Runaway growth at Stansted airport

Boosted by the popularity of budget airlines, Stansted has finally established itself as London's third airport. But as its passenger growth overtakes that of Heathrow and Gatwick combined, is it about to become a victim of its own success?

IF ANY further proof were needed that Stansted is now very firmly London's third airport, it came yesterday when BAA revealed that itspassenger growth last month exceeded that of Heathrow and Gatwick put together.

IF ANY further proof were needed that Stansted is now very firmly London's third airport, it came yesterday when BAA revealed that itspassenger growth last month exceeded that of Heathrow and Gatwick put together.

Stansted handled 1.14 million passengers in August - a 42 per cent increase on the same month last year. Put another way, that meansan additional 390,000 people passed through the airport compared with a combined increase of 262,000 at its two bigger brothers.

The phenomenal expansion of the Essex airport, located just off junction 8 on the M11, is being driven by the explosion in low-cost airtravel and the fact that Heathrow and Gatwick are both at bursting point.

This year Stansted will handle an estimated 9 million passengers compared with 5.5 million just two years ago. In the last 18 months,the number of destinations served from Stansted has grown from 23 to 65 and the number of scheduled airlines to 25.

It will not stop there. By the time the latest £200m expansion of the airport is complete in 2002, passenger numbers are forecast tohave grown to 11 million. The capacity of Stansted will then be 15 million - half that of Gatwick's at present.

It all seems a far cry from 1991 when Stansted's new £ 400m Sir Norman Foster-designed terminal was opened by the Queen. Thebuilding was like a temple to air travel, and, appropriately enough for a building with religious pretensions, half-deserted for most of thetime. If you could find Stansted in the first place, then transiting through its airy, marbled and largely empty departure halls was asolitary delight - quite the antithesis of modern day air travel.

The impact on BAA's balance sheet was not quite so pleasant. At that point Stansted was the biggest single investment project it hadundertaken and the pay-back was becoming ever more distant. The airport finally broke even in 1996 - two years later than BAA hadbudgeted for - and this year is expected to contribute profits of more than £20m.

Tim Jeans, marketing director of the low-cost airline Ryanair, Stansted's biggest operator serving more than 100 destinations, says: "Thebiggest change is that Stansted is now genuinely accepted as a London airport. People no longer turn their noses up at it."

The catalyst for growth has been the low-fare airlines - Ryanair and the BA subsidiary Go which began operations from Stansted inMay last year - account for one-third of the airport's passengers.

They are also redefining its catchment area. This currently stands at 11 million people in an area arcing from the east Anglia coast up asfar as Peterborough and down to north London.

But low fares are increasing people's propensity to travel further to an airport - meaning that Stansted is attracting passengers fromsouth of the Thames and even the Midlands and the North-west, where neither Birmingham nor Manchester airports have made the sameplay to attract budget airlines.

With success, however, come problems and Mr Jeans senses that Stansted is just beginning to be the victim of its own galloping growth."We are just starting to see some of the problems of the big airports being manifested at Stansted like congested ramps and air trafficdelays," he says. "The pinchpoint in the system over the next two to three years will be runway capacity but then again Gatwick hasshown it is possible to get 25 million passengers through a single runway.

John Stent, Stansted's managing director, is only too well aware that it could become the victim of its own success. "Our growth in thelast 18 months has been the fastest any airport anywhere has experienced," he says. "As we grow we will have to keep every aspect ofservice up to scratch or there will come a point when our good name will be at risk."

Being the newest and most modern airport terminal in Britain, Stansted has some inherent advantages. It is built on one level, car parkingis adjacent to the terminal and both the rail line which serves the airport and the monorail which ferries passengers out to the satellitescome directly into the terminal building. Mr Stent is proud of the fact that a third of Stansted's passengers arrive by public transport. Thefigure is likely to rise further at the end of this month when the "Skytrain" service from Liverpool Street station is renamed the StanstedExpress and frequency increases to every 15 minutes.

Part of the £200m investment currently taking place will be spent on improving road access by building flyover slip roads into theairport terminal from the M11 to avoid the delays and congestion that can occur when junction 8 is blocked by an accident or sheerweight of traffic. The A120 is also being upgraded, improving road access from the east.

Shortage of runway capacity is not, he says, something which worries him. When Stansted was turned into an airport in 1942 to serviceUS Army air-force bombers, it was built with what was then the longest runway in Britain. When approval was given for the expansionof Stansted in 1985 after a long-running public inquiry, it was envisaged that it would develop as an airport primarily for long-haul andcharter flights.

That has not happened because most of the world's flag carriers voted with their feet and opted to make Heathrow their UK hub. In theearly days of Stansted's expansion, this was a major setback for Stansted, the presence of a major trans-continental airline being seen asessential to help draw in feeder services and provide the airport with critical mass.

As it turns out Stansted has prospered without a British Airways or a big US carrier."Quite frankly, we could fill the 15 millionpassenger capacity with our present mix of short-haul operators and still get a satisfactory financial return," says Mr Stent.

Nevertheless, Stansted still hankers after a long-haul carrier and Mr Stent reckons it could land one if not next year then the year after."There is no desperation about this and we will not prostitute ourselves to attract one, but there is a genuine need for it within thiscatchment area."

He says Stansted has polled 3,000 local businesses and the overwhelming response was that Stansted both needed and justified atransatlantic service. Mr Stent says one possibility is to attract either Continental or North West, both of which have an alliance withKLM, Stansted's second biggest operator.

Ryanair's Mr Jeans thinks Stansted should concentrate on serving its existing carriers. "The desire to attract long-haul routes restsmainly with the airport's marketing department which would love to stick more pins on the map. But in my view it is unimportant to theoverall growth of Stansted. The pace of expansion is not going to be affected one way or another."

It would, nevertheless, be the icing on the cake.