Experts say London's Heathrow Airport should build a third runway to help Britain attract business opportunities from China. Provided to China Daily

Heathrow's stranglehold is over, and now there is a push on for more connections

Big British airports are in a round of renovation work in order to attract more business and investment from China.

London is the only British city to have direct air links with Chinese cities, and big regional cities are hoping to catch up.

Birmingham International Airport in the country's second-largest city is now extending its runway from 2,600 meters to a little more than 3,000.

The project is due to be completed in April 2014, and Paul Kehoe, the airport's chief executive officer, says the airport has a "growing desire to have Chinese airlines" then.

"What we are doing with a number of Chinese airlines is talking. We've spoken to three or four," Kehoe says, acknowledging that nothing had been confirmed. The problem is "we've got nothing to offer today, and they are looking for offers today".

Birmingham International Airport hopes to connect with Shanghai and Beijing, he says. He also mentions Guangzhou, Birmingham's sister city, and Chongqing, the most populous Chinese city.

In July, Manchester Airport unveiled plans to develop Britain's first "Airport City" to Chinese businesses and investors in Shanghai.

In London, Gatwick Airport has recently spent 1.2 billion pounds ($1.89 billion, 1.53 billion euros) on upgrading, and Hong Kong Airlines Ltd and Air China Ltd started flying to and from there in March.

That ended the stranglehold of London Heathrow, Britain's largest airport, over direct air links to China.

The Birmingham, Manchester and Gatwick efforts highlight Britain's growing interest in more investment and business from China, especially as Britain grapples with its double-dip recession.

The country is now home to more than 400 companies from the Chinese mainland, according to UK Trade and Investment. In London alone, Chinese enterprises are now the second-largest group of foreign direct investors.

China's investment in Britain has grown from almost none in 1972 to more than $2.3 billion (1.87 billion euros), half of these investments made last year, said the Chinese Ambassador to Britain, Liu Xiaoming.

In Birmingham, Shanghai Automotive Industry Corp's ownership of MG, the car brand founded in 1924, is an outstanding example of booming Chinese investment in Britain.

Birmingham is also home to NVC Lighting Technology Corp, China's largest lighting company, from Guangdong province.

China has invested in 24 projects in the Birmingham area, creating 711 jobs and safeguarding 78, according to figures provided by Business Birmingham.

NVC, which has invested 15 million pounds in the region so far, said it expects to create 250 new jobs by 2015.

"We certainly see that in the near future China will become a very large source of investment in the UK, and certainly into the city, because we demonstrate successful investments like SAIC and NVC," says Marek Dobrowolski, investment manager of Business Birmingham.

"We are being proactive on engaging with China," he says.

Dobrowolski says Business Birmingham, as an inward investment team, has 160 international projects in the pipeline, of which China accounts for 11 or 12 percent.

Chinese firms will have more investment opportunities in the city's 1.2 billion pounds worth of infrastructure projects in the pipeline, he says.

The British government plans to invest 200 billion pounds to develop the country's infrastructure over the next five years.

More air links with China are regarded as crucial to ensuring stronger business and investment ties between Britain and China.

A month before London Gatwick opened its route to China, the boss of Heathrow Airport warned that capacity constraints were "damaging the UK economy when the country can least afford it", after the number of passengers flying between Britain and China fell for a fourth consecutive month.

Heathrow is full to capacity and cannot take on new routes. Its traffic to China, including Hong Kong, dropped 0.7 percent in January compared with the same time a year earlier.

"Business leaders in the world's fastest-growing economies say they are putting off investing in the UK because of a lack of direct flights," says Colin Matthews, chief executive of Heathrow's owner, the British Airports Authority.

Wu Xiaoming, manager of Air China's office in Britain, says the airline is looking at the possibility of direct flights to Manchester and Edinburgh.

"Because this is a big investment, we are doing research to see if these routes will be profitable."

Air China operated direct cargo flights to Manchester a few years ago, but stopped them because of insufficient demand, he says.

Hong Kong Airlines did not do so comment.

Manchester Airport is trying to increase demand for long-haul direct flights from emerging economies to the city by developing a 150-hectare business park near the airport.

The Manchester Airport City scheme aims to offer high-quality premises to entice international companies.

The airport unveiled a 32-page document and a promotional film, both in Chinese, explaining its ambitious project at the Airport Construction Summit in Shanghai in June, hoping to attract interest from Chinese businesses.

Construction of the business park is expected to be completed next year at a cost of 659 million pounds. Facilities offered include hotels, offices, retail sites, manufacturing premises, freight, logistics facilities, coffee houses, bars and restaurants.

Some Chinese businesses already have a presence in Manchester. This includes Globelink China Logistics, which bought the Manchester company CBI Global Freight Management in 2010.

Nigel Sleigh, managing director of CBI, told the online media Place North West then that Globelink chose to set up its headquarters in Manchester because of its "logistical opportunities afforded by Manchester Airport".

However, no airline has agreed to operate direct flights from China to Manchester so far, says John Greenway, a spokesman for the airport.

Some Chinese businesses are considering establishing European headquarters in the city, but no details can be announced yet, he says.

Last year, Manchester Airports Group signed a sister agreement with Beijing Capital International Airport to exchange ideas on strategy, operations, sustainability, security and future development.

However, industry insiders have voiced doubts over the ability of Birmingham and Manchester airports to host sustainable long-haul flights to and from China.

Neil Chesters, managing director of the London consultancy Abbey Square, says regional airports are unlikely to establish long-haul direct flights with the same frequency as a hub airport like London Heathrow.

"If there are two flights a day to Heathrow, which then allows people to travel to Birmingham, and there are two flights to Birmingham a week, people will still fly to Heathrow," Chesters says.

If Heathrow does not provide long-haul flights to Chinese cities, Chinese passengers will fly to European hubs such as Amsterdam or Paris, and take connecting flights to Birmingham, which are likely to be frequent, he says.

Chesters says building a third runway at Heathrow is the only way to help Britain attract business opportunities from China.

He worked on a report last year by the consultancy firm Frontier Economics that showed Paris and Frankfurt already boast 1,000 more annual flights to the three largest cities in China than Heathrow.

Chesters' comments are echoed by Mike Carrivick, chief executive of the Board of Airline Representatives, a trade association for airlines that do business in Britain. Carrivick says cities such as Birmingham and Manchester probably do not have enough passengers to fill the type of aircraft that can fly to China nonstop.

There are few long-haul aircraft that would fly from Britain to China nonstop carrying only 100 people, he says.

Heathrow has a lot more to offer than its location, he says, because many Chinese airlines are still intent on using Heathrow, even though other London airports such as Gatwick and Stansted have a lot of free capacity.

Carrivick warns that every time a new destination is added at Heathrow, it is at the direct expense of a destination already served.

"Because no more flights can be added to Heathrow, we need more and more passengers to come in each aircraft, and that's getting rid of smaller planes and putting in larger ones in. That makes it very expensive for regional carriers."

Contact the writers at zhanghaizhou@chinadaily.com.cn and cecily.liu@chinadaily.com.cn

(China Daily 08/03/2012 page19)