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AIRPORT PROFILES Last modified on March 13, 2016

What next for Gatwick?

CEO, Stewart Wingate, talks to Joe Bates about his airport’s ambitious expansion plans and belief that the UK will get it badly wrong if Gatwick doesn’t get a second runway. 

Arguably Gatwick has been in the shadow of Heathrow ever since the latter replaced Croydon Airport as London’s main airport shortly after WWII, but could that be about to change?

There is no denying that under the ownership of the British Airports Authority (BAA), Gatwick played second fiddle to its bigger brother for decades and some legacy carriers openly admitted that they only flew there because they couldn’t get slots at Heathrow.

There has, however, been a significant change in the airport’s fortunes since Global Infrastructure Partners (GIP) bought it for £1.5 billion in October 2009 and the airlines appear to have sat up and taken notice.

Suddenly things changed as Gatwick had an owner prepared to devote considerable resources on upgrading, modernising and developing it, and for the first time ever really it could truly square up to Heathrow and compete against it on an equal footing for new routes and services.

And GIP has certainly put its money where its mouth is in terms of improving Gatwick’s infrastructure, to date investing £1.3 billion on enhancing its terminals, upgrading the airfield and improving surface access.

And there is much more to come, especially if it gets its way and the government gives it the green light to build a second runway.

So do the airlines want to fly to Gatwick now? “Absolutely they do and you only have to look at our traffic mix and see that we handled over 40 million passengers a year for the time in 2015 to discover the answer,” enthuses CEO, Stewart Wingate.

“Gatwick is, of course, a very different airport today to the one we inherited six years ago. Our facilities are better and still improving. Our service levels have reached new heights and our route network has improved and continues to get stronger. We are genuinely becoming the airport of choice for airlines.”

Easy to say, right? Well, as examples of its new popularity with the airlines Wingate tells Airport World that Norwegian Air Shuttle specifically wanted to fly from Gatwick and not Heathrow because its fees fitted in with its low-cost model and it offered the carrier the capacity to grow in London as well as fast turnaround times.

And he says that Emirates asked for Gatwick to be made A380-compatible so that it could operate the super jumbo on its daily flights to Dubai, instead of B777s, as the smaller aircraft couldn’t keep up with soaring demand.

As a result of the request the airport invested £40 million on six new large aircraft stands, airfield enhancements and equipment allowing it to accommodate the A380, and the airline now operates three into Gatwick.

“The business case was strong, so we did it and were rewarded with their first A380 in 2014,” says Wingate, noting that former owners BAA had decided to focus its A380 strategy on Heathrow. 

 

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Changing traffic mix

The facts show that low-cost carrier services led by easyJet currently account for 55% of the traffic mix at Gatwick followed by full service airlines (34%) and charter flights (11%), which between them handled a record 40.3 million (+5.6%) in 2015.

A host of new airlines in the last few years means that Gatwick’s list of legacy carriers is growing fast and now includes Aer Lingus, British Airways, Emirates, Garuda Indonesia, Iberia, Turkish Airlines, TAP Air Portugal and Virgin Atlantic.

EasyJet remains the biggest carrier at Gatwick accounting for 45% of all passengers followed by British Airways (15%), Norwegian Air Shuttle (8%), Thomson Airways (6.5%) and Monarch (4.5%). 

Norwegian has seen the most significant growth at Gatwick since GIP arrived in 2010, developing from a small player handling around 300,000 passengers annually to the airport’s third largest airline handing in excess of three million passengers in 2015.

It currently flies non-stop to five US destinations (New York, Los Angeles, Orlando, Fort Lauderdale and San Juan [Puerto Rico]) and will add Oakland and Boston in the next few months.

Another major boost to Gatwick’s route network and subsequently its passenger appeal will happen this May with WestJet’s milestone launch of low cost, long-haul services to six Canadian cities (Toronto, Vancouver, Calgary, Edmonton, Winnipeg and St John’s) courtesy of four daily flights.

Air Canada rouge, the Canadian national flag carrier’s discount subsidiary, has also announced its intention to enter the market this year.

Other airlines planning to launch new routes out of Gatwick in 2016 include Vueling (Paris); Ryanair (Belfast); Monarch (Lisbon, Almeira, Las Palmas); British Airways (New York and Lima); and Cathay Pacific, which in September is set to resume services between Gatwick and Hong Hong for the first time in 25 years.

Between them its airlines operate direct flights to 40 long-haul destinations, which account for between 15% and 20% of its traffic.

“We have worked really hard on developing and diversifying our route network, which I believe now offers a good mix of affordable services across the world,” says Wingate. 

“When we took over the airport around 12% of our passengers travelled on business. The figure today is 20% or one in every five passengers and that is testimony to our route network and how quick, easy and enjoyable we make travelling through Gatwick.”

Indeed, Wingate is quick to point out that many people travelling on business use Gatwick because of easyJet’s “incredibly strong network” throughout Europe and the convenience of the airport’s super quick check-in and security screening facilities. 

“We are a good proposition for business travellers looking at things from a value for money perspective, there is no doubt about that,” he remarks.

Gatwick is also breaking the mould in terms of its air traffic control services provider, replacing long-time partner NATS with Air Navigation Solutions (ANS), a UK-based subsidiary of Germany’s DFS (Deutsche Flugsicherung) in March 2016.

Wingate says that the decision was based purely on economics as ANS provided the best deal for the airport.

 

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Infrastructure investment

GIP’s £1.3 billion investment in Gatwick to date has amounted to around £200 million a year with key projects including the resurfacing of the world’s busiest runway; enhancing the check-in facilities in both terminals; and developing a security area in the South Terminal that Wingate describes as “world class”.

In addition the airport has upgraded its pier facilities through renovations and the opening of new facilities such as its £80 million Pier 5 and the planned new £185 million Pier 1, which opens this summer.

It has also added new car parking facilities; doubled the efficiency of security in the North Terminal; invested £7.5 million of its own money in a £53 million project to add a seventh platform and upgrade Gatwick’s railway station in collaboration with etwork
Rail; and opened new state-of-the-art immigration gates in the South Terminal.

And work continues to go on with the airport planning to complete a brand-new North Terminal check-in area boasting the world’s largest self-service bag drop zone with over 60 kiosks this summer.

It hopes that next thing on the agenda will be its £7.8 billion three-phase master plan that includes a new terminal, second runway and surface access improvements by 2025 should the government give it the green light for the new runway.

With such infrastructure in place Wingate says that Gatwick could eventually handle up to 95 million passengers and 520,000 aircraft movements by 2050.

And he says that the investment is there now to begin at least the first phase of the project – the new runway, first phase of the new terminal and a new Automated People Mover (APM) transit system that will link it to the existing terminals.

“Our plans are flexible, so what I suppose I am saying is that if the government wants a big plan we can certainly deliver that and make Gatwick bigger than Heathrow, but alternatively we can go with just phase one or phase two of the project and show that we can deliver it on time, within budget and provide the UK with the connections it needs,” enthuses Wingate.

“What we mustn’t do is nothing at all or the decision goes Heathrow’s way and it all unravels because of environmental concerns, sending us back to the drawing board and building in years of delays.”

 

Airports Commission and second runway

Gatwick handled a total of 267,767 aircraft movements in 2015 to enhance its status as the busiest single runway airport on the planet. 

It is no mean feat to get 55 aircraft movements an hour – take-off and landings – on a single runway for up to 17 hours a day on 365 days of the year, and with passenger traffic on the rise and an ever increasing number of airlines wishing to fly to Gatwick, there is simply no denying that a second runway is vital to ensure the gateway’s long-term future.

Wingate won’t get drawn on whether failing to get a second runway now will effectively signal the start of the end for Gatwick, fending off the question by stating that the airport will get it eventually. 

He also genuinely believes that the battle for the runway is far from over despite the Airport Commission’s recommendation to the government that Heathrow should get it.

In fact he takes the government’s decision to delay making any decisions until the summer as a positive that things are not done and dusted and that Gatwick is still very much in the frame.

“We should get permission to build a second runway as we are in the best position to make it happen and it will offer the best solution for passengers, airlines and the UK in terms of the benefits, cost and impact on the environment,” says Wingate.

“By the Airport Commission’s own economic analysis, Gatwick comes out on top as Heathrow’s $18.5 billion scheme is more than double ours. I also think that they have underestimated the dimensions of air quality and noise in this debate.

“Our environmental claims are not fanciful. We have measured our air quality for 10 years and can prove that we are well within the legal limits now and would be with a second runway. When it comes to noise we estimate that the new runway would only  impact on 5% of the number that would be affected by a third runway at Heathrow.

“Indeed, in today’s society we cannot possibly see how you can build a new runway at Heathrow because of its impact on the environment, particularly on air quality and noise.”

 

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Customer service

According to Wingate the ongoing investment in state-of-the-art infrastructure complements Gatwick’s new customer service focused business philosophy and corporate culture.

This has led to significant investments in queue-busting technology, new service offerings and initiatives such as making it possible to walk straight into the check-in hall from any of the South Terminal’s three multi-storey car parks.

Gatwick has upgraded all of its wayfinding in a move designed to make it easier for passengers to navigate their way through the terminals and cranked up its presence on social media to better communicate and interact with customers.

The opening of dozens of new and innovative retail/F&B outlets across the airport over the last six years have certainly proved popular with passengers and boosted concession sales.

The latest additions include Wagamama restaurants in both terminals that are open daily from 4am, The Nicholas Culpeper – a F&B outlet with its own gin distillery – in the North Terminal and a Grain Store Café and Bar in the South Terminal.

“The new outlets are based on the insight of our passengers. We asked them what they wanted from their airport experience, translated their feedback into a series of brands and today we see the end results. I think we have delivered a powerful message,” notes Wingate.

Initiatives such as the recently opened interactive sound installation on Gatwick’s 180-metre long Skybridge have also helped create something unique and different at an airport.

The soundscape serenades passengers with the sites and sounds of China’s Yangtze River courtesy of 128 kilometres of cables and 160 speakers across 80 channels that immerse visitors in 3D sound.

Sounds include everything from rushing water, the crackling of rocks and stones on the riverbed, skylarks singing, seagulls squawking, frogs croaking and dogs barking to those of people playing mah-jong, clunky fishing boats, noisy street markets and
a Cessna flying overhead.

Another more practical customer service based initiative set to take place next winter is the move to consolidate easyJet’s operations in the North Terminal and 100% base British Airways in the South Terminal.

“Having each of our major carriers in just one terminal will simplify passenger journeys by ending any confusion over where they need to go,” says Wingate. “EasyJet has been pushing for this for several years and now we and our airlines are in a position to do it.”

The move will also allow both Virgin and British Airways to open brand new business class lounges. 

 

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Airport security

Wingate also believes that Gatwick has one of the most customer-friendly airport security screening operations in the business based on the expansive layout of its checkpoints, performance and the assistance provided by staff.

He produces some statistics that prove that 97% of passengers pass through Gatwick’s security checkpoints in under five minutes and notes that the airport offers different types of security product for different passengers. 

These include a premium lane for those travelling in the aircraft front cabins or frequent flyers prepared to pay for the privilege and dedicated lanes for families and people in need of assistance.

At certain times of the year such as school holidays, the airport even goes as far as to make parts of the security area for families resemble fairy tale castles or other exciting places to make the security screening process fun and less stressful for kids.

He believes that “the transformation” of Gatwick’s security operation is most obvious in the South Terminal where the airport has removed a large retail area to create a new, more open and intuitive screening process in a zone 100% dedicated to security.

“Our emphasis is on helping people and getting passengers through in a comfortable manner. It is not all about speed, even though you get through all our lanes quickly,” says Wingate.

“All our security staff and passenger facing employees have to pass NVQs [National Vocational Qualifications] in customer service training and go on in-house courses to learn how to work together to maximise service levels to the customer.”

Such initiatives have led to the airport being awarded ‘Bronze’ and more recently ‘Gold’ status by Investors in People, an established, international framework that helps organisations to understand and improve how people contribute to the success of an organisation.

 

Airport report card

Reflecting on the current financial year, Wingate says: “If I was to look at our scorecard for 2015/2016, I would say we enjoyed a record breaking year service wise, a record breaking year passenger volumes wise and by the time we’re done we would have invested a further £200 million, so it’s been very successful.” 

By his own admission though he prefers to judge the airport’s success by looking at the bigger picture and how GIP has transformed Gatwick by driving service levels, passenger volumes and investment since acquiring it six years ago.

“In terms of customer service we have moved from being a medium performing airport to among the top quarter in Europe and our passenger feedback tells us that we are getting it right more often than not,” he sums up.

“In 2010 we did around 31 million passengers and by the time this financial year ends in March we will have handled 41 million passengers. That’s a rise of 10 million passengers, which put into perspective is more than the entire yearly capacity of Edinburgh, Glasgow or Birmingham airports.

“Finally, we have invested £1.3 billion on upgrading the airport since 2010, so overall, I think we have a good track record.”

And he believes that the success story will continue in 2016/17 with the planned new services acting as the catalyst for up to two million more passengers using Gatwick, regardless of what decision the government comes to later this year regarding the building of a new runway.

As you would expect, Wingate makes a compelling case for Gatwick’s expansion and his argument does seem like a sound one. Right, I am off to ask the government why it is limiting itself to one runway at either Gatwick or Heathrow when a new runway at each would be the best solution for UK plc.

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