Felicity Cousins talks to Birmingham airport chief Paul Kehoe about changing the government’s aviation policy in favour of the regions and how BAA has hijacked the meaning of ‘hub’
WHILE THE EYES OF the world focused on London and the roaring success of the Olympic Games, everything else over the summer seemed to take a back seat. Perhaps this is how the government’s decision to delay the call for evidence on airport capacity in the south east went relatively un-noticed, any protest drowned out by the screams of ecstatic Olympic spectators.
The idea of a third runway at Heathrow or the possibility of an airport in the Thames estuary has been pushed aside until later this year, but there is one man who has been lobbying the government to ensure this debate becomes more rounded, and this man is Paul Kehoe, Birmingham airport’s CEO.
Hub hegemony
Kehoe has written a report, entitled Don’t put all your eggs in one basket: a challenge to aviation orthodoxy, where he points out that in order for the UK to have a strong economic future, someone should challenge the obsession the industry has with the south east being the only option for airport expansion. “With this delay it seems the government has actually heard what we have been saying – we are in agreement that Heathrow is not the only answer.”
Kehoe says there are other airports across the UK, which are ready to take on extra capacity right now. Birmingham airport currently handles nine million passengers a year, but can take double this with its current infrastructure.
“This attitude is more like a developing economy – just using one city,” he says. “Even if they pressed the button on a third runway now, the south east issue would not be solved for years.”
To help “enlighten” the travel trade about the positives of using Birmingham, in July the airport launched its Airport Gurus; three travel experts who journey across the region talking to buyers and travel agents. Kehoe says: “It’s for the enlightenment of the travel trade, because, despite all the issues of capacity or range, having knowledge of the airport is vital.”
Market of millions
There are eight million people within an hour’s drive of Birmingham airport, but less than 40 per cent of those passengers use the airport. The Airport Gurus are targeting towns and cities within that range, places such as Oxford, Milton Keynes, Shrewsbury and Leicester. “All of them should consider Birmingham as an option instead of heading to London,” says Kehoe.
Are the fast trains to London a hindrance rather than a help, and will HS2 make Birmingham just another London airport? “Possibly we already are another London airport by dint of the improvements on the West Coast main line,” says Kehoe. “But there is no chance of calling it ‘London Birmingham airport’ while I am CEO. We are Birmingham, and we are on the map.”
Birmingham airport has had something of a rebrand since Kehoe took the lead in 2008. Dropping the ‘International’ from its name, the airport is undergoing a £100 million redevelopment, some of which has already been completed. In 2011 the £13 million refurbished terminal building opened (merging two terminals into one) offering a larger centralised security area, more space in the Arrivals hall, a 20,000sq ft duty-free store and, as of October this year, a No1 Traveller lounge.
A Longer reach
But the most significant development for the airport will be the extension to the existing runway, due to be completed in 2014. With its current runway, direct long-haul flights are restricted to India, and east and mid-coast USA. The extension will ensure flights with 2,500 miles extra range “so we can get 7,000 miles in one hop” to China, South America and the Far East. But Kehoe says because of the industry’s attitude, this may not be enough to entice people to use Birmingham. “The issue we face is that the airlines only want to fly to Heathrow. Passengers want to get to markets [like Birmingham] directly but they suffer because all the airlines go to Heathrow.”
This is a big frustration for all who do business in the West Midlands, where it’s reported that since 2003, after London, Birmingham has attracted more Chinese investment projects than any other UK city, receiving more than £76 million in capital investment and creating nearly 600 jobs during this period. Kehoe says: “One of the largest investors in the country is the Chinese investment in the Midlands, and the interesting thing about China is that they know Birmingham very well – for being an industrial heartland.”
Kehoe says feedback from the Asia Routes conference recently was positive: “Our runway extension will allow aircraft to fly direct from China, and we are pushing our route-development people hard. It will probably be a charter operator from the UK in 2015, but never say never – we are out there hustling airlines all the time.”
Kehoe’s idea for the UK is to have hubs like Germany. “We serve five German destinations with Lufthansa alone, and Lufthansa owns Brussels Airlines, Austrian Airlines and more, so that gives passengers a choice. If there is an issue with a flight to China via Munich, it doesn’t matter because they can still get to China via one of the other European hubs.
“The reason we want the debate is that BAA has hi-jacked the ‘hub’ word, and it has become a bit meaningless. What we need is greater capacity – and with the runway extension, our capacity can grow to 36 million passengers by 2030.”
Kehoe has steered the airport through some of the toughest times the industry has seen. How has his previous experience helped in times of austerity? Is ‘unbundling’ here to stay? He laughs: “The reason that has happened, and I take some blame for starting that at Luton, is what the airlines have done to us. They don’t want to pay for X, Y, Z. The airlines have the dominance, not the airport – apart from at Heathrow – so I’m in competition not only with airports in the UK, but also Berlin, Barcelona and so on.
“We have not raised our aeronautical charges for 17 years – and 17 years ago we had 80 per cent of our income from those charges. Today it is 45 per cent from aeronautical charges and 55 per cent from parking and lounges.” But Kehoe points out that unbundling shouldn’t affect business class passengers, who have access to lounges and fast-track lanes.
For the future, Kehoe says Brazil will be a focus and Rio is in range of the new runway. But his wish-list is more flights to the Middle East, North America, India and one or two direct services to China. “Look at the markets we are in – automotive, digital, industry: these markets need to have access to Birmingham. That’s where I would like to be in five or six years.”
• Paul Kehoe has been CEO at Birmingham airport since October 2008 and was previously CEO at Bristol International airport. Between 1997 and 2005 he worked for airport operator TBI Plc, joining as MD for Belfast International, then heading the company’s European division, and becoming MD at London Luton airport. Paul started his career in aviation as an air traffic controller in the Royal Air Force and has worked for British Aerospace and Serco Aviation. He is married with two children.