Wednesday, March 5, 2014

Stansted Discount Hub Plans Premium Lounge for Blue-Chip Clients

London Stansted airport, Britain's biggest low-cost terminal, will open its first premium lounge this year as its new owner seeks to establish the hub as a base for long-haul airlines.

Manchester Airports Group is spending 1 million pounds ($1.7 million) on the "Escape Lounge" in its main departure area, which will be free to some customers and otherwise operate a pay-on-the-door policy. Airline-specific rooms are a further option as Stansted seeks to broaden its offering, Andrew Harrison, the site's managing director, said in an interview.

MAG aims to expand Stansted traffic by luring heavyweight airlines such as Emirates of Dubai, the No. 1 on international routes, after deals to boost flights at Ryanair Holdings Plc (RYA) and EasyJet Plc (EZJ), Europe 's top Promotional Code operators. While keen to draw new clients, other enhancements spanning security checks to retail areas should appeal across the board, Harrison said.

"The way we see the terminal operating is with a great level of service for everybody, but with the opportunity for the full-service airlines to differentiate," the executive said, while adding: "They've got to be convinced that the market exists and the catchment area is strong enough."

Stansted lifted passenger numbers 2.2 percent to 17.8 million last year, barely half the 35 million it could potentially handle within the limits of existing planning restrictions, Harrison said. That means the single-runway site can easily accommodate extra flights even as London's Heathrow and Gatwick airports struggle to add operating slots.

Superjumbo Services

Emirates already serves MAG's Manchester base using Airbus Group NV (AIR) A380 superjumbos. Other long-haul clients include rival Gulf carriers Qatar Airways Ltd. and Etihad Airways PJSC, as well as American Airlines (AAL), Delta Air Lines Inc. (DAL), Air Canada (AC/A) Rouge, Singapore Airlines Ltd. (SIA) and Virgin Atlantic Airways Ltd.

Access to the Manchester lounge cost 17.49 pounds per person and offers complimentary pastries, sandwiches and drinks, together with more substantial meals for an extra fee. Several carriers at the airport also have their own lounges.

Long-haul passengers are attractive to airports because they tend to arrive earlier at the terminal, taking more time there and spending more on retail, food and beverage purchases for use or consumption during their trip, according to an Airport Cooperative Research Program report published in 2012.

Since agreeing to buy Stansted for 1.5 billion pounds in January 2013, MAG has embarked on a program of upgrades to the 23-year-old terminal building designed by U.K. architect Norman Foster, who went on to build new hubs in Hong Kong and Beijing.

Valet Parking

MAG has spent 5 million pounds on removing 40 check-in desks that aren't needed as more people check in remotely or at machines, using the space vacated to create a new security screening area with extra, longer lanes. That in turn has freed up 60 percent more air-side space for shops and food outlets.

Retail improvements at the airport located 35 miles north of London are slated for completion in the second-half of 2015.

Shops near the terminal entrance have conversely been pared back to reduce passenger-stress levels, Harrison said. Valet parking and fast-track security are among other enhancements being developed with an eye to the long-haul market.

Should the push to win new business prove successful, Stansted would dedicate one of three satellite buildings where departure gates are located exclusively to full-service airlines, and refine facilities there accordingly, Harrison said.

Unused spaces at the buildings, such as a short-lived mini lounge, would make upgrades relatively straightforward, he said.

Civil Aviation Authority data suggests 8 million people drive past Stansted each year to reach other London airports, according to MAG, with 6.7 million people living within a 1-hour car trip and 12 million within 2 hours.

The immediate surrounding also includes Cambridge University and science and technology company offices including the planned base of drugmaker AstraZeneca Plc. (AZN)

MAG, which also operates East Midlands and Bournemouth airports, bought Stansted from BAA Ltd. amid a forced breakup of the Heathrow-owner's assets as U.K. antitrust regulators sought to foster competition.

To contact the reporter on this story: Kari Lundgren in London at

To contact the editor responsible for this story: Benedikt Kammel at

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