Forbes Mutch/LONDON
IT IS NOT SO MUCH an airport, more "an industrial estate with a runway". This is how director Roger Campbell describes his airport at Southend, 60km (37 miles) from central London, along the northern coast of the Thames estuary. His description is also apt for many of the UK's other regional airports, as changing market conditions force re-adjustments in business strategies.
Times have been tough for many UK regional airports. Since the 1970s, when international passenger travel in the UK started gravitating towards a few, well-appointed and lucrative airports - mainly in the south of England around London - many regionals have been struggling with the problems of falling traffic, change of ownership, lack of investment and pressures from the communities they seek to serve.
Southend is a typical example. The recessionary downturn in the late 1980s saw already-falling passenger figures drop from 175,000 in 1989, to a little over 5,500 in 1994. Freight operations also dropped, from 26,000t carried to just over 4,000t during the same period. Falls such as this obviously lead to a reduction in income from retail activities, landing fees, fuel sales and maintenance, and it is not surprising that Southend, like many other regional airports, was faced with possible closure. Its owner, the local borough council, opted, however, for the cure-all remedy of the day - privatisation. The airport was sold to an independent operator in March 1994.
The change of ownership has seen a remarkable shift in operational emphasis and, more importantly, investment in the site. It is no longer an airport trying to offer a scaled-down version of what the big players can provide. Instead, several small aviation-related manufacturing and service companies have opened up on the site, causing Campbell to make his comments about it being an industrial estate.
Serving the community
Andrew Walters, managing director of the UK company, Regional Airports (RAL), which owns Southend, believes that a regional airport must provide the local community with "everything aviation, and more". He says that RAL, which was formed in the early 1990s, recognised very early on that an airport is a "whole business" and consists of aviation, retailing, land ownership and integrated transport opportunities.
"It is that totality of the business that will allow the smaller regional airports to survive and to be in place when the market grows, as it surely will," he says. Walters adds that competition from fast rail systems, and the polarisation of large air operators at larger airports, provide threats to the margins of aviation, where the regionals are operating. "Our conclusion," he says, "is that you need very good, sound, non-seasonal, year-round revenue streams, like property."
There are now nine companies operating from Southend, including spares suppliers such as Airline Airspares and Flightspares; Air Livery, which provides complete aircraft-refinishing services; interior manufacturers Benson Luney and Ipeco; and maintenance providers Heavylift Aircraft Engineering, RFS Aircraft Engineering and World Aviation Support. Walters says that there is a healthy cross-fertilisation of trade between customers on site. "We have tried to create a business community and we have developed, without much restraint of trade, a broad spread of businesses and not too much duplication." Peter Harland, managing director of Southend-based avionics supplier Avionicare, supports this claim, saying that most of his work comes from projects "-subcontracted by others at the airport".
The picture is much the same at Biggin Hill, Kent, another regional airport, 25km south of London, where airport director Peter Lonergan says that development has not only included an improved passenger terminal and flightcrew rest rooms, but also conference rooms for business meetings. "I would rather people came into the airport building for their meetings, than sit in their corporate jets on the tarmac," he says. Is he tempting them to rent rooms and spend money? "No. The sound of an aircraft APU [auxiliary power unit] running for hours on end can be irritating - to me and our neighbours."
Residents' concerns
Lonergan has to be sensitive to the concerns of local residents. One of the major battles in the development of the airport has been with the local community, and the local borough council, which often sees aviation as noisy and environmentally unfriendly.
He says that resistance has been largely broken down by the growing realisation that a regional airport can provide many advantages to the local community. He has commissioned an environmental-impact study, which shows that the airport is now one of the largest employers in the Bromley area of Kent. Lonergan says that about 1,500 are employed on site, including 600 at Hunting Aviation and that this does not include the surrounding infrastructure of banks, shops, garages and other services.
"We are a large employer," he adds, "and one of our philosophies is to employ local people - to become a centre of local employment." He says that there is an emphasis on youth, and the airport is willing to train young people - as air-traffic controllers and firefighters, for example. "It works very well. They grow up with a commitment to the airfield," he adds.
Ironically, the development programme at Biggin Hill has, in itself, helped break down environmental objections to the airport. When Lonergan arrived to take up his new position at the airport in December 1994 he found that "-a lot of things were outstanding; a lot of things needed doing. There were no signs of investment, and the main runway was worn out. Every time we had an air fair it was disastrous: the military jets just tore up great chunks of tarmac." It was so bad that pilots complained that landing at Biggin Hill was like "touching down on a washboard" because of the noise and vibration.
A UK Civil Aviation Authority inspection called for improvements to be made by December 1995, and £1.5 million ($2.2 million) was allocated to resurfacing the runway. At the same time, neighbours had been complaining about noise breakout from the airport, and so an earth noise-containment bund was built from millings from the old runway. Lonergan says: "We weren't asked to build the bund, but we work quite hard to be a good neighbour, otherwise we can't operate."
Business BENEFITS
The message that regional airports need not be a nuisance to the local environment, and can offer business advantages, is now being seen at other locations in the UK.
At Sheffield, Yorkshire, in the north of England, planning permission has recently been granted to develop an airport, due to be opened later this year, in connection with a new business park. According to Hugh Sykes, chairman of the Sheffield Development Corporation, the airport is an "-essential element of the infrastructure necessary to make the region of South Yorkshire competitive in the international market". The business park is expected to provide a mix of offices and industrial and distribution units, and will be another illustration of the "industrial estate with a runway".
Equally, at Leeds-Bradford Airport, also in the heart of Yorkshire, a £10 million expansion plan was put into action following a 1994 local-authority decision to allow 24h operation at the airport. According to marketing manager Barbara Sadler, passenger figures have risen from 200,000 in 1994 to an expected 1 million by the end of 1996. "The figure is expected to rise still further, to 1.5 million passengers a year over the next five years," she says.
The investment at Leeds-Bradford has been spent on modernising the passenger terminal and extending the runway. "We would also like to expand the retailing side of the airport," says Sadler, following Walter's line of diversification.
At the other end of the country, Bournemouth International Airport, in Dorset, on the south coast, has benefited from investment since it was sold by the local county council to National Express in April 1995. Phase one of a development programme has included a £2 million extension to the runway. Phase two will incorporate the upgrade, redesign and expansion of the commercial estate which borders the site.
As a result, Chris Heighway, director of local estate agency Goadsby and Harding, is quoted as saying: "The airport has the capacity to become one of the premier business locations in the central south-coast region. With the right infrastructure and a cohesive operational and commercial development plan, a vital resource will be realised."
Developing a broader business base appears to be the way to win friends, as well as providing financial security. Raising the capital for investment, however, is not always easy. Local authorities, having failed to invest in an airport, may take the decision to sell the site, but that often leaves the new owner with a shortage of cash and a lot of expensive catching up to do.
One way of raising the cash is to realise some of the capital which is tied up in the land itself. This is what Walters means when he includes "land utilisation" in his plans for Southend, where about 3Ha (7.4 acres) of airport perimeter land has been sold for development. Walters also says that the sale of utilities generated on site, such as electricity supplies, can also provide a ready form of income. At Southend, he has worked closely with Eastern Electricity, buying power in bulk and distributing the surplus not used by the airport to local customers. This reinforces the image of the airport as being community-acceptable.
THE FUTURE
Walters believes that competition to UK regionals may also start coming from mainland Europe, as the privatisation of airports in the UK is likely to be followed by privatisation of airports in other countries. This could lead to some problems, particularly for UK airports around the Channel Tunnel, but it may also present opportunities for companies such as RAL, which want to expand overseas.
"We are being approached by overseas organisations that are trying to find a future for airports of a similar size to our own," says Walters. "We are interested in adding to our portfolio, of course, but it has to be at the right price. They must also be able to deliver the wide range of business solutions that we are looking for." o
Additional reporting by Kate Sarsfield.
Source: Flight International