One-to-one with Robert Smith, Head of Aviation Development, Manchester Airport
Manchester Airport is the busiest airport in the UK outside of London and the only one other than Heathrow with two full-length runways that are both capable of handling trans-continental long-haul operations. It is currently in the midst of its £1.0 billion Manchester Airport Transformation Project (MAN-TP), which is designed to upgrade its terminal and airside infrastructure to unlock the additional capacity potential of its two runways. anna.aero’s Chief Analyst, Nick Preston, met with the airport’s Head of Aviation Development, Robert Smith, to discuss the airport’s ambitions for traffic growth and its top targets for new routes. Smith has worked for Manchester Airports Group since 2011, starting in the role of Aviation Development Manager at Bournemouth Airport, and also held the position of Business Development Manager at Manchester, before taking on up his current role in May 2017.
anna.aero: Manchester broke its traffic record in 2018, handling more than 28 million passengers. What level of growth do you expect to see in 2019 and beyond?
Robert Smith: “For our current financial year, which ends 31 March, we are targeting 28.5 million passengers. For the calendar year 2018 we reached a total of 28.2 million passengers. We continue to break records, which is down to continued growth with our customer airlines, such as Ryanair, and easyJet, with the latter adding five additional based aircraft during the coming summer season. This will see an increase in the number of easyJet based aircraft at Manchester to 17. Ryanair added three additional aircraft towards the end of S18 and we’ll see the effect of this extra capacity across the whole of the coming summer. We have successfully backfilled the capacity lost when Monarch ceased operating in 2017 and we are now growing over and above that. Backfilling Monarch was obviously a significant target, so we spoke to our customer airlines who were keen to grow and utilise that opportunity. Achieving the backfill is a mark of how strong this market is, with easyJet, Jet2.com, Ryanair, and Thomas Cook Airlines all seeing the opportunity. Next year we’ll be targeting further growth, through increases by existing partners, but we’re also welcoming a new airline in El Al. We’ll also see the benefit of the first full year of operations on the Jet Airways and Ethiopian Airlines services to Mumbai and Addis Ababa respectively.”
aa: What do you consider to be Manchester’s key catchment area and what is the composition of this catchment?
RS: “We tend to look at different catchments depending on the route in question. When we’re talking to long-haul carriers, we use a two-hour drive time catchment, which includes Yorkshire, North Wales and as far South as Birmingham. For short-haul we look at a one-hour drive time. As part of the work we’ve done over the last couple of years to understand that short-haul catchment, which is where a large proportion of our traffic is, we’ve also defined a low-cost catchment, which isn’t as simple as a one-hour drive time. It’s actually quite elongated, and when we analyse the CAA survey data it suggests that our LCC catchment goes quite far north, as well as covering large portions of Wales.
“There are 22 million people within a two-hour drive time of Manchester and we are lucky to have a really strong catchment. What’s important is that there is minimal overlap with the London catchment. We sit in a position where we can offer airlines a catchment area that complements any existing services they have in London, without cannibalising that demand. While London is ‘filling up’ Manchester can really offer an alternative for airlines around the globe looking to grow their UK services. With constraining factors in London, Manchester becomes that outlet. Our message to airlines is that they can grow their UK market share by launching a Manchester service.”
aa: Do you have a specific new route wish list for Manchester? Are there certain destinations or markets you believe the local catchment is crying out for?
RS: “Bangkok is our top, unserved long-haul market, and has been for a number of years, with more than 300,000 passengers travelling indirectly from Manchester or leaking to other airports. We’re working as hard as we possibly can with potential carriers to address that opportunity. Other targets include increased links to China with the likes of Shanghai. We have the Beijing service with Hainan Airlines, and with the Manchester-China forum, our drive to increase links to China is critical. At World Routes 2018 in Guangzhou, Hainan Airlines announced that it had secured the traffic rights to operate from that city to Manchester. We are now talking to them about starting that route in 2019 or 2020 and we’re hopeful Hainan will grow its presence here. Mumbai was towards the top of our targets and we have now secured that connection, but India remains an enormous opportunity. Delhi is unserved and a fantastic opportunity, and we’ve spent a lot of time in India talking to carriers about that. Jet Airways is now a key partner, so we would love to see it move into that market.
“In terms of short-haul, we have a lot of markets covered, but there are still some opportunities. Bucharest is one, which is unserved, and a lot of that traffic is going from alternate airports around our catchment, but we believe that’s a great opportunity.
“North America is an important market for Manchester and has been for a number of years. When you look at Manchester’s direct flights into North America, we’re right up there with some European capital cities and hub airports in terms of points served. I think there is still scope for growth, especially in frequency. We are seeing an upguage with United this year, from the 757 to the 767. We’ve seen a new Seattle service with Thomas Cook Airlines, which is fantastic for West Coast connectivity. Virgin Atlantic is launching flights to Los Angeles, joining Thomas Cook Airlines on the route. Going back several years we didn’t have any West Coast flying, so to have three routes out to the West Coast is superb. North America is well covered but there is still more we could do there. Houston started a few years ago with Singapore Airlines and that market has stimulated significantly.”
aa: Does Manchester have the potential to become a new hub airport for the UK and a genuine alternative to Heathrow for connecting flights?
RS: “We definitely want to increase our transfer passengers. We were referred to by the UK Transport Secretary as the UK’s Northern hub. It’s quite easy, to label an airport a hub, but actually if you look at what we’re doing here, with Flybe feeding the UK regions through its hub in T3, who are then connecting on to long-haul services, it’s a really important part of our business. We’re hopeful that while Flybe goes through its current sale process that there is an opportunity for it to continue to grow these services. In terms of transfer passengers, we tend not to compare ourselves too much with the biggest European hubs like Heathrow, Frankfurt and Munich. We have a really healthy mix of airlines here, but it’s hard to make sure that their separate strategies are aligning themselves with one another to provide feed. Partnerships, alliances, interlining and codeshares, they’re all really important parts of our business. As part of our transformation project we are building a transfer facility, with much more capacity, meaning it’s going to be much smoother for passengers to transfer through Manchester. Jet Airways knew its new Mumbai service would connect well on to Virgin Atlantic flights out of Manchester, so it’s about making sure that we are finding those partnerships and alliances and making sure we’ve got the facility here to really grow that, as well as we can. However, we don’t have that home carrier, and that will always be the challenge.”
aa: Manchester is currently undergoing its £1.0 billion Manchester Airport Transformation Programme (MAN-TP). What key infrastructure developments will be delivered under this transformation?
RS: “Our first new terminal pier is built and will now undergo a whole series of testing to make sure that it’s ready for opening on 1 April. We’re currently building an extension to Terminal 2 which will grow by 150%, so there’s a huge uplift in capacity. The extension is due to open in 2020. Over the next couple of years, the existing Terminal 2 building will be refurbished, with these improvements coming live in 2022. We also have two more piers being added, one of which will be completed in line with the refurbishment in 2022, while the final one will be finished by 2024. Terminal 2 will become our groundswell of operation. Terminal 1 will ultimately be decommissioned, with one of its piers becoming part of the new Terminal 2 and Terminal 3 will remain.
“In addition to the terminal developments, we are making some radical changes to our airfield. At the moment we have, due to current infrastructure limitations, some inefficient operational procedures. We will be removing these issues through a major upgrade to the airfield taxiways. We will have dual Code E taxiways, enabling the largest aircraft to pass each other and manoeuvre around the airfield more efficiently. We’ll increase our parking stands as well. At the moment we are constrained with overnight parking. easyJet will have 17 based aircraft in summer 2019, Ryanair 12, Thomas Cook 11, Jet2.com has 19, all of which are parking here overnight, and all of which need to depart early in the morning, so we need to deliver additional stands for those carriers to continue to grow and for us to secure passenger growth at the airport. This will include increasing Code E capability, with the MAN-TP scheme delivering 21 Code E stands, capable of handling new generation aircraft such as the 777X and A350-1000, and three Code F stands capable of handling the A380.
We have two runways with the technical capacity for 55 million passengers. Our terminals and stands simply cannot deliver that, which is why we’ve implemented the £1.0 billion transformation to provide further capacity growth as we grow passenger numbers.”
aa: How important are Maintenance, Cargo, Business and General Aviation activities for Manchester’s continued growth? What is the scope for expansion of these activities?
RS: “These activities are a really important part of our business and it’s important our on-site maintenance providers can continue to service our airlines. We’ve got Jet2.com and Thomas Cook Airlines with hangars here performing their maintenance checks. Plus, we have Air Livery for repainting and Signature for handling business jet flights. We’re a global city, and we need to be able to provide that access and level of service and Signature provides an important part of our airfield operation. In terms of cargo, we’ve got a couple of dedicated freighters here with FedEx. We generally see our cargo growth coming through belly hold cargo on passenger aircraft. We have limited stand availability, so we are focused on trying to drive as much cargo through belly hold capacity as possible. We get good feedback from the carriers about Manchester’s ability to absorb some of that cargo into the UK, rather than flying it into Heathrow and trucking it up North. As an airport group we work together with our partners at East Midlands and Stansted to offer a high-level of UK cargo coverage.
“For general aviation and maintenance, I think it’s important to continue to offer our current level of service, but it probably won’t grow significantly as we don’t have a huge amount of additional space available. Last month we announced ‘PremiAir’, which is our new private terminal, due to open later this year. This will be a small private terminal to the North of runway one, which will offer a premium passenger service. The airport will manage the terminal which will be available to those airline passengers which choose to source it.”
aa). What are the main challenges Manchester faces in terms of attracting new airlines and routes in the next few years?
RS: “Air Passenger Duty (APD) is a real issue for us. A lot of the time we are competing against other European airports to attract scarce aircraft capacity. Unfortunately, here in the UK we have APD to lump on top. We believe that does hinder some of those airline decisions. I’m generally in conversation with airlines that are also looking at the likes of Vienna, Barcelona, Madrid, Stockholm Arlanda, Oslo, etc. Due to APD, all UK airports are on the back foot in this regard, which is why we continue to lobby against it.”
aa: What are the airport’s main strengths and what opportunities do these provide for future growth?
RS: “What we’re delivering here with our new infrastructure is a significant improvement, which should make sure that both long-haul and short-haul carriers are getting the service they need. This means our LCCs are getting exactly what they need, but also our premium passengers are getting the lounges and terminal experiences that they require. That’s what MAN-TP will bring for us. Our catchment is, without a shadow of a doubt, a huge benefit with 22 million people within two hours of here, who continue to choose Manchester because of the wealth and breadth of our route network, and airline choice.”