Sunday, March 5, 2017
Airport chief: In post-Brexit Britain, Heathrow must expand
By Tim Wallace
United Kingdom - The Daily Telegraph
A winter tan is almost a requirement of the job for the chief executive of Heathrow, and John Holland-Kaye displays just the healthy glow one would expect from the man running the UK’s biggest airport.
This means it is hard not to envy his job at a meeting on a rainy afternoon in a pokey side room at the Queen Elizabeth II conference centre in the shadow of the Palace of Westminster.
The soggy location is a sign of Holland-Kaye’s most pressing current task. He must lobby politicians and businesses to continue Heathrow airport’s momentum towards a third runway.
Holland-Kaye is here to speak to the annual conference of the British Chambers of Commerce. As a sponsor of the event he gets a top slot on the agenda, going on shortly after Boris Johnson, George Osborne and John McDonnell.
The aim is to win and sustain support for the expansion of the airport, easing controversy around the project to help it meet the timetable for construction, due to finish in 2025.
In October Heathrow won the Government’s backing for its expansion, beating its rival, Gatwick, after an extraordinarily drawn out process.
Although Holland-Kaye had previously opposed Brexit, he credits the vote with helping Heathrow win approval to expand.
“Once the UK had made its decision to leave, the decision on airport expansion became obvious. We handle 30pc of UK exports outside the EU but we’re at capacity,” he says.
“If you want to be a global Britain, you have to expand your global airport, there is no question about it.”
The Brexit vote took him by surprise, but he has quickly found the benefits. With Heathrow’s importance as a centre for trade and travel, “we’ve had a bit of a wake-up call, we have to become global, and regain that sort of entrepreneurial spirit,” he says.
There have been unexpected benefits already, such as the boost to shopping at the airport, the weaker post-vote pound making its shops more attractive to overseas buyers.
This new attitude on Brexit flows beyond the expansion of Heathrow alone, with the airport’s chief vigorously explaining the potential benefits of a break with Brussels.
“It is rare for an economy as big as the UK to have a chance to reshape its place in the world,” he says.
Backing the Prime Minister’s efforts may mean Holland-Kaye will be in Theresa May’s good books when it comes to Brexit negotiation demands, and Holland-Kaye has set out his wish list for what Heathrow would like to see achieved after the UK’s departure, in terms of border controls, entry systems and the like.
“We want to make sure we have a system which is as quick and simple as possible for people who legitimately have the right to get into the country, and the same with goods. As a trading nation, that should be perfectly achievable. It should be a competitive advantage for the UK because we can set our own rules to some extent,” he says.
That positive sentiment matches the Prime Minister’s, as does his nod to security: “We are Britain’s front door. We want to be a secure front door, but also a welcoming front door.”
Bosses in sectors such as banking are grumbling loudly about Brexit negotiations, but Holland-Kaye sounds far less distressed.
“They [the UK and EU governments] understand aviation isn’t like some other industrial sector, it is the enabler to all other industrial sectors. How are you going to export without aviation, certainly for high value goods? So it is high on their list of things they want to fix early,” he says confidently.
If the aim is to go global, the Cumbrian-raised chief executive is also keen to make sure the expansion project does not sound distant from the rest of the UK, enthusiastically listing recent extra flights to Inverness, Aberdeen, Leeds Bradford airport and other decidedly non-London locations.
This applies to construction, too. He wants to build as much of the airport off site as possible, in factories close to the source of raw materials, before bringing them in by train for final assembly, avoiding dirty and unsightly road-clogging convoys of lorries and trucks bringing materials to west London.
Such a move also allows him to argue that the economic benefits of the vast project are spread nationally.
The environmental impact of expansion is also a focus for the airport, which is regularly targeted by protesters objecting to the carbon emissions from its planes.
A new strategic plan pledges to expand the airport without any extra emissions. Unlikely as that sounds – air travel is a major source of emissions and Heathrow’s expansion is designed to allow more flights – Holland-Kaye believes it should be possible.
“That is a really big challenge, it is not something that we might have aspired to five years ago, but now we see that we could do that and it is a really strong statement of intent on how we want to operate the company,” he says.
The airport has swapped all of its lights for LEDs and is pushed suppliers to operate in a more environmentally friendly way.
Perhaps more importantly 90pc of big airlines have signed up to a plan to find ways to expand without extra emissions by 2025, the year in which the new runway is due to open.
Cleaner engines also hope to be quieter, which, combined with fewer late night flights, should cut noise pollution for local residents. Training and education schemes, all the way down to primary schools, are also designed to
aid the airport’s neighbours.These all nibble away at pockets of opposition to the expansion, whether it be groups which want the economy to be rebalanced away from London, or climate change activists, or locals who want peace and quiet instead of the late-night roar of jet engines overhead.
As well as placating some of those campaigners, this also shows the planning authorities the company has taken complaints into account.
The most fundamental objection comes from those whose houses will be demolished to make way for the new runway. No careful planning can get around the fact that expanding Heathrow means thousands of local residents will lose much-loved homes which many intended to live in for the rest of their lives.
The airport has raised its compensation offer beyond the usual levels required by compulsory purchase laws for the roughly 4,500 properties. Residents will be offered a sum equivalent to an estimate of the “unblighted” market rate, that is, the price the house might get if Heathrow was not expanding, plus 25pc, as well as moving costs and stamp duty payments.
Would the chief executive be happy with that if his home was going to be demolished? “Yes I would, actually.” Holland-Kaye insists, adding: “We have to do the right thing by people.”
More of this discussion may come out in the rest of the planning process. The expansion still needs to go through Parliament and then more consultations. But Holland-Kaye says he expects the process to stick to a tight timetable while also building support for the project.
“It is a very consultative process, it requires us to respond to their concerns and either build them into our plans or explain why we haven’t, and that is a way of building consensus,” he says.
“Our plans are much better today than any previous plans we’ve had, because we’ve done a lot of consultation already.”
In his speech to businesses at the conference the chief rattled through the benefits of the plan.
It will result in more training and engineering expertise, he said, provide jobs across the land for suppliers, produce research and development in green technology, promote exports and much more.
“I’m sounding like a politician now,” he chuckles as he pauses for breath.
But that is exactly what Holland-Kaye needs to be to make sure he keeps the project moving over the next eight years.
John Holland-Kaye: CV
John Holland-Kaye grew up on a farm in Cumbria before working around the world in consulting from 1986, which took him to the US, Australia and the Philippines.
From 1995 he worked for Bass brewers in the UK, then moved into construction in 2002, working in the UK and the US.
He joined Heathrow in 2009 and worked on building terminals two and five, before taking the top job at the airport in 2014.
He is married and has two daughters.
2014 – Present: Chief Executive Officer, Heathrow Airport Holdings Limited
2012 - 2014: Development Director, Heathrow Airport Limited
2009 – 2012: Commercial Director, Heathrow
2002 – 2009: Taylor Wimpey, Divisional CEO
1995 – 2002: Bass Brewers, Managing Director, National Sales Division
1986 – 1995: Strategy Consultant, LEK Consulting