Friday, January 16, 2009

no more runways

Quite apart from the climate-related issues, Alex Thompson (of More4 news) made an excellent point about the foolishness of the government's decision to approve a third runway at Heathrow, in last night's Snowmail message.

He wrote:

Forget all the green stuff. It is simply this. The aviation business is contracting, not expanding, because of the current bust. Fact. If bust becomes boom more people travel, more people burn oil. Oil's a diminishing resource, so the price goes up. So fewer people travel because fewer people can afford it. So in a bust aviation contracts - and it will in a boom as the oil runs out. They're sunk either way. So who needs bigger airports?

That may be a pithy summary, but it's a very accurate description of a very straightforward - but often misunderstood - argument.

1 comment:

Anonymous said...

Oil is a diminishing resource, but we're a long way off from it actually running out and the market doesn't think that far ahead.

In a boom increased demand will increase the cost of air travel. More people will feel they can afford to travel and they will effectively bid up airfares (there are only so many seats on a plane). These increased fares encourage airlines to expand.