29 Jun 2022
By Alison McRae, Senior Director of Glasgow Chamber of Commerce
Airports haven’t been out of the media recently and, let’s face it, it hasn’t been for the right reasons. But just take a step back and consider the strategic role our airports play in the Scottish economy.
The ability to travel by air is vital for any successful modern economy. Not least does it provide the global city to city connections serving as virtual bridges supporting trade, knowledge transfer and tourism between markets, it enables links between businesses, governments and citizens – encouraging investment among other key economic activities.
If we take a look at Glasgow Airport as an independent destination, an economic impact report by York Aviation in 2019 highlighted that the city’s airport supported over 30,000 jobs, generating £1.44 billion of economic activity across Scotland each year. This included 5,300 people employed directly on-site.
Over and above this, it is important to remember the leverage point on investment as a result of an airport destination. Many leading companies have chosen to locate in the vicinity of Glasgow Airport including British Airways Maintenance, Thermo Fisher, HP, and Rolls Royce. Within a couple of miles, around 400 companies across a range of key growth sectors employ over 15,000 people, alongside the emerging manufacturing innovation district.
But let me not mince my words around the devastating impact that the pandemic has had on Glasgow Airport. Pre-covid the airport had successfully built year on year to secure some 9m passengers. This crashed down to 2million in 2020 & 2021, setting it back decades to 1973 figures. In addition, some 2,000 jobs were lost across the campus. 2022 has seen forecasts increase to 6m however conditions for economic recovery are fraught as there is an investment crunch in parallel to the ambition to reboot and decarbonise the airport.
According to Derek Provan, Chief Executive, AGS Airports, airlines fly to cities not airports and it is based on this city and regional context that airlines make their decision to commit to a destination.
Glasgow Airport seeks to restore the much-needed routes back but Provan warns not to underestimate the challenge and reinforces the importance, now more than ever, to work with the country’s cities and national partners. In the short term, securing direct US air routes is an imperative to aid recovery.
Peter Lederer CBE, Chair of Glasgow Tourism Partnership, is calling for a Route Investment Fund with a strategic and regional focus which could help to realise our economic strategy ambitions. If we were starting from a blank sheet of paper, we would need certain connections to make that work. Given our strategic priorities in Scotland, it’s about looking at the connections which would build our economic strategy across tourism, investment and exports and where value can be added regionally. We are already a small country so let’s coordinate to make the best decisions now to get it right medium to long term.
There is also a clear need to have some dot joining of government approaches such as the Trading Nation and Aviation Strategies to ensure focus and leverage from the most relevant markets for our economy.
Scottish Tourism Alliance research published last week reinforces consumer hesitancy to make bookings and incur expenditure, partly due to cost of living increases and Scotland’s inability to compete internationally on price and value for money – providing a further challenge for our airports.
It is indeed a vulture market in terms of global competition and Scotland is not on a level playing field. European competitors are in a better financial position to bounce back post-pandemic and accelerate the return of connectivity, with the likes of Germany having invested €820million grants to regional airports.
Glasgow Airport is certainly doing everything within its power to lead from the front in reaffirming its position as a major linchpin to our economy in a sustainable way but collaboration and a common good approach are going to be key to revitalising our airport.
This article was first published in The Herald on Wednesday 29 June 2022
