Stansted could experience meteoric take-off
Located midway between the technology and financial capitals of Europe – Cambridge and London – Stansted Airport will pass into new, almost certainly foreign, ownership early in 2013 and hand the incoming patrons an incredible opportunity.
The UK airport was bullied into a fire sale by the Competition Commission, which buckled to a self-interested lobby arguing that BAA had an unhealthy London monopoly in its ownership portfolio.
That was after the Coalition government scrapped plans to add a second runway to the Essex hub for fear of offending the environmental lobby that appears to dictate economic policy in Britain by dint of perceived power at the ballot box.
By sheer serendipity, the Commission and the present government may have done Stansted and its prospective new owners a huge favour: Four groups are in talks to take over Stansted for anything between £850 million and the cost of the regulated asset base of £1.3 billion.
This week London’s Mayor Boris Johnson, included Stansted in a £3m feasibility study that looked at extending the airport into a four-runway hub. The London Evening Standard suggested that Chancellor George Osborne backs the expansion strategy.
The Standard reported: “It would be a fraction of the cost of a new airport — a minimum of £60 billion — in either the inner or outer Thames estuary and rail links are already in place. Mr Johnson is vociferously opposed to building a third runway at Heathrow, so is understood to welcome the idea of Stansted as a compromise candidate.”
Under Boris’s plans, Heathrow would downsize to a small international airport — it currently serves 70 million passengers a year — as the new hub takes over.
So what price Stansted in this scenario? Despite the challenging macro-economic backdrop, anything less than £1bn would be a bargain.
Stansted is sitting on a goldmine – precious spare capacity, ready-to-roll infrastructure, rising cargo volumes and the option of growth without causing the kind of environmental chaos that similar expansion would cause at Gatwick or Heathrow.
Manchester Airport, which has an edge in terms of understanding UK airport infrastructure, is the only domestic bidder. Australian and New Zealand led consortia are in the bidding along with Asian interests. I understand that, while some media have been touting a Texan group, the fourth bidder entering the next round of the process is, in fact, a Malaysian interest.
Quantas recently used Stansted for London Olympic flights and were blown away by the infrastructure and efficiency – as was President Obama before them.
Ryanair, despite its intravenous rants at Stansted management, has increased flights from the Essex hub and winter passenger figures have been unusually buoyant.
I believe the political wind is about to change and that Stansted will be chosen ahead of Heathrow and Gatwick for further runway capacity. I also believe the new owners will bring in US and Asian passenger services as a matter of priority, diversifying from the current European-centric schedule.
But whichever consortium takes over, marketing will be the key to success. Stansted has never been marketed with optimum efficiency. With all due respect to our cousins across the Atlantic or in parts of Asia, locational nuances are not a core strength.
They simply don’t appreciate – because they are not told frequently or loudly enough – that using Stansted gives them swift and ready access to both London and the Cambridge technology cluster.
The name Stansted has to go. London Cambridge Airport will do nicely. The new owners will also have to develop some metaphorical balls and not be cowed by government whimsy or the green lobby.
They will have to attack the respective limitations of Heathrow and Gatwick and leave no global carriers in any doubt that London Cambridge Airport is the most accessible gateway to the City and a technology Shangri-La – and a hub that will give them capacity from which to grow their operations in a cost-effective manner.
We live in hope, not for the sake of Stansted or the new owners but for the economic health of the UK whose aviation strategy is the modern equivalent of the Ottoman Empire as ascribed by Russia in a less commercial era – the sick man of Europe.