BTN Europe presents an overview of business travel and MICE predictions for this year
ExCeL London - 24-25 February 2021
Britain’s regional airport chiefs are feeling bullish, despite recent challenges which have sparked a downturn in traffic for some and forced a change of growth strategy for others.
Smaller airlines were going out of business, Air Passenger Duty deters the establishment of new UK routes, and the stealth income some regional airports derive from costly drop-off and pick-up charges are enough to induce many business travellers to fly from Heathrow instead, according to a leading buyer.
“Even if their nearest airport offers a direct long-haul route on a US airline, some customers prefer to fly from London and transit to a British Airways flight on which they can get points to later use for family travel,” says Steve McGrane, assistant vice-president of global travel at Genpact, with clients based in Glasgow, Southampton, Edinburgh, Luton and Bristol.
Loyalty, he thinks, drives traffic to BA, while Heathrow offers the lure of dedicated airline lounges, upmarket restaurants and other facilities for business travellers, which are not prevalent at airports carrying mostly leisure traffic. “Those passengers don’t expect bells and whistles; they turn up at the last minute,” McGrane says.
Southampton is one of those hidden gems people often overlook, with a station at one end of the terminal, a large car park and fast security
However, a small airport without lounges, but the fast access to gates that travellers at Heathrow and Gatwick can only dream of, is a draw to business travellers, believes McGrane. He thinks the trump card that small but efficient regional airports hold is underplayed. “I think they’re missing a trick by not advertising the 30-minute check-in possible versus the couple of hours you need for London and other larger airports.”
Southampton, he says, is a case in point: “It’s one of those hidden gems people often overlook, with a station at one end of the terminal, a large car park and fast security. There are just a couple of places to eat, but it’s pleasing, if not pleasurable, to arrive at the airport 45 minutes before departure and know you can get through.”
Bournemouth is another favourite: “It’s my go-to for flying up to Scotland, even though I am only a 90-minute drive from Heathrow,” McGrane says.
Regionals recoverThe greatest challenge to regional airports impacted Birmingham Airport, which suffered a 4 per cent downturn last year following the Monarch crash in October 2017. “Monarch was our second biggest customer and it took us time to recover and start growing again,” says chief executive Nick Barton. But with Jet2, Tui and Thomas Cook picking up most of Monarch’s routes, Barton reports the airport has just enjoyed the biggest January in its history.
Now Birmingham, Britain’s seventh largest airport, with the highest percentage of business travel of any beside Heathrow, is forging ahead with an ambitious £500 million masterplan. It is aimed at increasing passenger numbers by more than 40 per cent by 2033. One of the first moves will be a bigger departure lounge and more shops, bars and restaurants. A glazed mezzanine floor will be pushed up through the roof to create the kind of dedicated relaxation area that is an increasingly popular feature of international airports.
Barton says he sees growth for Birmingham airport, which is 49 per cent owned by surrounding local authorities, coming mainly through long-haul traffic to and from the East. “Qatar, Emirates and Turkish Airlines already feed into their hubs from Birmingham, and markets in the Indian subcontinent are important. But we are weaker in the West, and we also need to look towards the US and Canada.”
The only way is EssexAlthough coming off a tiny base, Southend airport has even grander hopes of growing passenger numbers by 67 per cent this year; double the growth it achieved last year. The increase was fuelled by a confluence of happy events. “We had Air Malta flying a daily route to Sicily, easyJet basing a fourth aircraft here and a significant increase in traffic from Flybe,” says Glyn Jones, chief executive of Stobart Aviation, which owns the Essex airport – now billing itself as the sixth London airport.
Airlines are persuaded, with Ryanair opening its first base at Southend in April and Loganair flying in from several Scottish airports. Jones says the private holding company, which now owns three regional airports, was bold and visionary when buying the Essex site, which had “dwindled to nothing” ten years ago and immediately extending the runway. It was not quite so visionary with the terminal added in 2012, however, he concedes: “We had to extend it two years later, and now an extension of our arrivals area is a priority.” The airport has no e-gates but, Jones says, “excellent” border force support has helped the immigration process achieve the highest level of customer satisfaction with the airport.
APD was launched as an environmental initiative, but has become a tax that makes tickets more expensive than they need to be
Owning a railway station with direct access to the airport helps, with four to six departures an hour into the capital guaranteed. And catering facilities are extraordinary for such a small airport. “This is Essex, and people like to see and be seen,” says Jones of the airport’s champagne bar. He claims a queue for security, which never exceeds six minutes, and the coming installation of 20 self-service bag drops will help drive business traffic.
Stobart’s ambitions are huge for an airport with fewer than 1.5 million passengers last year. “Our aim is to reach five million by 2022/23 and we believe we have the capacity to become a 15 million passenger airport,” says Jones.
Stobart boasts a £513 million investment fund and is planning to work its magic in the north-east at Durham Tees Valley Airport, which it took over in March. The task is significant for an airport that was losing £2.5 million per year, and Stobart is also planning to restore commercial flights to Carlisle for the first time in 25 years.
Bristol fashionBristol Airport is proof that a downturn can be avoided when a client airline ceases to operate. It has maintained a 5 per cent annual growth rate, despite the demise of flybmi, says chief executive Dave Lees. “It represented three per cent of our traffic, but some of that traffic has been picked up by Loganair, which also inaugurated a route from Bristol to Aberdeen.”
Of £60 million worth of improvements budgeted for this year at Bristol, increased food and beverage offerings and a new consolidated car rental facility are designed to enhance the passenger experience. New short-haul routes are in the offing and Bristol is aspiring to regain some of the transatlantic traffic it enjoyed before the financial crash in 2008. Lees hopes these routes will be a big draw for business travellers. “There was strong demand from business when we had those routes. We believe we can win them back.”
There’s no doubt the UK’s regional airports are thriving and expanding. Time will tell if it’s sustainable and they have the blueprint for success.
The lure of vip terminals
Could dedicated VIP terminals lure aspirational passengers to a regional hub who might otherwise choose to fly from London? Manchester, which is building its own version of Heathrow VIP, has faith in the pulling power of luxury. Offering access to all travellers for a £50 fee versus Heathrow’s four-figure charge for a discreet fast-track service not available to Economy passengers, it has democratised the private terminal concept. Premiair, due to open this summer, will offer Manchester a new income stream, but some airport chiefs, including Glyn Jones, chief executive of Stobart Aviation, which operates its own private terminal at London Southend, believes the model may prove unsustainable.