Location of Business (Heathrow Airport)

[HeathrowAirport]

I have to complete an assesment based upon a location of business for London Heathrow Airport for AS levels. The folowing headings must be used to structure my evidence.

Access to raw materials
Distribution costs
Access to markets
Communciations and ICT
Scalling up or scalling down
Land cost
Labour costs and skills available
Government influence
EU influence
International location
Historical

Some of these I can do myself, but stuff such as information regarding ICT and Comms, Labour costs and land costs of Heathrow would be quite difficult to gain?

Sorry if this in the wrong place, but I hope you guys can help!

[AndoniP]

ICT and comms will relate to whether or not the building has the necessary comms and networking infrastructure to handle connectivity. For instance, telecoms demarcation points for internet leased lines and other circuits, and whether there is structured cabling installed in order to provide a basis for your office's network.

bear in mind that you also need to know how much power your servers, PCs and monitors etc will need, whether the floor power can handle it all, whether there is emergency generator / UPS backup, and so on.

land cost i guess would be the floor space rental per square metre i would assume.

[HeathrowAirport]

Hello AndoniP,

That actually helps, but regarding floor space - and land I also need to go into detail about the airports price as far as the perimeter, as it's not for an individual business but BAA Heathrow Airport itself. Then looking at Boris Airport, to see if a move would be sustainable.

I am not sure of the legalities if BAA actually own it, or do the UK government lease it to said party, who allow the airport to operate? I just need to know some figures of how much Heathrow costs to operate within it's perimeter, if BAA own the land. Being 1% of GDP I am sure it's pretty damn expensive.

Regards.

[Danscowpie]

Have a look at the City of London website for Labour Costs.

Boris Johnson's office recently supported a survey by a consortium of employers, charities and other well meaning organisations, which revealed that the realistic minimum living wage for living in London and all of it's areas of high industrial employment (i.e Airports, other major transport providers and employers providing attractive employment prospects), should be at least £8.90 per hour.

Labour costs vary enormously as to whether you employ staff directly or via an agency.
Employing staff directly costs require the employer to do all the work in calculating tax and NI contributions, employer liabilities, holidays and pensions where provided.
Agency employment precludes employers from all these obligations, all they have to do is ask the agency for an employee to fulfill a specific task for a specific period of time.
As a result, agency workers either earn significantly less, because it's menial work which anyone can do, or significantly more, because it's highly specialised work which the employer would have to pay a lot more to a full time employee to do, especially if its for a short period of time.

You may already be aware, but Agencies usually charge a mark up of between 30% and 60% depending on the type of employment and the salary.

As for prices at Heathrow itself, that would very difficult to quantify as each occupier of a particular outlet will negotiate an individual price with the BAA.
As far I know, the BAA own all of Heathrow airport and the land within the perimeter, out with that you'll probably find it's all private investment that owns the land.

As far Boris Airport, that will never happen in the current economic climate or in the forseeable future, especially while the opportunity to develop other airports exists.
The costs of Boris's idea are absolutely astronomical compared to the economic return - if there was no other airport it might make sense, but there are many alterantive options which could be expanded instead of another being built.

I'd be interested to know how you get on.

Best of luck.

[tornadoken]

HA: an AS examiner does not expect a Consultant's chargeable Report, but seeks evidence that you are aware of the pertinent issues, and have used more initiative than merely to assemble Google-product. Find (by ringing up) rentals-p.sq.ft. by commercial Estate Agents in the Borough of Hillingdon, then add a rip-off factor for the BAA monopoly. Again, whether you add 25% or 100% doesn't matter - you are displaying your awareness of the economic influence of scarcity. It's the process you are being examined on, not the detailed content, which no examiner can assess.

[WHBM]

HA : You may care to observe in passing in your report that the number of businesses around Heathrow using "raw materials" is very few (in fact I can't think of any), because the type of heavy manufacturing industry that uses these, which has for so long formed the main example for economists, has effectively been priced out of the area by land prices. Almost exclusively it is a distribution/service economy (air transport, of course, beng both).

I wonder if the "communications" refers to the narrow IT infrastructure meaning, or the more general transport etc communications, which of course Heathrow excels in more than anywhere else in Brtain, which is why so many international businesses have their British HQ nearby.

A key issue is also getting planning permission (Government influence) for any business location which may be different to what is there at the moment (eg building offices on farmland). This is practically impossible to obtain for many types of development.

[HeathrowAirport]

Wow - An exceedingly gracious smile on my face. Thanks all for the replies, this does help a lot. Understandably I don't need to give a full figures report, but how much is Heathrow airport valued?

[WHBM]

how much is Heathrow airport valued?
BAA, the owners of Heathrow, were sold in 2006 to investors from Spain, the Ferrovial company, for over £10 billion. When all the costs associated with the purchase are added on, Ferrovial actually paid out several billion more. The bulk of this value is in Heathrow, a minor proportion is represented by the value of the other BAA airports. If Ferrovial were to sell Heathrow (in passing :ok: but that is a separate topic !) they might get about £8-9bn for it today, if they were lucky.

[HeathrowAirport]

Ok thanks very much! Hopefully my class wont get jealous when I finish early again.

[HeathrowAirport]

In reference to Raw materials, is JET A1 fuel directly pumped via underground pumping networks or is the fuel delivered to the storage tanks via tankers from the oil refineries?

I remember reading during the Bunsfield Fire, that it had a pipe to Heathrow? I am guessing every drop is now pumped via pipeage?