Marginal Airports (UK)
Scourge of Bad Airline Management!
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What's missing - and the key to the survival of these marginal airports - is an in-depth re-education of the public.
Stop trying to play catch-up and create a parallel reality where air transport is just "normal" not something exotic or exclusive.
Scrapping the subidies for rail travel would help equalise the price equation
but more importantly, there needs to be an integrated approach involving the community, the airport and the airline(s) so that everyone feels their (sic) getting a fair deal.
the better the chances of "distorting" the market back again!
TA
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Whilst I would agree that rail subsidies are undesirable, the rail lobby would argue that air travel is 'subsidised' by the lack of duty on aviation fuels (due to international agreement).
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Originally Posted by TwinAisle
Why do you think offering a product at a price people want to pay, and at a price where you can make a profit without a public subsidy, is a distortion of the market?
This creates a problem when a small operator tries to run an alternative service at "normal" rates, often receiving a double-whammy because the airport doesn't think the 30- or 50-seater proposition is worthy of a similar "marketing" incentive. At "normal" rates, business customers make the cost-benefit calculation and it works, but only as long as business justifies it.
However, there is light in the tunnel here in France. The local authorities that run many of the marginal airports have come under increasing pressure to cut their subsidies, with the effect that there is a pattern emerging of primarily RA/EZ/Flybe/bmi airports on the one hand with typically high parking charges, hot, overcrowded terminals (even with on-time flights) and destinations only in the UK or Ireland; and on the other, smaller facilities with no major carrier but a better range of European or French destinations from smaller operators.
Last edited by CelticRambler; 19th Apr 2011 at 00:29.
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There are 48 active airports (not including the Scottish highlands) of which i would categorise as follows:
10 of them are 'major' - i.e above 5m pax per year (BHX, LHR, LGW, STN, MAN, GLA, EDI, BRS, LTN, LPL)
11 of them are 'major regionals' - i.e above 1m pax per year (CWL#, NCL, EMA, ABZ, LCY, SOU, JER, BFS*, BHD, LBA, PIK)
13 of them are 'regionals' - i.e above 100,000 per year (EXT, DTV, NWI, BOH, HUY, BLK, NQY, DSA, GCI, INV, LDY, DND, IOM)
14 of them are what i would consider 'marginal' - i.e pax levels under 100,000 per annum with no hope of them achieving more than that level, thus they must exist for alternative reasons (MSE*, LYD, SEN*, GLO, ACI, PEN, SWN, CRL, COV, OXF, CBG, PLH, LEQ, VLY)
There are numerous airfields in the non-pax related category such as Biggin Hill, Farnborough, Bristol Filton, Boscombe down etc etc that do not handle scheduled or regular holiday traffic. But even at this level they contribute to the ecomony in some way.
In my opinion, and due to the explosion of LCC's in the early 2000's; 'regionals' have tried to promote themselves to 'major regionals' by attracting LCC's. But it appears not to have been sustainable. To be sustainable, it must work even during an economic downturn. The fuel price also means that only very strong domestics will be viable in the medium term.
*THESE COULD BE PROMOTED UP A LEVEL
# THESE AIRPORTS COULD BE DEMOTED IN THE SHORT TERM
10 of them are 'major' - i.e above 5m pax per year (BHX, LHR, LGW, STN, MAN, GLA, EDI, BRS, LTN, LPL)
11 of them are 'major regionals' - i.e above 1m pax per year (CWL#, NCL, EMA, ABZ, LCY, SOU, JER, BFS*, BHD, LBA, PIK)
13 of them are 'regionals' - i.e above 100,000 per year (EXT, DTV, NWI, BOH, HUY, BLK, NQY, DSA, GCI, INV, LDY, DND, IOM)
14 of them are what i would consider 'marginal' - i.e pax levels under 100,000 per annum with no hope of them achieving more than that level, thus they must exist for alternative reasons (MSE*, LYD, SEN*, GLO, ACI, PEN, SWN, CRL, COV, OXF, CBG, PLH, LEQ, VLY)
There are numerous airfields in the non-pax related category such as Biggin Hill, Farnborough, Bristol Filton, Boscombe down etc etc that do not handle scheduled or regular holiday traffic. But even at this level they contribute to the ecomony in some way.
In my opinion, and due to the explosion of LCC's in the early 2000's; 'regionals' have tried to promote themselves to 'major regionals' by attracting LCC's. But it appears not to have been sustainable. To be sustainable, it must work even during an economic downturn. The fuel price also means that only very strong domestics will be viable in the medium term.
*THESE COULD BE PROMOTED UP A LEVEL
# THESE AIRPORTS COULD BE DEMOTED IN THE SHORT TERM
Last edited by shamrock7seal; 19th Apr 2011 at 05:52.
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Can anybody post some evidence that the key UK Intercity rail routes that are potential competitors to air, actually receive any subsidy ? As I understand it, the failure of GNER and then their successor on the East coast, was the high levels of fee that they bid to pay to the government, not the other way round.
When flights to LHR from MME were busiest, it took well over three hours to get from Darlington to King's Cross, and there were about 7 trains per day. At its peak, ECML (the then BR subsidiary) was charging over £300 executive day return at current prices, whilst British Midland were offering Diamond Club flights 5 or 6 times per day at lower prices.
Today, it's well under 3 hours by East Coast, every half hour from very early morning, and even 1st class fares can be had on peak trains at £34 single.
I think it's telling that EZY still pursue NCL-BRS whilst NCL-STN has been dropped. Even the BRS route is only 2 rotations/day during the week, whereas the extended rail alternative dawdle around Yorkshire and the Midlands to the SW remains busy.
And the road alternative these days, compared to when UK domestic flying was at its peak, is IMHO better. From the NE, the improvements in the A1/M1, and subsidiary routes have been substantial, and cars have become a lot more comfortable, mechanically reliable, and more fuel efficient. From the NE, the completion of the A1 upgrade currently underway, will further exacerbate that advantage.
About a decade ago, ONE North East's strategy document suggested that MME's future as a passenger airport should come to an end, and resources and investment concentrated at NCL. Of course, the equivalent of WW3 broke out in the N.E., but one can't help but feel that had this strategy been followed, the region would be better served for Pax air transport than it is now, especially given the history of route failure that the region has created in the interim, because of demand split (and therefore weakened) by having two airports.
When flights to LHR from MME were busiest, it took well over three hours to get from Darlington to King's Cross, and there were about 7 trains per day. At its peak, ECML (the then BR subsidiary) was charging over £300 executive day return at current prices, whilst British Midland were offering Diamond Club flights 5 or 6 times per day at lower prices.
Today, it's well under 3 hours by East Coast, every half hour from very early morning, and even 1st class fares can be had on peak trains at £34 single.
I think it's telling that EZY still pursue NCL-BRS whilst NCL-STN has been dropped. Even the BRS route is only 2 rotations/day during the week, whereas the extended rail alternative dawdle around Yorkshire and the Midlands to the SW remains busy.
And the road alternative these days, compared to when UK domestic flying was at its peak, is IMHO better. From the NE, the improvements in the A1/M1, and subsidiary routes have been substantial, and cars have become a lot more comfortable, mechanically reliable, and more fuel efficient. From the NE, the completion of the A1 upgrade currently underway, will further exacerbate that advantage.
About a decade ago, ONE North East's strategy document suggested that MME's future as a passenger airport should come to an end, and resources and investment concentrated at NCL. Of course, the equivalent of WW3 broke out in the N.E., but one can't help but feel that had this strategy been followed, the region would be better served for Pax air transport than it is now, especially given the history of route failure that the region has created in the interim, because of demand split (and therefore weakened) by having two airports.
mostly harmless
rail subsidy
@hipennine
Ah, rail 'subsidy'. The air community comfort themselves with the thought that inter-city rail receives massive subsidies - all that needs to be done is to remove them!
The situation is, in fact, rather more complicated.
In the old days, the nationalised British Rail had an 'Inter City' sector that was defined as 'the bit of the railway that is not subsidised'. All very clear.
After privatisation, government financial support for railways increased many-fold. True, more people are travelling by rail but the system as a whole became more inefficient and costly. However, overall government support has been coming down for the last couple of years.
The calculation of total government support to railways is very complicated. If you want to know more, you should read Roger Ford's column in 'Modern Railways'. 'Uncle Roger' is, I believe, a proud holder of a ppl and quite possibly a ppruner, so he might want to correct my mistakes.
In general, there are two main parts of the subsidy: a direct grant to Notwork Rail and a subsidy to the operator (or a premium paid by the operator). So, an operator might pay a premium to the government but this is outweighed by the grant.
The subsidy / premium is contracted between the operator and the government, usually getting more positive (ie less subsidy /more premium) over the life of the contract period.
So when GNER and later National Express East Coast (think London-Edinburgh) both contracted for too big a premium, their payments just got bigger and bigger. The current (state owned) operator, East Coast, pays a much smaller premium. First Great Western (think London-Bristol/Exeter) pays a premium but gets money back(!) Virgin West Coast (think London-Manchester/Glasgow) plays by different rules (I think).
But all in all, there ain't no great subsidy pot for inter-city rail out there just waiting to be taken away to rescue the regional airline industry. Trains are getting faster and more frequent and the railways are getting better at informing the public. Oil prices keep on going up, tilting the market more and more in favour of the train.
You don't have to believe me but I wouldn't bet my career on the regional airline business being the same size as now 20 years hence.
Ah, rail 'subsidy'. The air community comfort themselves with the thought that inter-city rail receives massive subsidies - all that needs to be done is to remove them!
The situation is, in fact, rather more complicated.
In the old days, the nationalised British Rail had an 'Inter City' sector that was defined as 'the bit of the railway that is not subsidised'. All very clear.
After privatisation, government financial support for railways increased many-fold. True, more people are travelling by rail but the system as a whole became more inefficient and costly. However, overall government support has been coming down for the last couple of years.
The calculation of total government support to railways is very complicated. If you want to know more, you should read Roger Ford's column in 'Modern Railways'. 'Uncle Roger' is, I believe, a proud holder of a ppl and quite possibly a ppruner, so he might want to correct my mistakes.
In general, there are two main parts of the subsidy: a direct grant to Notwork Rail and a subsidy to the operator (or a premium paid by the operator). So, an operator might pay a premium to the government but this is outweighed by the grant.
The subsidy / premium is contracted between the operator and the government, usually getting more positive (ie less subsidy /more premium) over the life of the contract period.
So when GNER and later National Express East Coast (think London-Edinburgh) both contracted for too big a premium, their payments just got bigger and bigger. The current (state owned) operator, East Coast, pays a much smaller premium. First Great Western (think London-Bristol/Exeter) pays a premium but gets money back(!) Virgin West Coast (think London-Manchester/Glasgow) plays by different rules (I think).
But all in all, there ain't no great subsidy pot for inter-city rail out there just waiting to be taken away to rescue the regional airline industry. Trains are getting faster and more frequent and the railways are getting better at informing the public. Oil prices keep on going up, tilting the market more and more in favour of the train.
You don't have to believe me but I wouldn't bet my career on the regional airline business being the same size as now 20 years hence.
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Marginal Airports(UK)
Looking carefully at the posts on this thread, we have come back to the old chessnut of municiple developement of airfields going back 50 Years or so.
The phrase "Chickens home to roost" comes to mind. Pairs of airports 30 miles apart. BHX and COV 12 miles !
A strategic ecomomic view of developement needs to be taken and It never has been.
The price of oil will inevetably shape the pattern of demand for air travel in the next 30 years. OK Hydrogen may be an alternative but where are the working systems ?
With the exeptions of LHR,LGW,MAN and the special cases of EMA (Freight) togather with NCL (Geography) and the some of Scottish Airports (More Geography), most UK airports could be considered marginal.
8 Million pax in 2011 using a facility now, could equal 0 in ten/fifteen years time. A valid but ominous thread for pprune.
CAT III
The phrase "Chickens home to roost" comes to mind. Pairs of airports 30 miles apart. BHX and COV 12 miles !
A strategic ecomomic view of developement needs to be taken and It never has been.
The price of oil will inevetably shape the pattern of demand for air travel in the next 30 years. OK Hydrogen may be an alternative but where are the working systems ?
With the exeptions of LHR,LGW,MAN and the special cases of EMA (Freight) togather with NCL (Geography) and the some of Scottish Airports (More Geography), most UK airports could be considered marginal.
8 Million pax in 2011 using a facility now, could equal 0 in ten/fifteen years time. A valid but ominous thread for pprune.
CAT III
Why should Newcastle be a special case? Surley it could be classed as marginal and the local forced to fly from Edinburgh or Manchester.
Not long ago Manchester airport placed a mobile advertisment at Newcastle.
Not long ago Manchester airport placed a mobile advertisment at Newcastle.
This thread seems to be a bit null and void. State ownership and strategic airport planning was considered in the 1960's, but only those deemed important nationally were retained under state control (BAA), the rest were left to their own devices.
Surely, as more of the regional airports are taken over by the private sector, it is these owners which will decide the direction these airports will go in. Some may grow and prosper while others will go to the wall, but I would bet that the ones that dont last are the ones that can be truly classed as 'marginal'.
Surely, as more of the regional airports are taken over by the private sector, it is these owners which will decide the direction these airports will go in. Some may grow and prosper while others will go to the wall, but I would bet that the ones that dont last are the ones that can be truly classed as 'marginal'.
mostly harmless
Surely the point of this thread is to analyse the likely future size and shape of regional aviation, hence which airports will survive. Not null at all.
s7s's classification provides an exellent starting point. But commercial logic, not the logic of passenger numbers, will determine the outcome. Thus a megagarch who is willing to pay to keep an airport open for her one flight a year will get her way. I exaggerate but you catch my drift.
So, the regional / 'marginal' airports whose catchment areas include enough business aviation / people willing to pay for premium flights close to their McMansions, will survive, subject to competition. Likewise, the island airports etc. for which there is no economic alternative will stumble on, perhaps with subsidy. The owners will find alternative uses for the other airports.
I reckon most or all of the major regionals will survive 20 years hence in some shape or other, though some might be much smaller than today.
s7s's classification provides an exellent starting point. But commercial logic, not the logic of passenger numbers, will determine the outcome. Thus a megagarch who is willing to pay to keep an airport open for her one flight a year will get her way. I exaggerate but you catch my drift.
So, the regional / 'marginal' airports whose catchment areas include enough business aviation / people willing to pay for premium flights close to their McMansions, will survive, subject to competition. Likewise, the island airports etc. for which there is no economic alternative will stumble on, perhaps with subsidy. The owners will find alternative uses for the other airports.
I reckon most or all of the major regionals will survive 20 years hence in some shape or other, though some might be much smaller than today.
answer=42, that kind of proves my point though. This thread seems to directly link passenger numbers with 'marginal' airports, when that simply is not the case.
Surely a better way of looking at it is like you say, the future shape of regional aviation as a whole, rather than looking at an airports passenger statistics in deciding which is 'marginal' or not?
Surely a better way of looking at it is like you say, the future shape of regional aviation as a whole, rather than looking at an airports passenger statistics in deciding which is 'marginal' or not?
mostly harmless
@pug
Well, I'd use pax numbers as a good first approximation of viability - the data is available, as s7s has kindly shown. If I wanted to get a tad more sophisticated, I would look to look at the total and high income population in the airport's catchment area - I might try to get some data on house prices as a proxy for the latter. I would also look at time/distance to next nearest airport and identify island airports. I would also include freight usage as an additional source of airport revenue. Put all into an econometric model, place in a warm computer and cook the figures until ready. Yum.
On regional planning, let's look at the potential value added of intervention compared with the market solution. How might markets not give a socially optimum solution? If there are two marginal airports and only enough business for one: both will close unless they either come into the same ownership or there is intervention. If the airport land is temporarily more valuable as housing but closure would have a impact on the regional economy that cannot easily be monetised. if our friend the megagarch decides she wants airport A to stay open, even though it is in everyone else's interest to keep airport B. (Of course, in this case, she might flounce off and buy Italy or something).
So, there is a potential case for regional planning, if reasonable decisions can be expected. This may or may not be the case.
Well, I'd use pax numbers as a good first approximation of viability - the data is available, as s7s has kindly shown. If I wanted to get a tad more sophisticated, I would look to look at the total and high income population in the airport's catchment area - I might try to get some data on house prices as a proxy for the latter. I would also look at time/distance to next nearest airport and identify island airports. I would also include freight usage as an additional source of airport revenue. Put all into an econometric model, place in a warm computer and cook the figures until ready. Yum.
On regional planning, let's look at the potential value added of intervention compared with the market solution. How might markets not give a socially optimum solution? If there are two marginal airports and only enough business for one: both will close unless they either come into the same ownership or there is intervention. If the airport land is temporarily more valuable as housing but closure would have a impact on the regional economy that cannot easily be monetised. if our friend the megagarch decides she wants airport A to stay open, even though it is in everyone else's interest to keep airport B. (Of course, in this case, she might flounce off and buy Italy or something).
So, there is a potential case for regional planning, if reasonable decisions can be expected. This may or may not be the case.
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About a decade ago, ONE North East's strategy document suggested that MME's future as a passenger airport should come to an end, and resources and investment concentrated at NCL. Of course, the equivalent of WW3 broke out in the N.E., but one can't help but feel that had this strategy been followed, the region would be better served for Pax air transport than it is now, especially given the history of route failure that the region has created in the interim, because of demand split (and therefore weakened) by having two airports.
Too many airports? I wonder how LBA has been been affected by DSA which must have also damaged Humberside which in turn damaged LBA also as a relatively new airport.
Together they must have cost LBA quite a few pax. DSA in particular seems to have been allowed to open only because of 2 notoriously voiciferous politicians and not because it was required.
LBA was also damaged because of consecutive anti airport Leeds city councils which has continued until this day.
Too many airports? I wonder how LBA has been been affected by DSA which must have also damaged Humberside which in turn damaged LBA also as a relatively new airport.
Together they must have cost LBA quite a few pax. DSA in particular seems to have been allowed to open only because of 2 notoriously voiciferous politicians and not because it was required.
LBA was also damaged because of consecutive anti airport Leeds city councils which has continued until this day.
Well, I'd use pax numbers as a good first approximation of viability - the data is available, as s7s has kindly shown. If I wanted to get a tad more sophisticated, I would look to look at the total and high income population in the airport's catchment area - I might try to get some data on house prices as a proxy for the latter. I would also look at time/distance to next nearest airport and identify island airports. I would also include freight usage as an additional source of airport revenue. Put all into an econometric model, place in a warm computer and cook the figures until ready.
On regional planning, let's look at the potential value added of intervention compared with the market solution. How might markets not give a socially optimum solution? If there are two marginal airports and only enough business for one: both will close unless they either come into the same ownership or there is intervention. If the airport land is temporarily more valuable as housing but closure would have a impact on the regional economy that cannot easily be monetised. if our friend the megagarch decides she wants airport A to stay open, even though it is in everyone else's interest to keep airport B. (Of course, in this case, she might flounce off and buy Italy or something).
The Government washed their hands of regional airports years ago and formed BAA (for those deemed to be of national importance). They believed that local pride, and a better knowledge of the local area would be a better driving force behind the regional airports. How likely are they to ever change their attitudes?
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Originally Posted by pug
Well, I'd use pax numbers as a good first approximation of viability ... Put all into an econometric model, place in a warm computer and cook the figures until ready.
Besides, those populations of high-earners may well be prepared to spend more on their flight, but how much of that feeds through to the airport? These are the same folk that are prepared to pay for a taxi to the terminal, fast-track security clearance and priority boarding. Why? So they don't have to hang around spending more money.
The regional airports destined to survive, even flourish, are the ones who stop trying to be like Heathrow, Stansted, Amsterdam, etc and offer a service adapted to their local population. Just because that population doesn't come up as "wealthy" in the stats doesn't mean they can't be more economically viable than a million bargain-hunting sun-seekers.
Just because that population doesn't come up as "wealthy" in the stats doesn't mean they can't be more economically viable than a million bargain-hunting sun-seekers.
Should it not be considered that an airport that relies heavily on revenue from footfall generated by one or two 'low cost' airlines is at significant risk if one of those airlines collapses/pulls out? At the other end of the spectrum there are airports who have diversified their aviation interests and have not put too much emphasis on low-cost airlines, their passenger figures look pretty dire, but are still commercially viable none the less. This is why I believe the thread is null and void.
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Forgive me for going off track, is that really why the BAA was formed to protect airports of national importance. Does that mean it was really thought that the 3 London airports, Southampton, Edinburgh, Glasgow and Aberdeen were the only airports considered such?
No, I believe it was origionally the London airports plus Prestwick and perhaps a couple of others. Bournemouth was state owned but was relinquished upon the formation of BAA.
In the case of Yorkshire, there was a very good idea of building an airport in the Ferrybridge area, to coincide with the opening of the M62, it would have also been on the A1. Would have been the perfect solution for Yorkshire but such a project could never get off the ground without state intervention.
In the case of Yorkshire, there was a very good idea of building an airport in the Ferrybridge area, to coincide with the opening of the M62, it would have also been on the A1. Would have been the perfect solution for Yorkshire but such a project could never get off the ground without state intervention.