The latest CAA statistics show a mixed picture for UK regional airports, with some clear success stories with others wondering how they can survive another year. With a number of challenges ahead, it is appropriate to take stock and see what the future holds in the light of market trends and future aviation policy.
In terms of passengers handled, the performance of most UK regional airports has been reasonably good over the past five years. Between 2013 and 2018, the top 10 regional airports grew by an average of 6.2% pa compared with 4.9% pa for the London airports and 5.1% pa for the UK market as a whole.
These top 10 airports include Belfast International (up by some 9.3% pa) which now flies to some 44 destinations, although direct services to the US by Norwegian Air were suspended in November 2018. Edinburgh, up by an average of 7.9% pa, currently flies to some 126 destinations worldwide including New York, Washington, Philadelphia, Dubai and Doha. At Manchester, the UK’s third largest airport, some 70 airlines now fly to over 210 destinations worldwide and new services have recently been announced by Virgin Atlantic and Jet2.
Cardiff Airport: Passengers have risen by 8.7% per annum over the past five years
For the next tier down – UK regional airports handing between 100,000 to 3 million passengers annually – there is a more mixed picture. Crucially, most of these airports are dependent on retaining flights by Ryanair and EasyJet. Some airports, such as Doncaster Sheffield (up by 12.2% pa over the past five years) and Cardiff (up by 8.4% pa) have been able to expand their route networks whilst others, including Glasgow Prestwick, Humberside, Durham Tees Valley and City of Derry in Northern Ireland have declined. Blackpool has recently announced that it will now focus on general aviation rather than scheduled services. Many of these airports are also dependent on other revenue opportunities eg from property development, aircraft maintenance (MRO) activities etc.
So what are the challenges ahead?
In the near future, the prospects of Brexit coupled with an economic recession and potentially higher fuel costs will undoubtedly force Ryanair, EasyJet and Jet2 to reconsider their route networks, with the more marginal services from UK regional airports likely to be the main casualty. Air Passenger Duty (APD), charged on all flight from the UK, is the highest tax of its type in Europe. Other countries in Europe, including the Netherlands, Belgium and Ireland have abandoned this type of tax. APD has risen by some 700% since it was introduced in 1994. As an example, from April 2020 a family of four travelling from the UK to Orlando would pay over £320 in APD in addition to the standard ticket cost. However, even if the impact of Brexit and a recession on air travel is severe, it seems unlikely that the UK government will cut APD given current climate change concerns.
The prospects of a third runway at Heathrow and potentially a new northern runway at Gatwick for short-haul traffic may also impact UK regional airports in the medium to long-term. On the one hand, there will be additional slots for services for domestic services into Heathrow and potentially also into Gatwick, although such flights will need to compete against an improving rail network, even if the future of HS2, the high speed rail link between London, the Midlands and the North, is currently uncertain. On the other, the increase in capacity at Heathrow and Gatwick will expand the range of flights at these airports competing against those at the regional airports.
The decline in the UK air charter market is significantly impacting UK regional airports
The demise of Thomas Cook and Monarch coupled with the decline of the UK air charter market as a whole, will put further pressure on UK regional airports, which have a high proportion of such services.
In 2016, some 7.2% of UK regional airport passengers flew on charter flights compared against 4.3% of passengers travelling through the London airports. There are further consequences in terms of airport retail and car parking revenues, which face competition from online retailing and off-airport car parking. Improved airport security is also putting pressure on UK regional airports in terms of both staffing and equipment costs.
How will the challenges of the UK’s policy of net zero carbon emissions by 2050 affect UK regional airports?
It should first be pointed out that most regional airports have, or are putting, their own house in order in relation to climate change. Manchester Airport, for example was among the first in the UK to be awarded Level 3+ carbon neutral status after investing over £7.5 million in energy efficiency, purchasing clean electricity and offsetting emissions.
Many other regional airports are moving to all electric ground operations fleets. New technologies such as the use of hybrid fuels and electric aircraft will ultimately change the picture of aviation in the future. In the case of electric aircraft, the initial developments are likely to be in smaller 2-12 seater aircraft due to limits in the battery technology. EasyJet has however recently announced a partnership with US-based Wright Electric to produce a fleet of electric aircraft with a range of about 500 km, suitable for short-haul routes such as those between the UK and Amsterdam. It is important that regional airports facilitate such developments for both their short haul passenger and general aviation markets.
UK regional airports play a vital role to local economies, providing both jobs and opportunities for inward investment. In a post Brexit world, it is vital that both national and local governments provide the support they need to achieve these objectives.