Gatwick's summer rush normally means its marketing and commercial team can take a step back, job done. Not this year, however, 12 months before Sir Howard Davies’ Airports Commission delivers its verdict on the South East’s airport expansion. Davies has already spoken, whittling it down to three options: a third runway at Heathrow; a second at Gatwick; or an extension of Heathrow’s northern runway to enable it to operate as two runways. The finalists must continue lobbying – so no rest this summer for Gatwick airport’s team and its chief commercial officer, Guy Stephenson.
Gatwick has a mountain to climb in the face of overwhelming support from the business travel community for Heathrow, so is stepping up its campaign. In brief, Gatwick’s plans for a second runway include a third terminal, plus a new transport interchange, enabling passenger numbers to grow to 95 million by 2050.
There seems little argument that Gatwick’s expansion would benefit the budget and leisure traveller, but what about the corporate flier? Stephenson says the notion that a redeveloped Gatwick would not be good for business travellers is “fanciful”. London, like New York, he argues, is an “Alpha++ city” because of its highly advanced integration with the global economy; and like New York – and Beijing – a ‘constellation’ of airports is needed to serve London, not just one main hub, and Heathrow would not be disadvantaged because of this.
“This is not an ‘either/or’ situation. If Gatwick gets a second runway, Heathrow would continue to perform its function, which is largely hub activities, particularly on behalf of its based airline,” he says.
Waiting game
Overcoming the government’s traditional bias towards the main hub and its home airline, British Airways, is a challenge, but perhaps not as much as in the past. BA is less expansionist and the geography of air travel has shifted east. BA acquired around 56 Heathrow slot pairs when it bought Bmi, but it has resorted to using them with fillers such as Mykonos and Santorini. These routes are an inefficient use of some of the world’s most expensive runway space, but proof that BA is playing a waiting game, according to Stephenson. “BA will continue to develop routes to emerging economies,” he claims. “It is choosing not to at the moment, not because there is not enough capacity, but because there’s not enough demand from the UK.”
Gatwick’s proponents argue that in the time it takes to get a third runway at Heathrow, this demand could diminish further as the Middle East carriers begin flying these routes instead. A new runway at either airport will take until 2025 to become operational. By then, the Gulf carriers will have a combined 1,100 more aircraft, and Easyjet and Norwegian (two big Gatwick users), plus Ryanair, almost 500 more. BA has fewer than 90 on order.
“The order books tell you the supply side is away-based carriers and low-cost,” Stephenson says. It is these airlines and others, particularly from Asia, that Gatwick believes makes its own case for a second runway entirely sound, as demand for London’s Alpha++ status grows. “It’s not just about BA developing long-haul services from Gatwick or UK-centric activity; the majority of growth will come from ‘away-based’ carriers that do not need connectivity from the UK. Most of these have fewer than 10 per cent transfer passengers.”
Around 6-7 per cent of Gatwick travellers transfer flights, compared with 37 per cent at Heathrow, whose transfer traffic will surely increase now that the alliances more or less have their own terminals. This is a big argument against expanding Gatwick, where business travellers amount to around 20 per cent of all passengers, against Heathrow’s 30 per cent.
“We’re not necessarily predicting any alliance is going to move, but we do have the UK’s largest short-haul network,” Stephenson says. Gatwick Connect, an airside bag drop for passengers with onward flights that do not interline, is already running. Although regular corporate travellers might consider it clumsy, it is planned to offer this option in global distribution systems and on eight out of ten Gatwick carriers.
In any case, Stephenson argues, the bulk of Gatwick passengers, and indeed, the UK’s, are flying point-to-point, with Gatwick already boasting 46 of Europe’s top 50 business destinations and 11 domestic routes. “When you look at the nature of demand for the next 30 years, the majority will be short-haul. We happen to think that building a mega-hub at huge cost is not the way to solve that. BA will be its biggest user, does not have a growth strategy and has all the slots it needs. You’re building it to deliver an important, but really small, part of the demand over the next 30 years, so why do it?”
Psychological barriers
For many, Gatwick’s Achilles’ heel has always been its distance from the capital – if only a psychological one, given the 30-minute train journey time. Stephenson protests that Gatwick is no further than Seoul’s Incheon or Beijing’s planned Daxing airport and that connectivity is about to improve drastically, with the number of directly linked stations rising from 129 to 175 by 2020 and the Brighton-Bedford Thameslink route extending to Cambridge – a near tripling of capacity over the next 20 years. “It will be as big as Crossrail,” he enthuses. More immediately, there will be one train to the capital every two-and-a-half minutes by 2019, and Gatwick will become part of the Oyster network this autumn.
The debate will rumble on for the next year. Heathrow claims to be confident that it has already won the war, but even if Gatwick loses, it will have won a few arguments on the way.