Need

In the advice to the Secretary of State " SoS" (document TR020002-005347-TR020002 Final Recommendation Report to DfT) the examiners:

Examining Authority
Kelvin MacDonald BSc(Hons) FAcSS FRTPI CIHCM FRSA – Lead Member
Martin Broderick BSc MPhil FIEMA – Panel Member
Jonathan Hockley BA(Hons) DipTP MRTPI – Panel Member
Jonathan Manning BSc(Hons) MA MRTPI – Panel Member

set out a complete chapter (Chapter 5) where they discussed "Need" (pages 54-103).
Their conclusion on page 103 stated:

Given all the above evidence, the ExA concludes that the levels of freight that the Proposed Development could expect to handle are modest and could be catered for at existing airports (Heathrow, Stansted, EMA, and others if the demand existed). The ExA considers that Manston appears to offer no obvious advantages to outweigh the strong competition that such airports offer. The ExA therefore concludes that the Applicant has failed to demonstrate sufficient need for the Proposed Development, additional to (or different from) the need which is met by the provision of existing airports.

This report was written in the 3 months after the examination concluded in July 2019 and passed to the SoS for the Department of Transport "DoT" to make their decision. In January 2020 the DoT delayed the decision and then further delayed this to the 10th July. The decision was announced on the 9th July and was a Yes against the advice given by the four experts noted above.

What the Examiners would have been unable to forecast was the Coronavirus Pandemic which has decimated the aviation industry.
This collapse of short and long haul flights has has two consequences:
1. The airport which handles most air freight is Heathrow. 67% of all air freight is carried in the belly of long haul passenger planes and this has dropped by 90% and according to most experts will not recover for 3-4 years.
2. This has meant air freight will need freighter only aircraft to carry freight for the next 3-4 years providing a boost to this niche market.

The problem for freight managers is consumer confidence is still low so the demand has also dropped and most of the World will enter a recession and currently no expert can predict when this will recover.
If freighters are to be used the upside is there is plenty of slots at all the airports to cater for this usage, certainly enough to not need a new airport in the South East for the foreseeable future.

To get back to the report I will not seek to post all 50 pages but will concentrate on the conclusions, the viewer can read the full report by clicking in the link above.


5.7. CONCLUSIONS (page 98)
5.7.1. The ExA is mindful that the ANPS does not have effect in relation to an application for development consent for an airport development not comprised in an application relating to the Northwest Runway at Heathrow and associated proposals for new and reconfigured terminal capacity and, therefore, the application is examined under s105 of the PA2008.
5.7.2. Nevertheless, the ANPS remains an important and relevant consideration in the determination of such an application, particularly where it relates to London or the South East of England.
5.7.3. Government policy states that the Government is minded to be supportive of all airports which wish to make best use of their existing runways, including those in the South East (ANPS paragraph 1.39).
5.7.4. The ExA considers that the Applicant’s forecasts, when seen in the light of the historical performance of the airport seem ambitious. Previously the airport did not go above around 50,000 tonnes of cargo and 200,000 passengers a year, compared to the 340,000 tonnes and 1.4mppa forecast now.
5.7.5. The ExA accepts in this context that the investment levels proposed for the airport are at a different level to that previously spent on the site and notes anecdotal evidence that British Airways was previously in discussion with Infratil but pulled out due to a lack of investment and failure of the operator to provide a state-of-the-art facility. However, conversely SHP make reference to Wiggins Group investing £6 to 7m on new aprons and taxiways to increase freight capacity to 200,000 tonnes per annum [REP5-028].
5.7.6. Although to a certain extent it may be a cause and effect situation, it is also reasonable to suggest that the previous operators of the airport, either Wiggins Group (of which one member of the Applicant’s team was also involved) or Infratil, an experienced airport operator, would have invested more heavily had there been a reasonable prospect of this investment being repaid through increased traffic levels. While at this time the new integrators were not around, Heathrow and Gatwick were at similar levels of constraint.

Capacity
5.7.7. The third runway would clearly add to capacity substantially at London Heathrow. The ANPS states that the Government estimates that a new runway at Heathrow would result in an additional 43,000 long haul flights. This would provide more space for cargo, a greater frequency of services, and boost trade and GDP. It appears to the ExA that Heathrow would be able to accommodate the projected 3m tonnes of air freight per annum in due course and that more markets would likely be served by routes from the Northwest Runway at Heathrow, should demand exist. Heathrow is the dominant airport in the UK for air freight, and the proposed third runway would build upon this, providing significant new opportunities for bellyhold freight via new long-haul routes. While the 3m tonnes of freight would not be achieved overnight it would be a substantial uplift from the almost 1.7m tonnes carried in 2017 and supply could rise roughly with demand.
5.7.8. London Stansted has reached agreement, subject to the signing of a Section 106 Agreement with Uttlesford DC, to increase caps on the airport from 35mppa and 274,000 air movements including 20,500 air cargo movements, to 44.5mppa and 285,000 movements respectively. While a substantial part of the business at Stansted is passenger focused, the Airport clearly provides an important base for freight, with capacity for both integrator traffic (Fed-Ex) and general freight. The Applicant’s view is that Stansted airport has made a strategic choice to prioritise passengers over freight but this is not objectively supported by the evidence.
5.7.9. Stansted is clearly a busy airport and becoming busier. However, from the evidence provided there appears to be a degree of capacity left at the airport, including for freight movements with the airport forecasting a growth to some 376,000 tonnes per year by 2028 from a level of 236,892 tonnes in 2017, involving 16,000 cargo movements a year (from 10,126 in 2017) and an increasing amount of bellyhold cargo alongside the predicted growth in passenger numbers.
5.7.10. EMA is a major integrator hub with significant growth potential. Given levels of passenger throughput at the airport, it is unlikely that there will be significant strategic conflicts between passenger and cargo traffic. The ExA does not consider that there is ‘substantial circumstantial evidence’ that there is likely to be little if any scope for general cargo operators to stay overnight at EMA and it appears that the airport seeks to attract both integrator and general freight traffic. Evidence is also noted of germinative Amazon Air operations at the airport (via DHL), and the substantial new warehouse and sorting centre adjacent to the airport [REP05-029].
https://www.nwleics.gov.uk/pages/east_midlands_gateway DCO granted

Demand and forecasts
5.7.11. The ExA does not agree that zero growth forecast by the DfT is a pragmatic view due to lack of capacity; the Department does not claim to model freight in detail and have labelled it as an assumption. From the evidence provided there is no clear view of the levels that demand for air freight may grow, but levels of growth that do occur are likely to be accommodated by the proposed new runway at Heathrow, should this occur.
5.7.12. Should this not occur, there may be more demand available elsewhere, although given the preponderance of facilities in northern Europe it may be that this increases trucking levels rather than leading to a substantial growth in levels of freight being handled at other UK airports. Furthermore, growth in bellyhold at Gatwick and at other airports outside the South East may occur.
5.7.13. The Applicant’s Azimuth Report [APP-085] is a comprehensive document but the weight that the ExA can place on its forecasts is reduced by the lack of interview transcripts available, and of the size and sample frame of many of the interviewees, when considering the size of the forecasts that are generated and there is little evidence that academic and industry experts have validated the approach of the Azimuth Report. Furthermore, there is little evidence that capacity available elsewhere such as at EMA, or the impact of the proposed Northwest Runway at Heathrow have been taken into account in the production of the forecasts.
5.7.14. The Northpoint Report [REP4-031] provides a valuable alternative source to ‘back up’ the Azimuth Report. However, the limitations identified within its model, particularly those considering the scope for migrating between types of carrier and the impact of price (particularly when considering differences between bellyhold and pure freight, and trucking) appear to the ExA to be substantial limitations in the case of the Proposed Development and a more detailed model assessing such variables was not available to the ExA.
5.7.15. The forecasts of Boeing and Airbus are useful in terms of noting overall levels of global air cargo growth and provide support for the Northpoint analysis. The ExA do note however the previous considerable overestimation of the number of freighters by these aircraft manufactures.
5.7.16. The Avia Solutions Report forecast [REP3-276 report available in Library] provides a comprehensive view of the viable potential of Manston Airport. The ExA note that this report is independent; the brief from TDC did not indicate any desired outcome and required an independent assessment advising whether or not it is possible to run a viable and economically sustainable free-standing airport operation from Manston. While the report was written in 2016 this remains relatively recent and it concludes that, even with a generous assumption over air freight captured from trucking, airport operations at Manston are very unlikely to be financially viable in the longer term, and almost certainly not possible in the period to 2031.
5.7.17. While the Avia Solutions Report’s conclusions were based on viability, this arises in the report from the authors’ assessment of potential and forecasts for the airport – in other words, the need for the development. Also of note is that the report considered capacity squeezes and a major retail group, akin to Amazon basing themselves at the airport; neither possibility led to a different conclusion. Due to the independence and depth of this report, the ExA place significant weight on its findings.
5.7.18. On the basis of the evidence provided, the ExA considers that the predominance of bellyhold freight in the UK market as opposed to pure freight is to a large extent a by-product of the dominance of Heathrow in the UK aviation market. The effect of the size of Heathrow, and the vast range of destinations that are available from this hub airport have led to the strength of bellyhold freight for UK purposes, particularly when coupled with the relative ease of access to the large hub airports and pure freight airports in northern Europe. Trucking is a necessary mechanism to complete this overall market pattern and allows access to the population and manufacturing capacity of northern Europe. In the ExA’s view air freight would still primarily be attracted to the airports with the widest possible global networks for reasons of economies of scale.
5.7.19. It also appears logical to the ExA that bellyhold freight would be significantly cheaper than pure freight and that this in itself also helps to explain the dominance of bellyhold over pure freight, with much pure freight dedicated to express integrators who can charge more for express delivery times.
5.7.20. The Applicant considers that Manston could act in a complementary role to bellyhold freight at Heathrow and integrator freight at EMA.
5.7.21. However, the ExA’s analysis of the predominance of bellyhold freight in the UK (above) suggests that there is little complementary role to be had – while some oversized freight items may be too large or bulky for bellyhold travel, the vast majority of general freight can be carried in bellyholds.
5.7.22. A useful point is made by the Applicant noting that the cargo industry is fundamentally changing, and that this change needs an innovative response which cannot be provided at constrained South East airports. However, the change proposed by the Applicant appears to be largely based on new integrators who would offer similar comprehensive delivery patterns and structures to established integrators but with less strict time restrictions. In the view of the ExA then the likely locations for such integrators are likely to be closer to the centre of the country than Manston. While Manston can clearly offer good quick access to London and much of the South East*, a more central positions within the UK offers more potential customers than just London and the South East can provide; within a three hour drive from Manston only the South East and parts of the East of England can be reached, whereas most of England and Wales is within three hours of EMA.
* Editor's note: The conclusion (tempered by the second sentence is slightly odd considering Heathrow is served by the M4 and M25, Gatwick by the M23 (with the M25 20 minutes away), and the East Midlands by the 8 lane M1. Manston is dual carriageway until the Hoath Way junction on the M2 some 35 miles away with a further 10 miles to the M25 and Dartford river crossing which for those in the area hold ups are a regular occurrence especially at the river crossing.

Summary
5.7.23. The ExA is not convinced that there is a substantial gap between capacity and demand for general air freight within the South East at present. Capacity is available or could be available at other airports within the South East or at other airports within reach of the South East should the demand exist, and such capacity could largely be achieved relatively simply through permitted development rights or existing facilities.
5.7.24. The ExA is of the opinion that general air freight would continue to be well served in the UK with spare capacity at Stansted in the short term (to 2030) and the proposed Northwest Runway at Heathrow in the longer term, and that new integrators are more likely to wish to be sited in a more central location. If constructed and operated then the Proposed Development could carry out a role within the market focused on perishables and oversized niche freight as previously but it seems unlikely that tonnage achieved will be significantly more than previously handled. Without the proposed Northwest Runway at Heathrow more demand may be available but the ExA’s conclusions relating to new integrators, that is that they would be more likely to base themselves in a more central location to their other logistical operations, remain valid.
5.7.25. The Applicant argues that price is not the only determinant in where freight business may go – factors such as facilities, speed, handling efficiency and location all count too. While the ExA agree with this view, it seems logical to assume that price is the main component in any decision made and that bellyhold freight will generally be cheaper. If demand were present, then facilities could be constructed at other airports where speed and handling efficient could be largely matched to the Applicant’s plan and the ExA is not convinced that the location of the Proposed Development is entirely favourable.
5.7.26. In terms of passenger traffic, the full extent of the Azimuth Report forecasts [APP-085] may be difficult to reach. However, the ExA considers that there would be a market for passenger traffic from the airport although the extent to which such traffic would be viable for the airport operators has not been assessed in depth.
5.7.27. GA was not examined in depth in the Examination, and the Azimuth Report [APP-085] does not cover the subject in detail. Nevertheless, the ExA notes the support for GA facilities in the APF and the NPPF (paragraph 104) and the representations received on this matter.
5.7.28. Appendix 1 of the Applicant’s Overall Summary of Need Case [APP11-013] states that little weight should be afforded to the submissions of SHP given the withdrawal of this company’s objection to the Proposed Development *. In this context however the ExA note the comments of York Aviation, which states that they strongly refute criticism of their work by the Applicant in its written answers and consider that they have “provided substantial and well evidenced responses throughout the process” [REP11-070].
* Editor's note The request by SHP to withdraw its representations was made less than five hours before the Examination closed at 23:59 on 9 July 2019. On that basis, the ExA determined that it was received too late in the Examination for the ExA to properly consider the request or the implications for other Interested Parties. SHP’s representations therefore remain part of the Examination Library. This determination has been communicated to IPs via the s51 advice pages on the National Infrastructure Planning website.
 
Given all the above evidence, the ExA concludes that the levels of freight that the Proposed Development could expect to handle are modest and could be catered for at existing airports (Heathrow, Stansted, EMA, and others if the demand existed). The ExA considers that Manston appears to offer no obvious advantages to outweigh the strong competition that such airports offer. The ExA therefore concludes that the Applicant has failed to demonstrate sufficient need for the Proposed Development, additional to (or different from) the need which is met by the provision of existing airports.