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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 58-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE WELSH AFFAIRS committee
THE
PROVISION OF CROSS-BORDER PUBLIC SERVICES FOR
MR STEVE HODGETTS, MR BOB LONGWORTH and MR MARTIN EVANS Evidence heard in Public Questions 1454 - 1583
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Welsh Affairs Committee on Members present Dr Hywel Francis, in the Chair Mr David Jones Alun Michael Mark Pritchard ________________ Memoranda submitted by
Examination of Witnesses
Witnesses:
Mr Steve Hodgetts, Business Development
Director, Q1454 Chairman: Good morning, bore da. Welcome to the Welsh Affairs Committee. Thank you for your attendance and for your helpful memoranda. Could you please introduce yourselves for the record, please? Mr Hodgetts: I am Steve Hodgetts; I am Business
Development Director for Mr Longworth: I am Bob Longworth, Ground
Transport Manager for Mr Evans: Martin Evans, External
Research Fellow of the Q1455 Chairman: Mr Evans, could I begin with you to begin
with, with a somewhat introspective and fortress Mr Evans: You have mentioned Q1456 Chairman: In that context is there such a thing as a
UK-wide aviation strategy as far as Mr Evans: Aviation policy is not
devolved, so that is a Q1457 Mr Jones: Just to develop that point on route
development funds, have you seen the memorandum that this Committee has
received from Mr Evans: No, I have not. Q1458 Mr Jones: Mr Evans: The difficulty occurred
because Wales was so late in setting up its route development fund, and I think
they are quite right that at least one route was supported that should not have
been, and that is Barcelona because obviously that is a route that would have a
large number of outbound passengers rather than attracting inbound passengers,
which is what the route development fund should do. It did support the route to Paris - I think
that was a very necessary route from Q1459 Mr Jones: Do either Mr Evans: No, the route development
funds have been operating in the devolved administrations, so Q1460 Mr Jones: So why are those airports able to expand so rapidly
and successfully when Mr Evans: The whole point of a route development fund is that it should be targeted at those peripheral and remote areas that need connectivity but otherwise have difficulty getting market solutions to bring forward that investment. Liverpool and Bristol have - certainly in Bristol's case - a much bigger market than Cardiff Airport, and certainly the important thing is much better demographics, because it is important what the income levels of the population are as well as the numbers of population if air routes are to be successful. Q1461 Mr Jones: How will Mr Evans: Yes, but it does have a very large catchment area and so it can draw on that large catchment area, and if you are talking about an airport such as Liverpool that has a large number of low cost services, as soon as you bring fare levels down you actually expand the catchment area because people are more prepared to travel to that airport. Q1462 Mark Pritchard: I want to try to understand the process for today, and I sit on the Transport Select Committee as well. Is there anything, Mr Hodgetts and Mr Longworth, you think might be asked today that might be above your pay grade and just the Chief Executive would have to answer? Mr Hodgetts: No. Mr Longworth: I am here to answer questions on transport as my speciality. I am not as well versed as colleagues on either side of me on the route development funds so I may have to defer some of those questions. I think it is a question of distinguishing between pay grade and working knowledge. Q1463 Mark Pritchard: I am trying to understand why you are both here and I am grateful that you are here, unlike certain representatives from Birmingham who were not prepared to come along, although that is going to change. So I am grateful for that and I am just trying to understand why it is not the Chief Executives of your respective airports standing in front of us today. Mr Longworth: I deal with surface access and it is my speciality within the airport, so on this occasion the Chief Executive asked us to respond to the Committee, wanted that to happen and I drafted that response and it was felt appropriate because of my knowledge on the subject and now I have come along to the Committee today. Mr Hodgetts: For me, I have full responsibility for route development and work with stakeholder authorities, including the Welsh Assembly Government, and I wrote the paper for the Committee today; so I am perceived to be the expert with what I say. Q1464 Mark Pritchard: I am very grateful for that
clarification. Is there something that
the Welsh Assembly Government is not doing that it could do which would assist
you in developing Mr Hodgetts: We have a good working
relationship with the Welsh Assembly Government but we find that their approach
can be somewhat delayed and un-businesslike at times. The late arrival of the route development
fund meant that it came in post changes to European Union rules when a lot of
the benefit of flexibility that Q1465 Alun Michael: Coming straight out of that, can you indicate
what Mr Hodgetts: We have a full time route
development team. My route development
manager was in Q1466 Alun Michael: You said earlier in your first response that
it is a question of attracting airlines rather than attracting passengers. Is it also a question of attracting airlines
rather than specific destinations, or is it the question of which destinations
are developed in relation to Mr Hodgetts: We would prefer to develop a
range of destinations which meets other stakeholder needs, in particular
business needs. Q1467 Alun Michael: To what extent is that a recent development? There is always the tension, is there not, between low cost users of the airport and scheduled flights. I may be wrong but I get the impression that the policy over the years has shifted one way or the other from time to time. Mr Hodgetts: It has and that has been a
response to the market changes as well.
I think we are seeing yet a further consolidation of airlines which is
reducing choice in particular. Q1468 Alun Michael: Does it surprise you that it is as low as 10%? Mr Hodgetts: It is not surprising given
the airline mix we have. What has been
particularly surprising has been the reluctance of other European flag carriers
such as Air France and Lufthansa to consider Q1469 Alun Michael: Why do you think they are so reluctant? Mr Hodgetts: I think they do not perceive
the strength of the devolved authority and the distinct cultural identity that
comes within Q1470 Alun Michael: Perhaps this is broader to yourself and to Mr
Evans, but what estimate is there of how much M4 traffic could be removed if Mr Hodgetts: We know that of the lost
traffic Heathrow attracts 31% of that traffic.
We know that within that traffic the majority is to European destinations,
not to long haul destinations. In theory
the majority of that traffic could return to Q1471 Alun Michael: So it is a question of creating the chance. Mr Hodgetts: Creating the chance. Q1472 Chairman: Mr Evans, you wanted to say something. Mr Evans: Yes, I just wanted to point
out how successful some English regions have been - some English regions that
have equally poor demographics, as does Q1473 Alun Michael: Mr Evans, I was going to turn to you anyway on some of your comments, but just on that one - because we do not have a regional development agency or the Welsh Development Agency any more so it is in-house activity by the Assembly - can you place it in that context? Mr Evans: Yes, and I think that there may be a structural problem here in that development of new air routes lies within the Department for Transport in support of those routes in the Welsh Assembly Government, whereas of course economic development and Visit Wales have an equal interest and I think there need to be some new mechanisms to pull all those interested parts of government together to work together with the airport to develop new routes. Q1474 Alun Michael: Apart from the question of the relationship
with the Assembly, which you have now covered, you made some comments
suggesting that Mr Evans: I think a lot of this comes down to history and of course when you have a new management at the airport they still have to cope with the history of what has occurred before, and the significant events I see are the original privatisation - and I do not think that the best model for that was used; the model that was used was just a straight sale, whereas the model that was used at Bristol was to bring in new investment, build a new terminal, put in extra capacity and say, "Right, we are ready for business - come along airlines" and that attracted a low cost airline Go which was taken over by Easyjet and really that fuelled the start of the growth at Bristol Airport. The second significant event was low cost airlines decided then to go to Cardiff and really the only one that was left was bmibaby, which has not performed in the same way as other low cost airlines in that it has not expanded at the same rate, it has not put in orders for large numbers of the new aircraft that could, because they are more efficient, lead to additional routes becoming viable. Q1475 Alun Michael: That is very useful in outlining the history but the future is a more dangerous place. Accepting that we are where we are, how would you see those issues dealt with going forward? Mr Evans: I feel that the way that Q1476 Alun Michael: You have said that about the Welsh Assembly Government's responsibilities but I was asking you for your comments about the airport underperforming. How do we get it to perform to the level that would lead you not to make that comment? Mr Evans: What the airport company itself needs to do is to send out - and you referred to it earlier - a persistent message about that they are prepared and ready for growth. So they have to have the capacity in the airport terminal, which they now have - they have put the capacity in there; they have to be able to operate on an efficient basis. There may be some deficiency issues around the operation of the airport terminal that still need to be addressed. They have to go out there and say, "Right, we are prepared to do deals with airlines" and they have to be consistent in that message. Q1477 Alun Michael: Can we just look at a couple of other
specifics then. You have both referred
to decisions in relation to bmibaby and KLM, but why have neither of those
developed more capacity at Mr Hodgetts: KLM have certain waves at Q1478 Alun Michael: So they are at capacity really? Mr Hodgetts: They are at capacity. The aircraft size could increase, which is
one of the questions that were placed upon them, but their fleet is currently
most 70 and 100 seaters and so until they re-equip, which they are now doing with
Embraer, we see very little chance for that to grow. But it is a high priority with us to bring
additional aircraft capacity. We see
that route as being capable of taking 130, 140 seater 737s for example, and we
are trying to persuade KLM that that should be the case. In terms of bmibaby, bmibaby were developed
as a defence mechanism of Q1479 Alun Michael: Thank you, that is very helpful. Can I ask one further question about
specifics, which is why did Lufthansa and Continental choose to invest in Mr Hodgetts: That was simply market
quality. They perceived Q1480 Mark Pritchard: Mr Hodgetts, is it not a failure of the senior
management team at Mr Hodgetts: I would refute that the
senior management has failed. The
quality of the airport is well received by the customers that use it. The network capability is the problem. If we look at research that has been
undertaken, particularly by UWIC we see that the reason that people do not use Q1481 Mark Pritchard: First of all, the funding of police, that has not actually been decided, as you know. There is still a big question mark over that, so it is not accurate on reflection, you may say, to say that you are going to have to fund the police because that it is still to be decided. Just pursuing that point about state intervention or the taxpayer bail out, given that it is actually contrary to Bristol - Bristol does not believe in intervening in the market and says let the market decide and it clearly is providing a superior product and service than Cardiff at the moment because, as you have stated, you have just been losing business after business to Bristol. So I would say to Cardiff senior management that rather than to look to the taxpayer I would say look internally at the service and at the product and try and improve that in order that you can compete with Bristol. Mr Hodgetts: We do not see any evidence
from the airlines that the product that we offer in terms of the airport
operation is defective in any way. The
airlines and users have high on time departure, good punctuality; they have no
complaints about the costs of operation at Q1482 Mark Pritchard: A final question: can Mr Hodgetts: It will take a lot longer; it will take a lot longer to achieve the critical mass of the network that the nation wants. Q1483 Mark Pritchard: What is the level of funding we are talking about? Mr Hodgetts: It would depend on the route network that has to be provided but typically you are talking seven figure sums for a long haul route, for example. Q1484 Mark Pritchard: How many long haul routes do you want to put
on, let us say in 2009, additional to compete with Mr Hodgetts: I think 2010 would be a lot
more likely given the market conditions but there are two key long haul sectors
that would work from Cardiff because they also have high connectivity, one of
which is the eastern seaboard of the US where you could then connect further
into the USA; the other one is somewhere in the Middle East where you could
then connect on to Australasia, the Far East and the Indian sub-continent. Both those routes are currently seeing
traffic leaking out of Q1485 Mark Pritchard: So how much would that be, so that I am absolutely clear? Mr Hodgetts: It would depend on what the airlines perceived the risk to be, but we will probably be talking a seven figure sum per year for each route. Q1486 Mark Pritchard: How many routes - two, you say? Mr Hodgetts: Two. Q1487 Chairman: Mr Hodgetts, in your memorandum on page 10 you
state that those who do use Mr Hodgetts: They are in order of choice. Those are the key findings we had from the
research. For those that use Q1488 Chairman: Can we explore the meaning of that word "accessibility". Can we break it up into talking about disabled access? Did they ask questions about that? Mr Hodgetts: No, we did not because this
work was undertaken before the airports became primarily responsible for
persons of reduced mobility. Having said
that, our persons of reduced mobility scheme, which we introduced in July, was
highly praised by Disability Wales and has so far handled over 6,500 users with
high levels of positive feedback, and if the Committee would like I can provide
further information on how that scheme has worked at Q1489 Chairman: If you could provide that for us that would be very helpful. Mr Hodgetts: Yes, I could. Q1490 Mark Pritchard: On disability because Mr Hodgetts: We currently meet all the EU standards and we are working currently with the Royal National Institute for the Blind on bringing a guide dog scheme in in the new year, which we will be one of the smallest airports operating that scheme at that point. In terms of other accessibility, we were fully audited by Disability Wales prior to tendering before the PRM - Personal Reduced Mobility Act - came through and our airport received no significant criticisms of the way it operated, and since then it has, as I say, handled several thousand persons of reduced mobility with a high level of positive feedback. Q1491 Mark Pritchard: Apart from the blind what is in the front of your mind on this issue, something that is not in place that you would like to see in place, and when will it be put in place. Mr Hodgetts: We believe that based on the audit we have been given by Disability Wales we have a fully structured product for all categories of persons with reduced mobility - not just infirm, elderly, partially sighted, hard of hearing, for example. We also have a scheme that we run for those who are nervous fliers for which we use the team that we have handling persons of reduced mobility to deal with those because they are far more intuitive and aware of people's disability even on mental impairment grounds. Q1492 Chairman: When Disability Wales makes observations on
these matters presumably they follow a certain international criteria of
standards? Because having travelled with
a disabled person some 20 years ago, which is a long time ago, I was struck by
the vast differences between this country, which was extremely poor, the rest
of Mr Hodgetts: There are no internationally agreed standards across the whole of disabled handling and the EU scheme is actually seen as one of the best at the moment. The majority of standards that apply are on aircraft access and that comes out of IATA, particularly ICAO. The work that we did with Disability Wales was undertaken by one of their consultants who is wheelchair bound, Will Bee, who --- Q1493 Chairman: Wheelchair users - you do not say wheelchair bound, you say wheelchair users. Mr Hodgetts: Wheelchair users. My customer services manager will chastise me when I return for having failed again. On that again we made sure that the audit was quite rigorous. We wanted to be sure that the product we offered would fully meet the standards and, where possible, exceed the limited expectations that were in the Act. We believe that that has been achieved. We are continuing to work with users to get feedback on where we can improve and we have already placed more staff into the system at key points just to make sure that information is provided because we found that was a significant failing in the early weeks. Q1494 Mr Jones: Mr Hodgetts, forgive me if this is a naïve
question but looking at the list of routes that you have supplied in your
memorandum you do not have any services to and from Mr Hodgetts: No. Q1495 Mr Jones: Is this not a major disadvantage because Mr Hodgetts: Evidently not as Heathrow
attracts 30% of the lost traffic and that user surface access means to achieve
that. There is, by means of the high speed
train between Q1496 Mr Jones: Could you repeat that? A good use of your environmental benefit? Mr Hodgetts: The benefits that Q1497 Mr Jones: And you do not host services from British Airways, do you? Mr Hodgetts: No, we do not; but we are not alone in regional airports - there are very few that do now. Q1498 Mr Jones: Please do not be defensive, I am just asking is that a disadvantage to you because clearly it is the premier flight carrier in this country. Mr Hodgetts: The British Airways brand is important to a lot of airports and we would welcome it back if their commitment could be assured to the regions, and I think that is a strategic issue that you will have to take up with British Airways; we find they are not interested in the shorter haul services particularly out of the UK regions. Q1499 Mr Jones: You did British Airways services, did you not? Mr Hodgetts: Yes. Q1500 Mr Jones: How long ago was that? Mr Hodgetts: 2001 they withdrew the base. Q1501 Mr Jones: For how long had they been operating from Mr Hodgetts: 15 years prior to that. Q1502 Mr Jones: Would you like to see them back? Mr Hodgetts: It depends on which routes
they would fly. There are some routes
that the market has shifted considerably, particularly in terms of low cost
competition, but there are key routes that British Airways could actually
provide a very good connection with, particularly into Q1503 Mr Jones: Mr Evans wants to come in. Mr Evans: I think it is important to
look at how airlines are consolidating throughout Q1504 Mr Jones: Mr Evans, you have a slightly different
perspective from Mr Hodgetts, on this.
Do you feel that it would be an advantage to Mr Evans: It is a very difficult route
to establish because there is a two-hour train service from Q1505 Mr Jones: But not necessarily a BA flight. Would it not be possible for some other airline to provide a service? Would that not be a benefit? Mr Evans: Only if that airline had an
agreement to co-share with British Airways so that you had through ticketing
throughout the whole of the British Airways network, from starting your journey
in Q1506 Mr Jones: That, of course, is the weakness of Mr Evans: That is right. As I said, really a regional airport will need to connect into those three big groupings and at the moment they are only connected to one. Q1507 Mr Jones: Could we turn please, Mr Evans, to Mr Evans: The Welsh Assembly Government
has funded the capital cost of providing a terminal at Q1508 Mr Jones: So, to summarise, would you think that Mr Evans: I think that would be
challenging to establish a Q1509 Mr Jones: I am aware, of course, that Mr Evans: Yes, it does. But you have to look at the size of the local market. Q1510 Mr Jones: Indeed, that is the point I am making. It would seem to me that Mr Evans: Yes and as you get further
and further east those passengers will be attracted to the greater range of
services and maybe lower cost services that are provided from Q1511 Mr Jones: To summarise, the impression I get from what you are saying is that you are sceptical as to the commercial viability; is that fair? Mr Evans: All I am saying is that that demand is as yet unproven and I think there is a lot more work to be done to show where that demand is coming from. Q1512 Mr Jones: Are there any other regional airports in Mr Evans: I think there is a need to look at where there is a strategic need for airports in Wales, and certainly the area that springs to mind is west Wales, which is one of the most remote and peripheral parts of the United Kingdom when it comes to access to air services. Even though it is remote, there is a large number of people from that area who do use air services, so that would tend to indicate that if you provided a local service that would stimulate even more demand, and I would think that a west Wales airport is viable. Q1513 Mr Jones: What sort of routes would you see operated in a Mr Evans: Certainly domestic routes because passengers do not like to travel long distances to access domestic air services, so domestic air services would attract the greatest share of that market. Q1514 Mr Jones: To Mr Evans: You cannot
provide an air service from Q1515 Mr Jones: So Mr Evans: I would say Q1516 Mr Jones: And which airport in particular do you have in mind when you talk of
a west Mr Evans: I think the
one that is best placed to serve west Q1517 Mr Jones: What is that used for at the moment, chiefly? Mr Evans: It is used for general aviation, so flying training, there is some air charter, and that air charter shows that there is some demand locally for air transport services. Chairman:
Could Mr Pritchard ask a supplementary
before you move on to Q1518 Mark Pritchard: I just wanted to ask on Haverfordwest and some of the charter flights around some of the oil companies; has there been any investigation or research as to the legal issues and the practical issues about some people actually sharing those aircraft, and if they are flying two or three executives in and it is a 12-seater, why some people in Wales cannot share those aircraft? Mr Evans: There is no legal reason why small charter aircraft cannot be shared on that basis. I think the difficulty is in how you would market such a service, so how many people would have to book on the service in order to say that it is going to run, so you therefore get uncertainty issues because it would not run unless you had got a certain number of people, and then you have to all decide what is the best time for it to run to suit everybody who wants to use the service, so, yes, there is no legal reason why not, but there are a number of practical reasons why it could not be done. Q1519 Mr Jones: Mr Longworth, just returning to your submission - and thank you very much for that - on the question of access to Manchester Airport from north Wales, it appears very clear from your memo that by far the largest number of north Wales passengers come to Manchester by road? Mr Longworth: That is correct. Q1520 Mr Jones: And by private car? Mr Longworth: Yes. Q1521 Mr Jones: In fact, the percentage of people coming by rail is very small indeed, only 4.5%; I think that is right? Mr Longworth: Yes. Q1522 Mr Jones: Can you say why the rail links between north Mr Longworth: I think you
have to go back to the origin of the development of the rail link into Q1523 Mr Jones: Particularly if you are incumbent with a lot of suitcases. Mr Longworth: It was
exactly that, and unless a passenger is travelling to Heathrow and is prepared
to put up with the trouble and strife of going across central Q1524 Mr Jones: You have got another platform coming in. Mr Longworth: We have got
another platform and that platform is available now. I will return to that in a moment, if you
like, just in the context of what we are doing.
We became known as a path-hungry station that was very reliant on train
paths rather than loading volume on the train services. In terms of market opportunity and development
of new train services, we are pursuing that logic and seeing where we can
strengthen the market. We have evaluated
with the SRA, and now the Department for Transport, and the train operators
about where the opportunities may be for growth, and certainly north Q1525 Mr Jones: Can I just pause briefly there.
You have said that 816,000 north Mr Longworth: That data would be around about the 22 million passenger throughput at the end of 2006-07, so it is slightly less than one in 20. It is a reasonable percentage of our business, slightly less than 10%, so we would have a very strong market threshold in there. I would add that it is the concentration of the market, and the nature of north Wales is actually more dispersed along the north Wales coastline, so we do not have a single destination defined as being north Wales in the way that you might have a concentrated market of, say, Merseyside or Leeds/Sheffield on the east side of our catchment area. Q1526 Mr Jones: So it is an important market but it is relatively small in the context of your overall passenger base? Mr Longworth: I would say
"relatively small" is being a bit too negative.
It is an important market. In
itself, if you think there are 1.2 million passengers coming from north Q1527 Mr Jones: Indeed. It seems very odd
that the rail services are so very poor from north Mr Longworth: Yes, and it has been a source of anguish in the region for a long time, and the development of a north Wales rail service between north Wales and through to Manchester itself, versus the airport, has been one of the topics that has been hotly debated with Network Rail, and Railtrack before it. Q1528 Mr Jones: The journey time is very long indeed, it is over two and a half hours, which I would guess is pretty much a disincentive to almost any passenger? Mr Longworth: It is. Again we know that journey time is a factor
on that. I think the journey time in
that sense is important in relation to the road time. The development of the dual carriageway and
the high-quality A55, and then the network around Q1529 Mr Jones: Have you had any discussions with Arriva Trains as to the potential
for developing through routes to Mr Longworth: Not since Arriva took over the franchise, and the reason for that was not that we do not want this but rather the lack of capacity at the airport end until now. Q1530 Mr Jones: So you could not accommodate them anyway? Mr Longworth: We could not
accommodate them anyway and, to be fair to Arriva, and knowing the people that
have been involved with rail in the change of the franchise before that, I
think there was an industry consensus that a direct service to Q1531 Mr Jones: Do you see any prospect of an improved rail service from north Mr Longworth: I do. You mentioned earlier that we have got the
third platform available. The third
railway platform was essentially brought in to fulfil initially a reliability
issue that was arising from the number of trains serving the airport. Because we are operating very near the
capacity limit of the network in that area, because most of the trains come
through Manchester, if a train runs late into Manchester it has been standard
operational practice for Network Rail to recover the time lost by trains by
terminating the train short at Manchester Piccadilly, and therefore inconveniencing
anybody going down to the airport. They
were obviously relying on the fact that there is good connectivity from
Piccadilly to the airport, and therefore network benefits have outweighed the
issues of airport access. There is also
the supplementary issue that has developed from the December 2008 timetable to
take place shortly where Virgin Trains will go three times an hour Q1532 Mr Jones: Have you had any discussions with the Welsh Assembly Government? Mr Longworth: Not on this matter yet, no. Q1533 Mr Jones: Sorry, you have not discussed the question of access at all from
north Mr Longworth: No. Q1534 Mr Jones: Because I remember raising this when I was in the Assembly six years ago, so they are clearly aware of the difficulty. Mr Longworth: I was not aware of that. Q1535 Mr Jones: So they have had no discussions with you at all? Mr Longworth: Not in recent times. In previous years we have invited representatives from the Welsh Assembly to the Airport Transport Forum, so we have had that contact at that level. Q1536 Mr Jones: You mentioned the western rail link; how imminent or otherwise is this? Mr Longworth: I would say that is a medium to long-term scheme at the moment. Q1537 Mr Jones: In terms of years that is what? Mr Longworth: I would say at least ten, probably more like 15 years plus. Q1538 Mr Jones: So way in the long grass? Mr Longworth: Yes, way in the long term. Q1539 Mr Jones: One other point - you mentioned in your memorandum that another
means of access from north Mr Longworth: There is a
possibility. Again, this comes back to
how capacity is used on the network. One
of the constraints that we have with southbound services at the moment is the
crafting of this new timetable. Network
Rail has run a series of utilisation studies across the network. The North West Study looked at access to Q1540 Mr Jones: And capable of being improved? Mr Longworth: Very much capable of being improved. There is an imbalance in utilisation capacity between the north and the south. We invested collectively with partners over £6 million to provide the south-facing cord opened in 1996 and this has been very lightly used. That is an issue of concern to us, that the industry at the moment is not responding to the challenge of providing a better service. Chairman: I know that Q1541 Mr Jones: Yes, there was one final question and that is: if it were possible
to utilise the Mr Longworth: Potentially. I think the judgment we need to make is
whether the north Q1542 Mr Jones: So people will carry on coming by car really, will they not? Mr Longworth: In the absence of any alternatives, people will come by car and find the car journey and the times they travel reasonable as opposed to ideal. Q1543 Mark Pritchard: I would have liked to ask this question to both Mr Hodgetts: Very much so. They are the
key to KLM's routes, for example, and they are a significant proportion on Q1544 Mark Pritchard: A rough estimate, unless you know the exact figure of business passengers last year? Mr Hodgetts: Our business passengers are less than 20% of the mix. Q1545 Mark Pritchard: Last year in actual numerical terms? Mr Hodgetts: There would be less than 400,000 passengers in total across the whole. Q1546 Mark Pritchard: This is business passengers, 400,000? Mr Hodgetts: Yes. Q1547 Mark Pritchard: Okay, and when businessmen travel, a lot of them take their laptops (some do not) and the business working environment within the airport is very important, business lounges, et cetera. What is the business lounge access and availability like? Mr Hodgetts: We have our own business lounge which we operate using the airport company. It is available to all KLM business-class passengers as a right, as with Eastern Airways and Flybe who can offer it to their passengers on the same basis. We sell it extensively through the Internet and we have a high proportion of repeat business in there. It has Wi-Fi activity, for example, built in. Q1548 Mark Pritchard: Looking at some of the blog sites for business users for your airport, given that there were 400,000 business passengers at your airport last year, how many internet terminals are there in that business lounge? Mr Hodgetts: There are six internet terminals in total but most people are using Wi-Fi now. Q1549 Mark Pritchard: That is not correct if you look at the people responding to your own surveys and blog sites on your airport, a lot of business passengers do not want to have to take their laptop with them, pack it, unpack it, go through security, et cetera, so many are reliant still on an internet terminal to do emails or to do business whilst travelling. I am very surprised and it really fits the pattern, not only at Cardiff, to be fair, but Manchester as well, so you have 400,000 business passengers a year, some of course will take laptops, some will use Wi-Fi, but a lot will not, and there are six internet terminals. Do you think that is really being business friendly? Mr Hodgetts: I think we will review that. We had not perceived the level of disquiet that you have picked up from the blogs from our own surveys, for example. Q1550 Mark Pritchard: The use of those internet terminals, just to test your knowledge here, forgive me, are they actually pay-as-you-go? Mr Hodgetts: They are pay-as-you-go. Q1551 Mark Pritchard: Are they change pay-as-you-go or are they credit card? Mr Hodgetts: They will be credit card. Q1552 Mark Pritchard: Thank you. I am sorry, I just did not know if you worked in business lounges, that is all. Mr Longworth: I do not but I do know a few things on that subject. We have an 80/20 split business/leisure as well. Obviously in terms of our market and what we are trying to do, that 20% of business travellers is an important part of the market of four million people. We do have a suite of lounges and we do have the same issues that you have referred to there. Q1553 Mark Pritchard: To be fair, it is UK-wide. I think Birmingham is probably the worst example but if you read some of the blogs on your website, they talk about "cramped conditions", "tatty business lounges", "not enough internet access", "rude staff" (that is a generalisation, I am sure) but, nevertheless, particularly for foreign visiting businessmen, Americans who expect these facilities on tap without a problem, without a fuss, I hope that the perspective of six internet terminals against the backdrop of 400,000 passengers might encourage Cardiff, and might encourage Birmingham and Manchester to look after their business passengers more if they are as important as you said today that they are. Mr Longworth: There has
been significant investment at Q1554 Mark Pritchard: Finally on this point
which I do want to make because it is important, time is money when you run a
business - I used to travel all over the place - and when you are in the
business lounge trying to run your company, you do not necessarily want to take
a printer with you, for example, so you want not just one printer that might
jam or one printer that 15 businessmen want to print out from. There should be far improved business facilities
in our airports if we are to not only keep existing business people passing
through but attract new ones. It is not
a vast expense and it is very embarrassing at Mr Longworth: I would point
out - and I cannot speak for Q1555 Mark Pritchard: My final point would
be that most business people passing through Mr Longworth: Yes, and they are making use of the lounge facilities in there, but those facilities are provided by the airline or by the handling agent, depending on which lounge product it is. Q1556 Mark Pritchard: I know but what those airlines do and do not do reflects on the overall image and reputation of the airport. Mr Longworth: That is true. Q1557 Mr Jones: I have to say, Chairman, and Mr Longworth might like to know this, that I think that the BA lounge in terminal three has improved tremendously recently. Mr Hodgetts: We will look again at our product. Mark Pritchard: We are working together here to try and be helpful. Q1558 Alun Michael: Could I turn to one other issue.
You referred, Mr Hodgetts, to the issue of access being very important
to people. There has been a proposal for
a new road link to Mr Hodgetts: I think the
latter is more important than the former.
We are looking to retain a market that is leaking to other markets from
within our core catchment area, so the distance travelled is not critical. However, for inbound visitors, the perception
they get of Q1559 Alun Michael: That is very helpful. Can we
look at one other issue which is the encouragement of air freight. That has not developed very quickly at Mr Hodgetts: We do. It depends again on the mix of services. A longer haul service would automatically
attract freight because that is part of the product that they sell to ensure
profitability. The majority of other
freight that attracts at the regional airports is usually fast parcels, and we
have had a successful operation with TNT which has allowed later close-out
times for example in Wales and the west of England than would be achieved by
trucking it into East Midlands. The
pressures of the current business downturn have caused TNT to suspend that
service at the present time and consolidate, so it is clear that close-out as a
USP for a parcels operator is not going to outweigh operating
characteristics. We still think that
there are opportunities for that market to consolidate into the west. Given the night restrictions at Mr Evans: I just wanted
to give you an example of the Emirates route from Newcastle International
Airport to Dubai, and on that route, according to a press release I have here,
over the past 12 months Emirates has shipped 1.7 million kilos of freight to
and from the North East, more than four times the total cargo shipments through
Newcastle International Airport in the whole of the previous year. It just emphasises what Steve Hodgetts was
saying there, that a new wide-bodied route to an international destination
could transform the amount of freight that goes through Q1560 Alun Michael: Have there been any efforts to identify the importance to business
in Mr Evans: An outcome of
the Q1561 Alun Michael: But you understand that it is to go ahead? Mr Evans: I do not know that it is going to go ahead but I am hopeful that it is going to go ahead. Q1562 Mr Jones: Mr Evans, would you say that inward tourism to Mr Evans: Yes, where
outbound travellers are prepared to travel long distances by surface to reach
their airport, inbound travellers like to travel to an airport as close to
their destination as possible, so my view is that there are tourists who are
discouraged from coming to Q1563 Mr Jones: Have you got evidence for that or is that just a gut feeling? Mr Evans: I have not got evidence of that; that is just purely my feeling. Q1564 Mr Jones: Mr Longworth, do you know the extent to which passengers from
overseas are using Mr Longworth: I have not
got an exact figure. What I can say is
that the amount of passengers using Q1565 Mr Jones: So you are primarily an outbound airport? Mr Longworth: Yes,
primarily an outbound airport, and therefore our route development is obviously
skewed and affected by that. We do work
with Marketing Manchester as the inbound tourism resource to promote Q1566 Mr Jones: To what extent are you working, for example, with Visit Wales? Mr Longworth: Again through Marketing Manchester, we use Marketing Manchester. Q1567 Mr Jones: So they are the point of contact? Mr Longworth: They are the
contact point. We use Marketing
Manchester as a contact point. They
would deal with Visit Wales and they would deal with England's North Country
and so forth as the tourist contact point.
Their remit is to go to contact points in the Q1568 Mr Jones: What about you, Mr Hodgetts, are you working closely with Visit Wales? Mr Hodgetts: We work very
closely with Visit Wales. We work at
director level with Roger Pride in particular.
We are aware that Visit Wales has a plethora of competing claims for its
time and money. We are still very keen
for them to apply on a consistent basis tourism marketing in Q1569 Mr Jones: Do you know whether Visit Wales are active in places like Mr Hodgetts: They are, and
they are particularly active in Q1570 Mr Jones: Mr Longworth has just said that Mr Hodgetts: Absolutely, and it is typical of a lot of regional airports. Q1571 Mr Jones: Is the limited availability of direct flights from Mr Hodgetts: We are being
told so repeatedly by International Business Wales, and the Welsh Development
Agency before that. Cardiff City Council
highlights in their Future Strategy report on the future of Q1572 Mr Jones: To what extent is the Welsh Assembly Government assisting you, short of financial support through route development funds? Mr Hodgetts: The Welsh
Assembly Government has assisted us by attending meetings with airlines around
the world, including the Q1573 Mr Jones: Are you finding, Mr Longworth, the Welsh Assembly Government equally helpful in terms of your route development? Mr Longworth: I do not deal with route development so I would have to defer that question back to colleagues. Q1574 Mr Jones: Could you ask them, I would be grateful. Mr Longworth: I will ask the question of colleagues, yes. Q1575 Mr Jones: Thank you. Mr Evans: If I could
again give you an example of what is happening elsewhere. I have mentioned Q1576 Mr Jones: Who operates Mr Hodgetts: It is a
combination of Mr Longworth: It is a 49/51
% split in favour of Q1577 Mr Jones: So they are obviously a very dynamic company. Mr Evans: I think the key is the partnership that they have established with the local regional development agency in that they have both taken responsibility for increasing the range of routes from the airport. Q1578 Mr Jones: So really the Welsh Assembly Government now could take a leaf out of
the Regional Development Agency's book in Mr Evans: That is what I would say, yes. Q1579 Chairman: Mr Hodgetts, the contrast between Mr Hodgetts: It is because
of why do we travel, why do we use air transport; we use it to get some place
else, in the majority of cases. In
regional airports it is for people who live in the locality within the
catchment to go to a place that they want to be at. Q1580 Chairman: So people are prepared to suffer the difficulties, people complain a
lot about getting into Mr Hodgetts: Absolutely right, and I have had comments made to me by people who use it that it is the equivalent of crawling over broken glass, but you can get to where you want to go when you are there. Q1581 Mr Jones: In demographic terms, how does Mr Hodgetts: Very similar. Mr Evans: In numbers Q1582 Chairman: If Mr Hodgetts: Again, access is not the critical factor in airline choice. Market characteristics and the market risk are two big areas. Every advantage that we can display in terms of accessibility and in terms of distribution patterns is an advantage but it is not the primary one. Q1583 Chairman: The striking contrast then is with places like Mr Evans: I said earlier that a very good study of intra-Wales air services had been undertaken which led to the establishment of the Cardiff/Anglesey air service but we have not had an equally good study of external air services, and if we look at the Wales Transport Strategy, in fact the strategy for enhancing international connectivity does not seem to be to improve the range of destinations served from Cardiff airport, it seems to be to improve surface access to other airports, and my feeling is that, yes, airports in the rest of England are going to be important to Wales where there is no provision from Cardiff, but the best provision would be to improve the range of services from Cardiff. Chairman: It has been an extremely helpful session this morning, and this afternoon now. It will certainly help us in our questions which we shall be posing in the new year to the Deputy First Minister and Transport Minister, Mr Ieuan Wyn Jones. Thank you very much for your attendance. |