It was good to find Holland-Kaye in an optimistic mood. “I certainly feel better about the world than I did a few months ago – July was one of our best months at Heathrow and then August literally was our best-ever.”
In May this year BAA appointed a new Commercial and Strategy Director, John Holland-Kaye, previously a divisional CEO and long-term senior executive with the homebuilding company Taylor Wimpey PLC. Prior to this he was Managing Director, National Sales Division, Bass Brewers, and has also worked as a strategy consultant with LEK Consulting for a number of high-profile businesses.
The role of Commercial Director of BAA is recently misunderstood, having changed significantly from the days when BAA had a high profile ‘Retail Director’. BAA increased its distance from core retailing last year with the disposal of Word Duty Free, taking the role of Commercial Director much closer to a conventional role “encompassing all income in the business.” Consequently, Holland-Kaye’s job includes retail, non-retail concessions, property and, most crucially, all airline revenues – clearly making a stronger concentration of powers than the time before Ferrovial’s purchase of the business in 2008.
In this new job Holland-Kaye is also a good barometer for the state of the industry on a number of levels – Heathrow’s users come from every corner of the planet after all – so its fortunes are very good indicators for the state of health of the whole air transport industry (for airlines, for airport companies, and not least for BAA). So it was good to find Holland-Kaye in an optimistic mood. “I certainly feel better about the world than I did a few months ago – July was one of our best months at Heathrow and then August literally was our best-ever, up by 0.3% on 2008.” At this stage in the cycle any traffic improvement is welcome, although BAA has significantly deepened the value of the result with a gravity-defying 10% improvement in retail revenues per passenger in the first half, which Holland-Kaye defined as “pretty good going.”
However, Holland-Kaye’s job is something of a fine balancing act. On the one hand he has the continued role of maximising retail revenue without a return to the days when its airports were seen as overpriced. On the other hand he has to lower prices for airline users. “The starting point is that we have to keep a sharp focus on passengers – the entire recently-launched consumer marketing campaign for Heathrow centres on our customer promise to ‘make every journey better’ – we won’t do that if the travellers think that what we are offering them isn’t good value, in fact I think we are providing much better service to passengers – but there is more to do.”
A significant chunk of this “doing more” centres on the prominent acknowledgment he gives to the predicament of his other key customers: “Airlines are struggling in a global recession, we must be more responsive to the needs of our airline customers, building meaningful two-way relationships with all airlines, reducing costs and looking for greater efficiencies.”
Indeed after the opening of Terminal 5 last year the rebuilding of Heathrow continues, this time with a focus back on the central terminal area and the organising of terminals by airline alliance. The next big development is for the Star Alliance, which is to get a new Terminal 2A in 2013 encompassing what is currently provided as Terminal 1 and Terminal 2 (Heathrow and Europe’s oldest functioning major building originally opened in 1955).
The first impressions of how this building will look were only released in August, but Holland-Kaye is already promising a number of advances over the commercial thinking that delivered Terminal 5. “We did some great things with Terminal 5 but the whole construction space was limited and we have an opportunity to do really well with the new terminal – we’ll start makings some major decisions on the retail form that this building will take at the end of 2010.” The goal is a big one with Holland-Kaye promising nothing short of seismic change: “The future for improving retail experiences is immeasurable…retail is our opportunity to do well…there’s still scope for a revolution in airport retailing.”
Star Alliance’s Terminal 2A opens in 2013 and Holland-Kaye promises advances over the commercial thinking that delivered Terminal 5: “The future for improving retail experiences is immeasurable...retail is our opportunity to do well...there’s still scope for a revolution.”
