A successful economy needs gateways – Southampton Airport interview
In the eighth interview of our Southern Powerhouse series, Neil Garwood, Managing Director of Southampton Airport, discusses the importance of the aviation industry for the local economy, and the part it plays in connecting the region.
While Heathrow and Gatwick have been slugging it out in the court of political and public opinion to gain approval for their new runway plans, the south’s principal regional airport has expansion plans as well.
Looking at the bigger picture, the country’s two largest airports account for just over a third of passenger numbers – 80 million at Heathrow in a year and 46 million at Gatwick. For Southampton, the figure is just under two million. The airport, according to managing director Neil Garwood, supports 1,000 jobs with 2,000 more in the supply chain, and contributes £160 million to the local economy.
Master plan for expansion
“In terms of our economy, I can’t overstate the importance of a regional airport providing connectivity,” Garwood says. “A successful economy needs gateways, and 3.5 million people live within an hour of Southampton Airport.”
In terms of convenience, it’s 99 steps from the railway station to the terminal building, but ironically it’s a lack of distance which the airport needs to address if it is to meet projected demand. The problem is that the runway is one of the shortest in the UK, which is why the airport hasn’t attracted much in the way of lower cost, high volume operators.
The airport’s master plan to 2037 sets out an increase in direct employment by 50% and economic contribution boosted to £400 million, predicated by a 164 metre runway extension. The infrastructure investment required is in the order of £100 million.
The resulting rise in passenger numbers, projected to reach five million, would take Southampton from 17th, to the edge of the top ten airports in the UK, although Garwood interjects to say that it’s not about league tables, but meeting demand.
In an initial survey, 62% of those asked gave it a favourable response, with 396 individual pieces of feedback. The challenge is how to move from acceptance to delivery. “The will is there, but joined up coordination and cooperation has to be consistent,” says Garwood.
He makes the point that in the process of getting major infrastructure projects underway, there can be a leadership vacuum caused by the multiplicity of organisations involved, that will each have different priorities. The consequence is that usually the project is in ‘limbo land’ for years.
“We should be bold about the future of air transportation,” asserts Garwood. “Aviation generates only two per cent of global carbon emissions (cows are responsible for 18%). Our airport will be carbon neutral by 2030, by which time planes could be powered by electricity. However, regulation has to be on a more pan-government, global level; China has estimated that in order to meet to the increase in passenger numbers, it will need to build 215 more airports in the time we hope to complete our runway extension.”
Garwood doesn’t need the commercial equivalent of a crystal ball to predict one particular line of objection to the proposals for Southampton, but explains: “Every form of transport creates noise, so if an economic case is made, the political will is there, and the development will deliver sustainable economic prosperity for the community, there has to be a happy medium found.
“Outside the boundary fence is not something we can determine or be accountable for, but we recognise that there will be infrastructure elements which will be constraints unless they are addressed; the mile from the M27 and M3 to the airport will need investment.”
Meanwhile, Garwood is concerned that aviation is at a fiscal disadvantage because of taxation. “This isn’t an anti-tax message but a recognition that it can be a clunky financial instrument, which in our sector is limiting economic potential,” he says, referring to air passenger duty. “It is a constraint to growth, and if that’s the intention, then government should say so rather than giving it an environmental gloss. It affects regional airports disproportionately because passengers on domestic flights pay the same amount there and back, but if they travel to France for example, the return cost is less.”
Taking a macro-economic view, Garwood suggests that more autonomy would help the region. “Devolution in the south is not as evolved as elsewhere in the country; there is an opportunity for central government to recognise that with it, the South could achieve more and in a shorter time frame. What we struggle with is a sense of identity; when we say the South, do we really mean the South East?
“While the country needs to be able to support and develop less economically active regions, that shouldn’t be to the detriment of those which are providing the greater possibility of delivering growth. The challenge is, if we direct public and private investment away from the south, what opportunities for overall national prosperity are we not going to be able to capture here?”
Find out more about the Southern Powerhouse here, or please contact us.