If you can navigate the frameworks, compliance standards and demanding clients, aviation is a lucrative sector to be in
Aviation is big business. Worth £18.4bn of UK gross national product and responsible for transporting almost 40% of UK trade with non-EU countries, it continues to be a lucrative sector - and not least because private clients are still spending money. Take Laing O’Rourke, for example. Winning the Heathrow Terminal 5 project from BAA catapulted it from being an ambitious London contractor to an international business complete with the expertise and London cost base required to reach global scale. BAA will now plough over £16bn into projects at Heathrow over the next 10 years and £1.1bn will be invested in refurbishing and improving Gatwick over the next five. And then of course there’s the potential for an entire new hub airport in the Thames Estuary. This idea is a political hot potato, but it’s one that the chancellor George Osborne implicitly embraced in his autumn statement last week as he pledged that the government would “explore all the options for maintaining the UK’s aviation hub status, with the exception of a third runway at Heathrow”.
Value for money has never been more crucial as clients increase the pressure on their supply chains to deliver more for less
And it’s not just in the UK where aviation is taking off - in the emerging nations too airport construction is one of the fastest growing sectors. China, for example, is forecast to open nearly 250 airports by 2020 to accommodate the ever-growing air passenger community - it is estimated that there will be 800 million new air passengers by 2014. But when it comes to winning work in airport construction, whether at home or in the lucrative international markets, life gets trickier. In a sector renowned for relying on frameworks, stringent compliance standards and all-demanding clients, firms will have to peddle hard to secure and maintain work in 2012 and beyond whether it is for design, consultancy or supply chain build works. And with the global economic crisis putting the brakes on European passenger numbers, value for money has never been more crucial as clients increase the pressure on their supply chains to deliver more for less. This week we speak to the firms at the heart of this sector, as well as to the major clients with work to divvy up, to find out just what the future of the aviation sector holds.
Tom Broughton, brand director
The sun goes in
Whether or not George Osborne’s U-turn on solar energy was a political gesture, the ramifications of the decision have certainly become real. Carillion last week threatened 4,500 staff in its newly acquired energy division with redundancy, with an estimated knock-on cost of nearly £20m. Many other smaller businesses have been obliged to write down profits, growth plans and staffing requirements. But for incoming Carillion boss Richard Howson, the “restructuring”, while frustrating, will likely be viewed as a blip on the share-price. The company has the scope and resources to be able to mobilise its 50,000 staff into other sectors and territories across the globe. Unfortunately, for the hundreds of SMEs operating across the UK in the solar sector the future looks much bleaker.