John McLellan: Airport anger at Prestwick plan

Gordon Dewar has presided over an aggressive approach to business at Edinburgh Airport. Picture: Jane Barlow
Gordon Dewar has presided over an aggressive approach to business at Edinburgh Airport. Picture: Jane Barlow
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Prestwick Airport is meant to be the Scottish Government’s base for the space race, and it certainly sets off Edinburgh Airport chief ­Gordon Dewar like a rocket.

Saved from closure last year when Nicola Sturgeon said her administration was buying the failed Ayrshire airport for £1, the estimated £7 million annual losses it was incurring are now being met by Scottish taxpayers.

For that, Prestwick now often sees just one passenger departure a day – Ryanair’s flights to Tenerife on Tuesdays and to Malaga on a Wednesday – compared to unsubsidised Edinburgh’s 130 services a day.

Dewar first made his anger public back in April and this week as controversy again surrounded the government’s decision he was in no mood to step back.

“We are spending £25m to prop up Prestwick but if it’s about the jobs, we might as well have given the staff £30,000 each and I bet they’d have all put in for redundancy,” he argues.

“Distortion of the aviation market in the UK is a major issue and it is the government propping up the wrong behaviour.

“At Prestwick you have one flight a day which is all just Scots going on holiday to Spain. Where is the benefit in that? And it needs £25m spent on its runway sooner not later.” Jobs is indeed what it’s all about and even the supposedly pro-market Conservatives support the government intervention because opposing a plan to save local jobs would be a guaranteed vote loser for one of the few Tories who holds a first-past-the-post seat at Holyrood – deputy presiding officer John Scott.

This week a new chairman was announced for Prestwick, ex-Air New Zealand chief Andrew Miller, at the same time as the Scottish Government stunned two private service companies at the airport by what was effectively their forced nationalisation.

At the heart of the government strategy is a dream that Prestwick will become the UK’s first space port, which now seems light years away ­following the crash of Richard Branson’s Virgin Galactic a fortnight ago.

It’s the exact opposite of the strategy now being deployed by Dewar at Edinburgh, under the ownership of Global Infrastructure Partners for the past two years, where investment is based on fast delivery to meet immediate demand.

The new security hall is due to be fully operational next month, with the expanded shopping mall opening early next year in the space occupied by the dingy security area.

The project will cost £25m as part of a £150m masterplan, the next phase of which will be the building of a ­second immigration hall.

Dewar explains: “At the heart of our developments are the people who have to use them, so for the new security hall we made sure it was what the security team wanted, which was a wide room with no pillars and a high ceiling. That cost more money but it was the right thing to do.

“On the other hand we made sure we didn’t include things we didn’t really need.

“And it’s all being funded by the retailers who are getting what they want, which is a better walk-through they know will be better for them.”

The speed with which the changes are being implemented shows what can be done when there is determination and no planning constraints, just 17 months from conception to ­completion, which Dewar says could not have happened under previous owners BAA.

“It would have taken 14 months just to pull together a proposal,” he says.

“We have a just-in-time policy and while there are risks, there is no point in trying to future-proof something for ten years ahead because you have to fund it until the expected demand is reached.”

Dewar has not been without his critics, particularly with the aggressive approach to parking and pick-up charges for which he makes no apology. It now costs an infuriating £3 if a pick-up takes more than five minutes and a fiver if longer than ten.

But squeezing as much cash out of all revenue streams is the key to offering airlines competitive rates to attract more routes which is at the heart of everything the airport does.

“We are very aggressive in selling,” he says proudly. “We have tripled the size of the sales team and invested in data so we are giving airlines the information that plays into their businesses and almost do their profit and loss calculations for them. The reason we can afford to be aggressive on price is because we have opened up other revenue streams, like retail and car parking charges, and we have worked hard on driving down our operating costs.”

The result is the likes of Qatar ­Airways launching direct services to the Gulf, where Dewar ran Bahrain International Airport, a wooing Dewar says started eight years ago.

“We have made Edinburgh punctual and reliable and we have proved the routes can be profitable. There is demand both to and from Edinburgh but the new Qatar routes are 55 per cent in-bound and that means more business coming here.”

Edinburgh-raised, Dewar is hugely optimistic about the city’s future and believes there is massive untapped potential for tourism and higher ­education, especially from the Far East and China.

While he feels the city is not yet properly geared up to deal with a new wave of visitors – especially the number of five and six-star hotels which can handle big coach parties which Chinese tourists expect – the main barrier is the UK’s air passenger duty.

“APD is costing our country. We could attract two to three million more passengers a year, more than half of them in-bound, if we didn’t have that. Which other industry could grow by ten per cent like that?” he says.

The Scottish Government wants APD devolved so it could be abolished, which is also the policy of the Scottish Conservatives, in direct opposition to Chancellor George Osborne.

APD is set to raise £3.9 billion for the Treasury next year and Osborne fears its abolition in some parts of the UK would eventually force in its abolition at London airports.

“Our competition is not Newcastle or Manchester but Dublin, Amsterdam or Copenhagen, but we cannot beat APD because it is bigger than Copenhagen’s charges.

“But we already have differences –Inverness Airport doesn’t have APD –and apart from the Greens there is all-party consensus that APD should be abolished.

“If it went I know I’d have two new North American routes by next summer and it would mean more visitors spending more money so that would mean more money going to the Treasury.”

Another Westminster deal, this time welcomed by the SNP, which has angered Dewar is the £2.8m contract to keep a Dundee-Stansted service going for two years.

“It’s a subsidy of about £300 a passenger and the only regulars are people like Lorraine Kelly and Brian Soutar and I don’t think either of them need public money. Anyone travelling from Dundee to the middle of London is far quicker driving to Edinburgh and flying to Heathrow or City than flying to Stansted.”

He has spoken out before about his belief that airports should stand on their own feet and with politicians at all levels complaining about budget cuts his point is more than valid.

But is anyone listening? It’s about time they did.

Gordon Dewar cv

Age: 48

Education: Forrester High, LSE and Strathclyde University

Employment: Chief executive of Edinburgh Airport (since 2012) and Scottish Tourism Alliance board member

• Previous career: Chief executive, Bahrain Airport Company, 2010-12; managing director, Edinburgh Airport, 2008-10; managing director, Glasgow Airport, 2007-08; Arriva plc, commercial director, UK Regions, 2006-07; First Group Plc, 1999-2006; (First ScotRail, commercial director, 2004-06).

Tram inquiry all smoke and no substance?

MORE fury has been directed from locals at the effect of trams on Princes Street’s congestion, and no-one standing at the top of the Waverley Steps can deny it’s anything other than chaos.

The view that a system designed to tackle congestion is instead making it worse seems fair, because the system which would have made the difference hasn’t been built. All the existing bus services are needed to get people to the tram, so until such times as the tram line is extended it will only get worse.

If a historic university and tourist town like Heidelberg with a population of 150,000 can run a tram network, then why can’t Edinburgh?

I’m just back from a trip to Southampton and it’s just the place to see 24/7 traffic chaos. All you need to do is stick an IKEA and a retail park in the middle of town next to a mall of a size which makes the new St James Centre look like a corner shop.

A city such as Edinburgh needs big solutions for big problems, but the truth is that despite the huge expense, the tram is not yet the big solution needed to make any impression on congestion or pollution.

Will the newly beefed-up inquiry help with any future plans for expansion? It might make some people feel better by making those responsible for the fiasco squirm and the public demand needs to be met, but I’m not sure we’re going to learn much which is not already understood.

Sympathy for car drivers

I have a lot of sympathy for taxi drivers – my dad drove a black cab for 30 years and it’s a hard way to earn a living, especially dealing with the weekend night club trade.

But the new fare of £6.60 for a two-mile trip approved by the council means short journeys are even more wincingly expensive compared to the bus. Expect those day-time lines of empty cabs sitting at ranks to grow longer.

And that is a lot of small businesses with a reason to be grateful the big financial firms are still here with their cab contracts and expense accounts.