UK's Gatwick may turn to emergency runway to boost capacity

Gatwick airport, the second-busiest in Britain, said in draft expansion proposals that it wanted to bring its second, emergency runway into routine use from the mid-2020s.

The airport is hoping to add new flights to overcome a summer capacity crunch, despite local opposition over safety, noise and environmental concerns. Gatwick lies 50km south of London and competes with Britain and Europe's busiest airport Heathrow, 35km to the west of London. Two years ago, Gatwick lost out to its bigger rival as the site selected by the UK government for a new runway.

The airport is, however, operating at full capacity in the summer when its mainly leisure customer base travels most.

In its draft plan, published on Thursday, Gatwick said it wanted to use new technology to increase capacity on its main runway. It also wants to use its second standby runway, which is currently only used in emergencies or when the main one is closed for maintenance, for routine departing flights.

Expanding airport capacity in densely-populated south-eastern England has long attracted opposition from local and environmental campaigners over safety worries and the impact of increased noise and air pollution.

After decades of political wrangling, the government gave the green light to expansion at Heathrow earlier this year but that plan still needs to overcome a legal challenge and win planning permission.

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Gatwick, owned by investment fund Global Infrastructure Partners and others, said its proposals would allow low-impact growth.

"Our draft master plan offers agile, productive and low-impact ways of unlocking much-needed new capacity and increased resilience from within our existing infrastructure," Gatwick CEO Stewart Wingate said.

Economists and business groups argue that, in the long term, expanding Gatwick will be necessary to help grow Britain's economy and international trade links, especially after the country leaves the European Union in 2019.

There will now be a 12-week public consultation before a final plan is agreed early next year, Gatwick said, which it will then submit to planning authorities. It added that it was not actively pursuing the building of a new, third runway but wants land kept available for this purpose should it require it.

Local group Communities Against Gatwick and Noise Emissions (Cagne) said using the emergency runway for flights would be unsafe as the runways are very close to each other. It would also create new noise problems as well as putting extra pressure on local transport links, they added.

"The local authorities, the people we elected, need to think hard before supporting Gatwick’s plans," Cagne said.

Gatwick said its use of the emergency runway would meet all safety requirements.

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Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”