Airport sets its sights on Shropshire
You don’t have to tell me about the qualities of Shropshire,” says Paul Kehoe, the chief executive of Birmingham Airport, as he gazes over the runway from the giant panoramic window in his top-floor office, writes Carl Jones.
“The Iron Bridge, Shrewsbury and the River Severn, Much Wenlock and its Olympic connections, the aerospace museum at Cosford – I consider it all an important part of the product we are offering from here.”
That no doubt comes as music to the ears of tourism marketing bosses, but looking the other way, just how strongly are the people of Shropshire connecting with the second city’s fast-growing airport?
The answer is, not nearly as much as officials feel that they should. Of the nine million passengers who passed through the terminals in the past year, fewer than 200,000 of those came from the county.
“That’s not enough,” Paul says bluntly. “We need to reach out to the Shropshire area more, and improve that.” But he knows this could be easier said than done.
The 55-year-old, who has been at the helm in Birmingham since 2008, acknowledges that travellers in many parts of Shropshire view Manchester as their first-choice hub.
Paul Kehoe
“If you can avoid the M6 and go up the A49 or A41 through Whitchurch, it is as quick going that way as coming down to here.
“So Shropshire is tough for us. There’s the ease of the M54, but when you get to junction 10 you often find yourself stopped, or stop-start. It doesn’t help that it’s just south of the toll road. If it was the other side, we might have more of a fighting chance.
“It helps us that the railway network points in our direction. The new Shropshire-to-London service can certainly work for us, if it stops at Birmingham International. It’s certainly easier than getting a train up to Manchester.”
He continues: “What we’re selling from here are attractions and facilities which are probably within an hour’s travel. It’s fair game for us to say that anything within a 60-mile radius can be claimed as a Birmingham product. So our leisure offering would include the likes of Ironbridge, The Wrekin, Shrewsbury, and Cosford aero museum.
“But equally so would the i54, Telford new town, and Donnington army base from a business point of view. We’re selling that economic engine that is one hour’s radius around Birmingham.”
Trial flights from China are being introduced to Birmingham over the coming months, and Paul believes it could potentially open up a huge new business market for the region.
“The likes of the Chinese think England and London are one and the same, so somehow, we have got to get a point on the map up here that they can relate to.
“Much Wenlock might be famous as the birthplace of the Olympic games, but on a map which hardly even shows Birmingham, how are we going to brand ourselves? And so, even though some of the outlying districts don’t always like it, in the end we just call it all Birmingham.
“When I came here, I did think it would be easier to sell to the 4×4 driving, Shakespeare-loving, chocolate-eating person because of the way the web could help to connect those local brands together. But that has been the biggest challenge, connecting with the world using the great brands that we’ve got.
“We’ll keep trying on that one, but I haven’t cracked it yet.”
Paul Kehoe has, however, ‘cracked’ quite a lot in the six years since he took over Birmingham’s top job, when the UK aviation industry was in the doldrums.
He was no stranger to the aviation sector, having started his career as an air traffic controller, and recalls his early training introducing him to Shropshire, through stints at RAF Shawbury.
He then worked for a variety of companies in the industry, including British Aerospace, Serco, and TBI plc, before becoming managing director of both Luton and Bristol airports.
It’s difficult to ‘lose’ an airport the size of Gatwick, but that’s essentially what had happened within months of his move to Birmingham.
“Yes, in the year 2009–10, about 35 million passengers stopped flying in the UK system as the recession began to bite,” he reflects. “That’s the number of passengers who go through Gatwick.”
“We’re currently in a growth phase, but three or four years later we are still down from that point by an airport the side of Stansted, which has 18 million passengers.”
Against that backdrop, it’s little wonder he considers his six-year tenure at the head of the West Midlands’ leading airport as a challenging period of his career.
Mother nature hasn’t helped either. He casts his mind back to April 2010 when the eruption of the Icelandic volcano Eyjafjallajökull closed airspace for nine days. “We lost the best part of two million quid in revenue through that,” he reveals.
“We’re now at the back end of the low-cost airline revolution phase. When it really got going in the early 2000s, it was something Birmingham really didn’t really take a part in.
“So, when we had our best year, in 2008–09, with 9.6 million passengers, it was when Ryanair turned up and put lots of traffic through. That was just before we had lots of airline failures like Bmi Baby and others that came and went.
“Ryanair, Flybe and Monarch have all done reasonably well, and there is a boom at the moment, with Birmingham growing at about four per cent, but I still think the market is incredibly challenging.
“Although we’ve bounced back and just had five months of growth, with both April and May this year being record months for us, I’m still a tad nervous of the market as a whole.
“The airport had a relationship with British Airways going back 60-odd years which was very fruitful, and we as a company kept other players out of the market because we loved British Airways so much, so when they left us in 2007 and pulled out of UK regional markets, I think it was a bit of a shock to us.
“The loss of BA was a psychological blow to the community and the airport, and a financial blow to the airport company. It was horrendous. We never went into loss making, but we have been working our way back to serious profitability since then on the back of low-cost traffic as we rebuild our business.”
Birmingham Airport faces challenges winning over Shropshire business travellers
So much of what happens at Birmingham is out of the control of the airport company itself. Paul is responsible for a workforce of around 600, but that’s barely 10 per cent of the total number of people employed on site.
So, when French air traffic controllers decide to strike, there are grumbles about passport control, issues surrounding retail services or delays over late arrival of baggage, he’s not the man in charge.
And yet, it is Paul, the boss, whose head is highest above the parapet when it comes to fielding the complaints.
On my visit, there were a staggering 370,000 minutes of delays in the European airline system – many having knock-on effects for Birmingham which Paul and his team were powerless to address.
Paul is broadly welcoming of chancellor George Osborne’s latest pledge to create a northern counterweight to the London-obsessed transport system, with the help of both HS2 and HS3 rail links.
“We are supporters of HS2, but the thought of having a crossroads between HS2 and HS3 at Manchester Airport is a real competitive threat to us.”
Even without getting into the argument about whether Birmingham should build a second runway – another political hot potato – the site has the capacity to more than double its current passenger base of around nine million people a year.
“The runway itself is now what’s called a balanced runway of 3,000 metres and its theoretical capacity is around 30 million passengers a year.
“It depends on many factors such as size and frequency of aeroplane, but there is no doubt that the capability is more than double the levels we are operating at today. And that would represent doubling the jobs at this airport too.”
But for more big-name airlines to choose Birmingham, they need to see a potential business customer base to fill the lucrative seats at the front end of the plane.
Paul says: “The most successful example of what can be achieved here is Emirates, which has gone from zero to being, possibly, this time next year, our most voluminous service, possibly overtaking Dublin.”
So what’s on Paul Kehoe’s ‘to do’ list over the coming months? Have his priorities changed?
“Well, it isn’t the job I thought it was, when I agreed to first come. When I came here, I thought the job was going to be a silver bullet to be honest. I thought I’d just get in here and sort it out. I was asked to transform the business and that’s what we’ve done.
“We’ve built a new pier, built a car park, put the two terminals together, built a hangar, built a control tower, lengthened the runway, downsized our staff, and we insource rather than outsource activities, changing the culture.
“The one thing that has eluded me to some extent, I think, is the market presence. We still struggle, but we have been doing all this in the worst aviation recession in 60 years, so should I beat myself up too much?
“I don’t know, because if you look at the graph showing loss of airport passengers in that time, we’ve actually been the least affected of UK airports. So, we haven’t done such a bad job.
“Most things that happen here are out of our control, whether it’s a power outage in customs and excise, a fuel-tank failure which means we can’t get fuel here, a French air traffic control strike, or a volcano . . . it just goes on.”
“But consumers are becoming more and more intolerant. They want it now, they want it perfect, and they deserve it.”
Elsewhere . . . County has hub reservations
Should Shropshire businesses be supporting the planned expansion of Heathrow Airport, and its controversial third runway?
That was the question posed at a breakfast briefing, ‘Heathrow Airport – One Hub or None?’, at the Buckatree Hall Hotel in Telford.
Chamber president Keith Winter with Andrew Macmillan
Andrew Macmillan, the airport’s director of strategy, travelled to the county to address the gathering, hosted by Shropshire Chamber of Commerce.
And the consensus in the room? A broad, but slightly reserved vote of confidence for the airport’s expansion plans.
With Heathrow – the UK’s only ‘hub’ airport linking us with the rest of the world – now operating at 98 per cent capacity, Mr Macmillan said expansion at the west London site was vital to prevent it losing touch with the rest of the world.
“We have the busiest two runways in the world, with planes landing or taking off every 45 seconds, and airlines unable to expand due to insufficient slots.
“Our model is different to other UK airports. As a hub, we are not competing with other UK airports, but with other hub airports such as Dubai, which is about to overtake us as the busiest in the world, for the first time.
“I am aware that some in Shropshire cannot understand why expansion should not take place instead at the likes of Birmingham where there is spare capacity. But this is not a choice between Birmingham or Heathrow. It is a case of saying do we want to have one of these hub airports in the UK or not, because we can only have one of them, and Heathrow is clearly where the demand lies.”
Nic Laurens, managing director of Severn Diamond Limited in Shrewsbury, once took 143 flights in a 12-month period, and while he said he backed Heathrow’s expansion plans, he added: “I still don’t believe it is good enough for the people of Shropshire.
“We are going to have a rail link to London, but it still requires a change, so most people are going to have to drive – and there is a suggestion of a congestion charge once you arrive, which immediately puts me off.”
Mandy Thorn, head of Marches Care in Shrewsbury, agreed that the new-look Heathrow would be “dead in the water from Shropshire’s point of view” if it imposed a congestion charge.
Simon Macvicker, Shropshire Chamber’s chairman of policy and managing director of Bridgnorth Aluminium Limited, said there was clearly more work to be done on the connectivity side. But he said it was “tremendously heartening” that airport officials were prepared to venture to the county to seek the views of the business community.
Chamber chief executive Richard Sheehan said: “We want to see Birmingham Airport flourish, but we can also see there is clearly wider value in the Heathrow expansion.”