City airport clears runway to attempt new take-off: The troubled project could be about to get off the ground, Michael Harrison reports

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London City Airport on a summer's afternoon is a tranquil place. Only the faint hum of the photocopying machines in its business centre and the propeller drone from a solitary De Havilland Dash 7 taxiing across the apron interrupt the air-conditioned quietude.

This, of course, is not how things were supposed to be. Five years after opening and with the benefit of a newly extended runway to accommodate bigger, longer-range jets, the airport should be bustling with business executives from across Europe, drawn by its convenient location in the Royal Docks, just six miles east of the City, and the promise of a 10-minute check-in.

This year, however, the airport will, at best, handle 200,000 passengers - 30,000 fewer than in 1990. Its owner and operator, the construction company John Mowlem, has pumped more than pounds 40m into the airport only to be repaid with continuing losses.

Mowlem however, remains confident that it will be a success. It expects to achieve the break-even level of 400,000 passengers by the end of 1993, and says the recent runway extension has brought considerable interest from airlines.

'It is at an important stage in development,' Roger Sainsbury, a Mowlem director, said. 'So it is not inappropriate to consider that, if we get a good offer, we could realise some of the value we have created.' That is why it is considering selling part of its investment.

The developers of Canary Wharf, which is but a short courtesy coach ride away, used to refer smugly to London City Airport as their own private landing strip. Now that the development has gone bust, the airport, perhaps unfairly, has been tarred with the same brush.

'Canary Wharf has had a psychological impact on us,' William Charnock, the airport's managing director, conceded. 'But in reality we never thought of it as an important source of passengers. It was always icing on the cake. We came into existence as a city-centre airport to serve the City of London.'

Moreover, Mr Charnock believes that its time has finally arrived. A year ago the airport served only four destinations and could accommodate just two small turbo-prop aircraft.

But by late October it will sport seven airlines flying six different aircraft to seven European cities - Paris, Brussels, Rotterdam, Zurich, Lugano, Stockholm and Berlin. 'Interest from European airlines is really very high,' Mr Charnock said. 'There are a further four considering starting services from here.' Come next spring, he said, Geneva, Oslo, Helsinki, Munich, Hamburg and Frankfurt should have been added to the list of destinations.

Although passenger numbers will remain modest this year, he predicts that by the end of next year the airport will be on target for its break-even figure. Passenger numbers of 1.7 million to 2 million are not inconceivable within five years, he added.

The take-off point for London City, if that is what it proves to be, came last December when, after a drawn-out public inquiry, Mowlem gained approval to lengthen the runway. This allowed the BAe 146 'whispering jets' - as well as the Dash 8, Fokker 50, Saab 340 and ATR42 - to start using the airport.

At a stroke this extended the airport's range from 250 to 1,000 miles - putting virtually all of Europe's principal cities within reach. From October three airlines will be using the 146 - Crossair to Zurich and Lugano, City Air Scandinavia to Stockholm's Bromma city airport and Conti Flug to Berlin's city airport of Tempelhof.

The lack of road and rail links which has hampered the development of the Docklands generally, is also being solved.

By next May the Limehouse Link in east London will be open, cutting the car journey from central London to 20 minutes, as will the Beckton extension of the Docklands Light Railway, taking the line just north of the airport.

Mowlem's eyes are set, however, on persuading the Government and London Transport to route the planned extension of the Jubilee Line through Silvertown station on the North London Line. This is only 300 yards from the airport, but if the station were to be converted, London City would ask for it be relocated closer to the airport and would run an underground travelator directly into the passenger terminal.

London City's ambitions do not stop there. Although it will always predominantly be a business airport - 97 per cent of its passengers are business travellers - Mr Charnock would like to see the airport developed as a hub for charter and leisure flights on weekends and attract more corporate jet operators.

None of this expansion will be undertaken, however, at the expense of London City's big selling point - its promise to put passengers on board 10 minutes after they walk into the terminal.

'In the end it's this short ground time that makes the difference,' Mr Charnock said. 'There is no doubt in our minds that we can still achieve it even when we have 500,000 or 1 million passengers a year.'

Given London City's ill-starred record, there is no guarantee that it will deliver. The airport has flirted with disaster almost since the moment it was inaugurated by the Queen in October 1987.

Two months after the opening it was forced to suspend flights to Paris because of air traffic safety worries. After its re-opening it took a year to live down the scare headlines it had attracted.

The following two years saw a steady growth in traffic but then disaster struck again in 1991. British Midland, which had already withdrawn its services to Paris and Amsterdam, announced it was also scrapping its Brussels service and pulling out altogether.

The other airlines operating from the airport - Brymon, Air France and Flexair - also trimmed their schedules and London City ended the year handling 25 per cent fewer passengers than in 1990 - a remarkable decline, even for an industry hit worldwide by recession and the aftermath of the Gulf war.

One observer familiar with the airport since it began operating said: 'The trouble is there has never been a strong British airline working for the airport and its development.'

British Midland might have been that catalyst but tired of the losses. Brymon Airways, the first incumbent airline, has never shown much interest in expanding its operations from London City. It operates only three times a day to Paris, for instance, against Air France's six flights.

London City's management has also been criticised for its low- profile marketing of the airport. Consumer awareness of London City remains low. Mr Charnock argues that the priority was to talk to potential airlines and persuade them of the type of airport it could become once the runway extension was approved rather than create a demand for more services with a multi-million-pound publicity blitz.

The airport is beginning to come out of its shell, however. This month London City in conjuction with the three BAe 146 operators will launch a pounds 150,000 advertising campaign due to run until Christmas.

London City has experienced false dawns before. But whatever the future holds, Mr Charnock maintains it is in much more robust shape. 'We are never going to suffer in the way we did in the past simply because we now have a completely different range and scope of aircraft which has made us a much more attractive proposition to airlines throughout Europe.'

(Photograph omitted)