The Guvnor
5th Nov 2001, 13:23
From today's Scotsman:
BAA offers port in a storm as airlines try to rebuild
Andrew Murray-Watson Senior Business Reporter
FOR a man faced with the full consequences of the current crisis in the airline industry, Donal Dowds looks remarkably sanguine about life.
As the chief executive of BAA Scotland, which owns Edinburgh, Glasgow and Aberdeen airports, he has to deal with the greatest crisis facing the industry in its history.
Many of the world’s biggest airlines are on the verge of ruin, a large proportion of Americans have become unwilling to fly and the threat of further terrorist attacks haunts the psyche of passengers.
But six weeks after terrorists used commercial jetliners to kill thousands of people and destroy the icon of the financial world, the twin towers of the World Trade Centre, is life slowly returning to normal for the industry?
"Normal is a word you have to be careful with these days," Dowds says. "But things have settled down. Heightened security no longer causes huge queues. We are now sufficiently organised that the travelling public will see no extra delay prior to boarding or disembarking aircraft."
And at Scottish airports, behind-the-scenes security is now tighter than ever . "I obviously can’t go into specific details concerning added measures, but it affects all operators, all employers, and all organisations that operate in airports."
But it seems the great Scottish public have not been deterred from flying by security concerns. Traffic levels were back to normal on 13 September, just two full days after the attacks.
And overall, passenger numbers are up on last year and increasing every month.
Traffic figures for September were up 8 per cent on the previous year and will rise by a similar amount in October.
Although Heathrow and Gatwick, BAA’s two London airports, have been badly hit by the fall off in transatlantic travel, Scottish airports have not suffered to the same extent.
Prior to 11 September, passenger numbers flying from Glasgow to North America was up 58 per cent on the year, but has since fallen to 30 per cent below last year’s levels.
But elsewhere, the short term effects have been negligible.
"What is difficult to predict is what will happen in the long-term," says Dowds.
"The current situation involves a number of different factors. Airline finances have gone from good to bad on a number of occasions, but are currently in a pretty dire state."
He adds that the combination of a downturn in the industry, coupled with the events of 11 September, make this episode unique in airline history and not comparable with the slump during the Gulf War.
"This is not Desert Storm with an identifiable start and finish. The war against terrorism will not be a quick fix, it will take time, years possibly. Because of that, it could feed across and hit business confidence," he says. "It makes predicting the future that much more difficult."
Airlines are not taking any chances. Last week, British Airways and Virgin Atlantic installed reinforced cockpit doors in their aircraft in an attempt to restore confidence.
Dowds welcomes the move, but warns against excessive measures.
"I am personally not in favour of air marshals. The idea of bullets potentially flying around in aircraft does not fill me with confidence at all.
"I am much more in the camp of prevention rather than cure. We need heightened security on the ground to make sure that nobody gets on the plane who shouldn’t be there."
But it seems that it is impossible to totally guarantee passenger safety.
"I don’t believe that there is such a thing as 100 per cent security," says Dowds. "You have to draw a sensible balance in light of the threat that exists to protect passengers. What is acceptable before 11 September is not acceptable now.
"But to go to the point of making security at an airport the same as that at a nuclear facility, for example, would have a tremendous effect, and you then have to question the viability of mass travel."
BAA Scotland has been protected from the fallout in air travel by the massed ranks of the budget carriers. EasyJet, Ryanair and Go all have major Scottish operations, and it is their ongoing popularity that is primarily behind the unprecedented number of passengers flying from Scotland.
For BAA, a Ryanair Boeing 737 full of passengers flying from Edinburgh Airport, paying £10 a time, is just as financially beneficial as a BA Boeing 737 full of passengers paying £200 a time.
"Ours is a volume business - fares do not reflect the charges we make," says Dowds.
The relentless advance of the no-frills flyers is a direct threat to the long-term future of flag carriers. But what action does the likes of BA take to rise to the challenge?
"That’s the $64,000 question," says Dowds. "Flag carriers are asking themselves that very question. How do they respond to the threat? I think they are as a group deciding. They are actively considering how to change the shape of their operations, what products they offer etc.
"I don’t know the answer to those questions and I suspect many airlines don’t either. I would have thought that there will be some competition on price and a greater focus on costs, but I would be very surprised if no-frills will totally replace premium services."
But the rise and rise of Ryanair and its peers can only be good for Scotland. More business people are flying on low-cost carriers to London from Scotland than ever before as recessionary pressures put the squeeze on travel budgets.
This year has already seen a bonanza of low-cost flights, including new routes to Dublin, Belfast and Amsterdam. And there could be more to come, according to Dowds: "The next phase of the development of budget carriers is imminent.
"I believe they will add volume to their established bases in Europe. That will result in Scotland benefiting from lots of additional international services in the next 12-18 months."
If that vision comes to pass, full-fare carriers will inevitably feel the heat, but it is still too soon to see whether the move towards the budget carriers is a short-term reaction to the downturn in the economy or a permanent trend.
With more flights leaving Scotland, there have been calls to upgrade transport links to the airports. In both Edinburgh and Glasgow, rail links have been proposed to take pressure off the roads.
Dowds says the extra choice for passengers would be welcome, but adds: "Personally I have serious questions about the rail proposals. Since Hatfield the costs of rail infrastructure has risen dramatically. At the end of the day, can a country of five million people really afford these links?"
What Scotland certainly can’t afford is vital airports being hit by the airline industry’s current turbulent state. But at the moment, passengers have every reason to be reassured that won’t happen.
BAA offers port in a storm as airlines try to rebuild
Andrew Murray-Watson Senior Business Reporter
FOR a man faced with the full consequences of the current crisis in the airline industry, Donal Dowds looks remarkably sanguine about life.
As the chief executive of BAA Scotland, which owns Edinburgh, Glasgow and Aberdeen airports, he has to deal with the greatest crisis facing the industry in its history.
Many of the world’s biggest airlines are on the verge of ruin, a large proportion of Americans have become unwilling to fly and the threat of further terrorist attacks haunts the psyche of passengers.
But six weeks after terrorists used commercial jetliners to kill thousands of people and destroy the icon of the financial world, the twin towers of the World Trade Centre, is life slowly returning to normal for the industry?
"Normal is a word you have to be careful with these days," Dowds says. "But things have settled down. Heightened security no longer causes huge queues. We are now sufficiently organised that the travelling public will see no extra delay prior to boarding or disembarking aircraft."
And at Scottish airports, behind-the-scenes security is now tighter than ever . "I obviously can’t go into specific details concerning added measures, but it affects all operators, all employers, and all organisations that operate in airports."
But it seems the great Scottish public have not been deterred from flying by security concerns. Traffic levels were back to normal on 13 September, just two full days after the attacks.
And overall, passenger numbers are up on last year and increasing every month.
Traffic figures for September were up 8 per cent on the previous year and will rise by a similar amount in October.
Although Heathrow and Gatwick, BAA’s two London airports, have been badly hit by the fall off in transatlantic travel, Scottish airports have not suffered to the same extent.
Prior to 11 September, passenger numbers flying from Glasgow to North America was up 58 per cent on the year, but has since fallen to 30 per cent below last year’s levels.
But elsewhere, the short term effects have been negligible.
"What is difficult to predict is what will happen in the long-term," says Dowds.
"The current situation involves a number of different factors. Airline finances have gone from good to bad on a number of occasions, but are currently in a pretty dire state."
He adds that the combination of a downturn in the industry, coupled with the events of 11 September, make this episode unique in airline history and not comparable with the slump during the Gulf War.
"This is not Desert Storm with an identifiable start and finish. The war against terrorism will not be a quick fix, it will take time, years possibly. Because of that, it could feed across and hit business confidence," he says. "It makes predicting the future that much more difficult."
Airlines are not taking any chances. Last week, British Airways and Virgin Atlantic installed reinforced cockpit doors in their aircraft in an attempt to restore confidence.
Dowds welcomes the move, but warns against excessive measures.
"I am personally not in favour of air marshals. The idea of bullets potentially flying around in aircraft does not fill me with confidence at all.
"I am much more in the camp of prevention rather than cure. We need heightened security on the ground to make sure that nobody gets on the plane who shouldn’t be there."
But it seems that it is impossible to totally guarantee passenger safety.
"I don’t believe that there is such a thing as 100 per cent security," says Dowds. "You have to draw a sensible balance in light of the threat that exists to protect passengers. What is acceptable before 11 September is not acceptable now.
"But to go to the point of making security at an airport the same as that at a nuclear facility, for example, would have a tremendous effect, and you then have to question the viability of mass travel."
BAA Scotland has been protected from the fallout in air travel by the massed ranks of the budget carriers. EasyJet, Ryanair and Go all have major Scottish operations, and it is their ongoing popularity that is primarily behind the unprecedented number of passengers flying from Scotland.
For BAA, a Ryanair Boeing 737 full of passengers flying from Edinburgh Airport, paying £10 a time, is just as financially beneficial as a BA Boeing 737 full of passengers paying £200 a time.
"Ours is a volume business - fares do not reflect the charges we make," says Dowds.
The relentless advance of the no-frills flyers is a direct threat to the long-term future of flag carriers. But what action does the likes of BA take to rise to the challenge?
"That’s the $64,000 question," says Dowds. "Flag carriers are asking themselves that very question. How do they respond to the threat? I think they are as a group deciding. They are actively considering how to change the shape of their operations, what products they offer etc.
"I don’t know the answer to those questions and I suspect many airlines don’t either. I would have thought that there will be some competition on price and a greater focus on costs, but I would be very surprised if no-frills will totally replace premium services."
But the rise and rise of Ryanair and its peers can only be good for Scotland. More business people are flying on low-cost carriers to London from Scotland than ever before as recessionary pressures put the squeeze on travel budgets.
This year has already seen a bonanza of low-cost flights, including new routes to Dublin, Belfast and Amsterdam. And there could be more to come, according to Dowds: "The next phase of the development of budget carriers is imminent.
"I believe they will add volume to their established bases in Europe. That will result in Scotland benefiting from lots of additional international services in the next 12-18 months."
If that vision comes to pass, full-fare carriers will inevitably feel the heat, but it is still too soon to see whether the move towards the budget carriers is a short-term reaction to the downturn in the economy or a permanent trend.
With more flights leaving Scotland, there have been calls to upgrade transport links to the airports. In both Edinburgh and Glasgow, rail links have been proposed to take pressure off the roads.
Dowds says the extra choice for passengers would be welcome, but adds: "Personally I have serious questions about the rail proposals. Since Hatfield the costs of rail infrastructure has risen dramatically. At the end of the day, can a country of five million people really afford these links?"
What Scotland certainly can’t afford is vital airports being hit by the airline industry’s current turbulent state. But at the moment, passengers have every reason to be reassured that won’t happen.