Critical Shortage of Hangarage and Airside Property in the UK Must be Addressed

Posted by Colliers on 31st January 2024 -

Our most recent research has highlighted that the UK’s aviation industry is facing a critical shortage of hangarage and airside property. For operators seeking to lease a hangar to service Boeing or Airbus airliners, just one existing facility is currently available in the UK.

This lack of availability is hampering growth, exacerbating environmental impact, and risks pushing investment and innovation overseas.

This isn’t a new problem, but it has intensified in recent years and the pipeline of new space has all but ground to a halt. 

Rising demand and limited supply

The impacts of the Covid pandemic on air travel are well known, but passenger numbers have increased rapidly since; in 2022 224.2 million passengers passed through UK airports, and 1.1 million tonnes of air cargo was carried on dedicated flights (up 23% on 2019).

There are more than 700 wide/narrow body commercial aircraft registered in the UK all of which require a rigorous programme of maintenance, repair, and overhaul (MRO). In 2023 the UK MRO market employs more than 24,000 people and is worth in excess of £5 billion.

The vast majority of existing hangarage is fully occupied and outdated, with development not keeping pace with demand.
During the last few years, the costs of materials and labour have skyrocketed and whilst some raw materials are now a little cheaper, construction costs remain at an all-time high.

This has driven a wedge between the rents that developers need to charge to recoup construction costs and the rental expectations of many occupiers. Established aviation occupiers remain in occupation in facilities that are too small or outdated, and prospective operators are left without suitable options.

Impact of the shortage

The consequences of the shortage are far-reaching.

Aviation companies are not able to operate efficiently - there are huge potential savings in costs and emissions if production, training, and maintenance can be brought closer to operational centres.

Moreover, the shortage of hangar space hinders the growth of the aviation industry in the UK. The UK has the potential to be a world leader in aviation innovation - in particular in the pursuit of a greener, decarbonised aviation sector.

The first trans-Atlantic airliner fuelled entirely by Sustainable Aviation Fuel took off from London Heathrow in November 2023 and the UK is becoming established as a centre for the development of alternative fuels and new propulsion technologies.

A lack of suitable available facilities, and the cost of building new, risks pushing this innovation and investment overseas which would be a significant loss to the UK economy.

Decentralising aviation infrastructure

Encouraging the development of aviation infrastructure at regional airports can help distribute the demand more evenly across the country and bring valuable investment to those areas. Land and labour are more plentiful and affordable than at more established hubs around major cities.

At Teesside International Airport a new, 27,000 sq ft hangar is currently under construction to the north of the runway. Hangar 4 was billed as the only speculative hangar development in the UK, but such is the demand that a pre-let has already been agreed and planning permission is in place for a further hangar adjacent.

To the south of the runway, Business Park South is a Joint Venture between Tees Valley Combined Authority and established local developers – demonstrating the potential of public-private collaboration in accelerating growth. The development has outline planning permission for 2.8m sq ft of business space including hangarage and is accessed via a new, dedicated access road from the A167 with direct access to the airstrip from much of the site.

As aviation continues to play a critical role in the country's economy and transportation system, it's vital that we find sustainable solutions to ensure the availability of adequate hangar space. Addressing this issue not only benefits the aviation industry but also contributes to the overall growth and stability of the UK's economy. By fostering innovative solutions and fostering collaboration, the UK can better prepare itself for the demands of a growing aviation industry.

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