Despite signs of an UK economic slowdown, business aviation is booming, and corporate operators are looking at smaller airports outside the capital for extra capacity.
If Britain is barrelling towards recession, you would expect corporate and private aviation to be a barometer of plunging economic confidence. But judging by the traffic figures and expansion plans of the country´s business aviation airports, the sector shows little sign of starting a descent.
With several of London´s traditional gateways for corporate travellers at, or fast approaching, capacity, the focus is moving to airports further from the capital that do not have slot or operating constraints and are keen to attract more business aviation, both passengers and maintenance.
As next week´s Farnborough air show again aims to entice the corporate aviation community to its dedicated business aircraft park, across the runway the TAG Aviation-operated business-only Farnborough airport is a symbol of London´s status as Europe´s centre of business aviation. The former military facility was taken over by TAG in 2003 and extensively rebuilt three years later with a striking terminal building and hangar work begins on a second hangar next week.
The airport also houses the UK-based sales and marketing operations of a number of airframers, including Bombardier, Cessna and Embraer, with HondaJet poised to be the latest arrival. FlightSafety International has a training centre on the site and a 180-bedroom hotel opens later this summer.
Walk into the terminal on any given day – not easy unless you are there on business, thanks to high security – and you will invariably spot a celebrity from the world of sport or entertainment, a business leader or a Gucci-clad Russian oligarch laden with designer luggage.
At any time, the apron is packed with more than a dozen business jets, many of them large cabin. Farnborough has become the UK´s busiest and most prestigious business aviation airport with more than 26,000 movements in 2007, up from 17,000 in 2004.
"Business aviation is booming and we are on the receiving end of that growth," says airport chief executive Brandon O´Reilly. "There is substantial demand for access to London from business aircraft users."
Farnborough´s problem is that, despite being the cradle of British aviation (Samuel Cody made his maiden flight from Farnborough in 1908 and the Royal Aircraft Factory was founded there in 1911) and home to several aerospace and defence companies including BAE Systems and Qinetiq, not everyone in the local community welcomes that demand. Local authority planning restrictions limit the airport to 28,000 movements a year and, according to O´Reilly: "We are now forced to turn people away."
TAG has launched a public consultation process to win residents´ support for its growth plans. As part of its charm offensive with the local community, it has introduced a quiet flying programme designed to alter flight patterns and reduce residents´ exposure to noise. But, although the airport has a hypothetical capacity of up to 100,000 movements a year, there is little prospect of Farnborough being allowed to operate at anywhere near that figure in the foreseeable future.
Instead, O´Reilly says he wants to "grow the airport responsibly", something that may involve continuing to position Farnborough firmly at the top end of the market: in the 12 months to May, for instance, the airport saw a 60% growth in the number of airliner-size business jets using the airport.
London´s four main airports – Heathrow, Gatwick, Luton and Stansted – have the distinct disadvantage as business aviation hubs of having to share out slots with passenger airlines.
Of the four, Luton is the most important and was formerly the country´s biggest business aviation hub. Signature Flight Support is the main fixed-base operator there, with its own hangar and handling more than 13,000 movements a year. Gulfstream has its European headquarters and service centre at the airport, while helicopter charter and aircraft handling operator Harrods Aviation opened a refurbished FBO there in January (it has a second FBO at Stansted).
City airport in London´s Docklands is the closest airport to the capital´s two financial districts. Alongside its scheduled domestic and European commuter shuttles it has been successful in attracting business aviation users. Until 2002, the airport had "virtually zero" business aviation, but after launching a dedicated Jet Centre that year it has grown to 14,000 movements annually, about 12% of overall traffic, according to the airport´s ramp services director Darren Grover.
The business terminal has just been expanded for the third time with a £1 million (.95 million) facelift, making it double the size of the original building. Fractional operator NetJets Europe and aircraft management company ExecuJet have both opened their own lounge areas in the terminal.
The facility is firmly pitched at the busy Canary Wharf financier, typically on a day trip and whose aim is to board his aircraft with as little fuss as possible, says Grover. "It´s not a typical American luxurious FBO. Our VIPs want to go through quickly and get into the air: they don´t want to spend time in our lounge, nice as it is."
London City also operates the Jet Centre at RAF Northolt, in the north-west of London, sharing the terminal with the Royal Air Force. Although the nearest airport to the West End of the capital and well-connected to the motorway network, the airport´s downside is that it is restricted to 7,000 movements a year.
Biggin Hill airport, south-east of London and also within the M25 orbital motorway, enjoys similar proximity to the city centre, at just over an hour´s drive from the financial districts. Initially an RAF base and then a general and commercial aviation airfield, Biggin Hill has in the past few years become one of the capital´s most popular business aviation gateways.
Although its operating hours are restricted, its great advantage is that it is effectively unconstrained on slots, with the airport only using around 15% of its permitted 250,000 movements a year. In addition to a passenger facility operated by airport owner Regional Airports (RAL), Jet Aviation opened a hangar and FBO in 2002 while charter broker Air Partner is investing GBP 7 million in its own facility at the airport.
Biggin Hill´s other pluses are its relative obscurity – high net-worth individuals can slip in and out anonymously – and its room for expansion, says Michael Girps, general manager of Jet Aviation (UK), who claims the FBO´s business year-on-year grew by 40% in the first quarter.
Maintenance is also performing particularly well – Jet Aviation specialises in Bombardier Challenger, Cessna Citation, Dassault and Hawker Beechcraft jets, handling about eight aircraft a day. "The lack of slot restrictions and the airport´s pricing structure make it very competitive," he says.
Capacity potential was also the attraction for Air Partner, which moved to Biggin Hill when it purchased Gold Air International in 2006, says the company´s chief operating officer Mark Briffa. "With other private airports straining at the seams and turning away existing business, we decided to consolidate our plans at Biggin Hill and build one state-of-the-art hangar with associated services and facilities," he says.
"Biggin Hill´s location and capacity, combined with Air Partner´s managed fleet and client base, will enable us to develop a premier private jet base that fulfils all our clients´ needs and attracts new corporate users to the facility."
Beyond the M25, a number of other facilities market themselves as "London" airports, or at least as regional airports that offer relatively speedy access to the capital.
The airport in the Essex seaside resort of Southend is also owned by Regional Airports and is around the same distance from London as Stansted and Farnborough, albeit just off the motorway network. The airport had about 3,500 business aviation movements last year – about 8% of total traffic – but has potential to grow as a hub for business aviation, says airport managing director Alastair Welch.
Although RAL has put the aircraft up for sale, plans are in place for a rail link to the City of London next year and a runway extension from 1,600m (5,250ft) to 1,800m in 2011, which would allow it to cater for most transatlantic business flights. Although the VIP facilities are relatively basic, Welch says the airport´s key selling point is its convenience.
"Passengers can be pre-cleared and drive their car up to the side of the aircraft," he says. Maintenance, repair and overhaul is also a big part of the mix with Air Livery, ATC Lasham, Flightline and Inflite operating hangars.
Lifting the LYDD
Around 90km from the capital, but still marketing itself as "London Ashford" (the nearest big town), Lydd airport on the Kent coast also sees big potential in business aviation, even though it represents just over 1% of the airport´s 30,000 annual movements.
Airport owner FAL, which bought Lydd in 2003, opened a business aviation terminal two years later which managing director Zaher Deir claims is "one of the best FBOs in the UK". Proposals are also afoot to extend its runway to 1,800m.
Despite its distance from London, Deir says the fact that it operates round the clock every day and is outside the congested London Terminal Movement Area of airspace also makes ease of access its biggest selling point. A new high-speed rail link next year from Ashford (15min drive away) will take passengers to London in less time than from Luton or Stansted, he says.
Lower Cost Base
Another airport undergoing a major facelift and promoting itself as within easy reach of London is Oxford. The airport – a joint venture between property groups Dawnay Day and the Reuben Brothers – earlier this year completed a strengthened 3,500m2 (37,500ft2) apron and will shortly open a business aviation terminal, branded Oxfordjet, which will be three times as big as the existing building.
The airport has also been able to increase its opening hours from 06.30 to 22.30 every day. It had about 50,000 movements last year, with around 10 business jet movements a day, but managing director Steve Jones is confident that will grow.
"We have a lower cost base compared with the London airports that cater for business aviation, we are less than an hour´s drive from the West End of London and, importantly, we have slot availability," he says. Although the university city is further from the capital than most of its competitors, according to the airport the fact that the M40 motorway is relatively uncongested means it takes only 16min longer to reach than Farnborough.
These journey figures all need to be taken with some scepticism but the airport insists its location puts it in striking distance of many London business destinations as well as much of the UK´s high-tech industry in the Thames Valley and south Midlands.
The airport is also attracting new business from charter and maintenance operators. PremiAir is moving its Hawker Beechcraft service centre from Blackbushe airport to a refurbished hangar at Oxford (the Surrey airport will remain its helicopter maintenance base). The airport will also be home to a new air taxi operation flying four Embraer Phenom 100 very light jets. The business, which plans to launch services in May next year, will announce its name at next week´s air show.
It is not just airports in the south-east that have ambitions to build their business aviation market. Newquay in Cornwall serves one of the UK´s top leisure destinations. It says its FBO, opened in 2003 and run by Midwest Executive, saw business aviation movements grow 11% in 2007 to 903, with a further 10% growth forecast this year.
"There´s been a movement of wealth to this region, with business people commuting to London, a lot of property developers and corporate hospitality," says Midwest Executive managing director Nick Weston.
The local authority-owned airport, which still doubles as a Royal Air Force base until November, is also popular as a technical stop for transatlantic flights because of its westerly position and long runway. "We saw a 28% increase in fuel sales last year," he adds.
Coventry airport traditionally has specialised in air cargo, but owner Howard Holdings has ambitions to turn it into the "London City of the Midlands" as part of a much larger airport expansion now going through the planning process.
Blue City Aviation has been operating the FBO since earlier this year, although airport managing director Chris Orphanou says the long-term plan is to build a bigger facility catering for business aviation, together with a heliport.
"Our business strategy includes bolstering the amount of corporate jet charters and with our 24/7 availability and close proximity to all the major motorways, we have a real advantage in serving this buoyant fraternity. Our costs too are considerably lower than the London-centric business aviation airports," he says.
Guy Lachlan, chief executive of the British Business and General Aviation Association, says that although "apocryphal" evidence points to some softening of demand in charter and for business aircraft in the used market, the sector in the UK continues to flourish and has been a significant contributor to the country´s economic growth in the past decade.
There have been success stories among airports trying to attract business aviation, he says. However, any brake on their ambitions is less likely to come from a slowing economy then from local planning restrictions, with several airports facing restraints on capacities and operating hours and smaller, local authority-run general aviation airfields under threat from housing and other developers.
Business aviation may be growing in popularity but, in the UK and elsewhere, it always faces a battle to be loved.
Farnborough Means Business
Farnborough International will throw open its doors on the 13 July to the largest and arguably most challenging business aviation showcase in the history of the biennial event.
The question mark that loomed large less than half a decade ago over the show´s suitability as a business aircraft venue has finally been erased – but not without a great deal of toil and ruthless determination by show organisers. "We have worked extremely hard to get business aviation back to Farnborough," says Farnborough International head of marketing Philippa Ewart.
As a declaration of its commitment to business aviation, the Society of British Aerospace Companies in 2004 introduced a dedicated business aviation park for manufacturers looking for direct access from their chalets to their aircraft. Despite a lukewarm reception in its first year from exhibitors and visitors alike, the area – now revamped and modernised – has grown from strength to strength. In 2004, 15 business aircraft were on display, in 2006 32 aircraft and this year around 40 aircraft will be exhibited.
Dassault, Hawker Beechcraft and Gulfstream now have chalets in the business aviation area known as J-row, while Bombardier, previously tucked away at the end of a distant row of chalets, has introduced this year a panoramic hospitality area close to the park.
The surface area of the business aircraft park has also expanded considerably. "The demand has been so great that we have run out of room and may have to invest in a larger facility in 2010," says Ewart.
The area, which also began as a three-day initiative, is now to last seven days. "We still offer companies an opportunity to pull out after three days, but most are remaining for five or seven days," says Ewart.
For the airframers, Farnborough complements the popular EBACE business aviation convention held annually in May, luring corporate, private government VIP and special mission customers.
"EBACE is the second biggest gathering for business aircraft buyers, and the largest outside the USA. Even with the continued growth of EBACE, Farnborough remains an important venue for the business jet segment," says Bombardier, which will be displaying its Learjet 60XR, Challenger 605 and Global Express XRS business jets.
"Shows of this magnitude allow us to connect with aircraft buyers, government delegations, financial analysts, suppliers and an impressive gathering of business and trade media all in one spot.
Gulfstream says it will have a G550 in the static display and a full-scale mock-up of a portion of the new G650 in the exhibit hall. It says: "Given this is our 50th anniversary year of the first flight of the Gulfstream GI, and more than 50% of our sales recently have been international, we determined that a presence at Farnborough, even so soon after EBACE, was warranted."
This position is mirrored by Dassault, which will be displaying the ultra-long-range Falcon 7X and large-cabin 2000EX. The company says: "The UK still offers strong market opportunities. Farnborough is a good place to see our English customers as well as our Middle East and Russians clients that are London based."
Cessna returned to Farnborough in 2006 after a six-year absence and this year will be displaying nine aircraft in a new dedicated area outside the business aircraft park, below the Textron chalet. "We have made a concerted effort to accommodate them," Ewart says. "We also will try to ensure that all of our government and VIP delegations from over 40 countries will visit the business aircraft manufacturers and the aircraft park – the business potential is huge."