Without a second runway Gatwick's expansion will grind to a halt in 2015, according to a new report.

Owner and operator BAA has published a ten-year plan predicting passenger growth and investment at its London airports to fend off takeover bids from international investors.

The firm announced plans to spend £9.5 billion on Heathrow, Stansted and Gatwick.

Stansted is set to get the largest chunk of the money, followed by Heathrow, which will replace Terminal 2 with a new building.

Gatwick will get £850 million, to be spent refurbishing terminal buildings and piers, replacing trains on the transit system between the terminals and refurbishing car parks and offices.

The number of passengers using all three airports is expected to grow by three per cent per year, BAA forecast. But by 2015 passenger growth at Gatwick is expected to reach zero.

BAA said passenger demand for the London area was projected to grow by about four per cent a year, meaning there would be about 19 million "lost" passengers a year by 2015.

Gatwick's passenger figures will increase from 32.8 million to 40 million by 2014/15, a figure then repeated in the following financial year.

BAA chief executive Mike Clasper said: "This is an ambitious and compelling capital programme, designed to meet the growing needs of airlines and passengers in the coming decade. It is the product of careful dialogue with airlines undertaken in the constructive engagement process set in train by the Civil Aviation Authority as part of its current price review.

"Successful execution of this programme is in the interests of BAA, its airline customers and the UK's economic progress."

BAA said it expected even higher returns from its other airports, including those in Scotland where it has an 84 per cent share of the market for air travel.

The company has laid out its defence against an £8.75 billion takeover bid from Spanish construction group Ferrovial, warning shareholders "it's not the right time, it's not the right price".

Mark Froud, chief executive at Sussex Enterprise, said BAA's forecast sent out a clear message that demand for air travel would continue to grow and UK airports must expand to meet this growth.

He said: "BAA's figures clearly show that once Gatwick reaches its passenger capacity with a single runway there'll be no more room for expansion even though the huge demand will still be there.

"This will have a devastating effect on the local economy, causing job losses and forcing businesses to move away from Sussex.

"Sussex Enterprise and the Sussex business community will continue to campaign for a second runway at Gatwick without which the economic prosperity for the county is under threat."

Tuesday, May 9, 2006