FIGHT AND FLIGHT

How Stephen By­ron helped trans­form Can­berra

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There’s a pic­ture cir­cu­lat­ing on the In­ter­net fea­tur­ing Can­berra Air­port supreme-o, Stephen By­ron clean­ing one of the food court ta­bles. There are no airs and graces about Stephen. When it comes to look­ing af­ter all as­pects of the air­port, he is un­afraid to get his hands dirty, even if this means tak­ing a wash­cloth and wip­ing down a ta­ble. It is that at­ti­tude to the man­age­ment and main­te­nance of the fa­cil­ity that is be­hind its suc­cess.

Of course, when you have some­one like Terry Snow in­volved as well, suc­cess is as­sured. Terry is the ex­ec­u­tive chair­man of the Cap­i­tal Air­port Group and ac­cord­ing to Forbes is Aus­tralia’s 39th rich­est per­son. He is also Stephen’s fa­ther.

The pair’s work on the air­port has at times been con­tro­ver­sial, with the $480 mil­lion de­vel­op­ment of a new ter­mi­nal for Can­berra Air­port, the de­vel­op­ment of Brind­abella Busi­ness Park, Fair­bairn and Ma­jura Park shop­ping precinct has come un­der var­i­ous crit­i­cisms rang­ing from the cause of con­ges­tion to tak­ing away civic jobs.

How­ever the work done specif­i­cally on Can­berra Air­port and the precinct where the Cap­i­tal Air­port Group owns the lease for the Com­mon­wealth land was a nec­es­sary step for­ward for Can­berra as a link be­tween the ma­jor States and as a hub for new busi­ness.

The buy­out of the air­port was syn­chro­nis­tic. In 1996 Terry had sold his property and de­vel­op­ment com­pany; so in 1998 when the air­port came on the mar­ket the Snow fam­ily was well placed to bid. They were long-stand­ing Can­berra cit­i­zens with the money re­quired to trans­form the precinct.

“We put to­gether a bid with a busi­ness plan to run the air­port and ul­ti­mately we were suc­cess­ful,” Stephen says.

The Snow fam­ily took over on 29 May, 1998. It was just a coun­try-town air­port at that stage.

“When our fam­ily pur­chased Can­berra Air­port al­most 15 years ago, what was here was lit­tle more than a tin shed in a sheep pad­dock,” Stephen

“We toured a num­ber of cities in Europe, in­clud­ing smaller air­ports. We came back and were al­most in de­spair about

how to gain con­trol of the ter­mi­nal and there­fore the abil­ity to build some­thing

im­pres­sive.”

said in March last year at the western con­course ter­mi­nal’s of­fi­cial open­ing. “But my fa­ther Terry Snow had a clear vi­sion for Can­berra Air­port to be­come the best small air­port in the world.”

At the time of the sale, Ansett and Qan­tas owned the ter­mi­nals and had con­trol over the growth of avi­a­tion traf­fic into Can­berra Air­port. The trick to turn the air­port’s for­tunes around was to wrest con­trol of the ter­mi­nals.

“We toured a num­ber of cities in Europe, in­clud­ing smaller air­ports. We came back and were al­most in de­spair about how to gain con­trol of the ter­mi­nal and there­fore the abil­ity to build some­thing im­pres­sive,” Stephen says.

“The sec­ond ques­tion was one of af­ford­abil­ity: how do we af­ford to do it when the avi­a­tion in­dus­try is so volatile? At that time we forged our first fun­da­men­tal prin­ci­ple. Di­ver­si­fi­ca­tion. We needed to di­ver­sify and build a busi­ness that was not de­pen­dent on the ups and downs of the avi­a­tion in­dus­try.”

Af­ter tour­ing Schiphol Air­port in Am­s­ter­dam, they found that the in­te­gra­tion of a busi­ness park would mit­i­gate some of the risks they were tak­ing fi­nan­cially. The Group be­gan to de­velop Brind­abella Busi­ness Park to se­cure an in­come stream to al­low them to rebuild the air­port.

Ansett’s col­lapse in 2001 also opened the doors to the ter­mi­nals and al­lowed the Cap­i­tal Air­port Group the free­dom to build a mod­ern air­port.

“We had a pretty run-down air­port, partly be­cause the pol­i­tics of federal govern­ment seats in Can­berra meant that they were very safe seats and not mar­ginal seats. So we were well be­hind the curve. We had 737-strength in­fra­struc­ture in the apron, the taxi­ways and the run­ways, but this re­ally daggy, dis­jointed ter­mi­nal fa­cil­ity where there were 42 ran­dom lev­els across two main lev­els. Ul­ti­mately, we knew that we had to de­mol­ish and start again. To do that, we had to strike a deal with Qan­tas.”

The Qan­tas deal proved rel­a­tively easy with CEO John Borghetti strik­ing up an ar­range­ment. How­ever, Ansett was prob­lem­atic.

“The col­lapse of Ansett in Septem­ber 2001 was the piv­otal mo­ment. To see your air­line rev­enue col­lapse and lose 50% overnight was some­thing dra­matic, over­laid with se­cu­rity pres­sures as a con­se­quence of the hor­rific events of Septem­ber 11. It ul­ti­mately played out into a very dif­fi­cult skir­mish with the ad­min­is­tra­tors of Ansett. We were able, at the end of that, to buy back the Ansett ter­mi­nal fa­cil­ity and thereby of­fer it as a new multi-user fa­cil­ity for any air­line that might come for the growth and re­build­ing of avi­a­tion in Can­berra. That was the piv­otal point. Through that, Qan­tas’s mar­ket share went from 50% to 75%. That meant that their fa­cil­ity was un­der stress and un­der-ca­pac­ity. They needed to come to the ta­ble with us and work out a plan for their growth. It was through that process and John Borghetti’s lead­er­ship that we were able to move ahead with a new ter­mi­nal project.”

Sub­stan­tial eco­nomic ben­e­fits to Can­berra were the re­sult. Many thou­sands of people have been em­ployed, start­ing with con­struc­tion. It has meant long-term jobs in the air­port, made pos­si­ble by growth in the pas­sen­ger num­bers from 1.8 mil­lion to three mil­lion, the ad­di­tion of new ser­vices to new cities in­clud­ing Perth, Gold Coast and New­cas­tle and more fre­quent jour­neys to Bris­bane and Ade­laide. All of that has driven sig­nif­i­cant growth for the tourism and ho­tel sec­tor in the city, as well.

Con­struc­tion of this in­fra­struc­ture was done in two halves.

“It had to be staged in two halves be­cause we needed to build a green­field prod­uct on a brown­field site. We’ve gone from four aer­o­bridges to ten. We’ve gone from 1,000 car parks to 4,000 car parks. We’ve gone from 22 check-in desks to 46 check-in desks. The over­all size of the ter­mi­nal has, in some re­gards, al­most quadru­pled. It’s got ca­pac­ity for growth; it’s got flex­i­bil­ity for the fu­ture. It’s got ca­pa­bil­ity for in­ter­na­tional oper­a­tion, and that’s ready now. It’s ready to­day. So we can look for­ward to op­por­tu­ni­ties to fly not only trans-Tas­man, but in­deed up into South­east Asia and across to the Mid­dle East.”

The key to get­ting this done was to main­tain solid re­la­tions with key con­trac­tors. The main con­trac­tor Con­struc­tion Con­trol has been at the fore­front of the project from the be­gin­ning. How­ever all con­trac­tors and sub-con­trac­tors have played their part and

The col­lapse of Ansett in Septem­ber 2001 was the piv­otal mo­ment. To see your air­line rev­enue col­lapse and lose 50% overnight was some­thing dra­matic, over­laid with se­cu­rity pres­sures as a con­se­quence of the hor­rific events of Septem­ber 11.”

they stick around be­cause long-term part­ner­ships cre­ate long-term trust.

“Our con­tracts are based on fair­ness and not hav­ing vari­a­tions. We work to a budget, but ul­ti­mately try to deliver the high­est qual­ity prod­uct. While I think people will be im­pressed with the de­sign of the fa­cil­ity we have, re­ally, it’s the qual­ity of the build that shines through in the prod­uct,” Stephen says.

Con­struc­tion Con­trol is be­hind the ter­mi­nals as well as the in­fra­struc­ture in Brind­abella Park, Ma­jura and Fair­bairn.

“They’ve been our builder all the way through for 15 years... a mar­velous part­ner­ship.”

An­other el­e­ment of suc­cess lies in Stephen and Terry’s trust of each other. This has been prom­i­nent since Stephen joined Terry in 1994 for a cou­ple of weeks work. Stephen found it stim­u­lat­ing and re­ward­ing and the lawyer stayed.

“Terry is one of the great en­tre­pre­neur­ial risk-tak­ers. He imag­ines the fu­ture of how things should be. I sup­pose I’ve been able to work to­gether with him on how we achieve and deliver that to man­age some of the risks. Ul­ti­mately, he’s been the driv­ing force for the de­vel­op­ment of Brind­abella

Busi­ness Park and also the ter­mi­nal. He is be­hind the de­sign and artis­tic flair of the in­fra­struc­ture. For a busi­ness­man, he’s enor­mously cre­ative and I’ve been able to work with him to shape that cre­ativ­ity into some of the commercial vi­a­bil­i­ties and man­age pres­sures along the way.”

The busi­ness is set up over two com­ple­men­tary di­vi­sions: property and avi­a­tion. Both of those businesses re­port to Stephen who re­ports back to Terry. Over the jour­ney the di­vi­sions have seen a cut in staff, but there are now 100 staff across the busi­ness. Suc­cess for Stephen is about nur­tur­ing the talent.

“We have had a team as small as 18 people and we now have a team of just over 100. It’s been about grow­ing young people along the way. We just had a din­ner last night to cel­e­brate 17 staff that have been with us for more than 10 years. There’s enor­mous loy­alty and ded­i­ca­tion, but also, we’ve been able to grow a lot of those people into the most se­nior man­age­ment po­si­tions.”

This is due in part to the fam­ily

at­mos­phere that the Group has cre­ated. Stephen says all staff mem­bers are part of the Can­berra Air­port fam­ily, which lends it­self to a spe­cial fo­cus on cus­tomer ser­vice and a pas­sion for do­ing things.

“It’s some­thing that’s very im­por­tant to us. It’s come out of that fam­ily busi­ness her­itage,” Stephen says.

As bright as the fu­ture is, chal­lenges loom. A pro­posed so­lar farm to be sit­u­ated north of the air­port could af­fect the safety of pi­lots and pas­sen­gers fly­ing into Can­berra. Can­berra Air­port has raised con­cern and ob­jec­tion as have Vir­gin and Qan­tas. The prob­lem is re­flec­tion of so­lar pan­els into the pi­lots’ eyes.

“Our view is that there is no loca- tion any­where in the world iden­ti­cal to this where a so­lar farm has been built, on the same an­gle, point­ing to­wards the in­com­ing pi­lot. Our view is a proper safety ap­proach means you don’t con­sciously in­tro­duce any additional risks.”

The hope is the farm is re­lo­cated. Mean­while, Terry and Stephen are work­ing to­wards in­tro­duc­ing in­ter­na­tional flights.

“It’s not just that Can­ber­rans want them. It’s not just that the na­tional cap­i­tal of Aus­tralia de­serves such flights. It’s also, in my mind, a re­flec­tion of the fact that Aus­tralia, as a coun­try, needs its na­tional cap­i­tal to be con­nected to Asia di­rectly. We see sig­nif­i­cant growth, around 550,000 in­ter­na­tional pas­sen­gers over the next three to four years. We see the in­tro­duc­tion of low-cost car­ri­ers, ei­ther Tiger or Jet­star, over the next 12 to 24 months. We also see the de­vel­op­ment, on site, of an air­port ho­tel. That will start con­struc­tion early in 2014.”

The plans have been grand from the get-go, but Stephen and Terry un­der­stand that to re­main rel­e­vant and to stop Can­berra from pos­sess­ing a fan­tas­tic air­port that is un­der­utilised, growth is im­por­tant. It’s a fam­ily that has never rested on its lau­rels and Can­berra is the ben­e­fi­ciary of that drive.

Stephen By­ron

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