Business Travel Show Europe Kick Off, 23 February,
Global Travel Risk Summit Europe, April 2023,
3rd Annual Sustainable Business Travel Summit
THERE WAS A TIME when flying from major airports such as Heathrow had something of a cachet attached.
The business traveller departing from a big hub had the notion, in their own mind at least, that in the corporate world, they'd really arrived. Many got into their cars and drove past their local airport on their way to one of the major London terminals and with good reason - most of these regional airports offered few connecting flights and even fewer direct services, and had poor facilities for corporate travellers.
Today, things are very different.
The last decade has seen a surge of carriers moving into the regions while, ironically, British Airways is now in total retreat following the sale of its regional network to Flybe to concentrate on feeding Heathrow and Gatwick instead.
On the other side of the coin, SkyTeam (in the form of Air France and KLM), the Star Alliance carriers (including Lufthansa) and those in the Middle East, plus some US airlines, have really exploited the potential outside the London catchment.
Paul East, chief commercial officer at Wings Travel Management, believes that airline alliance route networks have greatly enhanced the appeal of regional airports now that they have truly global reach. "Alliances have improved dramatically and they have the added advantage that travelling regionally does allow you to make cost comparisons," he says.
All of this means that in some ways regional airports could be the best option, and if cost is at the top of the list, then local airports and connecting flights make even more sense. So has there been a shift in where travellers are starting out from? Travel management company (TMC) ATPI's booking figures seem to confirm a shift away from the London airports. In February, its non-London bookings were up 24.5 per cent year on year, compared with a 20 per cent increase overall.
Gary Hance, director of IT and yield at ATPI says: "It wasn't the greatest year in 2010, so maybe this is a reflection of the fact that the bankers and insurance companies haven't yet recovered fully, but it may mean there is more buoyancy outside London, which is prompting things like Emirates using the A380 from Manchester."
Giles Travel has also seen a marked switch away from the legacy carriers in the last year as the low-cost airlines have drawn business travellers away from the main hub airports. "The increase in low-cost usage is about 20 per cent in the last year," said Giles Travel sales director Richard Priestley. "The reason is that a lot of companies that we look after now have a policy to take the cheapest possible option within Europe."
He adds, however, that this often does not take into account the travel-from- home element, which can push up the total cost beyond that of going from a major hub.
Wings Travel Management's East adds in another factor in the regional airports' favour is that of duty of care - something increasingly on the agenda for TMCs. "It gives the traveller the ability to get off a long haul flight and be a lot closer to home rather than having a two- to three hour drive," he said.
When it comes to cost, air passenger duty (APD) is a hidden factor in the price that some TMCs offer clients. Consequently, according to East, there have been few requests from customers specifically about the tax or how to avoid it, but he adds: "It will become more and more a factor as there is greater media coverage about it." Others, though, are already finding it a major factor.
"We offer three options on long-haul and include a European hub as the cut price option," said Richard Priestley. "We have to be seen to be doing that because companies are considering the fare, tax and fee."
Rebecca Davis, client relationship manager for Corporate Traveller, based in the north west, says: "We do try and help local firms within the north west - it's a northern thing". Davis does not believe direction of travel is a factor when choosing an airport, citing one client that eschews the direct flights from Manchester to New York in favour of a hop over to Amsterdam to use KLM's service. "It's only perhaps £100 cheaper, but the client prefers the service on KLM," she adds.
Corporate Traveller also records the total carbon footprint for clients, another factor in choosing whether to fly from local airports. Along the same lines, and perhaps something that will become more prevalent in the future, is the preference to support local businesses, such as taxi firms, to get to the departure point rather than driving or taking a domestic flight connection to Heathrow.
On her wish-list, Davis believes the north west needs more services to JFK and that Manchester could support a fourth daily Emirates flight. Her list also includes a differential rate APD that encourages airlines to invest more in regional airports.
Davis's point about the airline product is an important one in the mind of Aberdeen-based ATPI's Hance, who praises Emirates for using the Airbus A380 from Manchester.
"You are not going to get anything better than that in business class," he said, but adds: "The product from, for example, Newcastle is older and many airlines offer different levels of service on different aircraft. It's a consideration we have to think about when booking regional flights."
Davis agrees that TMCs have to work harder in giving the option of going direct or via somewhere. Customers now expect a plethora of options given to them before they make their final choice.
"Clients will ask for a price from Manchester, Liverpool or Heathrow, but nine times out of 10 they will go from the regional airport because, with Heathrow, you have to factor in a £110 hotel bill and a £120 train fare and probably the same on the way back - and since Heathrow got bigger, they just don't like going through there," Davis says.
The point on pricing is important, because a direct regional long-haul flight fare can often be slightly more expensive than those from London. However, the price differential weighs heavily in the regions' favour once accommodation and travel costs to a distant hub airport are factored in.
With all the benefits of the connections, price and products, regional airports themselves have also risen to the challenge. Most offer an experience that is a breeze compared with, for example, Heathrow Terminal 3 on a bad day. Moreover, many have either invested in facilities for the business traveller themselves or have had airline investment, such as the swish lounges opened by the cash-rich Middle East carriers jostling for dominance at Manchester airport.
Regional airports are also riding high on the back of changes in the passenger tax regime. Since last November, APD has really swung in regional airports' favour for the budget-conscious corporate buyer.
APD on business class fares to destinations, including Singapore and Kuala Lumpur, rose from £110 to £170 last November, a hefty premium on an already expensive fare. However, it is possible to reduce this to only £24 by flying to a European hub and connecting to the long-haul flight there. While this may not be an attractive proposition from the London area, it can be from the regions, particularly if flying eastwards.
Carriers that are actually based in Paris, Amsterdam and Frankfurt are mostly benefiting from this, but regional connections also permit other flight combinations. Anyone, for example, with a link to Frankfurt from their local airport can pick up the Qantas service to Singapore from the German hub if schedules permit.
Passengers flying long distances eastwards can also make savings on APD and published fares with carriers which fly direct by going via the Middle East instead. The big three - Emirates, Qatar Airways and Etihad - have been quick to exploit the connecting possibilities. In March, Qatar Airways revealed a shift of capacity away from Gatwick in favour of expanding at Manchester, announcing plans to go double daily to Doha from June. Rival Etihad swiftly followed this with an increase to 14 flights a week from Manchester from August, less than a year after opening first and business class lounges there. Emirates immediately trumped this by announcing a third daily Manchester- Dubai departure from May 1.
On a smaller scale, Southampton is another airport that has really blossomed in the last decade, albeit from serving point-to-point flights. It has carved a real niche in some areas, particularly routes to France, since Flybe made it a major base. Southampton now claims to be the number-one UK gateway to France, with 14 destinations. "We are increasingly seeing people from the Channel Islands connecting to France via Southampton," said a spokesman.
Regional airports have thus learned to live without BA and to look to budget carriers, Europe, the Middle East and the US for their airline partners. A good example is Birmingham, which, like Southampton, was an early victim of BA's centralisation. BA had a full-scale short-haul operation complete with a Terraces Lounge there and served most European business capitals until 2007.
The airport's chief executive, Paul Kehoe, admits that Birmingham learned how to cope without BA the hard way: "We are still suffering some of the shocks. We should have had an alternative strategy in place. We need to pursue other markets and we're talking to European carriers about improving frequency on key business routes."
Birmingham has the infrastructure to attract both new carriers and corporate flyers, having spent nearly £80 million in the last few years, including merging two terminals into one - a £13 million project that will be complete in July. Part of this has meant improving the business traveller's traditional bugbear, the security area, which Kehoe describes as "now one of the best in Europe".
The upgrade appears to be working.
The airport is one of Lufthansa's fastest-growing destinations and full service routes are growing at a greater pace than those from budget carriers.
For Emirates, which spent £2 million on a lounge at Birmingham, the route clearly works as a feeder to its hub, as 75 per cent of Birmingham passengers take a connecting flight from Dubai.
Kehoe is clear about why the airport wants more business travellers. "Business passengers park longer and more often and, because they are away more often, they do more 'guilt' shopping," he says.
He adds that weighing up the total cost of travel offers a convincing argument for local airports versus the big hubs once the car journey, parking and extras like meals are taken into account, particularly with fuel costs now so high.
For most business travellers, there seem to be fewer and fewer downsides to shunning Heathrow, even when travelling on an indirect long-haul journey.
There is perhaps the increased risk of baggage going astray and ruining a brief trip, plus the interrupted sleep that an indirect flight can sometimes bring. Then there is that old annoyance of not being able to collect mileage points if you switch from your usual carrier.
However, since none of these things show on the bottom line when it comes to scrutinising travel budgets, travel managers will be keen to look at the options for their travellers flying from closer to home - a trend that looks like it will continue.