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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 58-ii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE WELSH AFFAIRS COMMITTEE
The
provision of cross-border public services for
MR PAUL KEHOE, MR JOHN MORRIS and MR NEIL PAKEY Evidence heard in Public Questions 1584 - 1636
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Welsh Affairs Committee on Members present Dr Hywel Francis, in the Chair Mrs Siān C James Mr David Jones Albert Owen Mark Pritchard Hywel Williams ________________ Memoranda submitted by and
Examination of Witnesses Witnesses: Mr
Paul Kehoe, Chief Executive, Mr John
Morris, Head of Corporate Affairs, Q1584 Chairman: Could I welcome you to the Welsh Affairs Committee and could I ask you to, for the record, introduce yourselves, please? Mr Kehoe: I am Paul Kehoe, the Chief Executive of Mr Morris: I am John Morris, Head of Corporate Affairs at Q1585 Chairman: By way of introduction, could I ask you how you got here this morning? Mr Kehoe: I came down by train last night from Q1586 Chairman: Very sensible. Mr Kehoe: Because I recognised how important this meeting was, to be here on time. I am actually a very good friend of Neil's. Q1587 Chairman: It was obviously a very wise decision. A witness will be coming shortly and I will be asking him that question as well. Why do Welsh people use your airport? Mr Kehoe: Not enough Welsh people use our airport is the important statement
to make. Of the 9.6 million people who
fly through Birmingham International about 125,000 come from Wales; I think the
reason for that is that you have that distribution of population, the scenic
bit at the top in North Wales where the passengers can go to Liverpool and
Manchester, the industrial bit in the South from which they can use Cardiff and
Bristol Airports. The bit that we truly
serve is that central portion of Q1588 Chairman: I was struck by
the statistics which you provided us with, and I thank you for that, showing
very high numbers of people coming from Ceredigion and a remarkably low number
from my part of the world, Neath and Mr Kehoe: These statistics come from the Civil Aviation Authority and
obviously they sample survey, so perhaps on the days that they were surveying
there were not many from Chairman: Thank you. Mr Mark Pritchard. Q1589 Mark Pritchard: Do you
think that increasing your transatlantic routes - for example, US Airways which
is flying to Mr Kehoe: It may do. What I have not
got today for you, though I am sure we could try and find it though it might be
somewhat more difficult because the information would be with the airline, is
the number of Welsh passengers on the Continental service which has been
running for a number of years. Clearly,
it is a very brave statement of intent by US Airways to set up in the current
environment a new transatlantic service and it is very early days for us to
actually understand how successful that will be - we hope it is - but actually
having international premier service routes, with full service airlines, is
what most airports would love to have.
It certainly puts you on the map and can, when you have those routes,
start to generate traffic. Again, I
still think our target market, because of the ground infrastructure links, will
be the Aberystwyth-Birmingham corridor that will see lots of traffic, because
you have opportunities at Q1590 Chairman: Could I just interrupt for one moment. Could I ask the witness who has just arrived to introduce himself for the record, please? Mr Pakey: Neil Pakey, Deputy CEO of the Peel Airports Group, which looks
after Chairman: Thank you. Mr Pritchard. Q1591 Mark Pritchard: Your job
description when you applied for the job of chief executive at Mr Kehoe: Yes. However, if I may just
qualify that job description was written prior to Northern Rock and prior to
the current recession and what we are seeing in the Q1592 Mark Pritchard: But is it not the case that you cannot take off and land aircraft on the same runway at the same time - it is logical, it is not safe to do so - and therefore even extending it to 2020 to get the passenger numbers that are within the business plan do you think having a single runway can deliver that on time? Mr Kehoe: Absolutely, and the reason I am confident of that is that we have a
model in the Q1593 Mark Pritchard: So the people of Wrexham, let us say, and the quiet hills of Shropshire should not expect their lives to be disrupted by an increased in lower traffic movements as a result of a future application for a second runway, because you are saying as chief executive in your time you would not apply for a second runway at Birmingham. Mr Kehoe: It is going to very difficult in the current environmental
climate. The White Paper was very clear,
it said Q1594 Mark Pritchard: The final
question in this section, if I may. If
you are successful I Mr Kehoe: That is a very good question. I am not sure of the efficacy of the arresting systems; however, what I can tell you is that the new scheme that we will have in place - and Solihull District Council are minded to approve the planning application subject to section 106 conditions - will have full CAA and international civil aviation organisation runway-end safety areas of 240 metres, which is the design standard. We have not got that today and we are building that into our plan. Mark Pritchard: Thank you. Chairman: Mr Hywel Williams with a brief supplementary and then Mr Albert Owen. Q1595 Hywel Williams: How big
could the market in Mid Wales be if you have 125,000? That is less than 2% of your current trade so
are you reaching out to people, because our concern of course is to improve
transport facilities for people within Mr Kehoe: This is an important point.
The airport can do some, but we need to work with other agencies, and to
give you an example of how we need to be joined up we are delighted to see
increased rail services with Arriva Trains Wales coming into Birmingham
International Station; there are seven services a day to Aberystwyth and seven
to Holyhead, plus the Virgin operation that goes through that airport. But some of those trains do not arrive until
after our first flights have gone, so the opportunity for Welsh passengers to
actually get to the airport is poor, so they have to drive. Of course the ground infrastructure is such
that until you get to Q1596 Albert Owen: Just on the
improved rail facilities that you are talking about within Mr Kehoe: Can I ask John to answer that as he is the rail expert? Q1597 Albert Owen: They came in
in December of 2008. Just on that point,
there were extra services you said, but one major one was cut from Holyhead,
being the boat traffic. Was there any
boat traffic that you were picking up from Mr Morris: To answer the first question we have our modal share target which is the total number of people coming by public transport and we have an objective of that to be 25% of people coming by public transport by the year 2012. Last year was our highest total ever and in the full year we got to 23.4% so I think there is generally a shift towards public transport which is a result of better timetabling, greater awareness through our efforts through our website, through the rail company and through the coach and bus companies. There is a shift that is happening but we can do better, particularly when we start looking at franchise processes in the future; it is about bearing in mind that people need to be in a certain place at a certain time. Since 1995 the airport has spent over £50 million on surface access so we genuinely think that we have played a large part in it; what we are now inviting is others to be part of that. Q1598 Albert Owen: Did you have an input in the new timetable when it was drafted? Mr Morris: We were consulted into the franchises by the Department for Transport. There was a consultation and we made our views known but they were not necessarily all taken up. Q1599 Albert Owen: Before I go
on to freight you have a list here of where you have identified Welsh
passengers coming from, and I know it is only 2%, some 125,000. There is none here from Mr Kehoe: These are, as I say, surveys and when asked for their address the information that we get back from passengers --- Q1600 Albert Owen: There is not
even the historic Gwynedd so I was just a bit confused because there are direct
links from my constituency to Mr Kehoe: Yes. As you quite rightly
say we have grouped it together, it is part of the 18,800 that are from Q1601 Albert Owen: Thank
you. If I can move on to freight, we
have been told that it only accounts for 1% of Mr Kehoe: Very little, in fact we are not seen as a freight airport and most
of the freight that goes out of the Q1602 Albert Owen: Most of that freight is travelling to the southern airports by road. Mr Kehoe: Or Q1603 Albert Owen: Probably
passing Mr Kehoe: Absolutely, but we are not dedicated freighters. Q1604 Albert Owen: Sure. What about Mr Pakey: Similarly, most of the freight is sent down to Heathrow, some to Q1605 Albert Owen: A serious point to both of you is that if it is a high percentage of British exports is it not a market that you should be encouraged to market for? Mr Kehoe: Clearly in terms of the priorities we are very clear that our focus
is passengers and if we can get passenger flights to come in and they can put
freight in the belly hold that is great. I do not want to go and market for
freight typically because it occurs at night and we have night
restrictions. In terms of planning
applications we are trying to bring forward we have put significant constraints
on our night-time operations. There are
airports which are capable of doing night-time operations, like Mr Pakey: We have less restrictions at night at Liverpool and with the airport company being owned by the same company that owns the Mersey Docks and Harbour Company we have developed a concept called "super port" and there are clearly some very long term plans and ambitions in terms of targeting markets like China et cetera into the Mersey area with the port and airport working together. With the present downturn the freight market has in fact been hit worse than the passenger market in percentage terms, but we hope that it will come back. Q1606 Albert Owen: Sticking with
Mr Pakey: I expect it to increase because we have gone from 4% where we were
in 1999, which was about 52,000 people out of a 1.3 million total, and now we
are at 5.5% which is nearly 300,000 of 5.5 million people, so both our
passenger numbers and the percentage coming from Q1607 Hywel Williams: Can I ask
you about Mr Pakey: The whole issue of airport competition has widened so much since
the European Commission liberalised the aviation airways in Q1608 Hywel Williams: I was just
reflecting on my own pattern of travel: when I have been flying internationally
I have tended to go from Mr Pakey: I was on it this morning but there was fog at Q1609 Hywel Williams: The focus
of this inquiry is travelling from Mr Pakey: Yes, indeed and that is something again that we feel is a real
priority going forward. When we started
out with half a million passengers there was not even a bus service from
Liverpool so our public transport was 0% and somehow, through buses largely, we
have gone up to 14%/15% public transport usage, so we realise that with better
public transport coming in that figure will increase and so will the
penetration. The bigger scheme that we
have been working with Cheshire on is the Halton Curve or, as it is now called,
the Halton Chord which is rail access coming from Chester around to the airport,
so instead of having to go from the airport into Liverpool city centre to come
back out to North Wales, that will actually be a much better prospect. We are working hard to try and get that
scheme recognised and prioritised and we would very much welcome the Q1610 Hywel Williams: Can I just ask in terms of new rail and coach services to the airport is that a commercial proposition or does it need public funding? Mr Pakey: It is an interesting one. We
have a very good relationship with Merseytravel so the vast majority of our bus
services are with Merseytravel for Merseyside and the moment you cross the
public transport boundary into an area outside Merseyside you cannot get the
interest, apart for the one exception where you have Arriva running commercial
bus services to Manchester city centre and Terravision is another bus company
that runs services to Manchester as well.
We are crying out for a bus service to Q1611 Hywel Williams: Where did you get to with that? Mr Pakey: Unfortunately it fell down.
We were looking for some public support behind it and we tried; the
Government had a scheme - I cannot remember the name of it - something about getting
buses to airports, Kickstart scheme or something. That did not work. We tried to talk to Merseytravel but they
would not look beyond Merseyside and every other public transport authority
would not look beyond their region and this was a cross-regional bus service so
it did not start. The chap from the bus
company in Q1612 Mr Jones: Mr Pakey, like
Mr Hywel Williams I used to use the VLM service to Mr Pakey: It certainly is, and I have another airport up in Q1613 Mr Jones: The tax regime is now seen as a real impediment to expanding services. Mr Pakey: Indeed it is, internationally as well. I mentioned earlier on that Ryanair has gone
to Q1614 Mr Jones: I see that your transatlantic services were discontinued as well. Was that for the same reason or were there other reasons for that? Mr Pakey: That was part of the reason.
With the transatlantic service I have to say the airline brought the
problems on themselves - this was Fly Globespan - and they leased an aircraft
from Iceland Air but the aircraft from Iceland Air proved to be less than
reliable - in fact it was shockingly bad in terms of the number of delays. It was an interesting one because the Mr Jones: Thank you. Q1615 Mark Pritchard: Mr Kehoe, you mentioned earlier on about getting the product right, not just about the infrastructure of the airport but service standards et cetera. I am sure you must get frustrated, as all chief executives of airports do, by anecdotes about poor service, am I right? Mr Kehoe: It goes with the responsibility. It does not exercise the mailbag too much but, yes, from time to time. Q1616 Mark Pritchard: Rather
than give you an anecdote can I give you a precise experience that I want to
pass on to you on behalf of Welsh passengers and indeed English passengers as
well. At 8.30 am on 17 September last year
I was flying out of Birmingham and there was a huge queue, just one security
terminal open - the luggage security terminal - I just happened to speak to one
of the staff and I said, you know, "Why, at 8.30 in the morning, peak time,
people leaving, you have this massive queue giving a bad experience for
business passengers and a bad experience for leisure passengers, all important for
your business." The person told me "We
have 17 people off sick, we have only got 12 staff on", although I do not see why
six could not be on one or the other - perhaps you could inform me of
that. It does seem that on several occasions
when I have flown out of Mr Kehoe: I apologise if you did have such a bad experience. It is unusual at that time, at 8.30, because the peak actually is before what we call slot one and slot one is the reason why Welsh passengers cannot get a train to the airport because they leave between 6.30 and 7.30 and therefore the peak queues come before that; there is actually a gap in the programme before the next, slot two, comes in later in the day, so it is unusual for that to be the case. I do not know what terminal you went out of but if it was Terminal 1 there are six lanes there and they should be manned according to the passenger flows. There is no doubt that there has been an issue with staff sickness, but it is not 17 people it is 17% of staff have been sick and that is something that I am looking into. I have actually only been in post since November and one of the things we have set out to do is to review just about everything that we do at the airport. The 17% staff sickness is very worrying, and I need to get to the bottom of that, but actually it is a very tough job and these people have to get very close to the general public day in and day out for eight or nine hour shifts; they have to physically interfere with members of the public, which is a horrible experience for both passenger and indeed for the operative. That may be why there is high sickness, I do not know, but there is no excuse for poor service, there is no excuse for not informing you properly as a passenger, you have that right to know, and my experience is that when passengers are informed appropriately and with courtesy they take that as thank you very much, hope it does not happen again. I notice this is not the first time it has happened to you --- Q1617 Mark Pritchard: Can I just
say this is not an opportunity to reflect my personal anxieties about the
airport, what I am reflecting also are blog sites. Can I urge you, if you do not already, to read
some of the blog sites about the Mr Kehoe: That is the key focus that I will be looking at in terms of our
marketing. I am staggered, having come
into this airport actually from Q1618 Mark Pritchard: I am glad
you mentioned railways. You will be
aware of the direct rail service from Wrexham through Mr Kehoe: I do not know the detail, but John will answer that. But I do think it is bizarre and I do know that the train actually stops physically at the station but the doors do not open. I do not understand that, but John is our rail expert. Mr Morris: My understanding - and it is just my understanding - is that it is to with some moderation of competition rules that were put in place at privatisation. It seems to us to be a little bit curious that you have a train that sits in the station for regulation purposes but people cannot be let on and off it and I think when you have got such a scarce resource, such as that route between Birmingham and Coventry where they are already trying to squeeze a quart into a pint pot, it seems very, very curious that the companies cannot get together and say this is for the greater good of moving passengers around. Q1619 Mark Pritchard: Mr Morris,
also, briefly, Virgin yesterday announced that they are looking to take two
direct rail trains from Mr Morris: From our point of view anything that improves accessibility to Birmingham International has got to be a good thing. It is about scarce infrastructure and we ought to use that infrastructure in the best possible way, so it is certainly to be welcomed - the more services the merrier as far as I am concerned because it helps to get people in and it helps to achieve our modal share targets. Q1620 Mark Pritchard: My final question, the Welsh language is very important to Welsh people; what provision do you currently provide for your over 100,000 Welsh passengers and wanting to increase more as far as bilingual services are concerned? Mr Kehoe: We provide no Welsh services whatsoever and I think that is a function in that we do have some other ethnic minorities that are in a greater proportion than the Welsh consumers so if there was a pecking order of signage, for example, we may be looking at some Middle Eastern and Indian languages before we actually looked at Welsh. Q1621 Mark Pritchard: Notwithstanding my own comments, Welsh is of course a language of the United Kingdom; with regard to the other languages you referred to this is the United Kingdom and the Government currently have said that they want to see local authorities reduce translation and interpretation costs. Do you think, given the concern that was expressed on the Wales/Shropshire borders a couple of years ago about some road signs being bilingual - Polish and English - that in fact you may be going in the wrong direction of both public opinion and Government opinion and people need to speak English as much as possible? Mr Kehoe: It is horses for courses. What we will do is come up with the most pragmatic solutions for the passengers who fly through the airport. At the moment it is only 100,000; if it were greater than that, in the millions, then clearly we would look at our position again and have the most appropriate signage. This comes back to your point about the passenger experience - and I am a consumer as well of passenger experience - and the biggest thing that frustrates me as a consumer is signage and my inability to read it quickly and to be processed quickly. If we make it more confusing it just adds to that airport experience, which I think has deteriorated for consumers over the last 20 years because of the assault course that we have put in the way for passengers. They just do not enjoy the experience, whereas it used to be a very glamorous thing to do. Mark Pritchard: Thank you. Q1622 Mr Jones: Mr Pakey, you
are aware I am sure of the limited service that operates between Mr Pakey: We would never object to any other region or airport wanting to
expand their services but I would question the viability of it seriously with
the market, and I would also look at the map.
I see Liverpool is almost in Wales so I do kind of feel there is maybe
more that we could actually be doing together to actually maximise big numbers
coming in rather than the little niche services, but we would never stand in
the way of a niche service. Yes, we
would gladly get our roads signposted in Welsh to Q1623 Mr Jones: Can you perhaps
expand on the point that you made? You
questioned the viability of expansion of Mr Pakey: I have very good experience at one or two of our airports. We run Q1624 Mr Jones: Mr Kehoe, to
what extent does Mr Kehoe: I believe it is at the margin.
Although you can access the airport from the M5 and the M50 down to
Abergavenny and the Valleys Cardiff actually has a very well-contained
catchment of 2.1 million people so they are really servicing that East-West
corridor. It is interesting though, with
my Bristol hat on from a few months back, that people are prepared to pay a tax
to fly out of Bristol, so they will drive across the bridge and they will pay
their toll to fly from Bristol because of the destinations that are provided
from that airport. Where our market is
in Wales it really is the centre and if you talk to Neil and his colleagues at
Liverpool and to Manchester, they will say they have got North Wales, Bristol
and Cardiff have got South Wales and we are left with the important rural bit
which goes all the way to Aberystwyth - some very beautiful parts as well but
very few people. That is why our focus,
in terms of where are we putting our efforts, may well on the borders and the
English side to be absolutely blunt, Shropshire and Herefordshire, where we will
pick up traffic. It is at the margins
however in terms of our competition with Q1625 Mr Jones: Presumably it
all revolves around destinations at the end of the day; would you be inclined
to bid for new destinations in order to compete more with other regional
airports including Mr Kehoe: We are in competition of course.
The population of the Mr Jones: Thank you. Q1626 Chairman: On that point, what is surprising in those
statistics about different counties of Mr Kehoe: This is the Abergavenny road that comes down from the M50 around Abergavenny
and straight down the valley into Q1627 Mrs James: Both of your submissions mention working with Welsh authorities and agencies and I wanted to ask you what has been your experience of working with those partners, particularly when you are marketing the airport to Welsh passengers? Mr Kehoe: I have to say mine has been very limited - even at Q1628 Mrs James: Can you see where you possibly could fit into any initiatives, or have you any ideas? Mr Kehoe: We are exploring that. I had a meeting with the chief executive of the Regional Assembly and she was of the view that there is something the airport can do and there is a small market. There is a small market and we can add value, but it is limited. Q1629 Mrs James: Mr Pakey. Mr Pakey: We enjoy a very good relationship with Tourism North Wales but it
is a little frustrating, if I am honest with you, because every time we get some
initiative that we are going to roll out together there is never any funding,
they never seem to have any money. For
example, they wanted to have North Wales Tourism representation in our airport,
a desk with all the leaflets and all the products that Q1630 Mrs James: You have
touched on a very important thing there because you do not only have a role in
getting people out of the country - off on their hols, business et cetera - but
there are huge opportunities, particularly in the downturn, for bringing people
in, business people and tourists, into Wales.
Have you in Mr Kehoe: I have just written that down because I think it is the most
important thing. I have just walked here
down Q1631 Mr Jones: Mr Pakey, you said you have been dealing with North Wales Tourism which is actually a private company - declaring an interest, they are actually clients of mine. Have you had no dealings with what used to be the Wales Tourist Board but is now Visit Wales and is an arm of the Welsh Assembly Government? Mr Pakey: Yes, indeed, sorry, I should have been more specific. We have dealt with them. Q1632 Mr Jones: You have dealt with both organisations. Mr Pakey: We have dealt with both, yes. Q1633 Mr Jones: What has been the response of Visit Wales? Mr Pakey: To be honest when I say "dealt with", we seem to meet once every
six months, then we hit a wall somewhere and then we say "We will see you again
in six months", so we have never really managed to achieve very much yet
together. The relationship is there, I
get invited over to their things in Q1634 Mr Jones: As I understand it you are quite willing to provide facilities at concessionary rates. Mr Pakey: Facilities and contacts. Mr Kehoe here mentioned the internet but we have got the first link if you like with the airlines and they themselves have tremendous advertising and marketing potential, whether it is in-flight magazines, their own websites or in the destination or departure airports for the inbound traffic. There is masses that we can actually do together, and I am not saying that it is not being done, it is that maybe we have not quite got there yet. We probably need to up the priority listing a little bit to try and make it happen again, but I kept on feeling that this was taking us down to Cardiff, because every time you were feeling that you were not going to have anything to put into a pot that could be generated to create a return on investment it seemed the message coming back to me - forgive me, I do not know whether it was from Visit Wales or North Wales Tourism but the message coming back to me was we do not really have it and we might have to go down to Cardiff and plead for it. We have not gone down that path yet but I will keep trying, and if anybody can help me oil the wheels I would certainly be more than happy if it gives me some shortcuts as to how to make that change. We are all willing, that is the important thing, to make things happen. Q1635 Mrs James: Just to add to that, as Mr Jones said North Wales Tourism is a private company which does an excellent job of promoting on behalf of local operators and things, but there are also the regional tourism partnerships which are funded by Visit Wales et cetera, and they have a much more localised brief. It might be helpful if you plugged into them as well, because that is their brief, to market on a regional basis. Mr Pakey: I would be quite happy if Paul and I were to form an alliance with Q1636 Chairman: Given the
service that you provide at both airports for the Welsh people have you ever
thought about seeking a meeting with either the Secretary of State for Mr Kehoe: I have not, not yet, but having said that we have just started this
process that I mentioned to Mrs James a short while ago in terms of meeting
with the cross-border agency through the local RDA and that will be the start
of it, but we have not approached the Welsh Assembly at all. I have to say again, going back in history
when the Assembly was first created and the First Minister was appointed, there
was a lot of support for Mr Pakey: From a Chairman: Thank you very much, all of you, for your evidence today and for your earlier memoranda. If you feel that there are points which maybe have not been covered today we would be very pleased to receive a further memorandum. We are particularly grateful for the efforts you have made to come to give evidence to us. We have found the exercise most instructive and it will certainly inform our final report on transport. Thank you very much.
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