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Expanding our horizons
The former managing director of Leeds Bradford International Airport – and one of Leeds's most influential business leaders – now speaks for the trade body which represents all UK airports. Business Editor NIGEL SCOTT caught up with Ed Anderson whose message is that while airport operators are concerned about their environmental impact they need to be allowed to expand.
SOMETIMES opportunities in life come along which suggest an element of fate.
So it is with Ed Anderson, who found himself applying for a job whose description could have been written with him specifically in mind. In June, the former boss of Leeds Bradford International Airport took up a new challenge as executive chairman of the Airport Operators Association (AOA) – a three-day-a-week job which sees him divide his time between Leeds and London.
The AOA is the trade body which represents all the airports in the country.
BAA, which owns Heathrow, Gatwick and several other major airports, is by far the dominant member of the approximately 70 airports which come under the umbrella of the AOA and these also include a number of much smaller airfields.
It is an organisation Anderson, an accountant and economics graduate, knows well – he was chairman in 2001, when the post was an honorary one, and he held it for a year.
When the AOA decided it needed someone with a track record in the airport industry as its figurehead, it probably had no need to look beyond the former Leeds Chamber of Commerce president, who remains one of the leading business figures in the city.
He explains: "Traditionally, the chairman would always be an honorary position taken by an airport managing director who would do it for a year. Increasingly the association found that it's quite difficult now to find someone who's able to spare the time because everyone's day job's become so much busier and, secondly, there was a feeling that the association needed to raise its game a bit – and one of the ways it could do that was by having a chairman who could devote more time.
"They actually appointed someone last year – a politician (Lord Bach] and two months after being appointed to that job he was appointed to the Government so he had to stand down.
"Someone held the fort for a bit but they advertised it again, this time being clear that they wanted someone with airport industry background. So it just worked out. The timing was right for me."
The association's main purpose is to lobby Government and policy-makers and influencers – MPs, people from the media and their like – to try to get across its agenda and to fight for its members.
"What I hope I can bring to the job," says Anderson, "is real experience of having run an airport so when something crops up I can say to the people in the office 'I can tell you what Ryanair would be saying now' because I've actually been there. From my point of view it's brilliant that I can continue my involvement with the industry but not have the day-to-day issues – 'Have the caterers cleared the tables?' – those sort of things.
"As far as the aims of the association are concerned, they did a big strategic review a couple of years ago to narrow it down as much as possible. I think what it's really about is making sure there is a climate of debate in which the case for further expansion of aviation can be heard.
Economic
"At one time we took it for granted that that was the case. Around the time the Government issued a big White Paper in 2003, which is the policy everyone looks to now, the case for aviation was widely accepted.
"I think, since then, those who don't want aviation to grow, or in many cases want it to contract – I'm talking about the environmental lobby – have really been on the front foot and I think we've been slightly on the back foot. So we're trying to redress that. Hopefully the debate is more balanced.
"We're very concerned about the environment, as well, but we're looking at sustainability in all its facets – which includes the economic aspects.
"It's trying to strike this balance between concern for the environment but not losing the economic benefits that aviation brings."
He says technological change is a big issue and believes the issue of cost – and specifically cost savings – will help to drive the green agenda. "There's a massive incentive now for the big aircraft manufacturers and the airlines to make their aircraft more environmentally friendly because of the high price of fuel. "If they are able to operate in a more efficient way, it's not just good for the C02 emissions but it's going to be economically beneficial as well."
Environmentalists should note that he is, was, and always has been, a supporter of plans to expand Heathrow Airport.
"We understand the Government is planning to make an announcement on that before the end of the year," he says.
"When I was at Leeds Bradford some people were a bit surprised that I was arguing for further expansion of Heathrow but I was very clear that, actually, that is important – firstly for UK plc and London's standing as a world-class city but, also, from a regional perspective.
"Having access to what should be the number one airport in the world, with all its worldwide connections, is really important to this region and to business in particular.
"If Heathrow isn't expanded – and we're really talking about another runway – transfer traffic will go to Frankfurt, Amsterdam and Paris, and that's not good for our economy."
But does he fear plans for the expansion of the aviation industry might get caught up in the current political turmoil which has stemmed from the credit crunch and Gordon Brown's perceived unpopularity as PM?
"There is that potential, yes. I've read articles that say 'Ten things Gordon Brown can do to try and restore his popularity', and 'Not agree to expand Heathrow' is often on that sort of list.
"It would be tragic if that happened because then it would be delayed for goodness knows how long, maybe ten years, and by then we'd have missed the boat and the other major airports of Europe will have captured that traffic.
"This is interesting to me because of its regional dimension.
"I was talking to the people at Leeds Bradford and they are saying that it's still massively important to them. They are still very mindful of the impact on business."
So what do we need in the region in terms of development of air services from Leeds Bradford?
"I just say what I said when I left Leeds Bradford. I had done everything I could to try and expand the routes from Leeds Bradford and I think the new owners have very exciting plans and their strategy is to invest in the terminal facilities and attract new services alongside that investment.
"I've no doubt that they'll be very successful in that and it will be excellent news for the region when that happens. I keep a close interest in what happens at Leeds Bradford."
Exciting
The biggest success story of the Leeds airport's recent expansion – which began under his tenure – has been the arrival and rapid expansion of budget operator Jet2.com.
There was quite a spat, recently, when the outspoken boss of bigger low-cost rival Ryanair, Michael O'Leary, suggested that Jet2 might feel the heat of rising oil prices to the extent that its future would be, to say the least, turbulent.
O'Leary's comments earned a stern rebuke from Jet2.com's boss, Philip Meeson, who insisted the airline was here to stay. But the industry was rocked afresh last Friday with the collapse of Britain's third biggest leisure operator XL and the grounding of its airline fleet.
So what is Anderson's take on the O'Leary row and the troubled state of the airline industry generally in the wake of XL's demise? "He's done this before," he says of O'Leary. "It was about two or three years ago when he was talking about a 'bloodbath' or something and I just think that's Michael O'Leary's colourful way of expressing things.
"There's no doubt, right this minute, the industry is finding it tough but I do believe that the industry is very resilient and that there's an underlying demand for air travel which I believe will continue to grow.
"Looking beyond whatever this short term turns out to be, I think the prospects are still very, very good – but that's not to minimise the pressures the industry feels right now.
"But I'm very confident about the ability of the people who are operating in the industry to get through. That's the track record that the industry has."
Looking beyond the short term and into the future, he concedes the debate about climate change and aviation's role in climate change is clearly going to continue.
He insists it's all about keeping it in proportion. "Yes aviation is a contributor but actually it's quite small – two per cent of total emissions – so, yes, we're happy to play our part but in a way aviation is an easy target. It's easy to say 'Right, there's no more flying' but that doesn't solve the big problem.
"I think the Government has a very balanced view of this but, obviously, they are subject to pressures. That is my sense, that they do have a balanced view – and that's not just from private comments, it's also from their public statements. But the proof of the pudding is in their actions.
"We do see the Heathrow decision as symbolising where we are with the whole debate.
"When it comes to airports growing, and aviation growing, Heathrow is one thing but there are lots of airports, including Leeds Bradford, which are bringing forward proposals for development.
"So, without lining up behind every single one of them, we work to try and create this climate where aviation is able to grow hopefully to the benefit of all airports – and the growth of regional airports is very important to the UK as well."
Other big issues the AOA faces
Aviation Duty – Proposals will be firmed up over the next couple of months to replace Air Passenger Duty (APD) with the new tax. APD is a tax on passengers, who pay the airline which passes it on to the Government. The proposal is to get away from a passenger levy and to go to a per plane levy.
Says Anderson: "There are quite a few things that we don't like about it – one is that they're going to increase the total tax take quite significantly by half a billion pounds – and we say this is the worst possible time to be piling on extra costs or taxes because of the state of the market.
"The proposal is that airports will collect it and we're very much opposed to that but, equally, so are the airlines and I don't know why the Government has come up with the idea because it just puts another party in the process that isn't really needed.
"If we only achieve one thing in our current representations on this subject it would be to make sure that airports are not the collectors of this tax."
Airport policing – Under the current system certain airports are designated for police purposes – including all BAA's airports apart from Southampton and Aberdeen, plus Manchester and Birmingham. Essentially, the local Chief Constable decides what sort of level of policing is necessary at the airport and then the airport operator pays the bill. A planned new system would do away with that. Instead, the Chief Constable, other regulatory authorities and airport management would sit down and do a full risk assessment and decide what part policing must play. Following that agreement, the airport will pay for the policing.
Says Anderson: "What we don't want is one Chief Constable having a completely different view to another chief constable over how it should work."
He says the AOA would have liked to see one overall supremo but admits it has "rather lost that argument".
And he warns: "Certain airports, like Leeds Bradford, don't pay at all for any policing but they will do in future. It's quite crucial, really, that while everybody's feeling the pinch in the current economic climate, new costs are coming over the horizon and one of the things we must do is to make sure this is kept proportionate."
Competition Commission report – Its main finding was that BAA should be broken up. The AOA doesn't have a view on that as it doesn't take a position the ownership of its members.
Says Anderson: "This report is 300 pages long, with quite a lot in it including the Competition Commission questioning the policy for air transport. The last thing we need is another review of policy because that just delays everything, so we will be arguing our point strongly.
"There is a bit of a suggestion that there should be more economic regulation of airports. Airports are already highly regulated in most of their activities, and for obvious reasons to do with safety and security, but on the economic regulation side it has tended to be quite a light touch. The last thing we want is an argument for more economic regulation – it just equals more costs."
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Wednesday 23 May 2012
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