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Interview

with Kevin Brown, Managing Director, Aberdeen Airport

27.11.2008 / Energyboardroom

Please introduce Aberdeen Airport to our readers.

Aberdeen Airport has invested £50 million in the last five years in our campus, and is proposing to spend the same sum going forward over the next five years. We’re planning some exciting projects, not just in terms of resurfacing our runway, but also extending the runway, expanding the capacity of our aircraft parking stands, rehabilitating the taxiway network, and investing in security products. At Aberdeen 99% of our passengers clear security within less than 10 minutes and a very significant proportion do so within five minutes. We’ve extended the terminal’s check-in area and our offering in the car park, while making improvements to road networks in and around the airport campus. There’s not one part of the airport that has gone untouched.
Key projects going forward are very much centered round building a new international arrivals hall, because obviously as the supply chain supporting the oil and gas industry becomes more global, we must make sure our product keeps pace with that. The airport is keen to develop the international arrivals hall product, with the aim toward a more direct, efficient and convenient journey for passengers. We have seen a great increase in the number of passengers who can actually fly direct to a lot more destinations in Aberdeen at any point previously and the intention is to see the number of direct domestic and international destinations continue to grow for the benefit of both business and leisure passengers. Recent developments are – however – not just about bricks and mortar and developing the airport, but also about the people who make the airport what it is. We take investment in our people very seriously to make sure we get the best standard of service for our customers. This year, I was proud to go to Shanghai to collect an award from the Airports Council International (ACI) after Aberdeen received the Best Improvement award, competing against 140 airports worldwide. It was a very proud achievement for everyone at the airport. We’ve also been short-listed nationally, with the airport ranking in the top five companies in Scotland for Corporate Social Responsibility, and more recently we were short-listed in the local chamber of commerce awards in terms of people development and customer service. Recognition on a global, national and local level is very welcome and very important – they show we are working very hard to provide our customers with a great service. Aberdeen Airport has had 42 months of consecutive growth, and 18 months as BAA’s fastest growing airport in the UK, all coming about through the deregulation of the airport and the removal of the restrictions on our opening hours. Aberdeen Airport is now a 24-hour operation, and from that our growth has shot through the roof, with 3.5 million passengers per year. There’s an economic credit crunch impacting not only the UK but the world, and we along with other businesses can see and feel some of that impact, but – fortunately – not to the same extent as some other regions in the UK, because the oil business is still a buoyant operation. There’s still 24 billion barrels of oil, and a change in the North Sea’s operating model, whereby many smaller companies are entering with lower overheads and can more productively manage oil fields. That is complimented by support companies, actually exporting the expertise being developed in Aberdeen with the subsea technologies worldwide. That’s a market that has grown 10% year on year over the last five years and is dependent on global connectivity. Aberdeen as a regional airport is well connected all over the world to key airport hubs and the strategy is to look for even more direct links. Houston is a key one and the airport is working with a number of partners to see what kind of opportunities and support there is from the local oil industry to actually see such a service being introduced.
Developing products, people, route networks, and understanding the market and our customers’ business better is possible because we actually speak to them. We’ve met with Oil and Gas UK and have a better understanding of the oil business from their perspective. We also have regular sessions with key business leaders in the region, as well as with members of the public on a monthly basis to help mutually understand needs and where we can work together.

What would you highlight as the most significant services to and the importance of the oil and gas industry from the Aberdeen airport?

Aberdeen Airport is unique because of its three helicopter operators and terminal. Aberdeen has four runways, five terminals, and is the busiest heliport in Europe. In terms of better addressing the business market, we work closely with the helicopter companies to understand their needs as subcontractors to the oil and gas industry. Aberdeen Airport has a part to play in providing an adequate, open, high-capacity facility to service that part of the network. Aberdeen Airport is big enough to provide a range of destinations, with 40 offered from Aberdeen, but it’s not so big that people can’t breeze through the experience and get on their journey quickly, and get back home to spend time with their families or at the office. Aberdeen Airport also has the busiest airfield in Scotland and the fifth busiest in the UK, just behind Heathrow, Gatwick, Stansted, and Manchester, with up to 42 hourly movements at peak times. Those living in Aberdeen and Aberdeenshire also have the highest propensity to fly, with a Scottish average of 6.5 annual journeys compared to 8 at Aberdeen; despite a catchment area of 500,000 people in this part of the world, around 3.5 million passengers fly with Aberdeen each year.
The airport appreciates business travel but is also keen to see inward-bound tourism, which is why when business people come through our airport, we give them a sense of place that they’re in Aberdeen, to understand what this part of the world has to offer, and go beyond just traveling through a sterile building that could be any building, anywhere in the world. This sense of place comes through our artwork depicting local places and attractions, the use of local materials and in the products we sell in our retail outlets.

Speaking of the nature of running a business like an airport or heliport that is a monopoly in a sense, what keeps the drive and upkeep to excel?

My background is in utilities, which I joined as a national industry and have seen through privatization. My philosophy is that yes, there may just be one airport, but we don’t behave as a monopoly. We value the customers’ experience through our product. Monopolistic behaviour would suggest you don’t invest in your product, you don’t care about customer service, or work hard to grow your business, but Aberdeen Airport has seen 42 months of consecutive growth, £50 million in investments, and won local, national, and global awards in customer service. People do have a choice: they can choose to drive to Glasgow or Edinburgh, or even further to Newcastle or Manchester, especially for leisure opportunities. People do have that option, and some will choose to go to different airports. But people choose to fly from this airport because we provide direct services for them. Aberdeen is well-connected to London, Amsterdam, Charles de Gaulle, Copenhagen, and Manchester, which are all key hubs. There are benchmarks between airport prices in different parts of the world, as an example of airports more closely aligned or situated geographically to other airports, and many other airports earn higher returns on their business model than we do. We consider our position as custodian of the airport for the benefit of the people who live in this part of the world.

In this regard, could you speak to the importance of initiatives like the Airport Business Development Forum in attracting business and leisure to the area?

That initiative in particular was established to look at securing permission for 24-hour opening and to secure permission for a runway extension, both of which were successful through that business forum and through the very welcome support of the wider business community. Right now, a top priority of the Business Development Forum is ensuring good connectivity with Scandinavia, with 700 daily seats between Aberdeen and Norway. We’re working with tour operators, tour guides, attraction managements, exhibition centres and hotels to actually put packages together where people can fly in and make use of the connectivity and use these other facilities, while enjoying whiskey trails, castle trails, or golf. We have 72 golf courses in the vicinity, a Victorian heritage trail, and an authentic visitor experience of the real castles, and that’s what we want people to experience. Developments like the Donald Trump golf resort will be a huge boon for the tourism industry. As much as we have a significant oil industry left and a supply chain for subsea technology, we cannot be complacent and focus on just one industry; we want to make sure our economy is diverse and can sustain itself going beyond the oil and gas years, wherever and whenever that may be. Clearly, tourism is one of those key elements. And it’s not just about Mr Trump’s development; a Jack Nicklaus-designed golf course and others in Aberdeen will supplement the 72 that already exist. This provides a diversification in terms of facilities and quality of life in this part of the world, which helps the industry attract and retain people to live here and create a base for themselves and their families.

You mentioned the airport’s commitment to CSR. Would you detail some specifics for our readers?

Aberdeen Airport’s departure lounge was opened two years ago by Scotland’s First Minister and is effectively an 800 sq.m extension of our building – and its completely carbon neutral. Our energy usage within the extended building is less than what it was previously, before the extension, thanks – for example – to the energy-saving lighting we introduced. The lighting actually changes depending on exterior ambient light levels. Other additions including a more modern HVAC system have resulted in a 15% reduction in CO2 usage over the last five years. The airport looks very seriously at usage of gas and electricity in terms of our carbon footprint. We’re also adjacent to one of the world’s finest salmon rivers – the River Dee – and we have a £6 million water treatment plant in place. All the deicing fluids coming off our airfield actually go through the treatment plant, resulting in clean water going back into the natural water courses. Significant investment in technology and maintaining systems has ensured Aberdeen Airport preserves the quality and quantity of the water leaving this site.
Recycling is another key aspect of the business, focusing on targets of recycling 30% of our waste and that’s always increasing. Surface access for transport and its promotion is another issue, and the airport is a founding member of the Dyce Transport Management Organisation which is made up of a number of companies in and around the area, looking at ways to make transport and infrastructure more sustainable, promoting car-sharing, supporting a bus shuttle link between the airport and the local train station and lobbying for more frequent trains at commuter times to encourage people to come off the road and use public transport to get to and from the airport.
Aberdeen Airport also works with a number of charities, including the homeless charity, the Foyer which has seen as build a garden for homeless people in a community to the north of Aberdeen. This year the airport’s charity committee has provided more than £12,000 to local groups, clubs and organisations, including buying a horse for a local special needs community. The airport also participates in an ‘Outreach’ program in association with the National Trust for Scotland, where staff help local schoolchildren in terms of developing their interviewing, presentation, and communication skills. We work very closely with the community and a lot of our staff works directly with local charities, to support and supplement their efforts, across a very broad spectrum.

From what you describe the airport seems more multifaceted than might be expected. What are the biggest items on your agenda as Managing Director?

To make sure we continue to provide what our customers require, and to do so in a safe, secure, and responsible manner. We understand concerns for the environment are ever-increasing, and of that there needs to be a clearer understanding. Aviation contributes an extremely small proportion of global CO2 emissions, and while I’m not excusing that, agriculture – for example – generates much more … around 9%. There’s a lot of work to be done, even down to the basics of animal feed to reduce the release of greenhouse gases from animals, as well as making cars more efficient and encouraging more effective public transport, better housing insulation and moving away from the use of incandescent lightbulbs.
Safety is always a major priority, and the airport has just invested £2 million in our forecourt for security after the events at Glasgow Airport in June 2007. The safety and security of our passengers is key, but so is having an efficient and successful business. The airport receives excellent feedback from both passengers and airlines. One initiative in this regard is called One Airport, which tries to engender more of a community spirit in the airport. To a certain extent there is a very strong community spirit because of the relative size of the airport. Being good is good, but we want to be great, integrating that culture and make sure different business partners sit down together to understand each others’ business better.

Will we see a 43rd consecutive month of growth, given the current economic climate?

No. On the bright side, although many airports are into potentially double digit decline, we are seeing a bit more stagnation, a 2-3% decline in the last year, but again, that’s in comparison with a much bleaker picture elsewhere in the UK. It’s important to remember that over the last four years passenger numbers at Aberdeen have increased by around 1 million. I’m absolutely confident in the business going forward, and that people in the supply chain need to position themselves around the world, and people still want to go on holidays. We still have a prosperous economy, and people still need and want to fly. No one is immune, but we certainly haven’t been impacted to the same degree as other regions in the UK. Aberdeen Airport is actually seeing new routes, with new destinations to Grand Canaria, Oslo, Ibiza and Dalaman, and new routes added to Stavanger and Tenerife.

Do you anticipate Aberdeen Airport will be able to keep its strong trajectory after improving so much so rapidly?

We look at who passengers rate as the top airports in the world, and Ottawa comes out at number seven. We met them in Shanghai as they collected their 24th award at these presentations, and remain in regular contact to gain a better understanding of how they run their business, and how they gain that level of satisfaction from their passengers. We like to look to the best and understand how they got there, and how we can get there too. Although it was a great honour to receive the Best Improvement award, we’re not standing still, because what passengers are satisfied with today may not necessarily be the case tomorrow. It’s a moving target. As a result, people coming through the airport regularly see transformations every time they visit, and this will continue to be the case with a very ambitious capital program going forward in the area of £20 million next year alone – a significant investment not just allocated toward allowing bigger and more aircraft to land, but enhancing the passenger experience with new facilities, catering outlets, seating, airline lounges, increased check-in capacity and car park spaces, and providing a warm welcome in coming back into the country from abroad. The job will never be finished, and that’s what makes it an interesting environment to work in. The airport is a very dynamic and fascinating place to work, because you don’t know what’s going to come next, and that’s what makes it so exciting.

What is your final message to OGFJ readers about what we can expect to see from Aberdeen Airport in the future?

We appreciate their support and their business, and we will continue to work with them, understand their changing needs, and adapting our product to support them.

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