Heathrow: We’re ready to build

Heathrow: We’re ready to build

After yet another record year, Britain’s busiest port is determined to continue growing and is calling in the contractors. Bryce Wilcock met with Heathrow chief John Holland-Kaye to find out more

When asked how confident he was of a third runway being built at Heathrow, John Holland-Kaye smiled as he said the airport was the ‘45 favourite, with the bookmakers making them 23.’

And the airport’s chief executive has every right to be in a cheery mood. With the airport celebrating its strongest year to date last year, it is showing no signs of slowing down after welcoming 5.5 million passengers through its doors in January, marking Heathrow Airport’s strongest ever start to a year.

Surrounding these celebrations however, remains the cloud of uncertainty over the government’s delay in making a final decision over airport expansion in the southeast. In September 2012, the UK government launched a five-man commission to explore how the UK can maintain its status as an international hub for aviation and to highlight immediate actions to improve the use of existing runway capacity over the next five years.

After three years of research, The Davies Commission recommended last July that a third runway should be built at Heathrow, at a cost of £18.6bn. Other shortlisted options included the extension of the existing northern runway at Heathrow - costing £13.5bn - or building a second runway at Gatwick, costing £9.3bn. Despite this, the government has continued to put off making a final decision on the expansion, which was expected late last year.

Throughout this period, politicians, business leaders and local communities across the south have all had their say on the commission’s recommendation, but Holland-Kaye is confident that the government will go ahead with the commission’s recommendation and Heathrow will be given the nod over its competitors.

He is so confident in fact, that Heathrow has already revealed the four winning bidders to assist in expanding the airport. Back in March, following a competitive tendering process, Arup, CH2M, MACE and Turner & Townsend were all chosen to work alongside Heathrow Airport Ltd to deliver its expansion plans.

“We just want to get on with this, the important thing is when we start building, and when we are able to get the new airport open,” said Holland-Kaye before going on to talk about what he expects to happen next. “If the government thinks it needs a few more months to do some work on environmental issues to avoid a judicial review further down the line, then that will be time well spent but we just want to get on with this expansion and make it happen.

“It is such a huge opportunity for the UK – we should be having more flights to the UK’s regional airports as well as to more of the worlds most emerging markets and the sooner we get on and have a decision, the sooner we can make it happen.”

Prime Minister David Cameron had promised a decision on the issue by Christmas last year after the commission led by Sir Howard Davies gave Heathrow the nod, but the debate is still on going.

When asked why he believed Heathrow was the best option, Holland-Kaye broke his reasoning down into three key points before going into detail. He said: “There are three things that are unique about Heathrow’s expansion. The first is we can go from just over 80 long haul destinations today to around 120, making the UK the best connected country in the world.

“Secondly, we can also introduce more services to regional UK airports. The third is cargo. We’re the largest port in the UK and there’ll be exports from the UK flying around the world every day from Heathrow, helping small businesses expand into global markets, and no other airport in the UK can do this. Expanding Heathrow will allow more capacity for the UK to remain a great economic power.”

With Heathrow at full capacity, demand is high. Garuda Indonesia launched the UK’s first non-stop service to Jakarta from Heathrow last month, providing direct access to one of the BRIC’s most emerging economies. Garuda however is just one of a number of airlines looking to connect more services from across the globe to Heathrow and Holland-Kaye believes it is vital we continue increasing not only the number of international services, but also regional.

“A third runway at Heathrow would lead to more long haul connections for all of the UK not just London and the southeast. We’re at full capacity today and we’ve seen the number of flights to UK destinations pretty much halved in the last 10 years. We need to reverse that and only expanding Heathrow can do that.

“We will keep adding long haul routes but nowhere near where we need to be able to get to. We can keep Britain in the game for the next 9-10 years until we get the capacity but there is so much pent up demand there that we just cannot get access to. I have 30 airlines who want to expand at Heathrow. No other airport has that kind of demand – we just have to get on with it.”

One of the key motivators behind the airport commission’s report was the need to ensure UK exporters could continue to compete overseas. With the world economy’s centre of gravity gradually moving eastward, and global supply chains becoming more complex, air connections are set to be ever more important in establishing access to key export markets for British businesses.

Speaking about what extra airport capacity would mean for exporters, Holland-Kaye said: “Our cargo capacity is full on many key routes, which is holding back UK exporters by forcing them to have to go by longer and more complicated routes to get to market. We should have the world’s best connected, most efficient and sustainable hub right here in the UK with regular flights to all of our regional airports and all other key trading centres – keeping Britain right at the heart of the global economy.”

With plans also in place to double air freight volumes with a £180m overhaul of it’s cargo facilities, Holland-Kaye spoke quite passionately when asked about the airports commitment to small businesses, referring to one 23-year-old entrepreneur from rural Staffordshire in particular, saying: “Small businesses start their exporting with a box on a plane – not a container on a ship. And most of them go through Heathrow.

“I was with one young exporter from the West Midlands just recently, Louis Barnett, who is exporting chocolate to Mexico – which is extraordinary. Talk about taking coal to Newcastle! It just shows if you let our small businesses get access to market then they will find a way to develop their export business. But unless we make it cheap and easy for them to get to growing markets – which means you want at least a daily flight so they don’t have to wait three days until they can come back – and ideally you want competition on those routes to bring prices down – we aren’t going to give businesses that chance. Mexico City where he exports to is a perfect example – we have daily flights from British Airways and Air Mexico which is a perfect example of what we can achieve with more services connecting the UK to the rest of the world.”

It’s not just the nation’s exporters who will benefit from the plans either. As Holland-Kaye was quite keen to point out: “With Terminal 2 all of the mechanical and electrical systems were made in the West Midlands - all of the steel came from Sheffield – the floors of the carpark came from Glasgow and the toilets came from Northern Ireland. This is a great example of how we will spread the benefits of our £60m investment right across the UK.

“A prime example of this is Hart Doors in the North East. When we built Terminal 5 they provided all of our doors and it was a great window for them to display their products worldwide. We will need a lot more of this collaboration whilst we are building as we spread the work across the UK.”

Speaking last May, campaign group Let Britain Fly said it was concerned that other countries plan on building more than 50 new runways between now and 2036 – leaving the UK at risk of falling behind its competitors - a view which is shared by Holland-Kaye: “This is definitely, definitely the case.

“We’ve already fallen behind the French in terms of being the best connected and there is only six airports in the world with over 50 regular flights to long haul destinations and Heathrow is one of them – Paris is another which has just overtaken us.

“We’re also going to see others overtake us over the next 10 years. We were until last year the 3rd largest airport in the world – we’re now down to sixth. In 10 years time Paris will probably have overtaken us in terms of passengers and we will probably see some of the Asian and Middle Eastern hubs move ahead of us.

“We maybe just about in the top 10 – or top 20 – but that’s a mark of how the UK is gradually losing its place among the world elite. We’re a trading nation – we must be right at the heart of those trading links. And that decline will be a symbol of international companies choosing to invest in other countries besides the UK and we have to fight back. That’s why I believe the UK government will make the right decision and expand Heathrow. They get it – they understand just how important Scotland, Northern Ireland, the Northern Powerhouse and the Midlands Engine are to the whole economy, and Heathrow can bridge them all.”

Despite the commission’s recommendation, a number of politicians and local figureheads have campaigned against the decision. London Mayor Boris Johnson for example has been a vehement opponent of the expansion, while in October 2009, Prime Minister David Cameron declared that he would not support the project, saying “no ifs, no buts.” Both Zac Goldsmith and Sadiq Khan - the respective Conservative and Labour candidates hoping to succeed Boris as Mayor - are also campaigning against a third runway. Goldsmith in particular, has vowed to quit as an MP if a Heathrow plan is approved.

Speaking in December, Gatwick's chief executive, Stewart Wingate, said the delay was a ‘defining moment in the expansion debate’ and claimed Heathrow's supporters must now realise that a third runway will never go ahead "as the environmental hurdles are just too high." His thoughts were echoed by a number of environmental groups and local campaigners standing against the commission’s recommendation.

But when asked about the subject, Holland-Kaye insisted he was ‘confident we can meet tough environmental standards,’ adding: “We have developed our plans so that we will have fewer people affected by aircraft noise and today we will meet all air quality targets and will have no more cars on the airports roads.

“We’ve worked with the local community to design these plans and the majority of local communities do now support Heathrow expansion including MPs and local councils. We are still working hard to improve our environmental position, in fact over the past five years we have reduced emissions from the airport by 16% because of actions we have taken.”

He also highlighted the effect it will have on the local economy, saying: “We have a great track record of reducing the impact on local communities and the communities we are talking about are our people. A quarter will come and work for us – we will provide 40,000 jobs for local people in fairly underdeveloped areas of London. In places like Southall we can provide jobs for future generations and that is why there is so much support for Heathrow expansion.”

Also backing Holland-Kaye in his corner however are some of the nation’s leading politicians and campaign groups. Industry bodies such as the CBI, FSB and TUC have all aired their support in public as well as a number of high profile business leaders. The CBI, which condemned the ‘deeply disappointing’ delay, has warned waiting could cost the economy more than £5bn.

More recently, outspoken entrepreneur Sir Richard Branson accused politicians of refusing to back Heathrow’s expansion plans, stating “they are more concerned about their own careers rather than doing what is right for the country." The billionaire founder of the Virgin Group said the UK is being "held back" by the government's delay in backing a third runway at the West London airport.

When asked for his views on the matter, Holland-Kaye felt he had the backing of the majority of politicians and business leaders, stating: “Most politicians I’ve met are going into politics for the right reasons – they want to make the country better as a result of what they’ve done. That’s what we believe as well. We want our children and the next generation to have at least as good an opportunity as we have had but unless we invest in the infrastructure like Heathrow – we aren’t going to achieve that.

“There’s huge support from business, unions and politicians so we just need to get on with it and make it happen. But I do understand Richard Bransons frustrations – he didn’t get where he is today by putting off making big decisions till the next year.”