Flybe boss: Forget Heathrow v Gatwick – government should look at issues outside of south east
For the British aviation industry, the debate of the day (and decade) is south-east airport expansion: Heathrow versus Gatwick.
Everyone in the industry has an opinion, and Saad Hammad, the chief executive of regional airline Flybe, is no exception.
“From my analysis of the Davies report [into airport expansion], it looks like Heathrow is the logical option,” he tells City PM, speaking from Flybe’s compact office in Hammersmith, west London. “I have to say, Gatwick has not been progressive about regional connectivity. Heathrow have engaged in discussions with us, and I’ve got to give them credit for that.”
Read more: MPs call for "urgent" decision on airport expansion
But the former EasyJet chief commercial officer is far more interested in setting out his vision of an RAF station, based less than 10 miles away from Heathrow, being opened up to commercial flights.
“It’s going to take you a decade to build [runways at either Heathrow or Gatwick]. In the interim, you have the government assets at Northolt,” he says.
“We can operate with our aircraft at Northolt, we can give much needed connectivity to regions of the UK into London, there is an infrastructure to make that easily set up and customer-friendly in terms of terminal requirements and so on. [And it can be done] very quickly, in a matter of months, not years.”
Hammad reveals he has been in discussions with the chief executive of Heathrow about setting up a shuttle service between the two airports.
“We can generate income for the government – we estimate £7m in air passenger duty and landing charges,” he says. “And it’s in your gift now. You can do this right here, right now. And we can connect under-served parts of the UK [to the capital].”
Hammad is frustrated by the lack of attention the government gives to to other parts of the UK.
“Policy making… tends to be very south-east based,” he says.
“Take the whole debate around airport expansion: originally it was actually more focused on global connectivity – not the needs of the regions. The good news is we’ve managed to really work hard to get our message across that any incremental capacity has to be to the service of the whole nation, not just for the people of the south east, or indeed the global traveller connecting through.”
Exeter-based Flybe finds opportunities where others do not.
“I’m excited about the long-term potential for Flybe [because] there’s limited incremental investment in rail, road and ferry infrastructure across Europe,” he says.
“Look at what’s happened here, in this country: rail fares have gone up, there are issues on practically every line, they’re closing routes. So for us to give connectivity therefore to the regions, who are increasingly under-served by the by the alternative modes of transport and the mainstream airlines, is a wonderful prize to capture.”
On Monday, Flybe begins running “rescue” flights between Cardiff and London City Airport to make up for the closure of the Severn rail tunnel for six weeks.
Read more: Flybe shares continue to decline on trading update
Hammad joined Flybe in the summer of 2013 with the airline was facing a “significant threat” to its survival.
This summer, Flybe reported its first profitable year as a publicly-listed company. But despite the positive results, the company’s shares have dropped significantly this year, from above 90p at the end of 2015 to around 50p.
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Hammad shrugs it off, saying: “All the airline share prices are down significantly. We’ve just got into profit for the first time, so now we’re going to continue down that track and I’m sure the share price will follow.”
However, he identifies uncertainty around Brexit as one of the major troubles for Flybe and other airlines in 2016, along with terrorist atrocities and economic volatility.
He believes the Brexit itself will not be a problem in the long-term: “Whatever the political arrangement, the UK geographically remains part of Europe. Economically, the links are incredibly strong with Europe. I don’t think they’re going to evaporate because we got out of the EU. And certainly culturally the links are alive and well and remain strong.”
Short-term, though, there are problems.
“We want clarity. I think all airlines want clarity, actually,” he says. “What is concerning is this period of uncertainty. We don’t know what these arrangements are. It’s affecting customers, it’s affecting our costs, it’s giving us a lot of volatility to manage through.”
He also sets out what Flybe and other airlines need from negotiations: “It’s very important to continue to benefit from that common aviation area framework. Not just for Flybe but I think for the country, for the economy. And I think the European economy needs that as well, because they don’t want to have restrictions on their access to the UK.”
As a result of the turbulent conditions, he predicts companies folding and consolidation, but declines to say whether Flybe is in any discussions. But he does believe his airline will be one of the winners.