Sky high

Ask Ove Arup's Gregory Hodkinson to name the airport projects he is involved with, and the list is as long as your arm. There are new terminals at Orlando, Salt Lake City, Tel Aviv, Toronto, Zürich, and Heathrow Terminal 5. The firm is also working on planning studies at Newark, Seattle … and he could go on. Hodkinson gives one reason for this: "There isn't a major airport in the world, apart from Hong Kong, where there is adequate capacity to cope with today's traffic, let alone tomorrow's."

Hodkinson is Ove Arup & Partners' director responsible for airports, a division that handles everything from traffic forecasting to building design to civil infrastructure work. Ove Arup is not the only firm to experience a surge in airport-related schemes. The airline business is one of the fastest-growing industries in the world and, to cope with projected growth, an estimated £300bn will be spent on new terminal buildings, runways and control towers in the next 20 years, according to research by Momberger Airport Information.

The anticipated 5% growth in passenger numbers in each of the next 20 years is fuelled by cut-price airlines. A similar rise in the amount of air freight has been driven by the growth of e-commerce; customers can order from all over the world and they want their purchases fast. And as airports become increasingly busy transport hubs, they are attracting satellite business parks.

The UK has already seen significant expansion since airports were privatised in 1996. Regional airports are developing to compete with Heathrow and Gatwick. A YRM-designed £27m terminal at Bristol opened two weeks ago. Birmingham International Airport started a £260m expansion programme in 1997. And BAA plans to spend £4.4bn over the next 10 years, including £1.5bn to build the stalled Terminal 5 at Heathrow.

Overseas, the picture is the same. The Spanish government has plans for a new £1bn airport in Madrid. Projects in the pipeline in south-east Asia include proposals for an airport in Manila in the Philippines and a £4bn airport in Bangkok, Thailand. For future developments, all eyes are on China. Domestic air travel is becoming a feasible way of navigating the huge country and with it will come the potential for regional airports to grow.

How do you take off in the airport sector? It is not easy. We are not talking tin sheds here. Airports are complex amalgamations of terminal buildings, runways and control towers. There are baggage-handling facilities and sophisticated IT systems to be housed, as well as retail units. Then, there is the question of directing people through the area safely, ensuring that incoming passengers and outgoing passengers understand where they are going, not to mention installing or upgrading transport links around the terminals and into the nearest town.

If you are new to the sector, the UK is probably the best place to start. It is difficult to get on the first rung of the ladder, but some developers new to operating airports are currently building lists of preferred contractors. Peel Holdings, owner of Liverpool Airport since 1997 and the newly acquired Finningley Airport near Doncaster, is developing its procurement strategy for airports. Director of construction David Glover looks for firms that have proved themselves with the developer on other jobs or for recommendations from trusted architects or quantity surveyors.

"I would want some link, relationship and loyalty," he says.

Small and medium-sized contractors can get a look in at Birmingham International Airport, which is currently inviting firms to prequalify for the next five-year phase of its £260m development programme. The deals range from £2m to £40m, but it has to be said that even if you do get on the select list, there is no guarantee of any work.

Airport contracts come in fits and starts. Laing does an average of £25m a year in airport-related work, but, admits Andy Marsh, the firm's air sector manager, that could mean £90m one year and nothing the next. But partnering arrangements, such as BAA's framework contracts, are levelling things out. "All you can do is balance the resources as best you can. Framework-type agreements are coming along, which means you get a better spread," he says.

Designing or building airports is an area where it is possible for British firms to become global players. A strong record in the sector counts with overseas clients because of the complexity of the projects. "Airport clients and airlines feel comfortable with people who understand their operating requirements and business," explains Ove Arup's Hodkinson.

Contractors such as Amec and Laing, who have built up a track record, are expecting to cash in on the current crop of international work. Amec has a £300m turnover, which it intends to expand by establishing partnering arrangements with clients.

The firm's strategy is to establish an early relationship as an adviser and stay until the end. Merco de Noronha, director of Amec Airports, is aiming to offer a one-stop shop from consultancy to construction to facilities management. An early understanding of the scheme helps the firm later. "It is not necessarily the way to get a contract, but if a client is aiming at a low-cost airline, the building will need to be cheap and cheerful. We need to know and understand that early," he says.

Both abroad and at home, privatisation and the popularity of public-private partnerships have changed the face of airport work. Consultants say they are increasingly having to come up not only with the designs but the money to get them off the ground. Increasingly, they need to understand the business case for the facility simply to work out if they will get their money back. "You have to take to the party your skills as an engineer and a big cheque book, because these projects come with lots of noughts," says Graham Ruddock, senior engineer at Mott MacDonald.

As private money comes in, architects are finding that the design work requires an ability to please two masters. There are two types of client in the airport sector: the operator – such as BAA or Birmingham International Airport – and the carrier – such as British Airways, Lufthansa or Ryanair – and their design needs are different. The operator wants to encourage punters to hang around in the terminal spending money, whereas the airline wants to get the passenger through the gate and on to the plane as quickly as possible. "It is important to understand that and achieve a reasonable degree of both," advises Ove Arup's Hodkinson.

Getting the design right does not happen overnight, and neither does planning permission. An architect could find that an airport design spends 10 years in orbit. Consultant YRM has already spent six years advising BAA on the business case for Heathrow Terminal 5, and its recently completed terminal at Bristol took 10 years from start to finish. Ove Arup and YRM have a vast catalogue of projects on the go, of which some will come off and some will not. "We expect a long planning time," says YRM managing director Jonathan Gray. "We are absolutely aware of that and make sure we have plenty of other work."

The long haul has its rewards. The projects are prestigious and, although the market is competitive, there is a global cycle of work. Chek Lap Kok in Hong Kong may have finished, but the rest of the Far East is looking lively at the moment. "When growth has been satisfied in the Far East, we will see a transformation in Latin America," says Bill Millington, air transport development director at Halcrow, which is advising on strategic planning and design at the £6bn Inchon airport in Seoul, South Korea.

Ask Gregory Hodkinson in five years' time to list the airport projects he is working on and he may mention a new terminal at Rio de Janeiro, Buenos Aires and Bogota.

How the Internet is fuelling airport business parks

There cannot be any more positive proof that there is money in airports than the fact that one of the USA's major property firms has decided to set up a company dedicated to business parks next to them.

Hines Air Property was established in January to build cargo warehouses, hotels, business parks and catering facilities around European airports, targeting especially Gatwick and Heathrow. "There is not a lot of land, but it makes the market more interesting for us," says managing director Simon O'Donnell.

So far, the firm has no fixed targets for the amount of development to be carried out, but O'Donnell cites a US firm that set up a similar company and managed to build a £1bn portfolio in five years.

As O'Donnell is a former employee of BAA Lynton, firms looking to work with Hines Air Property can expect an emphasis on long-term relationships based on continuous improvement.

Land agents are also noticing an increase in business parks around airports. The e-revolution means goods such as books, CDs and computers are transported by aeroplane. "We see growing demand for distribution sheds because of the e-commerce explosion," says Greg Nicholson, head of investment at land agent CB Hillier Parker.