Armed with surging traffic, a carbon strategy, a new labour deal and a future rail link to London, Nick Barton, Chief Executive Officer at Birmingham International Airport (BHX), holds a strong hand. Mark Pilling reports
“If I opened my window and dropped my mug of coffee it would land on the site of the HS2 station that will be built literally just there,” said Nick Barton, pointing out of his office during our interview.
High Speed Two – HS2 – is a huge UK transportation project involving the construction of a high-speed railway line from London to the West Midlands and connecting onwards to Manchester, Liverpool and Glasgow.
Helpfully for BHX it is the first stop on the new line after departure from London, with a journey time of just 32 minutes. Construction of the Interchange station is just beginning, with the line scheduled to be operational towards the end of this decade. It will put Birmingham within easy reach of London.
“It is only a matter of time before connectivity between this airport into Old Oak Common and into London is going to be mind-blowing because it puts us effectively into Zone 5 of the tube map,” enthused Barton.
To non-Londoners, Zone 5 is an outer band of the UK capital’s public transport system; the BHX train link will take roughly half the transit time of a ride on the Piccadilly underground line from Heathrow into the centre of London.
And, remember the name of the new Old Oak Common Station, which will become a huge rail hub to rival classic London stations like King’s Cross and Waterloo.
“All the infrastructure, the roads, the rail, the cuttings, the tunnels [for HS2] – they are under construction here right now,” said Barton. “It’s not going to be here next year, but it’s in our near view, because we’re always planning way ahead in airports. The time really is now to be starting to get active about our thinking and our promotion of our networks in anticipation of HS2.”
Network rebuild
Having the HS2 rail line will provide a huge stimulus for BHX, which serves the populous region of the West Midlands of six million inhabitants. The city of Birmingham and its metropolitan area are second only to London in size.
This large catchment area is the powerhouse that has driven BHX to full traffic recovery compared to 2019 levels. In its 2021-2022 financial year, which ended on 31 March 2022, traffic had limped to 3.6 million as Covid travel restrictions prevailed.
In its last financial year, ending March 2023, Barton reported 10.4 million passengers, versus 2019 levels of 12.1 million, as traffic flowed back in 2022 and into this year. This financial year, 2023/24, Birmingham Airport forecasts drawing level with, or even exceeding, 2019 volumes.
The airport has restored or added destinations over the past year, bringing the number of points served back to the 150 in its route network in 2019, while staff numbers too are almost back to pre-pandemic levels, said Barton.
The airport had been on a roll before Covid, growing by 51% in the 10 years before the pandemic. And that roll looks set to continue as this decade unfolds.
“We have had very good recovery on the airline network,” said Barton. “We have over 30 different carriers operating now. We are delighted that all the widebody service has come back with real strength.
“We’re very pleasantly surprised that there are such high load levels on the aircraft. And that’s without exception. They are all doing well,” explained Barton.
A major boost for BHX is the return in force of the Gulf majors, plus the addition of another big player from the region. In July, BHX announced Emirates, Qatar Airways and Saudia have collectively expanded the airport’s direct Middle Eastern connectivity to its best-ever level.
Emirates has brought back its Airbus A380 to BHX, operating twice daily to Dubai; Qatar Airways will fly Boeing 787s daily to Doha, while Saudia has arrived at BHX for the first time with a three-times-weekly 787 service to Jeddah.
“These new services and investment are not only a big economic boost to the region as our global ties grow, but they’re also a significant vote of confidence in the future of the West Midlands from three of the world’s biggest airlines,” said Andy Street, the Mayor of the West Midlands.
The arrival of Saudia has been aided by the Saudi Air Connectivity Program, which was established in 2021 to support tourism growth in Saudi Arabia by enhancing air connectivity and developing existing and prospective air routes, connecting Saudi Arabia to new destinations.
“I expect we will see more capacity being put on very soon to support further growth in those areas,” said Barton of the Middle East region.
Air India expands
A rejuvenated Air India is building up capacity again at BHX, too. “Air India has been given a complete makeover and a new lease of life under Tata. They are back up to levels we haven’t seen for five years, and we hope we’’ll see more from them as well,” said Barton.
The carrier has increased its weekly flights from India to BHX from one a week to six, with two services to Amritsar and four to Delhi.
In parallel with strong demand for longer-haul flying, BHX saw an even faster return for its short-haul operations led by low-cost players easyJet, Jet2 and Ryanair.
The Irish LCC added a sixth 737 Max to its BHX-based fleet this year and is operating over 350 flights on 42 routes, including new ones to Girona and Pisa.
In May, easyJet announced it would open its first base at BHX with three A320 family aircraft located there from March 2024. The airline already serves key domestic and international routes from BHX with the new base being a “landmark investment” and a “huge vote of confidence in the West Midlands”, said Barton.
“The LCC market is something that we are growing very strongly here at BHX,” he added. “We’ve got a very significant catchment area that needs to have more routes. I know every airport is going to say that, but we genuinely do need to get more coverage across Europe.
“We also need to get depth on those core routes to increase daily and weekly frequencies to give the public more flexibility,” noted Barton.
For Barton, a core routing means important city pairs and what BHX describes as the Mediterranean “power destinations”.
“This means more capacity into places like Alicante and the hotspot beach destinations,” he said. “The demand for those routes remains insatiable and I think the LCC market is especially good at serving those markets with the second homeowners, the boat owners, and the frequent short-trip holiday makers. There is a whole group of people that need more capacity, more destinations, and more frequency in this region.”
Transatlantic
The last time BHX had a transatlantic connection was a United Airlines service to New York JFK, which ended in 2017. American Airlines also flew the route for a short time but stopped in the same year.
The BHX team is working on a resumption of transatlantic links, but it will take time. “I would expect a direct connection into New York or that region to happen at some point in two to three years’ time,” said Barton.
“Going westwards across the Atlantic we have a lot of leakage from our catchment which we need to do more to capture. A lot of our traffic goes past our front door down to Heathrow, which I can understand as they’ve got the depth and the frequency of operations,” he said.
“Aircraft availability is a key issue there because the A321XLR is the aircraft of choice for that sort of operation. They are exceptional aircraft,” said Barton. “When those start to become more available, that’s when we’ll see the North Atlantic opening up. ”
For BHX, this will be welcome, but in the meantime opportunities elsewhere abound. “With the capacity going through the Middle East, Turkish Airlines going through Istanbul, and with Lufthansa, Air France and KLM connecting into the three core Northern European hubs, there are a lot of options for growth to deliver more capacity into the subcontinent and further east,” said Barton.
Traffic outlook
Barton described the marketplace as showing incredible vitality, with no signs of slowing despite concerns over rising interest rates and economic slowdown in many countries.
“The appetite to travel and the price point is clearly OK [for passengers] and there are fundamental levels of high demand,” said Barton. “Airlines are seeing a strong market, and frankly they deserve it after the miserable experience of running airlines through Covid which was a near-death experience for many.”
Asked to assess where the business sees itself today, Barton is typically honest in his answer: there are issues around recruitment, industrial relations and terminal modifications taking place as the airport copes with rising traffic.
“We are content with where things are, but it’s still not perfect. That’s partly to do with the ongoing recruitment challenge, although it is getting a lot better,” he explained.
“You’ve also got an industrial relations landscape in the UK which has been quite challenging,” added Barton. The airport itself faced strike action earlier in the summer from security officers and others, but agreement was reached on an improved pay offer, and the strike was averted.
The rise of industrial unrest does not surprise Barton, who has seen and managed through turbulent times before. “I think it’s just the ebb and flow of running a complex business such as an airport in a highly volatile national economic landscape,” he believes.
“It is inevitable that you will see a more tense and fragile industrial relationship. It’s unavoidable,” said Barton. “The answer is engaging with unions to find common ground and find a reasonable response.”
For some, the arrival of industrial unrest and strike action was a new phenomenon. “A lot of our HR specialists had never experienced industrial action, which in some ways is a tribute to the UK economy that we’ve had such an extended period of relative industrial relations harmony,” said Barton.
“Overlay all of that with a major construction project, which is about meeting the [new UK] standards for airport security for cabin baggage by June 2024,” said Barton.
BHX is spending over £50 million (US$63 million) to adjust its terminal to cope with new security scanning machinery that is larger and heavier than the equipment it is replacing. “This is taking place right in the heart of the most trafficked area of the airport. It is an immense challenge to deliver all this development through a busy summer,” said Barton.
In addition to the new security checkpoints, BHX is investing in a self-service bag drop capability, expanding its baggage area and adding aircraft stands.
Infrastructure expansion
“You always have what we would call an industry leading constraint, which means there’s always some part of your product that needs to be expanded to cope with the next phase of passenger growth,” said Barton, who expects that BHX will grow 50% over the next 10 years, and maybe even more.
The airport’s single runway can handle this growth; more stands will be added as aircraft numbers increase though.
The airport is slot co-ordinated, but not slot constrained. However, it is almost at maximum runway capacity at peak hours.
Apart from stands, for which it has space, BHX will continuously invest in its terminal. “The bulk of our investment will go into the terminal, its facilities and its equipment so that we can have a building that is worked harder as it grows but doesn’t let you down,” said Barton.
“Then there is a tertiary but very important sub strategy which is our carbon strategy,” explained Barton. “Replacing a lot of the existing equipment not only builds your resilience because the new equipment is built to modern standards, but also invariably supports your carbon reduction strategy, because it consumes less power.”
Sustainability strategy
BHX launched its sustainability strategy in late 2019, just prior to Covid. At that time, it made a commitment to become a net zero carbon operation by 2033.
“Even then it was an ambitious target,” said Barton. “Covid has come along and robbed us of two years of our normal life. But what we haven’t done is reset the number to 2035.
“We have stuck with 2033 which has turned the heat up even more on the challenges that were already in the 2019 declaration,” said Barton. “And we’ve been open. We said at the time we made that commitment we don’t know how we’re going to do it.”
And that’s the point for Barton. “I think this is too important for us to not be ambitious,” he explained. While the 2033 target may be “scary”, the challenge of solving the problem and pushing as hard as possible is critical.
“A lot of executives seek to avoid failure so only announce things that they know there’s a good chance of hitting. We laid down the challenge internally and then we made a public statement about it at a time when most were looking at 2050 [to achieve net zero],” he said.
“I took the view that beyond 2033 was probably someone else’s problem. And therefore, if I made it my problem, I would own it. And as a business we will do whatever we possibly can to hit that target,” said Barton.
In August BHX published its second sustainability report, covering the 2021 to 2023 period. This outlined that the airport was on track towards its 2033 target and had reduced carbon emissions within its direct control by 27% in 2021/22 against its 2019/20 reporting baseline.
In the same month, the airport unveiled a major investment to install a large solar array with the aim to provide 20% of its on-site electrical power. By May 2024 it will install 12,804 photovoltaic panels on a 1.5km long, six-metre-high embankment flanking the edge of the runway. This will be a 6.8MW facility and BHX will look to add further solar capacity to increase its renewable energy generation.
Barton is convinced that technology advances will be part of the decarbonisation answer for the aviation industry: “It’s a delight to be in this industry to see the innovation that’s going on.”
Hydrogen support
BHX will do its bit to support the “buccaneers out there who are spending considerable amounts of money in R&D trying to solve an industry problem”, said Barton.
To this end, BHX is working with hydrogen-electric aircraft developer ZeroAvia on concepts to create a hydrogen production and aircraft refuelling facility at the airport.
An area of land with access to the BHX airfield and the local road network has been earmarked as a suitable location for the facility. On-site solar power is being considered as a source of renewable energy to produce hydrogen.
Subject to funding, planning and regulatory permissions being secured, the ambition would be to use the pioneering plant to support early flight demonstrations, and to refuel road vehicles – potentially including local buses.
Amid all this activity, Barton himself is going back to school, taking a management training course at Oxford University’s Saïd Business School.
“I’m going because I want to share with others in different industries about navigating uncertainty, which is one of the hardest things to do as a chief executive,” he explained. He observed that his can be a lonely job, even when leading a business of hundreds or thousands of people. “The idea is to put myself out of my comfort zone in many respects and try to make me more effective at decision making.”
The next decision was simpler for Barton as the interview ended: whether to refill his coffee mug, which conveniently had not been dropped out of the window.
