Business Weekly - Cambridge, UK

Seat of power: Stansted now earning more revenue from aeronautical business than retail side

This upbeat scenario flies in the face of some irresponsible speculation in some sectors of the national media – and promises to hand the Cambridge-Essex-London corridor a massive financial boost up to the projected runway opening in 2015.

Some national newspapers had reported that Heathrow would get an additional runway and that plans for G2 at Stansted would therefore be scrapped. But I can disclose that the G2 blueprint is almost ready to roll and was close to being submitted before the Christmas break.

Stansted’s owner BAA is awaiting one or two road and railways alignment reports from Government agencies that are integral to the holistic G2 plan and are awaiting these ready to make a formal application in late January or early February.

At the rate government agencies move, one suspects the latter is the more likely scenario. Give or take a month, this determination to press ahead with a second runway at Stansted hands the region a multi-billion pound boost in the long-term.

As a benchmark, Stansted’s plan to work up to its highest projections on annual passenger numbers only takes out 70 properties in the immediate vicinity; Heathrow’s would take at least 700 properties and the comparison in terms of the eco-friendliness of the respective proposals is entirely valid.

A delay from Christmas to February in submitting the G2 application will not affect the long-term timetable. It is anticipated that the inevitable public inquiry to follow will take a year and determination of the outcome by the Government another 12 months after that.

It is estimated that the first stage of the £1.4bn construction project will take four years and incorporate the runway, terminal improvements and apron. BAA is confident it is on track for a 2015 opening.

Stansted is also set to unveil plans for a refurbishment and extension of the departures area in  2008.

A competitions probe into an alleged monopoly of London airports by BAA is ongoing but there is a growing feeling that the attitude of carriers like British Airways could be softening. It was their contention – and that of others including Ryanair – that the alleged monopoly was driving up landing charges for the carriers.

Government sources tell me they detect a growing realisation among the airlines that if Stansted is de-regulated by the CAA it would be allowed to impose much higher landing charges than it has  been levying under the current regime.

“We see a softening of attitude by BA, for example, and it may just be that sensible market forces will prevail and that the airport and the airlines will grow together on cost structures they agree among themselves.”

For the first time in its history, Stansted is generating more revenue via aeronautical charges than are emanating from the retail and car parking sides of the business, which further strengthens its financial position and underpins BAA’s long-term investment plans for the Essex hub.

Business Weekly understands that aeronautical revenues have shot up from around 30 per cent of Stansted’s business to nearer 54 per cent.