The UK’s Airport Operators Association (AOA) industry trade body brought together many of the nation’s big airport hitters together for a day and a half in the Hilton London Metropole Hotel in late November – alongside many others who play a vital role in the sector. Airside also attended.
AOA chairman Ed Anderson offered some welcoming remarks before going on to look at what was to be a continuing theme of the forthcoming conference sessions – the scarcity of airport capacity in the south-east of England and the recommendations of the Airports Commission, chaired by Sir Howard Davies, that were released in July, and with reference to which the Conservative Government is expected to base its long-term airport capacity development strategy (an announcement had been due in December last year, but was then postponed to the summer of this year).
The AOA has played its role in pressing for further runway capacity, while also stressing the need to make the most of existing capacity across all the UK’s air gateways. Anderson talked of the need for “a clear, integrated way forward for all UK development” – and sustainable development at that.
Despite the current uncertainty over the capacity issue, he highlighted the fact that the aviation industry is “powering ahead” in the UK, with passenger numbers rising quickly and the sector’s expansion spurred by economic growth. There is much to look forward to, he said, not just the Government strategy announcements expected imminently.
Willie Walsh, the ever-confident and ever-engaging chief executive of IAG, took to the floor for a question and answer session with conference moderator (and well-known newsreader and television presenter) Natasha Kaplinksy. Walsh predicts a record year for airlines in 2015, with US carriers likely to enjoy particularly high profitability. More optimistic now than he has been for some years for the sector, he nevertheless highlighted some of the concerns facing his and other airlines – not least security (brought into sharp focus by both the downing of the Russian Metrojet aircraft over Sharm el-Sheikh and the more recent terrorist atrocities in Paris, Istanbul and elsewhere).
Walsh confirmed that IAG is interested in bringing yet more carriers into the Group’s fold, though he denied there was likely to be any short-term news in this regard. He pointed out that the acquisition and integration of operations such as bmi, Vueling and Aer Lingus have gone well, and confirmed that he is currently being approached by both carriers and governments looking to sell carriers. “We will see further airline consolidation. And it’s a positive step towards improved customer service,” Walsh insists.
With regard to the Airports Commission findings released in July, he believes it to be “an excellent report”, although its recommendations were revealed to be the obvious ones vis-à-vis the London gateways. Moreover, he certainly feels that some of the figures produced are somewhat “off”; if the high capital investment figures said to be required for some of the infrastructure developments considered are accurate, inefficiencies would certainly be built in, he said. “We need infrastructure that is both efficient and cost-effective,” Walsh argued, urging caution in how much we should be prepared to spend on expansion.
His preference is for another runway at Heathrow, for which he says the economic case is better. Additional runway capacity at both gateways is not required, he added, also specifying that private investment is likely to prove more efficient than any public sector spending programme.
As for IAG’s own future? Walsh is expecting 2016 to be another good year, building on the successes of 2015.
INDUSTRY REPRESENTATION
Walsh’s Q&A was followed by a short presentation from Paul Drechsler, president of the UK’s Confederation of British Industry (CBI), who looked at the economic value to the UK of airport infrastructure development, and especially the potential benefit of new runway construction. The links to growing economies that can be created as a result of new runway capacity, plus the benefits to UK PLC in the form of job creation and skills development, are huge, Drechsler pointed out. The construction of a new runway at either of the big gateways is likely to have significant economic benefits throughout the UK supply chain, he argued.
Drechsler was followed by Jim McAuslan, general secretary of the British Airline Pilots Association (BALPA), which represents 80% of the country’s commercial pilots. He talked of the current concerns of those members BALPA represents, in particular pointing to the issues of being pressured to fly when feeling serious fatigue; of the threats to aircraft safety and security; where the next generation of pilots might come from and how they can be appropriately trained; and the need to engender a “just culture” in the industry that makes the most of pilots’ talents and experience.
McAuslan also mentioned a threat that has been reported in the UK national press in recent months – that of pilots being blinded by lasers shone from the ground, one example of which saw the retina of the co-pilot of an aircraft flying into Heathrow damaged by what has been described as probably an ‘industrial-strength’ laser. He also drew attention to the threat posed by drones being flown into prohibited airspace, either deliberately or accidentally. Certainly in the former case, as with those using the lasers, he believes that only the full force of the law being brought against such people will discourage them and others from doing the same.
THE UK GOVERNMENT VIEW
Robert Goodwill, the parliamentary under-secretary of state for transport and the Government minister responsible for aviation, spoke briefly, noting that the Government is currently carefully considering the recommendations of the UK Airports Commission. He also noted the Government’s announcement that it is to double spending on aviation security, and spoke at greater length on the increasing frequency of drunken passengers causing problems on aircraft. Goodwill suggested that airports can – and, to some extent, already do – work both with police forces and carriers to discourage excessive drinking at airports among those about to take a flight.
A panel discussion then took place, involving Debra Barber, managing director of Cardiff Airport; Tim Hawkins, corporate affairs director of Manchester Airports Group (MAG); Paul Kahn, president of Airbus Group UK; Martin Rolfe, chief executive of NATS; and Andrew Swaffield, chief executive of Monarch Airlines.
Barber spoke on the importance of smaller, regional gateways such as Cardiff to the economic and social fabric of both the UK as a whole and their more local communities. She said that it is vital that governments realise any one-size-fits-all aviation strategies will not work equally well across regional airports such as Cardiff and major global hubs like Heathrow.
Hawkins considered how the Airports Commission and its findings have dominated the news agenda, with what goes on at airports around London seemingly occupying all thoughts. He noted that gateways like Manchester can also play an absolutely critical role, not least in helping drive the nation’s ‘Northern Powerhouse’.
Kahn focused on Airbus’ customers’ needs – which are primarily those of the airlines. He said that Airbus UK works closely with its carrier customers on many issues that affect them and the wider aviation industry: requirements for new aircraft, improved emissions technologies as part of ‘sustainable aviation’, and much more.
Rolfe discussed “the invisible infrastructure” that is the UK’s airspace and said that, while it has served us well so far, it is in need of change now that the traffic pressure on it is so high. NATS has the plan to do this, Rolfe confirmed, forecasting a great deal of change in UK airspace operations, especially in the south-east of the country. There will be many ‘winners’ but also some ‘losers’ as a result of such change – for example, in terms of those who feel an impact from aircraft noise as a consequence of changed flight paths. But: “We need a 21st Century airspace for a 21st Century industry,” he concluded.
Finally, Swaffield spoke on issues including security, and raised the spectre of how terrorist attacks such as those involving the Russian Metrojet and at Sousse in Tunisia have the potential to close entire markets for customers and the carriers that serve them. He insisted that there needs to be a robust response to any terrorist attacks but argued that, wherever possible, we shouldn’t let entire tourist markets be closed by such atrocities.
GATWICK STANDS READY
Stewart Wingate, chief executive of Gatwick Airport, described the rapid expansion that has taken place at the south London gateway since it left the BAA fold back in 2009. Over the last six years, it has enjoyed a massive rise in passenger throughput and in airline customers, such that it is now approaching full capacity. Its focus has been on the need to compete effectively as a stand-alone enterprise, Wingate says, as well as to grow and to become London’s “airport of choice”.
Massive investment has been funnelled into the gateway over those six years (about £1.3 billion, or US$2 billion) to stimulate the airport’s growth, but any further step-change increase in capacity is going to depend largely on a governmental nod to the construction of a second runway. Such a second runway would be entirely privately funded, Wingate said, involving an investment of £7.88 billion ($11.9 billion), and would be ready for operations by 2025 (assuming the green light was given now).
Development airside would allow for London Gatwick to become potentially the UK’s biggest airport facility, Wingate said, and would cater to both the fast turnaround times required by low-cost carriers and the needs of long-haul legacy carriers and their latest aircraft types. The UK PLC economic case for an additional runway at Gatwick is better than that for Heathrow, he insists, and would entail a lower environmental impact than the Heathrow option.
The comparative benefit in terms of improved international connectivity will be pretty similar, Wingate considers, and – even if Heathrow is chosen by the Government in favour of Gatwick for a new runway – that project is likely to come to grief anyway, he argued. He also has no problem with the idea of a new runway at both gateways being given the go-ahead at ministerial level.
THE VIEW FROM THE OTHER SIDE
The next day’s conference saw the views of some of ‘the competition’ expressed. Lilian Greenwood, Labour’s shadow transport secretary, offered her thoughts, for example, making for an interesting comparison with the words of Goodwill the day previously. Plus, Michael Arthur, president of Boeing UK & Ireland – the big OEM (original equipment manufacturer) competition for Airbus in the commercial jetliner-building world – spoke about modern technology’s potential application for a quieter and smarter aviation sector.
Ian Davies, chairman of Rolls-Royce, offered his view on that same subject from the standpoint of a major commercial aircraft engine manufacturer while, finally, John Holland-Kaye, chief executive of Heathrow, supplied a competing view to that of Wingate with his own advocacy of what the UK’s current biggest aviation hub can offer – now and in the future. He explained exactly why he believes Heathrow’s expansion is the right option, based on the airport’s role as “an engine for the economy, its importance as a UK-based global hub of the regions, the critical part air freight plays to business and its role as a good neighbour”.
These, and other experts from the aviation world, combined to offer a revealing and very interesting insight into the UK’s aviation sector, and the issues that currently dominate the thinking of many of its big players.
The decision of the majority Conservative Government in December – a month after the AOA Conference – to undertake further study on the back of the Davies-led Airports Commission was greeted at the time by many as a ‘fudge’. If there is no decision on whether Heathrow or Gatwick should be chosen as the site for the new runway this summer, the outcry might become deafening.
