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The regional view

The new chair of the Regional and Business Airport Group (RABA), Neil Pakey, reveals his plans for the organization’s 33 airport members in a post-Brexit era

 

How does it feel to be named chair of RABA?
It’s exciting. I’ve always tried to support regional airports, given the massive positive impact they have on local economies and the unique voice they provide on issues facing the industry.

What’s your professional background?
I was the CEO of the Peel Airports Group for a number of years, which included Liverpool John Lennon, Doncaster Sheffield, Durham Tees Valley and Barton Aerodrome, and I’ve just finished a three-year contract as the CEO of the Shannon Group, which included Shannon Airport and its associated aviation and non-aviation business parks. I also worked in the European Commission’s air policy unit for three years, which I think will be particularly relevant during Brexit. From a trade body perspective, I served as chairman of the Airport Operators Association (AOA), elected for three terms. Hopefully, I can put this experience to good effect for RABA.

What will be your first task in the new role?
Talking to members about the key issues they face and what can be done about them – there are 33 airports making up our membership, and we hope to increase this to 40 in the coming months. Secondly, RABA is still a relatively young trade body, so increasing its profile and ensuring our target audiences know who we are and what we are advocating is the next priority. Also, RABA needs to engage proactively with other regional and business stakeholders, local authorities and business groups. Basically, anyone that shares our economic agenda and recognizes the contribution our members can make to achieving it.

What do you think the main challenges will be?
We are currently finalizing a 12-point response to Brexit for the new government ministers with responsibility for aviation. There are some huge issues that specifically affect our members and which are business-critical to them – more than larger airports because of the relative economies of scale. But Brexit has thrown up potential opportunities as well as uncertainty. Under EU law, British and Irish airports have been unable to replicate the tax-free zones that many global businesses find so attractive. When you consider our need to be globally competitive, this doesn’t make sense.

We should be able to develop our smaller airports as key trading ports, declaring them as free trade zones with special tax and investment benefits, and modern, hi-tech research, manufacturing and logistics clusters, in every part of the UK, not just the south-east. The challenge for the government is to respond quickly and imaginatively, and deliver some of these opportunities.

Could Brexit really have a major impact?
It depends on the performance of the UK politicians and civil service. Can they protect our regional airports by ensuring we retain the free market access that the EU single market agreement has given us? We see this as fundamental. Then it’s a case of exploiting any opportunities Brexit could offer us by removing regulatory burdens created by the EU, not to mention getting our duty free industry back to where it was, with additional revenues for airports and tax-free shopping for passengers travelling to EU countries.

How strong is business in the UK at the moment?
The period since the financial crisis in 2008 has been tough for RABA’s regional and business airport members, but 2015 and the first half of 2016 had seen a welcome turn around. At the moment, however, there is a concern that another economic downturn will accompany Brexit.

We want to change how the government sees the UK’s regional airports. Around the world, regional imports are critical infrastructure assets serving local economies, offering high quality domestic and international connectivity, and a location for aerospace and other aviation-related or dependent businesses. This is why some states retain them wholly, or partially, in public ownership. Crucially, these states recognize that the cost of running air traffic control, a fully-serviced fire service, policing and security are obviously more burdensome with less passenger throughput.

If we want our regional cities and economies to do well and prosper, we need our airports to be seen as strategic enablers. It’s all very well saying these airports must make money to survive, but the economists know there is more to it. The return on investment goes beyond the airport perimeter fence into communities, and to all the businesses and tourism stakeholders in those regions. It’s those in the regions who need the connectivity and will see a return from any new services or businesses we provide.

So what can the government do?
We’ll be launching a long-term manifesto in the autumn, setting out the policies that we need the government to adopt. This will enable the full potential of our members’ assets. We think our contribution can be substantial, so all we ask is that politicians and civil servants engage with us, so that we can articulate the collective wishes of our members.

What are the benefits of using regional airports over larger ones?
Each of our members has their own unique operating model. Research has shown that passengers want the convenience of flying from their local airport, with connections to hubs like Heathrow and Amsterdam, or through Irish airports for the USA. Heathrow now only has connecting flights to seven airports in the UK, so it’s vital that this increases, which is why RABA members support Heathrow as the best first choice for additional runway capacity in the south-east. Highlighting these benefits will be part of our long-term manifesto in a few months’ time.

July 26, 2016

 

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