Originally Posted by
EI-BUD
In relation to Eurowings, if A320 as you mention that Lufthansa used BHD BRU as the experiment of a Belfast route, why now would Eurowings be actively considering BFS Airport? Surlely for a German airline, who will attract mainly German originating pax, the question will be would a Belfast service work, the Brussels airlines experiment didn't prove that one airport suits better over the other. Eurowings would not be concerned by opening hours, runway length etc.so nothing had proven or disproven for them that BFS or BHD is better.
The Brussels Airlines experiment wasn’t to prove that one airport suits better over the other, it was to prove whether or not Belfast would be able to sustain a Lufthansa Group service. LH Group’s BRU service failed, hence the mooted Lufthansa route to FRA and SWISS route to ZRH never came into fruition.
With regards to Eurowings, my source tells me that BFS is the only airport on the cards for a potential Belfast route, and last years ‘Choose Our Next Route’ competition mentioned BFS by name, and was publicly supported by BFS management.
Originally Posted by
EI-BUD
I am also curious as to what the 'lock on Aer Lingus slots is about? My sources tell me that Aer Lingus is performing extremely well on LHR...'
When IAG made their offer for Aer Lingus, they made a commitment that Aer Lingus slots would be ‘locked’ for a period of five years, meaning the slots had to be used for Aer Lingus services between LHR and Ireland. This was to ensure that Aer Lingus didn’t sell their LHR slots to British Airways, to be used for long haul expansion.
However, according to EI-A330-300 in their post above, BHD was not included in this agreement.
That doesn’t mean that my suspicions aren’t correct though - Aer Lingus could still just be holding onto the slots until BA needs them.
You mention that your sources say that Aer Lingus is performing well on its BHD-LHR route. That may be so, but what is good for Aer Lingus may not be good for IAG as a whole. Aer Lingus’ BHD-LHR flights carry flight numbers for several Star Alliance carriers. Surely this is bad for business for IAG, as Aer Lingus are essentially assisting the likes of Air Canada and United Airlines on services rivalling BA from LHR. It would make a lot more sense to axe Aer Lingus’ LHR service completely, and use the slots for a) 1-2 daily BA services to BHD, and b) 1-2 daily BA long haul services.
Originally Posted by
EI-BUD
BHD I'd agree is trailing behind BFS, but the pax levels are good considering that Europe's 3 big low cost airlines are big up the road. The pax volume is typically at a sustainable level for BHD, the biggest issue is whether given competitive pressures can the airport charge sustainable rates to its operating airlines….
Between 1998-2008, passenger numbers doubled to 2,570,742, but since then passenger numbers have remained constant. Between 2008-2017, BHD’s average passenger figure was 2,559,093, which is almost identical to both the 2008 and 2017 figures. Stagnation has already lasted a decade at BHD, and will continue unless management can attract new routes and airlines.
The demographics of passengers at BHD has shifted substantially over the past few years. In 2014, just over half of passengers flew with Flybe. In 2018, that number is expected to exceed two thirds. Conversely, IAG’s market share has crumbled from 42% in 2014, to just 30% of passengers expected to fly with Aer Lingus or British Airways in 2018.
One of the key issues facing the airport is that their two largest airlines are either in financial difficulties (Flybe) or seem uninterested in the Belfast market (Aer Lingus). What happens if Flybe’s next round of capacity cuts hit hard on BHD, or if Aer Lingus axe their remaining sun routes? When BHD lost Ryanair and bmi baby, the airport had Flybe and Aer Lingus to fall back on and replace the lost capacity. BHD no longer has such a safety net.
The ideal solution would be if a new airline established a base at the airport, as this would give the airport some breathing room if Flybe or Aer Lingus were to cut capacity. However, the prospect of this is unlikely, why is why BHD needs to diversify its airline portfolio. By doing so, it gives the airport a passenger safety net, meaning that the airport can still make a profit, even if Flybe were to cut 20% of their capacity from BHD.
However, the time available for BHD management to attract these new routes and airlines is getting smaller. the rapid increase in passenger figures from BFS over the past few years has given BFS a competitive advantage over BHD, and here’s why;
Since 2014, BFS have increased their passenger numbers by 1,802,608, meaning the airport is receiving a lot more revenue than it did four years ago. Compared to 2014, BFS is now more able to invest in their terminal facilities, and to spend more money on advertising campaigns. Furthermore, an increase in aircraft movements means that BFS has greater flexibility in setting their airport fees.
In contrast, BHD passenger numbers have stagnated, with aircraft movements falling. This means that BHD have less money available to make terminal improvements, and are unable to reduce airport fees without eating into their profits.
As BFS continues to grow, and if BHD continues to stagnate, then the gap between the two airports will keep on growing, with BFS being able to invest more and more money in their passenger facilities. Eventually, there will come a time when airlines - including those currently operating from BHD - will find BFS to be the more attractive airport, despite its distance from Belfast relative to BHD.
The Northern Ireland market is growing, and is expected to continue growing for the foreseeable future. Those such as El Bunto can suggest that there is no need to continue growing BHD because it is a ‘niche’ and can make a profit in its current guise. That’s all well and good, but passenger numbers from Belfast will grow, so if BHD doesn’t expand, ultimately all of the growth will go to BFS.
Eventually there will come a time when the difference in passenger numbers between BFS and BHD is so great that - despite having its own following - there will be calls for the airport to be closed. BHD doesn’t provide a unique service that makes it stand out from BFS. There would be no difference in passenger numbers or the service provided if BHD’s entire operations were shifted to BFS. After all, the vast majority of routes operated from BHD have been, or still are, operated from BFS as well, and Flybe is the only airline that hasn’t operated from BFS at one time or another.
By looking at the markets shares of both BFS and BHD since 2014, it is already evident that BHD are losing ground at a rapid rate. BHD’s market share has already fallen from 38.8% to 30.5%, and is only expected to get worse.
2014: 6,589,089 = BFS 61.2%, BHD 38.8%
2015: 7,084,020 = BFS 62.0%, BHD 38.0%
2016: 7,812,685 = BFS 65.9%, BHD 34.1%
2017: 8,396,398 = BFS 69.5%, BHD 30.5%
If we assume BFS continues to grow at an average rate of 5% (as it has done 1997-2017), and that BHD passenger numbers continue to stagnate at 2.6m, then here are the estimated market shares 2018-24;
2018: 8,728,380 = BFS 70.2%, BHD 29.8%
2019: 9,034,799 = BFS 71.2%, BHD 28.8%
2020: 9,356,539 = BFS 72.2%, BHD 27.8%
2021: 9,694,365 = BFS 73.2%, BHD 26.2%
2022: 10,049,083 = BFS 74.1%, BHD 25.9%
2023: 10,421,538 = BFS 75.1%, BHD 24.9%
2024: 10,812,615 = BFS 76.0%, BHD 24.0%
Between 2014-24, BHD’s market share is expected to fall by a whopping 15%. By 2024, fewer than a quarter of Belfast’s passengers will fly from BHD.
Hence, it is essential that BHD does grow its passenger numbers. Continuing to stagnate will ultimately lead to the closure of the airport. Various constraints mean that BHD is never going to become Belfast’s largest airport, but it needs to keep up with BFS for as long as possible, and attracting new routes and airlines is the key to the survival of the airport.