Opportunity Knocks

Christmas came early for London Gatwick airport. On Dec. 4, 2009, the gateway changed hands — moving from BAA to Global Infrastructure Partners (GIP) for the princely sum of $2.26bn (GBP1.51bn).

According to Andrew McCallum, director of communications and external affairs, the airport finally had an owner that cared. “London Gatwick was just one of a group of seven airports under the previous owner,” McCallum says. “As far as the BAA strategy was concerned, Gatwick was a poor relation to London Heathrow. But we are making major investments.”

The sale was a long time coming. The UK Competition Commission’s initial ruling that BAA’s ownership of London’s key gateways was adversely affecting competition was given in August 2008. Gatwick naturally entered a period of limbo, and suffered from under-investment as a result.

But the drawn-out sale wasn’t without some benefits. Prospective bidders for London’s second gateway included improvement plans as part of their submissions. GIP consulted with all stakeholders, including the airlines, before finalizing its development blueprint.

“It means we’ve hit the ground running,” McCallum says. “It’s been a really hectic first few months, but we’re already beginning to see the results.”

Capital Investment Program
GIP’s Capital Investment Program identified some key areas in need of development, including check-in, baggage systems and security.

Check-in in particular needed urgent attention. The South Terminal at Gatwick is 52 years old; the North Terminal is 26 years old. Both are in desperate need of modernization, especially when it comes to the latest check-in technology. “We’re already working on implementing a host of new systems, which will have a dramatic impact on ground operations,” McCallum says. “We will also put new baggage systems in place so there will be a big change and significant benefits for passengers and airlines.”

By 2013 the North Terminal will have been extended to accommodate the new check-in facilities. Extra baggage capacity, including a much bigger reclaim area and baggage sorter will have been added. For good measure, there will be a larger short-term car park and improved roads around the terminal.

Baggage facilities and check-in at the South Terminal will also be upgraded.

Closer in, a $66 million (GBP44 million) inter-terminal shuttle is scheduled to open in July 2010, part of Gatwick’s plans to cope with traffic levels forecast to reach the 40 million mark within the next few years.

McCallum also informs the airfield will be developed to maximize capacity, with alterations to taxiways and parking stands, which will again have a knock-on effect for ground handlers. “By increasing airfield efficiency, we will enable our handlers to be more efficient as well,” he says.

One very busy runway
One vital aspect affecting efficient airfield operations won’t be changing. Gatwick is, and will remain, a single- runway airport — remarkable for a facility that even now handles more than 33 million passengers annually. “We have already said that we don’t have any plans to add a second runway in the foreseeable future,” notes McCallum. “Our current configuration makes Gatwick’s single runway the busiest in the world, but we actually plan to get even more capacity from it.”

McCallum reveals this will involve improving runway occupancy times, investment in airfield infrastructure and collaborative decision-making. Close cooperation with the UK’s National Air Traffic Services, Department for Transport and Civil Aviation Authority will also help in developing surrounding airspace.

At the moment, UK government policy still requires Gatwick to safeguard land for a potential second runway, located south of the current one. That policy also states that a second runway at Gatwick will only come under consideration if a third runway at Heathrow is not possible, and even then there are legally binding agreements in place not to construct a second runway before 2019.

GIP’s announcement on the second runway has been welcomed by local environmental lobby group the Gatwick Area Conservation Campaign (GACC) whose Chairman Brendon Sewill, says: “This firm statement will kill off some silly speculation, and will remove a lot of uncertainty and anxiety.” GACC has said it looks forward to working constructively with the new owners to reduce the airport’s noise, pollution and CO2 emissions.

Advisory body GATCOM (Gatwick Airport Consultative Committee), which comprises representatives from a wide range of interest groups including local government, airline, passenger, business and community and environmental groups, also welcomes the new independent Gatwick airport. “Our members will want to build a sound working relationship with GIP and the new executive management team, and be closely involved and consulted about any future proposals,” Vice Chairman Neil Maltby says.

Other changes at Gatwick, although less headline-grabbing, are no less fundamental to GIP’s drive for improved efficiency. The airport’s technical systems will be completely overhauled and GIP is currently in the process of trying to unravel about 150 different BAA legacy systems. The aim is to put in place new systems that have proved themselves as “best in class”, and which are most appropriate for a single airport operation.

Quality time
A single airport operation with a single runway it may be, but Gatwick isn’t limiting the number of ground handlers. That wasn’t always the case. Due to a lack of airside space, in 1998 the airport applied successfully to the UK Civil Aviation Authority for approval to limit the number of third-party airside ground handlers to a maximum of four, while the number of airside bus operators was limited to just two.

In 2006, however, the airport applied to introduce full ground handling liberalization, citing significant changes to airside infrastructure, baggage sortation systems and greater use of Common User Terminal Equipment. It also highlighted a series of future capacity improvements.

Current service providers include British Airways, Servisair, Swissport, Menzies and ICTS. Gatwick’s new owners will be looking very closely at this but have no current plans to limit the number of ground handlers.

McCallum notes that ground services are vital to the quality and reputation of any airport. A passenger’s journey experience has a multitude of touch points and ground services play a huge part in delivering a quality end-to-end service. “We need to work very closely with all our handling agents,” McCallum says.

Another problem with the BAA strategy was the lack of key performance indicators for their service providers. “In contrast, we are going into great detail with our service providers and partners, and we intend to set some tough targets,” McCallum says. “It’s an area we really want to sharpen up.”

Gatwick is currently in dialogue with handling agents on new license formats, which will come into effect in the next few months.

It’s not just about improving what handlers can do for the airport. The reverse is equally true. Feedback from companies is already being received and GIP will study all the requirements to see where issues can be usefully addressed or ideas deployed.

GIP has also been carrying out extensive passenger polls — the main reaction being the majority are interested in getting through the airport as quickly as possible.

It’s a viewpoint GIP wants to accommodate and with a $1.52 billion (GBP1 billion) program of improvements underway the company is obviously as good as its word. Passengers and airlines at Gatwick may find that all their Christmases have come at once. “We’ll be doing everything we can to make sure that happens,” McCallum concludes.

London City Airport
Global Infrastructure Partners is also the major shareholder in Docklands Aviation Group Limited, operator of London City Airport.

Located just six miles from London’s financial district, London City Airport (LCY) is on a very different scale to Gatwick. Serving 2-3 million passengers, less than one-tenth of its sister facility, it is configured to serve business customers, offering the shortest check-in times of any London airport.

Opened in 1987, today London City Airport has connections to more than 30 UK and European destinations, as well as six days a week round-trip services to New York. The airport also hosts a busy corporate aviation facility.

Operating within a limited footprint means that all operations at the airport have to be ultra-efficient. “That’s what we take with us from London City to Gatwick — the need to run an efficient operation,” says director of Communications and External Affairs, Andrew McCallum. “That really is the key.”