Forecast
Knife edge has at last hit the nail on the head!
Perhaps its useful to look at the trends in air transport to identify what growth will occur over the next 5 years south of Birmingham. Passenger traffic is forecast to grow globally at nearly 5% annually to 2032. UK is a strong performer
We know that the top 5 London airports are completely full, they have no runways slots available early or late in the day, or in the case of LHR and LGW, no slots available at all. No new based aircraft can be accepted. Bigger aircraft or other airports are the only options.
Second we know that the LCC in particular are dealing with this by deploying larger aircraft, 737 max for RYR, for easyjet it is expected that some A320neo will be switched to A321neo (40% larger than A319). We also know that RYR and EZY both have a growth strategy to go after the legacy carriers business from the major hubs. The LCC market share is still low in Germany, France and the Netherlands - which is where they are going next. We also know that the LCC need year round profitable demand for their expensive new aircraft – big cities.
Third, we know that the 3 Gulf carriers and Turkish are hoovering up all the long haul traffic headed to the east and south of Europe. EK even add A380 service to BHX this year. The legacy transfer traffic at the European hubs is falling alarmingly as passengers choose the Gulf and Turkish alternatives.
Fourth, IAG purchased Aer lingus intending to make Dublin the Transatlantic hub for Europe, feeding Dublin from secondary cities. Wow has the same idea using Reykjavik as the European hub to the US and Canada.
Lastly and inevitably, in England, the charter and holiday operators and the corporate operators will be forced out of the London airports to less constrained runways elsewhere. It is also likely that the charter operators will be increasingly obliged to shrink their Gatwick and Stansted operations to their larger aircraft types.
There is already evidence that Birmingham and Bristol are sweeping up the resulting demand by providing an alternative to the London airports. There are frequent new route announcements. TK is almost a no-brainer for a Bristol service. Southend will inevitably grow as Stansted fills (imminent), Luton will start to squeeze out the corporates – my guess is to Farnborough, even Norholt.
KLM is already reacting by adding destinations to boost their AMS hub that neither TK or the Gulf carriers can reach. I think Aer Lingus will do the same from Dublin.
So what does that mean for the south coast airports?
Exeter will always play second fiddle to Bristol not much more than an hours drive away and will stick at more or less 1m pax.
Bournemouth has the runway, has proven demand to support regular service by Ryanair to the big 5 holiday spots (PMI, AGP, ALC, FAO and BCN) and within five years will likely see holiday charter and cruise growth. But not much, it will probably stick at sub 1m pax for the next 5 years and will be mostly dependent on Ryanair for any significant growth. There is an outside chance that Blue islands will introduce a Jersey service in summer 2017 and Aer Lingus back to Dublin, similar time scales.
Southampton is interesting for other reasons despite the excellent rail link, its runway is too short for any regular unrestricted operations by the LCC to anywhere the demand justifies the larger aircraft size. The KLM move to SOU makes sense, they have to add UK regional airports, I think they will push Flybe off the SOU/AMS route and by 2017 go to 3xdaily.
Air France might try to do the same with SOU/CDG but Flybe are the better bet there. The sun routes from SOU just can’t compete with the alternatives available elsewhere, so I think Volotea will most likely be a one season wonder. Flybe clearly can’t make the E195 work profitably on those routes except in absolute peak season, even with fuel as cheap as it is, which is why the aircraft have gone elsewhere.
All in all its hard to see SOU climbing above its routine performance of sub 2m pax by 2020.
The airports for significant growth % in the Southern half of England, away from London, are really only BRS and BHX.
But all the airports will do just fine. There is plenty of money and much less cost in tin pots.
FF