88
100
69
0
81
100
67
100
0
100
0
100
71

Notes: Routes operated from 2005.

USA and Europe came into force in 2008,7 London Heathrow Airport
opened to full competition and US carriers gained better access
attracting more intercontinental trafc. Other fast growing major
trafc ows are to Central America, the Caribbean, Middle East and
North Africa. The level of overlapping in intercontinental trafc between Gatwick and Heathrow represents the percentage of passengers from Gatwick to destination airports also connected to
London Heathrow. For example, in 2012, 81% of intercontinental passengers from Gatwick to the USA ew to airports also served by
Heathrow.
There is complete overlapping to destination airports in Middle
East, Canada and Indian Ocean Islands. A high level of overlapping
is also observed to airports in USA, North Africa and the Indian SubContinent. The major specialization of intercontinental trafc in
Gatwick with respect to Heathrow is to destinations in the Caribbean Area, Central America, West Africa and Atlantic Ocean Islands,
the latter being operated from 2005. On average, 70% of intercontinental trafc from Gatwick connected to airports also served
from Heathrow. Such high level of overlapping, in addition to the
spatial closeness to Heathrow, indicates that Gatwick could be considered as its main substitute to reach many intercontinental
destinations.
The lower part of Table 3 also shows the major passenger destinations from Manchester airport in 2012, their average growth
rates in the 19902012 period and overlapping with Heathrow.
During the period, intercontinental passenger trafc at Manchester
Airport increased at an annual average rate of 6%. The number one
destination was to the United States, which growth at Manchester
was directly attributable to the lack of access, by large US carriers,
to Heathrow Airport. The second largest destination was to the
Middle East with average annual growth of 29.8%. The third destination with an annual average growth of 8.4% was North Africa,
followed by Central America, with an annual growth rate of 10%.
To understand the dynamics between Manchester and Heathrow,

we can compare the overlap between destinations from the two


airports. If for instance there is little overlap, the two airports are
complementing each other and specializing. Manchester might
for instance have a larger proportion of intercontinental leisure
destinations than Heathrow.
If, however, the overlap is substantial then Manchester Airport
can be seen as an emerging substitute for a portion of UKs

Notes: LCY=London City Airport; LGW=London Gatwick Airport;


LHR: London Heathrow Airport; LTN=London
Luton Airport; STN=London Stansted Airport; MAN=Manchester Airport;
LPL=Liverpool John Lennon Airport; BHX=Birmingham Airport.
Fig. 2. European passenger trafc from selected airports, 19902012.

71

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474


Table 4
Two-stage estimation (Eqs. (2) and (3)) of the spillover effects from constraints at Heathrow Airport: intercontinental trafc. 22 observations from 1991 to 2012.
First-stage regression

a0

a1
***

0.459

***

Spillover effect

Adjusted+ R2

99.1

London Heathrow LHR

1.018

Second-stage regression

b0

b1

b2

London Gatwick LGW


London Stansted STN
London Luton LTN
Manchester MAN
Birmingham BHX

0.940***
0.879***
0.980***
0.998***
1.022***

0.410***
9.60E03
7.78E03
0.120***
0.013

0.658***
0.042*
0.060
0.150**
0.054*

98.5%
47.0%
67.4%
98.2%
94.1%

p < 0.05.
p < 0.01.
***
p < 0.001.
+
Adjusted for the number of independent variables.
**

intercontinental trafc. In this case we might nd that foreign airlines with no grandfather rights at Heathrow have no option but to
operate to Gatwick and Manchester airports if seeking to serve the
UK, so the carriers compete by replicating Heathrows service
offerings. The fast growing destinations to the Middle East overlap
completely with Heathrow. Among the major intercontinental destinations, only Central America, West Africa, and the Atlantic
Ocean Islands can be regarded as a specialization of Manchester
Airport compared to Heathrow. However, the high degree of overlap between Manchester and Heathrow indicates that Manchester
is emerging as a substitute hub to Heathrow. Manchester is an airport dominated by carriers lacking access to the London airports or
not being able to increase frequencies out of Heathrow: the latter
group being a clear example of a congestion spillover effect.
4.2. European trafc
Fig. 2 shows trafc to European destinations for the airports included in the analysis. European passengers at Heathrow peaked in
2000 to 30 million and then remained relatively stable to 2012
with no signicant presence of low-cost carriers. One of the major
effects of congestion in Heathrow has been a gradual focusing on
intercontinental destinations and lessening of domestic and
short-haul European services. Gatwick and Stansted registered a
marked increase in European trafc because of the development
of low-cost carriers. However, European trafc in Stansted decreased from 2006 because of Ryanairs decision to reduce the
number of routes due to increase in airport charges (RBB, 2011).
While, Manchester airport saw its trafc to European destinations
remain relatively stable and the low-cost market share increase
signicantly. Consequently, in Manchester, low-cost carriers replaced full service carriers on European destinations.
5. Empirical analysis
We performed the regressions by employing yearly data from
1990 to 2012. The number of observations for each regression is
22 (23 years with one lagged explanatory variable related to passengers in previous year). To increase the number of observations
we also evaluated monthly data. However, we eventually decided
against that because the period of a single observation should be
long enough that the effects of an airport increasing constraint or
improvement project could be felt on the other airports. Table 4 reports the results from the application of the two-stage procedure
to estimate the congestion spillover effects due to the constraints
at Heathrow Airport. The rst-stage OLS regression (from Eq. (2)),
which estimates intercontinental trafc volumes in Heathrow,
shows high t and explained variance (R2 = .99). The error term
of the rst-stage regression is entered as the dependent variable

in the second-stage OLS regression (from Eq. (3)). The set of regressions are estimated for each airport separately to test whether limitations in Heathrow affect its trafc.8
The most signicant congestion spillover effect for intercontinental trafc is that related to London Gatwick. The value of its
coefcient, 0.66, is also the highest, in absolute terms, reecting
the high level of correlation with unexplained growth in Heathrow.
In other words, for each intercontinental passenger lost in Heathrow, Gatwick recovers 0.7. After Gatwick, Manchester airport
seems to be the one whose intercontinental trafc is most correlated to Heathrow, with a signicant spillover coefcient of
0.15. That conrms that at least for intercontinental trafc, Heathrow and Manchester are not fully separated. In other words, the
spillover of constrained supply for intercontinental ights at Heathrow, is primarily affecting Gatwick and then Manchester. In the
latter case, the congestion spillover is mainly causing a reduction
of demand leakage from Manchester to London. The other two airports, Stansted and Birmingham, show more modest, but still signicant congestion spillover effects. However, as already
remarked, those two airports are less suited to contribute to the
scalability of the airport system for intercontinental trafc: First,
due to the dominance of low-cost carriers, and second, due to limited spare capacity in the short-run.9
Whereas congestion spillover effects to Gatwick are expected,
due to the spatial closeness with Heathrow, our results show that
intercontinental trafc at Manchester and Birmingham are also affected. The results tell us that, at least in terms of Gatwick and
Manchester, there is some scalability in the UK airport system to
absorb spillover demand from Heathrow Airport. However, the
SC is not sufcient to absorb spillover demand over a longer period
of time if Heathrow will remain constrained. Thus, in the absence
of Heathrows expansion, Gatwick, Manchester and Birmingham
would need to expand capacity.
Capacity expansion is dependent on many factors, not only
available land, but also to what extent the local population is
affected by the negative externalities of the airport. Assuming
that capacity can be expanded, Manchester will over time absorb
more of the local leakage to the London airports as enduring
growth reinforces quality, increases route overlaps and service

8
We performed the regression diagnostics for the intercontinental and European
estimations. In particular, we employed the White Test for homoscedasticity, the
Jarque-Bera test for residual normality, the DurbinWatson test for residual
independence, and the condition number test for detecting multicollinearity problems (for more information see Greene, 2011). All tests conrmed, within a 5%
signicance level, a unbiased estimation of the regression coefcients and their
statistical signicance. Details are available from the authors on request.
9
Birmingham airports runway was too short to serve long-haul intercontinental
ights. The airport has now increased the runway length from the 2605 to 3000 m to
serve the long-haul market.

72

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

Table 5
Two-stage estimation (Eqs. (4) and (5)) of the spillover effects from constraints at Heathrow Airport: European trafc. 22 observations from 1991 to 2012.

a0

First-stage regression

a1
***

a2

a3
***

Spillover effect

Adjusted+ R2
94.3%

London Heathrow LHR

1.015

1.173

0.356

0.072

Second-stage regression

b0

b1

b2

b3

b4

London Gatwick LGW


London Stansted STN
London Luton LTN
London City-LCY
Manchester MAN
Liverpool LPL
Birmingham BHX

1.072***
0.956***
1.000***
1.282**
0.984***
0.987***
0.999***

0.970***
1.208***
0.934***
0.988***
0.991***
1.015
1.000***

0.203***
0.112*
0.074*
0.024*
0.182***
0.016
0.057*

0.202***
0.277***
0.141***
0.020
0.146**
0.074**
0.068*

0.477*
0.031
0.159
0.222**
0.018
0.106
0.125

98.9%
99.3%
98.8%
96.6%
95.6%
97.4%
97.1%

p < 0.05.
p < 0.01.
***
p < 0.001.
+
Adjusted for the number of independent variables.
**

frequencies. Developments in technology could even strengthen


the spillover. The employment of smaller and greener single-aisle
aircrafts for intercontinental ights is already allowing airlines to
increase route frequencies to secondary airports, reducing the need
to connect through the congested Heathrow.
Table 5 shows the results of a model estimating congestion
spillover effects for European trafc. In the rst-stage regression
(from Eq. (4)), the independent variables estimating the number
of passengers at Heathrow consider both the FSC and LCC components, even if the effect of the latter is almost negligible. In fact, the
corresponding variables, a1 and a3 are not statistically signicant.
The residual term of the rst-stage regression is again employed
as an independent variable in the second-stage regression.
So, spillover effects due to constraints at Heathrow, while being
highly signicant for intercontinental trafc especially at Gatwick
and Manchester, are much less prevalent for European destinations. Only London City and, to a lesser extent, Gatwick show signicant spillover coefcients at the 95% level. Interestingly,
London City, with its proximity to the London city centre and its almost complete absence of low-cost carriers, is the ideal substitute
of London Heathrow for European business travels.
Most of the growth to European destinations has been induced
by low-cost carriers that have never operated in a signicant way
from Heathrow. So, limitations there could not affect their development elsewhere. However, the second-order effect detected by
the model indicates that full-service carriers European origindestination passengers previously ying to Heathrow are in part induced by congestion and higher fares to choose other airports.

Table 6
Estimation (Eqs. (6) and (7)) of the spillover effects from constraints at Heathrow
Airport under two different leakage development assumptions: (i) linear growth over
time and (ii) inversely proportional to the spare capacity index SP. 22 observations
from 1991 to 2012.

London Gatwick LGW


London Stansted STN
London Luton LTN
Manchester MAN
Birmingham BHX
London City LCY
Liverpool LPL
SC = Spare capacity.
p < 0.05.
**
p < 0.01.
***
p < 0.001.

Intercontinental trafc

European trafc

b2-Linear

b2-SC index

b4-Linear

b4-SC index

0.949***
0.077*
0.106
0.221**
0.093

0.539***
0.034*
0.049
0.118**
0.043

0.585*
0.137
0.189
0.089
0.183
0.323**
0.172

0.384*
0.018
0.125
0.043
0.112
0.185**
0.099

5.1. Congestion spillover effects and trend analysis


The empirical analysis assumes that the leakage from London
Heathrow to another airport, if any, was constant during the period
under consideration. However, development constraints in London
Heathrow became more pronounced over time: its spare capacity
index in Table 2 shows a steady decrease over the years. So, it is
reasonable to assume that the congestion spillover effect was not
felt equally in 1991 as in 2012. We modied Eqs. (2) and (4) by
multiplying the growth unexplained in Heathrow, our spillover
variable, by a weighting coefcient Wt.
INT
INT
INT
INT
PAX INT
AIR;t b0 PAX AIR;t1 b1 DPAX AREA;t b2 W t eLHR;t eAIR;t

EU;FSC
EU;LCC
EU;FSC
PAX EU
AIR;t b0 PAX AIR;t1 b1 PAX AIR;t1 b2 DPAX AREA;t
EU
EU
b3 DPAX EU;LCC
AREA;t b4 W t eLHR;t eAIR;t

7
10

We considered two different patterns for Wt :


(1) Linear pattern. A linear increase of Wt from 0 in 1991 to 1 in
2012. In this case the assumption is that the congestion
spillover effect (if any) linearly increased over time;
(2) SC index pattern. Wt is set as inversely proportional with the
spare capacity index at time t, SPt: Wt = Min(SPt)/SPt where
Min(SPt) is the minimum value of the spare capacity index
over the period. Wt is equal to 1 when the spare capacity
is at its minimum value (in 2012) and the spillover is likely
to be felt most, and decreases as the spare capacity index
increases.
Table 6 reports the new coefcients related to the congestion
spillover effect, b2 in the intercontinental case, and b4 in the European case, and their statistical signicances under the two trend
patterns.
With respect to the intercontinental case reported in Table 4,
the analyses conrm that the most signicant congestion spillover
effects are to the Gatwick and Manchester airports. However, the
congestion spillover to Birmingham, relevant when assuming a
constant leakage from Heathrow during the period, is not signicant when overweighting the observations of the last years. That
could be explained by the steady reduction of its spare capacity
from its peak in 2002 (Table 2) that made it unt to accommodate
leakages from Heathrow during the last few years.
Regarding the European case, the results reported in Table 6

10
The models reported in Eqs. (2) and (3) can be seen as particular cases in which
Wt is equal to 1 for all years.

S. Gudmundsson et al. / Journal of Transport Geography 35 (2014) 6474

conrm the robustness of the estimations of Table 5, with signicant congestion spillover effects to the Gatwick and London City
airports.

6. Conclusion
In this paper we have studied how development constraints at
major hub airports cause spillovers with wide implications on how
air transport systems scale. The results support that congestion
spillover effects can occur, not only, to spatially close airports
within MARs, but also to more distant airports outside the MARs.
This nding supports the notion that airline strategies drive the
geographical patterns of air trafc and capacity requirements at
airports (Humphreys and Francis, 2002). For this reason signicant
congestion spillover effects to other distant airports constitute airlines and passengers preferential choices and therefore demand
patterns that should bear weight on long-term capacity planning
in a scalable air transport system.
Our results support results from stated preference studies (CAA,
2011) used to assess airport substitutability in the UK, but we offer
a more robust approach to estimate the spillover effects through a
model based on aggregate data. In other words our study underlines the usefulness of aggregate data to understand demand
dynamics within MARs (e.g. Fuellhart et al., 2013). Our study,
therefore, provides a more ne-grained evidence of changing demand patterns in the UK reinforced by Heathrows development
constraints. Spillover effects of intercontinental ights inuence
ight frequencies, demand patterns and new ight offerings at
both UK secondary airports outside and within the London MAR.
These changes are induced by substitution services through ATM
leakage from Heathrow and reduced demand leakage to Heathrow.
We therefore show that the overall substitutability of Heathrow
services by other airports, across several spatial levels, is increased
due to spillover effects, and causes increased dispersion in intercontinental services within the UK air transport systems.
Given the likelihood that a solution to Heathrows development
constraints is not available, at least over the medium-term future,
the characteristics of congestion spillover effects tell us how other
London airports and spatially more distant UK airports will scale in
the absence of a major capacity enhancing investment at Heathrow. We introduce, also, in our study trend analysis in spillovers
from Heathrow to cast light on longer-term developments at other
airports. Overall, we can state that congestion spillover effects
facilitate the development of secondary airports and makes better
use of the scalability of the airport system when it comes to intercontinental services. Hence only the lack of scalability justies new
airport construction in an air transport system.
The methodology we have applied in our research represents a
novel approach in transport research and can be used to assess regional and modal spills to multiple nodes within transport
networks.
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