FIGHT AND FLIGHT
How Stephen Byron helped transform Canberra
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
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.