Aviation Infrastructure: adding new facilities against enormous odds – CAPA-ACTE Global Summit insights

It is a popular refrain that there has been no new runway added in the UK since WWII – although many unused and underused airports have been reactivated. Across the world, similar stories abound – it has taken Sydney nearly 50 years to decide to build a new airport – although major exceptions like China, the Gulf, Turkey and Mexico do exist.

Following the interminable process leading up to a decision to add a new runway at Heathrow Airport, the next step is actually to navigate the many hurdles involved in actually building it. Manoeuvring a way through the various needs of the stakeholders is a delicate business and not everyone is ever happy.

PricewaterhouseCoopers, Global Aviation Leader & Partner, Michael Burns, moderated an airline panel discussion at last week’s CAPA-ACTE Global Summit entitled ‘Aviation Infrastructure – adding new facilities against enormous odds ‘. Here’s some of the insights delivered by the panellists during the session…

Heathrow Airport, CEO, John Holland-Kaye

Expansion will get British economy ‘moving’ in the early years of Brexit
Welcoming the UK Civil Aviation Authority’s recognition the airport’s expansion and cost reduction efforts, Mr Holland-Kaye said: “We are pleased that the Civil Aviation Authority has recognised the progress we and our airline partners have made on delivering Heathrow expansion affordably, so that airport charges can be kept close to current levels… Together, we will deliver expansion in a way that meets the needs of passengers, local communities and investors and get the British economy moving in the early years of Brexit”.

Heathrow has been practically rebuilt over the last 10 years
Heathrow was “not really designed” to operate as the UK’s biggest airport and one of the largest airports globally. Mr Holland-Kaye said the airport has been practically “rebuilt” over the last 10 years to “give us the service level that we need”. Mr Holland-Kaye confirmed terminal refurbishments were complemented by an adjustment of the previous “spider web” operational design, with the airport now moving to an “Atlanta style” layout.

Heathrow CEO aiming for airport’s 400 companies to have common goal of serving passenger needs
Heathrow requires a “huge” amount of collaboration, with 400 different companies based at the facility. Mr Holland-Kaye said his role as CEO is to “make sure we have a common mission… the common goal is the passenger”.

UK finds it hard to get to Asia, South America and Africa due to capacity constraints
The airport has been at capacity for the last 10 years, and “now the time has come where we need to be bigger”. Mr Holland-Kaye stated a third runway by 2025 now has “cross party support”, with the Government now “clearly” understanding UK economic growth constraints associated with non-expansion. Mr Holland-Kaye said currently, it is very difficult to get from the UK to parts of Asia including China, South America and Africa due to the constraints.

Airport charges to remain ‘close to current prices’ following expansion
London Heathrow Airport CEO John Holland-Kaye is “pretty confident” airport charges will remain “close to current prices” following expansion of the facility.

Heathrow catchment within one hour to double in 10 years
Heathrow’s catchment area within one hour will double in the next 10 years, with better access to the West, South and Wales. Mr Holland-Kaye acknowledged Heathrow is lagging competitors in France and the Netherlands in terms of connectivity, with the new scheme aimed at catching up.

Certain Chinese and Indian carriers interested only in serving Heathrow
Certain airlines from China and India have expressed interest in operating to Heathrow but are not interested operating to other UK airports while Heathrow adds capacity.

‘Stars have aligned’ for expansion
What seemed “politically difficult” for the airport’s expansion five years ago no longer applies. “The stars are now aligned”, he said.

Expansion would not be an issue ‘if aircraft were silent’
If “aircraft were silent”, expansion and a third runway at Heathrow would not be an issue. Mr Holland-Kaye believes technological advancement “will open up greater opportunities” for both airports and airlines in the future, with more operations possible at lesser environmental effect.

bmi regional, CCO, Jochen Schnadt

bmi regional: Infrastructure ‘crunch’ continues in the UK
There is an “infrastructure crunch” in the South East of the UK. Mr Schnadt does not share the optimism of London Heathrow Airport CEO John Holland-Kaye, regarding Heathrow’s planned third runway opening in 2025. Mr Schnadt urged for a complementary, long term UK plan for better use of existing infrastructure, which would also benefit regional airports.

New Heathrow runway plans for 2025 is in a ‘very very long time’
A new runway at London Heathrow Airport planned for 2025 is in a “very, very long time”. Mr Schnadt asked “what happens in the meantime?” saying while operating through a large hub “makes sense” in terms of the national economy, regional connectivity should aim to grow while Heathrow is expanded. He however acknowledged markets will always exist that can only be served by a connection, because “they just aren’t big enough”.

European Commission, aviation director, Filip Cornelis

Not a lot of new infrastructure being built in Europe is an ‘understatement’
Generally there is not “a lot of new infrastructure being built” in Europe. Mr Cornelis highlighted “that’s an understatement”, however the situation is not only prevalent in aviation. The issue is “very much the same” for rail and other projects, according to Mr Cornelis.

Power is ‘very dispersed’ across Europe
Power is “very dispersed” across Europe. He emphasised citizens are “empowered” to block proposed construction projects on environmental and other grounds, impacting infrastructure investment.

Capacity and demand exists for more secondary airports in Europe
European Commission aviation director Filip Cornelis believes “there is capacity” for more secondary airports in Europe. Mr Cornelis pointed to military airports which are largely “no longer needed”, adding there is potential for Europe to accommodate greater demand from narrowbody and point to point operations. He also expects a global drive towards “mega hubs” serving the world to be “balanced out” to an extent.

European Governments ‘not very keen to put money into infrastructure’
Governments in Europe are “not very keen to put money into infrastructure”. Mr Cornelis however stated airport groups are conducting “interesting developments” in the formation of investment and “airport networks”.

IATA, Regional VP, Europe, Rafael Schvartzman

ATM modernisation in London required or new infrastructure ‘will be useless’
Without modernisation of ATM in London, new airport infrastructure “will be useless”. Mr Schvartzman said Europe continues to incur “huge costs” in not being efficient enough to deliver a Single European Sky.