Menzies chief: Airlines could ditch Heathrow if third runway isn’t approved
Heathrow Airport has “come a long way” in recent years but its third runway plans are a “must” if it wants to stay competitive, the boss of the world’s largest airline services companies has said.
In an interview with CityAM, Menzies Aviation chief Philipp Joeinig warned airlines would begin to “look for alternatives” if they see the airport cannot “cope with the growth” in passenger numbers seen across the industry.
“That’s why I think that the third runway is a must, you know, if the UK and Heathrow in particular, wants to continue to be a major hub… then capacity increases have to have to come.”
Heathrow’s long-delayed and highly controversial plan for a third runway has been thrown into further doubt in recent months amid a general election and reports it is considering other means to increase capacity over the next decade.
The airport has faced a string of downbeat statements from senior aviation figures on the future of the proposals, alongside growing criticism of its wider infrastructure.
The head of IATA and former British Airways boss Willie Walsh said on Saturday the expansion project was dead and buried and warned he expects connectivity at European airports as a whole to “stagnate” in the coming years.
Prior to Walsh’s comments, Emirates chief Sir Tim Clark made headlines on Tuesday when he compared Heathrow Airport and Terminal Five to a dilapidated Second World War hub.
In his role at Menzies, Joeinig oversees check-in services, baggage handling and refuelling at a number of major hubs. His outlook is more upbeat.
“I think Heathrow Airport has come a long way, and if you look at Terminal Five and Terminal Two I think it’s working well,” he said.
“Heathrow has some of the best connections to the city of all of all major airports in the world [and] is continuously investing, but there is never enough you can do.”
Planning delays have plagued Britain’s infrastructure scene though and Joeinig conceded red tape and the “political framework” hasn’t helped airports in Europe and the UK in recent years.
Alongside Heathrow, Gatwick is pursuing £2.2bn proposals for a second runway and has increasingly prioritised infrastructure investment in recent years, including a revamp of its station.
“If you look at any airport… let’s say towards the East, things can get done quicker. Sometimes in the UK and in Europe as well, you need a lot of consultations and bodies that need to agree to any expansion of infrastructure and that doesn’t help you know.”
“If you look at any airport… let’s say towards the East, things can get done quicker.”
Menzies boss Philipp Joeinig
It comes amid growing concern Heathrow could fall behind rival global hubs such as Dubai and Istanbul Airport and at a time when air travel demand in the Far East is soaring.
“The time it takes to move things around and to change things to get ready and and be prepared for any increase in capacity is a very long process and that should be changed. Less regulations, a more business friendly environment… [and] more benefits for people” working on critical infrastructure projects, Joeinig said.
Menzies itself has been targetting expansion in China, in a move it claims could generate a revenue increase of around 20 per cent.
The London-headquartered firm snapped up a 50 per cent stake in Jardine Aviation Services Group, which is based in Hong Kong’s expanding International Airport, in January.
Joeinig told CityAM the firm’s pipeline of planned acquisitions was “very strong” and included countries such as Peru and Portugal. Overall, however, the balance was “a bit more towards the East,” he said.
Menzies has joined airlines in a post-Covid profit bonanza over the last year as travel demand finally recovered from the lows of the pandemic.
Current forecasts suggest this summer will be the busiest in years, while Heathrow has predicted record passenger traffic in 2023.
The news is good for airlines and airports alike but has fuelled concern of a repeat of the disruption seen over the last two summers.
A shortfall in staff after Covid-era job cuts caused chaos at UK airports in 2022 and last August was arguably worse as thousands of flights were axed following an unprecedented meltdown at the UK’s National Air Traffic Service (NATs).
“We have been working together to ensure we are much more ready for the increased traffic [this] summer,” Joeinig said, adding that Menzies started hiring people in April and May to train them up for the busy summer period.
Whatever the summer holds for the aviation sector, profit will likely continue rising at all its associated businesses. Menzies reported a third-year of double digit growth in its full-year results in April, as it served over 217m airline passengers, up 18.6 per cent year-on-year.
Joeinig said he was “optimistic” that with the “right support” from government, the market would continue to boom in 2024 and 2025.
Heathrow was approached for comment.