The North East’s two international airports face unprecedented demand for flights over the next 20 years, as air fares remain low for business and tourism passengers.
Newcastle International Airport and Durham Tees Valley Airport have both recently published extensive “masterplans” outlining their visions up to 2030 and 2020 respectively.
Newcastle International, which is majority-owned by the seven local authorities, is the third largest airport in the North of England and last year saw 4.46 million passengers pass through its doors.
Speaking to The Journal, chief executive, Dave Laws, said he hoped to make Newcastle International “the most welcoming airport in the UK,” whilst building new income sources for the business.
He said: “We consider ourselves to be the North East’s airport, and our masterplan continues our aim to diversify the business, to protect against future downturns. The plan covers all aspects of the airport’s operations, from facilities, to infrastructure and customer experience.
“We’re fortunate to have built a robust mix of flights from Newcastle. With a third of flights scheduled, a third low cost and a third chartered - we’ve developed a balanced business.
“We hope the improvements and expansion will take us up to a projected 8.5 million passengers by 2030. The plan takes us beyond the business of running an airport and takes us into the property industry via our partnership with UK Land Estates to develop a 175,000 sq ft business park close to Callerton Parkway Metro station.”
The plans, which also includes new aircraft hangars and extensions to the passenger terminal, aim to double the airport’s contribution to the local economy to £1.3bn by 2030, and take total airport jobs in the regional economy to 10,000.
Partnerships with AIS Training and Maersk have allowed the airport to establish a world-class fire training facility, which is now selling services to national and international firms - recently accommodating a team of fire fighters from Faro Airport.
Newcastle International’s Australian private sector partners, AMP Capital, are supporting the plans. AMP, which is Australia’s largest retail and corporate pension provider, came on board in 2012 having previously invested in Melbourne Airport.
Some airside facilities have already been revamped as part of the first stage of the £14 million passenger terminal works. Bars and eateries such as The Beer House, Flying Hippo, and Aspire Lounge have been catering for passengers since April. The second stage of works, beginning on September 1, will see the terminal receive a remodelled duty free shop and new food and drink outlets.
The new layout is designed to be more intuitive for business and leisure travellers, and will make room for new brands as well as existing operators such as WH Smith, Boots, Travelex, Accessorize and Traveller.
Dave sees the airport as central to the economic growth of the region and is pleased that of some 200 responses to the airport’s masterplan consultation, nearly all have been positive.
He added: “The airport has a symbiotic relationship with the regional economy. As demand grows for flights, the business community benefit from increased connectivity and generate their own demand for new routes.
“As the regional economy continues on its upward trajectory, we hope to see the airport grow in tandem. We see the airport as a key partner to the region’s businesses and the masterplan will continue to build on this relationship.
“In the immediate future we face a number of geopolitical challenges including the issue of air passenger duty, and our campaign to lower this; the outcome of Scottish referendum; and the outcome of the Airports Commission’s review of a third runway at Heathrow - which we support.”
Recently the airport reported an increase in turnover to £48.9m in 2013, driven by a 1.4% increase in the number of passengers; the effect of the full year of the upgrade of Emirates’ daily service to Dubai; a successful start to Aer Lingus Regional’s new Dublin service and a strong year for Air France and KLM.
A strategic report which accompanies the airport’s accounts read: “The increase in passenger numbers was achieved against the backdrop of improving economic conditions in the UK as a whole and the North East in particular and it is pleasing to see that growth has returned to the industry after a number of years of flat passenger numbers.
“The company has capitalised on the improved passenger throughput and its ability to grow revenues from all sources of the business to secure strong revenue growth.”
Durham Tees Valley Airport (DTVA), which has operated as a commercial airport since the early 1960s, is majority owned by Peel Investments (DTVA) Ltd and in 2013 saw 161,092 passengers pass through its doors.
In November 2013 Peel launched an ambitious plan to raise investment by selling off land to the north and west of the terminal to accommodate a development of 400 houses.
Peel aim to generate cash to pay for 9,600 sq m of office space and 16,820 sq m of industrial units - which they say could generate up to 3,800 new jobs. In April DTVA published the final masterplan which also detailed Peel’s ambitions to make the airport a freight cargo destination with the introduction of a freight siding to the Tees Valley railway line, which already runs onto the airport site.
Further provision for activities such as aircraft engineering, dismantling and recycling will also be created along with a ‘multi-modal’ logistics centre. Some remodelling of the airport terminal will also take place to cater for business customers - now the focus market for DTVA.
The plan follows a rocky time for DTVA as it scrapped its mainstream charter holiday flights in 2013, in a bid to focus on business travel. Tour operators Thomson/First Choice and Balkan Holidays saw their routes to Ibiza, Palma and Bulgaria pulled, leaving only scheduled daily flights to Amsterdam with KLM and Aberdeen with Eastern Airways.
DTVA bosses hope the masterplan will leverage public sector funding, particularly Regional Growth Fund investment, which the airport has missed out on twice.
Speaking in April, Airport strategic planning director Peter Nears said: “The impact of the recession has made significant and lasting changes to the air travel industry and the Master Plan sets out how we can establish a viable business model and long-term investment strategy for Durham Tees Valley in the light of those changes.
“The reality is that many major operators, including low-cost carriers, now concentrate their activities at a limited number of airports and Durham Tees Valley is no different from a number of other smaller airports across the country in having to diversify income sources.
“One of the key strengths of Durham Tees Valley is its land holdings north and south of the runway and maximising the return from developing those assets holds the key to securing airport services.
“Of course, people have been concerned for the future following the fall in passenger numbers over recent years but I hope that they will now see that this Plan does set out a path which, with support from our stakeholders, the business community and the public, can lead to a more secure future for Durham Tees Valley.
“Our task now is to move forward with key elements of the Master Plan and that will be happening in the very near future.”
Speaking at the time of the DTVA masterplan publication, NECC chief executive, James Ramsbotham, said: “The Durham Tees Valley Airport Master Plan is a bold and ambitious document that will hopefully secure the airport’s long-term future by maximising its freight potential and considerable land assets.
“DTVA can play an important role in ensuring the North East remains connected to key business destinations and, while it is disappointing that further investment, will not be sought to increase the passenger offer, we are supportive of the master plan.”