LoCos, MAN, and the North of England
Allow me to pontificate. That is all I may do, for although I have worked in the air transport industry for some 28 years I would not profess to have an intimate knowledge of the economics of our worthy calling.
By the mid-1990s, MAN had developed into a significant second-tier gateway airport, with services by most of the principal European flag-carriers and a decent number of long-haul routes out to 3 continents beyond Europe. The strategy pursued under Sir Gil Thompson and others (in accordance with the 1978 White Paper) seemed to have worked and MAN provided the North of England with a realistic alternative the using the London airports when travelling just about anywhere. BA remained lukewarm about MAN as a long-haul hub, but that mattered less and less as overseas carriers moved in one by one. The domestic network was very comprehensive, enabling some serious hubbing through interline and on-line connections over MAN, although the transfer 'product' was never developed to the required quality. The second runway promised the availability of slots to grow this hubbing.
Into the late-90s, even as Runway 2 was under construction, LoCos began to spread out of the South East, most significantly with EZYs committment to Liverpool. Many of us were unsure that this would be a success, but 10 years on it has been hugely successful, with tenfold growth in LPLs pax numbers, helped by RYR of course, even if they have only just eventually scraped a profit this year. Then came Jet 2 at LBA and BLK, bmibaby at EMA; Robin Hood, Coventry, all eating away at MANs catchment with services almost exclusively on the low-cost model. Great in the short to medium term for the traveller living north of Watford - they got cheap flights from a local airport to many of the places they wanted to go (for a holiday, at least). Great for those airports which had been sleepy hollows for many years.
But has it been great for the North of England in the longer term, and is it sustainable? Compared to the mid-1990s described above we now have 'choice' - which so often means fragmentation. We have 'choice' to fly to the same destinations for the same fares from just about anywhere. Whilst I have no doubt that the LoCo boom has generated some new traffic I am equally sure that it has undermined the traffic and yields on the full-service routes that MAN previously supported, leading to the loss of many such services. Of course there have been other factors such as the Iraq war, terrorism, credit crunch, oil price etc, but I can't help wondering that through the fragementation of demand due to LoCo and numerous departure points, the North of England has lost out on having its own air transport hub, something which could only ever be viable at a single airport in the North, and that was obviously MAN.
We've seen MAN lose many of the hard-won long haul routes, and also, worryingly, a good number of primary European routes with flag carriers. In this way MAN has lost its critical mass of services which could feed eachother and make new long haul destinations viable. MAN has seen LoCo growth, basically replacing the old legacy services with the same offerings at the same price as are available from LPL, DCS, LBA etc. Not a great exchange deal for the North, as the price has been the loss of its global direct services. Furthermore, most of the smaller regional airports no longer have a service to LHR, and so they cannot even connect over London. Even where the LoCos operate into major EU hubs they do not have interlining arrangements with the big gobal alliances - another loss of connectivity. Somewhere along the line this must be damaging the economy of the North. Good connections are essential to business. Have we exchanged our good connections for a cheap way of getting to a stag night in Eastern Europe?
Airports were never intended to be profitable. They were not built to be businesses in their own right and to seek turnover and retail spend as their raison d'etre. They were built by governments, both national and local, in order that their country, city or region should benefit politically and economically by the trading links that were forged. That may sound out of date, but I re-ask the question - Has the LoCo-led fragementation of air services ultimately benefitted the North of England?