Check-in – the Vanderlande airports podcast

Episode 12 – behind the scenes at Heathrow Airport!

May 19, 2021 Vanderlande
Check-in – the Vanderlande airports podcast
Episode 12 – behind the scenes at Heathrow Airport!
Show Notes Transcript Chapter Markers

Welcome to a very special episode of Check-in, where we go behind the scenes at Heathrow Airport in the UK with CEO John Holland-Kaye, and discuss the various challenges the airport has faced over an unprecedented year – as well as look forward to the future with a good dose of optimism.

We also discuss technology and how the airport’s suppliers and partners can play a role in its long-term future, with Heathrow’s Chief Solutions Officer, Chris Garton. We do hope you enjoy this episode.

A – Hi there, and welcome to this very special edition of Check-in… the Vanderlande airports podcast.

 Today, we’re delighted to be bringing you not just one, but twoguests on this episode, which takes us behind the scenes at Heathrow Airport in the UK.

With 2020 having brought so much disruption to our industry, we’ll be assessing the legacy of COVID-19, looking at the current situation, as well as looking forward with a degree of optimism.

So, without further delay, what better way to start this episode than to welcome the CEO of Heathrow Airport, John Holland-Kaye, who joins me on the line now…

John Holland-Kaye, welcome to Check-in, it’s a real pleasure to have you with us today.


JHK – Thank you.


A – And whereabouts are you joining us from, from the UK?


JHK – Well, I’m joining from my home. We’re just coming to the opening up of the country again, so I started to go back into work a couple of days a week, which has been just fantastic. 


A – Excellent. And well, we know what a senior figure you are from Heathrow Airport, and I’m sure there are many questions we could have asked you. But we need to start somewhere. So, let’s turn our gaze backwards a little bit. Tell me about your personal experiences from 2020, I mean this was an unprecedented year for many airports such as Heathrow.


JHK – It has, it’s been a terrible year in aviation and I know many businesses around the world have actually had a good time in the past year, but I think we can see that aviation has not only been hit harder than many other sectors, but it’s going to be one of the slowest to recover. Even here in the UK, we can see that domestic sectors such as hospitality, hotels, restaurants are starting to get going again before international aviation gets going. And for the UK aviation business, we are almost entirely dependent on international aviation. As long as borders are closed, then we really have no business. It’s been very challenging, but what has struck me through the last year is how amazingly adaptable we are being, as a community to changing to these extraordinary circumstances and we only have a few thousand passengers a day passing through Heathrow, compared to 200,000 plus on a normal day. We’ve been very quick to change our business model to reduce our cost base, to change the way we work, become much more agile, but most of all we’ve really worked together to collaborate, to make sure we’re supporting each other to get through a very difficult time. And I must give credit to all the Vanderlande team for being part of ‘team Heathrow’ and working with us through the last difficult 12 months.


A – Excellent to know John, thank you for that. And if it’s not too much of a stretch, can you take us back to those early days, in February and March of 2020, what were your initial priorities when you learned that this pandemic was going to take hold?


JHK – Well, at the beginning of 2019, start of 2020, this was going to be the biggest year we had ever had. January 2020 was our busiest January ever, so we were expecting record activity, we were also just really gearing up our expansion programmes to build the third runway, and investment was heavily underway there. And then suddenly, over the course of about a month, everything ground to a halt. March was a devastating time where we went from almost full capacity to almost no planes flying whatsoever. And it was shocking to see week by week how demand was just drying up. And it wasn’t that people didn’t want to fly, it was that there was nowhere they could fly to. And that was a very difficult time, a lot of uncertainty for all of us personally, and of course the lockdown started and people were having personal crises as well as worrying about their work… could you get through? Would your family be healthy? As well as will I have a job. So, a very stressful time for everyone and what we tried to do at Heathrow was move quickly to be very clear with people what we thought the demand would be, we were planning for the changes we needed to make to get our very high fixed-cost base down to something that would be more manageable, and conserve cash for an unknown period of time. And now that we look back on that time, I’m very glad we acted quickly and decisively and radically to get our cost base down, because as we have all seen, this crisis has lasted for far longer than any of us could have expected. 


A – And what’s incredible for airports is that you go from a situation – as you mentioned there – from a 2019 where you had the chance to be proactive in your planning and in your strategy, then all of a sudden, you’re facing the other side of the coin and you had to be reactive. That was the only immediate way forward. So, what has changed strategically for Heathrow, would you say, over the past 12 months.           


JHK – Well, you’re absolutely right, in a crisis you can only control the things that within your control, which is what we have done. And at the time, it maybe felt like the world had changed forever. I think now we can see increasingly that many of the things will come back to the way they used to be. And that’s an important thing for us to remember. Aviation will recover… it’s a question of when and how quickly. But within a few years, we will be back to the kinds of levels of international travel that we have been used to. So, we need to plan for the future, conserve our resources in the meantime, and make sure we’re planning for our future. And that means that many of the things we were working on before the pandemic are still relevant now. So, things like additional capacity at the airport are absolutely critical. We have a little bit more time to build that, because we won’t need that as urgently as we once would have, but by the early 2030s, we will absolutely need an expanded Heathrow if Britain is to be at the heart of a global trading network around the world. So, that will become more important, but our other big strategic push is about decarbonising the global aviation sector. That goes hand-in-hand with winning the right to expand. And Britain has been leading the decarbonisation of aviation and we have been trying to get a global consensus on this and we’re making really good progress on this. IAG, our biggest airline customer, has been absolutely at the forefront of committing to net zero by 2050 and committing to the ten percent of sustainable fuels within the next decade. That’s fantastic leadership and we’re trying to make sure that prop 26m we get a global agreement on that. So, those are the two big strategic pillars for Heathrow, where we’re going to be taking a leading role to make sure aviation continues to play the fantastically positive role it plays for all of us in the world, as a global economy, but that we also do it in a responsible way and we get to net zero.       


A – Absolutely. And one of the things that interests me is that, in the aviation industry, unlike other sectors perhaps, it’s quite a small world where airports are involved. So, in reaching something like you mentioned there, your sustainability goals, do you speak to other airports, other partners, other institutions perhaps, on how you can become more sustainable?


JHK – We do, and one of the unique things about aviation is that although it’s very competitive on some levels, it’s also incredibly collaborative. And we see that at Heathrow within our Heathrow culture, where all the 400 companies here work together, and we’ve also been working more closely than ever with our airline customers on getting the UK aviation sector to restart, working with international airlines and airports on getting some global standards for international travel, but most of all on sustainability. And we’ve been talking about the importance of facing into our climate challenges for the last couple of years, every speech I have made has included this. And we’ve been able to build a coalition of the willing behind this, where it’s not just the UK aviation sector that has committed to net zero and has a plan to do it, but the US airline sector has done the same in the last month or so – a fantastic step forward, as have the Europeans, Middle Eastern airlines, even some in Asia and Australasia, so it’s really becoming a global movement. And that has to start by people looking themselves in the mirror and saying what legacy do I want to leave for the world. Do I want to be part of the problem, or part of the solution? And we decided that we not only had to be part of the solution, we had to take a leadership role and to call out what was really happening with aviation’s emissions being unsustainable, and call on others to join us in committing to net zero and the plan to get there. That’s primarily about changing the fuel that aircraft use, and sustainable aviation fuel is the only game in town in getting to net zero on long-haul flights by 2050. But of course, there’s also a role for some of the new tech that we all get excited about, hydrogen and electric-powered planes… they will have a role to play, but they’re not the only solution.     


A – No, but excellent to hear that not only do you have a vision and that you would like to be a leader in this, but you’re also seeing ways that you can make it more of a reality. Because you cannot achieve it in isolation… it will be interesting to hear what’s going to happen over the next 10-20 years at the airport. But just to bring it back to the strategy there, what are the biggest challenges for you or facing your airport while those traveller numbers return to normal over the next few months or further ahead?


JHK – Well, it’s certainly a difficult time financially, airports are big infrastructure assets, we need to keep all of our equipment in good condition and working even if we have terminals that close. Our baggage system has to be able to be maintained and keep working, and of course, for the two terminals we have that are operational… even if we only have a few passengers travelling through, everything needs to work. We also need to keep it safe and secure, so even when we have very little revenue as we have now, we still have a very significant fixed cost base that we have to cover. That means that it’s going to be a very challenging time financially for all of us in the aviation sector, until we see passenger numbers coming back. Because passengers pay all of our wages, they help to support our businesses, and it is only having more people flying which will allow us to get our businesses back on a sound financial footing. So, that is the real challenge, and what’s going to be difficult over the next 6 to 12 months is making sure that we are able to accommodate the growth in passenger numbers, which could come back quite quickly, so having the right facilities available, having the right simple processes in spite of all the new testing and checks that will be required, so that people can keep on flowing through the airport smoothly. But we have to do that while making sure we don’t waste money on preparing for growth that doesn’t appear. And that’s just going to be a difficult time, it’s going to be quite ambiguous, it’s going to be quite volatile over the over the next 6 to 12 months, and that’s why we have to work together on a common plan, sharing the information that we have, and making sure that all of the companies on the airport are working to the same pace and can accommodate the same level of passengers. So that not one of use becomes the weak link in that chain. And that’s part of our role as the airport operator, to coordinate all of those 400 companies across the airport and make sure that we can serve passengers in the very best way we can. 


A – And we are at such a… I guess anyone who picks up a newspaper and has an interest in flying for holidays or for business will recognise that we are at a very crucial turning point now, in terms of the pandemic and global movement. And for you, you’re completely at the frontline with this, so what are your new priorities as we head further into 2021, summer holidays coming up, and further ahead?


JHK – Well, you’re right, this is a turning point. We are just waiting to reopen international travel, we don’t know how quickly that will happen, but we know that the pent-up demand to fly is enormous… it’s the one thing we’ve all been looking forward to during lockdown. So, when people are allowed to go to places they want to go to, they will start going quite quickly. And we need to be able to gear up to meet that demand. But the most important thing for all of us is keeping people safe while they’re travelling. All of the COVID safe procedures that we’ve put in place, the cleaning of the airport, the wearing of face masks, the protective screens, that’s all going to be vital to not only keeping people safe, but also building their confidence in travel. Many people won’t have flown for over a year, they’ll be unfamiliar with how to do it, some of the processes will have changed, all the new checks you have to go through, making sure you’ve had the right tests, and they’ll be a little bit anxious about being in a busy space. So, all of us at the airport have to do everything we can to make sure they feel safe and confident. And that comes down to our personal safety as well, it’ll be very tempting for people to relax their discipline around social distancing or wearing face coverings, but it’s massively important that we don’t. Because when passengers – particularly the nervous ones – see anyone working at the airport relaxing their guard, it makes them really anxious about their own safety. So, we all have a role to play in keeping people safe, which will encourage them to come back and travel, which will help all aviation businesses recover.


A – Absolutely. And here on Check-in, we know there are challenges, we know this year has been absolutely extraordinary in the aviation industry, but we do like to have some kind of positive message within all this, John. So, do you look ahead with a sense of optimism? And if you do, what supports that view?


JHK – Yeah, I do. I’m a naturally optimistic person, but when I look at how we have come together over the last 12 months, and put aside a lot of rivalries and concerns we might have had, to help each other to survive… we’ve all been incredibly versatile over the last 12 months, we need to keep on doing that, we need to move quickly to make change happen, it’s going to be a very uncertain time, but the resilience and the determination, and teamwork that I’ve seen has been just fantastic. And that’s what we want to keep on doing as we come out of this pandemic. Because it’s going to be a time of exciting change, we talked about some of the challenges of climate change and growth that we’ll want to accelerate our activity on, but there’s also a huge change coming in the way that people travel. We’ll be moving increasingly to a more data and digitally enhanced journey, so your journey through the airport involves less human contact, and that’ll put the passenger more in control of their journey, so that’s one big change that we’ll see. I think we’ll see a lot of change around the baggage space, we’ll have a more versatile baggage system, and potentially changing the baggage product so that we don’t have as much of a division between the airport, handlers and airlines, and a more seamless service. We can see a lot of change around cargo, and the other big flows that we manage at the airport. So, there’s a lot that we will want to change over the next few years, and if we can maintain that real team spirit and urgency of getting things done, it’s amazing what we’ll be able to achieve in a very short space of time, by working together to a common goal.


A – Well, that brings us to the end of part one of this episode of Check-in, so thanks to John Holland-Kaye, the CEO from Heathrow Airport… thanks very much for joining us today.


JHK – Thank you, my pleasure.                 


A – Some really fascinating opinions from John there, and what a privilege it was to hear him describe the challenges facing an airport like Heathrow.

 But how does this translate into technologies? And how can the airport’s suppliers and partners play a role in the long term?

 To discuss this further, I’m pleased to say that we’re now joined by Heathrow’s Chief Solutions Officer, Chris Garton.


Chris Garton, welcome to Check-in, it’s great to have you with us today.


CG – Thank you very much and thank you for the opportunity.


A – And how are things with you today, Chris?


CG – Yes, all well thank you. 


A – OK, so I’m afraid we’re going to plunge right in at the deep end, Chris. Given your role and responsibilities – and I’m sure this is a question on a lot of people’s minds, and they’ll be interested to hear, so tell me a little about your personal experiences from 2020… this was such a challenging year for airports such as Heathrow, wasn’t it?


CG – Absolutely, a challenging year for everyone, but particularly for aviation and especially for Heathrow. If you think back to 2019, we were serving just over 80 million passengers, and with the onset of the coronavirus pandemic, passenger numbers obviously reduced very rapidly and all of the business in aviation were faced with the prospect of their costs being higher than revenues, which clearly is a threat to the future success of the sector. So, we’ve had to as a community, talk about ‘Team Heathrow’, being our community at Heathrow, we’ve all had to act together to protect our business. And I’m grateful to the support from all colleagues and partners at Heathrow, in the Team Heathrow community that we have managed to do that. We realised very early on we would have to take some control over our own destiny, if we were to protect our businesses and see a recovery for international aviation. We’ve worked hard together to do that and one of my first tasks was to help reorganise Heathrow to better match our costs to our reduced revenues, but then my focus shifted very quickly to how do we make travel safe for passengers and for colleagues, and working with a range of international hubs we’ve helped to develop the various hygiene standards that we see today and in all of the airports of the world. And then we moved on last year particularly to focus on testing and testing technology, we trialled a lot of that technology across our different hubs, shared our results and worked with our local governments to propose risk-based ways of restarting aviation, but also safe ways in which passengers could travel and colleagues would be safe as well. So, delighted when last summer the UK Government adopted some of the principles we put forward – we call it a ‘risk-based process’, they call it the ‘traffic light system’, and we’re hopeful that that will be the key to a successful restart of aviation this year. 


A – That’s great to hear, and I think what will be interesting for listeners is the sense of togetherness and working together that you’ve mentioned there. I think when you read a newspaper, I think you can be forgiven for thinking that Heathrow is somehow an island all to itself and takes care of its own business, but you clearly worked hard with a lot of different partners to survive and come out of 2020. 


CG – I think one of the key lessons I’ve personally taken from 2020 is the power of collaboration. As an industry sector, we’ve collaborated together, we’ve worked very closely with government and industry bodies, with regulators. I just described the example I’ve been involved in with the various international hubs, literally spanning the globe, so Toronto in Canada, and Los Angeles and San Francisco in America, through to Sydney in Australia, and most of the major hubs in-between. And that’s been incredibly beneficial – to develop common standards, so that passengers have less confusion when travelling internationally. 


A – And we come to the present day… earlier in the episode, we spoke to John Holland-Kaye, the CEO, and I think we phrased it as being somewhat of a ‘turning point’ for Heathrow and in our own situation with regards to the pandemic. So, where is Heathrow now in terms of the recovery, and what has helped you in arriving at this point?


CG – Well, I think we still face some difficulty, traffic numbers probably explain the difficulty we face best. We’ve just announced that in the first quarter of 2021, we served 1.7 million passengers. That’s 92% down on the 2019 level. So, we are typically handling just 10% of our normal business. But we’re very optimistic now, that with the work that we’ve done and the announcements on the roadmap the government has made that the restart, if you like, or the ramp-up of aviation is about to commence and we’re focused on May of this year to see that ramp-up begin in earnest. So yes, we’ve made some steps towards recovery, but I think it’s the second half of the year that we’re going to see most of that happen.  


A – So, Heathrow is very central in the UK as a logistics and transport hub, and as we know, we won’t get bogged down in the headlines… but, the UK vaccination programme is progressing nicely, perhaps not so in other countries around the rest of the world. So, does that give you any particular headaches in terms of the work that you’re doing at Heathrow?


CG – Well, the overriding priority for all of us, and especially at Heathrow is the safety of passengers and our colleagues. And that’s why we proposed last year a risk-based process so that aviation could continue, even though some countries may be having higher risk or lower risk, and clearly what we wanted to ensure was that we matched the risk in a different part of the world with the level of controls that would be applied. So, today you see for the so-called ‘red list’ countries, there is a hotel quarantining system and testing applied to ensure that passengers who do travel in, and the numbers are very small, we ensure that we don’t transmit COVID within the community. For lower risk countries as we saw last year, the ‘green’ countries, there was the opportunity to travel and the risk was low. That, I think, is the key to success going forward – that we adopt a risk-based approach, to avoid confusion for travellers we try as hard as we can as an industry to adopt a common international standard – we’ve done a lot of work on how testing and vaccination can combine together to ensure that it’s safe for passengers to travel, and also safe obviously for colleagues in the airport.  


A – Excellent, and in your role as Chief Solutions Officer, I’m interested to know… what is your perspective on new solutions and innovations, for example, touchless technologies or perhaps digitalisation?


CG – Well, we’d made a lot of progress at Heathrow prior to COVID with enabling the passenger process. And touchless and digitalisation are just two of the themes that we’d adopted. I think what we’ve seen is that COVID has acted as a catalyst to accelerate a number of areas of technological improvement. One of my favourites, perhaps it’s not the most strategically important, but 12 months ago the idea that we might sterilise all of our washrooms using ultra-violet technology deployed via a robot that is autonomously controlled, that sounded pretty science-fiction. That happens every day now at Heathrow, that’s just business as usual. So, I think what we’ve seen, and this brings me back to this theme of collaboration, because we’ve seen by working together, we can get to better solutions, faster. And I think when the world looks at vaccination development in the pharmaceutical sector, we’ve seen the same thing, we’ve seen universities collaborating with pharmaceutical companies, and we’ve seen progress with vaccinations that we’ve never ever seen in our history prior to this. 


A – Have your expectations changed in terms of the demands you put on suppliers? I can imagine that you work with quite a long list of industry suppliers and partners, so what are your expectations and the demands you put on them?


CG – Well, I think one interesting point is the word you use ‘supplier’. We increasingly refer now to ‘partners’. We’re seeing that there is more benefit from a longer term relationship, with fewer bigger partners, the relationship is two-way… most of our partners bring us as many good ideas as we come up with ourselves. And we’ve also seen benefits from increasing the scope that our partners work within. So, perhaps a traditional supplier relationship sees the airport buying a piece of equipment from a supplier… nowadays, with a partner, we tend to have a conversation about the need that needs to be fulfilled, and the partner can then very often go on to operate and maintain equipment. And one of our earliest examples of this, and one of our earlier strategic partners was Vanderlande for baggage, where historically they were always a supplier of some of the baggage systems at Heathrow, now they’re the supplier of all of the baggage systems at Heathrow, but they also operate them, and maintain them, and develop them, and we work very closely with Vanderlande on future developments and meeting the needs of our passengers and travellers through the way we develop that baggage system, jointly. 


A – So, even for me, or for a layman, you can perhaps see the added value of someone who doesn’t only supply a solution and then say: “thank you very much Mr. Customer” and leave the arena. I can already see the added value of building those long-term partnerships, and as you say, working together and collaborating. In terms of the future then, how can Heathrow’s long-term partners support your strategic ambitions?


CG – The partners are already bringing us knowledge from other sectors that they operate in, and that’s very helpful to changing some of the legacy processes that exist within aviation, but there’s a new emerging opportunity, and that’s with fewer bigger partners, they’re going to start working together among themselves. Again, with the service to the end passenger in mind, and if I take the example I was talking about… Vanderlande in the baggage area, Vanderlande are working very closely with another partner – DHL – on the end-to-end baggage process. And you wonder what that might bring in the future, for example, will the baggage system even be on the airport, will it be a local baggage factory, will you bring your suitcase yourself to the airport, or will DHL collect it and then deliver it to your hotel or back home again. So, we can already see ways in which traditional airport processes are going to be challenged and changed, and improve the service and the levels of quality to the customer.


A – Excellent. I think our listeners will be pleased that you’ve mentioned the end-to-end approach there, because that has surfaced a few times on Check-in, and it’s always interesting to hear how the dynamics of baggage service and baggage delivery may potentially change in the future. I think you’ve mentioned this a few times already, but is there anything else you’d like to say about how you work with the rest of the industry to identify solutions that wold benefit Heathrow airport.


CG – Well, again, it’s this learning of collaboration. We’ve learned that there is huge benefit in collaborating across the industry, benefit for passengers in terms of consistency of approach and better solutions, and we intend to do more of that going forward, because we believe in delivering that benefit to our passengers. And I think by doing that, we can step up the levels of quality within our industry, and we benchmark ourselves with other sectors… most travellers and flyers will now that in many parts of the world aviation sees itself as having delivered you an on-time experience if you left within plus or minus 15 minutes of the time on your ticket. That’s a level of quality that’s historically been around, but if we were to compare ourselves with our colleagues who run the Japanese bullet train, I think they talk about plus or minus a few seconds as an on-time departure. And therefore, the same customer will experience two very different levels of quality, depending on which travel sector they’re taking. So, we want to raise the levels of quality as our customers will be better satisfied with that as an experience, and so it’s the right thing to do. 


A – Excellent Chris, and you might not like me for asking this, and it’s a bit of a ‘million dollar question’, but what is your perspective on the long-term future of the aviation industry?


CG – Well, clearly there is uncertainty. But we can see pent-up demand to travel, and I’m extremely confident that we’ll see the aviation sector return to growth this year. The big challenge for aviation – you could say that COVID’s the biggest challenge we’ve ever had to face – I think a slightly bigger challenge, but certainly a more important challenge is how we deal with carbon and sustainability. And we have plans now to focus on decarbonising our industry, we need to rely on a sustainable business model going forward, and by decarbonisation, I mean both on the ground and in the air. And as an airport, we’re working on both of those things. I think once we achieve that, there is a long-term sustainable future for aviation, and we will see growth continue. And in the particular context of the UK, growth in aviation’s going to be absolutely critical if we’re to enable ‘global Britain’. We need to connect Britain with all the growing markets of the world. Our success and prosperity as a country is going to depend on that increasingly, and at Heathrow, we realise that we have a really major part to play in making that happen.


A – Well, that brings us to the end of today’s Heathrow special, which gives me the chance to say, Chris Garton, CSO from Heathrow, thank you very much for being with us on Check-in.                 


CG – Andy, thank you very much indeed, and thank you for the opportunity to discuss these important issues with you. 


A – Well, what a shame, but we’ve officially come to the ‘end of the runway’ as it were, on this special edition of Check-in.

Before we go, I’d just like to extend a huge “thank you” to our guests John and Chris, and everyone who has supported us in making this episode a reality.  

This is Andy Lynch signing off, and until next time, take care and we’ll see you again for more industry insights soon.   

Intro and welcome
Thoughts on 2020
Changing strategy
Industry cooperation and sustainability
Returning to ‘normal’
A turning point
Looking ahead
Halfway thoughts and welcome Chris
The power of collaboration
Road to recovery
Global considerations
New technologies
Partnership with Vanderlande
The future