Avoiding the Hell That Is Heathrow

Early evenings at London Southend Airport, crunch time at most airfields, is the very picture of British civility: Check-in service is brisk, and lines are virtually nonexistent. Unfortunately for the airport's operator, so are passengers. The terminal, Britain's third-busiest 40 years ago, today often attracts more plane spotters than actual fliers. London Southend handled just 4,000 passengers last year; London Heathrow, Europe's busiest hub, drew 65.7 million.

That imbalance isn't keeping secondary airfields such as London Southend from reaching for the sky. Airports on London's periphery increasingly are positioning themselves as respites from the crowds and frequent flight delays for which Heathrow has become notorious. The catch: Traveling to the British capital's center from these "London" airfields can take more than an hour—or about as long as it takes to fly from London to Amsterdam.

London Southend owner Stobart Group is investing £35 million ($57.1 million), betting it can lure travelers back to the airport, 36 miles east of London, by highlighting less-crowded terminals and transit links that help them match door-to-door travel times to and from larger airfields. London Oxford, 42 miles west of the British capital, is pitching the same advantages.

Capacity constraints at Heathrow have been exacerbated by a government decision last year to block construction of a third runway. That is improving prospects for London's peripheral airports. London Southend aims to boost annual passenger numbers to 1 million by next year as demand surges for the 2012 London Olympic Games, which will feature events far from the city's core.

The number of passengers using the four largest airports serving the London area—Heathrow, Gatwick, Stansted, and Luton—climbed 84 percent in the past two decades, to 124.4 million, in 2010, according to Britain's Civil Aviation Authority. Heathrow, which owner BAA says operates at 99 percent capacity, accounted for about half of last year's total. "Whatever level of demand that we go up to, it will substantially exceed the capacity we have now," says John Strickland, an aviation analyst at JLS Consulting.

Stobart Group, which bought London Southend for £21 million in December 2008, has built a new train station at the airport, adjacent to an extended landing strip and a terminal that will be completed by October. "With the Olympics we'll have one of the best direct connections of anywhere," says Alastair Welch, managing director of the Stobart Group unit that owns Southend.

London isn't unique in being served by airports located well away from its city center. The growth of low-cost airlines in Europe in the last decade has helped fuel the expansion of airports on the outer limits of larger cities. Ryanair (RYAAY), the region's biggest discount carrier, and its rivals rely on lower landing fees and faster takeoff and landing turnaround times at smaller airports to make their business models work. Among airfields served by Ryanair are Frankfurt-Hahn, about 70 miles from the city's main airport, Brussels-Charleroi, 35 miles south of the Belgian capital, and Hamburg Lübeck, 45 miles—an hour's bus ride—from the city center.

Pierre Waddoups, a businessman using London Southend's cafe recently before a meeting in the area, says he would consider flying from the airport if flight times and the price suited him. Waddoups says he uses London City Airport, in the financial district, despite living within 15 miles of London Stansted, the area's third-biggest field. He avoids Heathrow altogether. "When you come to a smaller airport, it's more personal, more friendly," he says. "If you go to Heathrow, you get lost in the whole business of the airport."

Stobart's Welch aims to get Southend passengers from the plane onto the train platform within 15 minutes, where rail service, running up to eight times an hour, can take them to London's Liverpool Street station within 50 minutes, or to Stratford, the site of the Olympic Park, within 42 minutes.

London Oxford now focuses on private business jet services and offers limited charter services. The airport is in discussions with airlines about the economic viability of offering more daily services to destinations such as Dublin and Munich, says James Dillon-Godfray, the airport's business development director. "We know that there's a market there; we've got 5 million people on our doorstep," says Dillon-Godfray.

London Oxford spent £2 million last year buying 4.4 acres for airport parking space in anticipation of increased demand during the Olympics from private jet companies. The airport averages about 20 business flights a day and predicts that traffic may double during the Games.

The airport changed its name in 2009 to attract more attention outside Britain and to alert passengers traveling from west London neighborhoods such as Kensington or Chelsea that they can reach the airport in the same time they would to competing business jet terminals in Britain's southeast. "A lot of the markets outside of Europe simply didn't know we existed," says Dillon-Godfray of the name change. "We now get a much better Google presence. It's a bit tongue-in-cheek, but it works and we get noticed."

The bottom line: Airports far outside London are competing for overflow business from crowded Heathrow.

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