The managing director of Glasgow airport talks to Gary Mason about business recovery, crisis management and the importance of political backing for aviation.
When Amanda McMillan first arrived at Glasgow Airport in the autumn of 2008 her first job as managing director was to impound an aircraft after the carrier went into liquidation. “That was a whole new experience for me coming from the drinks industry,” she says. “It was pretty brutal for everybody especially the staff who had all worked here for years.” The grim process of packing a snow plough behind an aircraft which was now an empty shell was symbolic of the cold blast of economic doom and gloom which hit the aviation sector full on – and from which many European airports are only now starting to recover fully.
For McMillan that was year zero but thankfully she can tell a very different story today. Glasgow’s trophy cabinet has been filled with three big industry awards this year and passenger numbers are getting back to pre-economic crash levels with Glasgow being rated one of Europe’s fastest growing airports by the ACI. An impressive list of new carriers, new routes and a sense that the aviation industry in Scotland is receiving solid political backing has given the place an air of confidence.
But the airport’s experience of emerging through the UK’s economic collapse and other major events such as the shocking 2007 terrorist attack on Glasgow have left a profound mark on the MD and her staff. There is the hard fought grittiness that comes with having come through an extremely tough time and emerging through it intact with a fresh sense of perspective.
She told Airport Focus: “I now understand that airports are a great barometer of the economy and if you had lifted the covers on it back in that era you would have seen that some of the domestic flying was beginning to be suppressed by the economy. But when I impounded that aircraft that was really the start of the first third of my life here which was just characterised by doom and gloom.”
The list of casualties, which came thick and fast, included Zoom, XL Airways and Globespan which was a huge loss for Glasgow because it had six aircraft based at the airport. Given what happened it was surprising that McMillan didn’t panic and run for an exit. But she says: “Although I didn’t fully understand the industry at that time I knew fairly quickly that I wouldn’t be able to do a fast and furious turnaround at the airport because I had twigged to the reality that it is so linked to the economy.
“The way I dealt with the first phase was to say to the staff we will recover but it will be a slow process so what we need to do now is make sure we are fit for when the passenger traffic starts coming back.”
She says the airport worked really hard for the first two years after the crash and a lot of shoe leather was worn out trying to fill the leisure gap that had been left by the series of carrier insolvencies. The first big breakthrough came when Jet2 decided to base an aircraft at the airport which was a small sign that the second phase of recovery had started. “From 2011 to 2013 we began to pick up pace and we knew we could get out of the 6 million passengers a year territory to the 7 million mark. Now we are in the third phase of really moving back into growth beyond what Glasgow has ever managed to achieve.”
Next year the airport expects to have record breaking passenger numbers above 9 million and McMillan talks confidently about progressing upwards to 11 million passengers.
Ryanair at the right time
A lot of this growth has been driven by the arrival of Ryanair to the airport in 2014 and the new east pier extension that was recently completed is testament to the muscular low cost carrier’s commitment to Glasgow with 10 routes now operating from it. However, the boss is keen to stress that her airport has a good mix of carriers and is not just a low cost specialist. “We are fortunate that we have a nice blend of airlines here. It is right to underscore Ryanair’s recent development here because it is significant but I see Glasgow as a very diversified airport with every range of carrier – legacy, charter and low cost.”
The recovery in aviation is never far from a fragile one so it is important for airports to build resilience and not be dominated too much by any particular carrier. She says that during the recession doldrums the airport did not think that Ryanair was the right fit for Glasgow and although there were talks between the two they did not end in any business agreement.
“At that time I didn’t want to be dominated by one carrier so we paced ourselves and decided the moment was right for Ryanair after we had turned a corner,” she adds. “That meant in my mind that the carrier would complement what was here rather than drown it out. That’s the way we go about resilience. We try to have a good mix by making sure there is good route and network coverage. But a lot of our efforts have been towards ‘joining the dots’ in Europe and we need to give Ryanair due respect for that – they are hugely powerful in Europe.”
She also says that the move was right for Ryanair because they were not flying from primary airports back in 2008 but now very much are.
Luring long haul
Success in attracting long haul routes direct into Glasgow has also been part of the airport’s recipe for recent success although McMillan acknowledges that this process had started before she arrived. “We already had an Emirates flight and a New York route and we knew full well there was a market for Orlando and Canada,” she says. “So we basically just looked to build on the strength of what we already had. We are selling the proposition to airlines that because Glasgow is the largest city in Scotland and has a huge metropolitan area, there is a massive pool there to fill long haul aircraft. What we added on to that in recent years is the power of Glasgow as a gateway to the whole of Scotland which means we can attract inbound as well.
“So in summary I think we had a good story to tell in terms of outbound demand as soon as the economy picked up but we added the two things together and said we had great underlying inbound potential as well.”
She says that a good example of that is the arrival of Canadian low-cost carrier WestJet. There was clearly a strong demand for people to go to Canada from Glasgow given the historic migration history between the two countries but it also worked on a reciprocal basis with Canadian Scots wanting to visit relatives, trace their ancestry or come as tourists.
How important has political backing for aviation generally been in Scotland for the success of Glasgow? The promised 50 per cent reduction in Air Passenger Duty (APD) by the Scottish Parliament with the longer term aim to abolish it completely would clearly be a fillip for all airports north of the border.
Backdrop of political support
McMillan says the airports have worked hard to make their case given the link between a strong economy and thriving aviation market. “When we were really struggling I spent quite a lot of time with politicians trying to explain that airports were crucial to building our way out of the recession – and were generally a force for good rather than a force for evil.”
She says that Scottish politicians have realised that given the country’s geographical position exports are vital and aviation is a main cog in that process. “I think we have now built a strong backdrop of political support for the airport industry which is in sharp contrast to what has happened in England,” she adds.
This has clearly included explaining the benefits of taking a different stance to APD. “When I discussed this with politicians I could very easily explain to them that when I sit down with an airline and I am up against another European city my business case is a lot weaker,” she says. “They got that and started to work with us doing the maths. Clearly this is not straightforward as it is never easy for a government to give up revenue.”
No half measures
She is less impressed obviously with the noises coming from Scottish ministers recently indicating that the reduction in APD may come in smaller stages rather than a straightforward 50 per cent cut. “Staged implementation is not helpful to the underlying proposition but is also very complex for airlines to administer,” she says. She adds as an example of this piecemeal approach the decision taken by Westminster to abolish APD for children under 16, which has been very difficult and expensive for carriers to factor in to their pricing structures.
“We would prefer a loud and meaningful message and a simple one – 10 per cent is not going to shift the dial. We will continue to push for a speedy 50 per cent reduction rather than a slow one.”
What does Glasgow’s MD think of the continued delays that have surrounded political decisions on expanding runway capacity in the south east of England? “The curious thing about running an airport is that you live for the day to day but you also have a huge responsibility to look towards the long term,” she says. “The difficulty with the Heathrow decision is that everyone keeps kicking it into the long grass. But we have a massive responsibility as custodians of these assets to provide for the future and get it right.
“For me any delay in this decision from a national perspective is a poor one. There have been plenty of clever people who have thought it through.
“From a Scottish perspective clearly short term nothing is going to change for us anyway once the decision has been made. But Heathrow is our most popular route and Gatwick is also a significant route for us but we are very constrained in our access to the south east.”
In fact Glasgow provides flights to all five of London’s main airports but she says this underlines the importance of aviation connectivity to the whole of England. “Regional connectivity is massive for us but Heathrow retains the biggest appeal because it is the one true UK hub.” She adds that Scotland as a whole should take a far greater interest in this process and says “there has been too much sitting on the fence” for an issue which is vital to the nation’s future prosperity.
Despite its strong commercial performance the headlines for Glasgow airport have not all been positive this year. Strong press interest in drunk passengers who cause problems while flying have found an outlet at the airport and earlier this year one low cost carrier announced that it was putting a ban of passengers bringing duty free alcohol on one Glasgow route. How have the airport management handled the issue given that leisure travel is a main area for growth?
McMillan says that she personally believes in a “one campus” approach by airport staff which brings together all the separate teams of people who work there. “The airlines and airport staff, the police and the retailers here have a genuine ability to work together which I think is quite unique,” she says. “For disruptive passengers we have worked out a strategy that involves everyone. Police have trained staff and retailers how they politely decline over-enthusiastic passengers. We have also trained duty free staff about when to decide not to sell miniatures. And some of the airlines have gone right down to micro-management style precautions on certain flights. I think the response has been measured because we are talking about a minority and we don’t want to flip it the other way where the vast majority of sensible people no longer see flying as being fun.”
These issues seem insignificant to the terrorist attack on the airport in 2007 when a vehicle loaded with explosives was crashed into the front of the terminal building. The MD thinks that the incident had a profound effect on staff who were there which resonates today but in a positive way.
“People are now acutely aware of these threats today but we went through that experience much earlier,” she says. “It changed our whole outlook on airport crisis management and business recovery. We quickly realised that the airport wasn’t our own – it belongs to the authorities after something like that happens and they were keen to lock it down for a period of time. Airports are private businesses that provide a very public service and when something like that happens you get a very good idea of how much public support you get for the disruption and for how long. We were pretty sure that night that we had about 36 hours of sympathy and then that would be gone and people really wanted the airport to re-open.”
As a consequence of that incident she says that the airport has managed to cope with big events such as the ash cloud disruptions and the Commonwealth Games with “just a little bit more grit and determination.”