25 August 2011

UK Airline Traffic Faces Bleak Future

I watch traffic trends. Finding what trends are possible is like a treasure hunt.

One of the trends I have been watching is the decline in traffic in the UK. The recent recession pushed the largest adjustment in traffic (read fall) since 1950. But even absent this dramatic worldwide event - the market for travel in the UK has undergone a radical change in the past 15 years.

Just looking at the headline numbers you miss the fundamental shifts in traffic patterns. The massive growth and subsequent maturity of the LCC model produced a huge boom at Stansted and Luton (both one runway locations) and the regions. Only one major runway has been added to the main UK airports in the last 30 years. That was at Manchester. Efficiencies in air traffic and ground control have absorbed the increased travel. Remember when runway separation demanded 2 mins between each movement. The massive growth at Stansted made a huge difference to the UK. Thanks Ryanair and Easyjet.

But the future looks really bad. The current government reversed the previous Blair government in abandoning not 1 but three major airport projects which would have in effect increased capacity in the SouthEast of the UK by 30+%.

While the focus of the DFT's UK Aviation forecasts was to look at the effect of Carbon emissions - it had to have a baseline. That looks pretty bad. Consider their conclusions:

The updated forecasts also incorporate the latest economic growth forecasts, the latest oil price projections, reflect the entry of aviation into the EU Emissions Trading System (ETS) and the Government’s policy not to support new runways at Heathrow, Gatwick and Stansted.

The number of air passengers using UK airports is forecast to recover from the recent downturn, rising from 211mppa in 2010 to 335mppa in 2030 (within the range 300mppa to 380mppa), and to 470mppa in 2050 (within the range 380mppa to 515mppa).

The central forecasts indicate that, with no new runways, the three largest London airports will be at capacity by 2030, and that all further growth beyond 2040 will occur at regional airports.

The impact will be muted somewhat by the growth of rail connections to Europe. Remember that each Eurostar train is the equivalent to 2 747 full flights leaving.

One impact I dont think they have considered is the value of Cross Rail which in turn could add capacity to the market in the UK. By enabling additional traffic to little used airports which are viable. Such as Southend and Manston's massive runway complex. Further Cambridge Airport (1 hour from Kings Cross) could also be added to the pool. So there are several options that the Government refuses to acknowledge as viable choices.

Virgin Atlantic is right to sound the alarm. HM Government must address the lack of capacity and infrastructure in order to enable a vibrant UK economy.

I refer you to Aerotropolis as a good thought provoking book that can stimulate that a strong central government can do.

OK Chaps - time to wake up and smell the Coffee. And you don't have much time before it goes stale.


No comments: