Glasgow Prestwick airport : Survival of the fittest
Published : July 2008
With its flexible approach and a firm eye on the future, Glasgow Prestwick airport is Scotland’s fastest growing airport. Becky Done asked chief executive Mark Rodwell about surging ahead in a challenging market
Without Glasgow Prestwick airport, Scotland would have seen around 240,000 fewer visitors last year; the Ayrshire area would have seen 780,000 fewer; and Scotland as a whole would be around £200 million worse off. The airport is projecting an increase in its 2.4 million passengers next year, and its major carriers are planning to introduce new routes. Impressive within an industry said to be struggling.
“Ryanair has just announced another three routes from our airport – to Tenerife, Faro and Malaga – starting this winter,” chief executive Mark Rodwell explained. “We’re also having positive discussions with Wizz Air. Their latest route – Poznan – has proven to be very popular and successful.”
“I think the demand for air travel is increasing,” he explained. “The fuel situation may discourage people for a while, but I am certain the growth will return. If you look back in history at similar periods – for example, 9/11 and SARS – you’ll see that the growth in passenger traffic rapidly increased as soon as that crisis was over. Right now it will be survival of the fittest, and we’re very lucky to have what I believe are the fittest passenger and freight operators running from our airport.” By way of example, Rodwell cites Ryanair’s 20 per cent rise in profitability over the past twelve months.
Infratil, the company which owns Glasgow Prestwick in addition to Kent International and Germany’s Lubeck airport, recorded a turnover last year of around £30 million from its European airports, a large proportion of which was generated by Prestwick. Rodwell has found that being linked to the two other airports provides a level of flexibility when negotiating with airlines: “What we’re able to market is not just Prestwick Airport but also Kent or Lubeck as well – so we can present it as a package. Therefore if one
particular destination doesn’t necessarily suit an operator, we’re able to offer other options." Prestwick is forward-thinking in its approach to attracting airlines and retailers. “We do a lot of work before we actually go to airlines and present to them,” Rodwell explained. “Gone are the days when airports just sat back and waited for airlines to come and knock on their door. We’ve got sophisticated modelling tools now that we use to look at the route economics, to work out whether or not a route is likely to be profitable. And then we can go to the airlines with specific routes that we believe are both marketable and profitable.”
Rodwell is particularly proud of the airport’s track record of attracting major retailers such as Nuance Tax- and Duty-free, WH Smith, Yates and Starbucks to the terminal. Major car hire companies like Hertz, Avis, Europ Car and Sixt have also chosen to operate out of Prestwick. “We have some major companies who wouldn’t necessarily come into an airport of our size, but we’ve been able to attract them and they’ve all been very, very successful. Why? Because we’re open to different options of structuring things, and we work cooperatively with our retailers. The feedback we get from our retailers is that we have that ‘can do’ attitude – and that’s something they’re looking for.” It is this key element that Rodwell believes makes Prestwick stand out: “The retailers deal with many companies who put everything in place and say they want the business, but then it’s a real struggle to get it in place. We work with our retailers on a daily basis, on issues such as managing the flow of passengers to increase retail spend while also getting the aircraft out on time!”
The ‘can do’ attitude is also a major factor in other airport successes. In 2006 when the liquid restriction came in, Rodwell received notification from the Department for Transport at 2am. “Many airports weren’t able to open for a number of days; but we mobilised our management team instantly. We all came in, the team was together, we worked out what we needed to do and we put it all in place. It was all hands on deck. We had the operation up and running by 5am,” he said, “and had all of our flights going out that morning.”
The success that day was due in no small part to Prestwick employing all its staff – apart from refuelling personnel – in-house. “We have a better control over delivery of service,” said Rodwell. “We didn’t have cross-business politics or anything like that – it was one team, working together.”
In total there are 480 staff working at Prestwick, and the company has just concluded a successful wage negotiation. This, said Rodwell, was “very well received. We’ve got a very positive relationship with both our employees and the unions. People have recognised that this is a difficult environment,” he acknowledged, “but at the same time, we wanted to recognise our employees. We’ve come up with arrangements that pay a base increment, but the rest is linked to productivity gains – so we’ll have sickness and absence targets, and if these are met or maintained then the employees will share in the benefit.”
Staff at the airport have also regularly ensured the smooth reception of passengers destined for major international events, such as the Gleneagles G8 summit, and the UEFA cup final; in addition, Prestwick has been the site of a national hijack emergency exercise in which all levels of government were involved. “We get very positive comments coming through about the ‘can do’ attitude of our staff which has been shown time and time again when we’ve held major events. Everybody gets involved and does what needs to be done.”
Rodwell is confident that the airport’s partnership with the budget airlines places it in a powerful position for the future. “Low cost travel will continue to grow and prosper, but the legacy airlines are struggling more and more. In fact, some of them are now talking about introducing charges for on-board meals, and baggage. That would have been unheard of in the past for a full-service carrier – but they’re adapting their business model to what the budget operators have found to be very successful. It will be the fittest who remain out there, and the airlines are having to change their operating models to survive.”
For Rodwell, there is no doubt that Glasgow Prestwick will continue to grow and flourish, despite public concern for the industry as a whole. “No doubt there will be casualties in all of this,” he acknowledges, “but the strong players will use that to their advantage.” END