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:

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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.
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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).
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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.

Cheers

UK Cancels Major Airport Expansion

BAA - the Spanish owned company that controls STN and LHR - has canceled the two major projects for the London area which will have a major impact on the future of airline traffic in the UK.

LHR T6 and the 3rd runway was always going to be a battle. In my view the alternative of a new airport would be a better bet. However Stansted cancellation of the 2nd runway is both short sighted and a clear mis-read of the market by the politicians.

Accepting that you will never make all of the people happy all of the time comes down to a decision of what is the optimal solution for the country as a whole. The nature of the UK will be that the infrastructure of ground transportation such as high speed rail between the mainland and the UK will never give the level of support and value than the continued growth of airline traffic. Stansted is a classic case. It is in the middle of the country side and very few people are actually impacted. Whereas LHR is a different proposition. Even Gatwick's second runway is viable - more so that LHR's 3rd runway.

The UK government cannot simply abandon two runways and expect no economic impact.

With no mitigation strategy by the UK coalition government this will have to wait for up to 5 more years before the issue is addressed again.

As we have seen the fragility of the Channel Tunnel continues to blight traffic to and from the Mainland of Europe. The UK needs a balanced mix of international transportation links. Without it the country will be seriously disadvantaged.

I urge the UK Government to re-open the solution for the need of additional runway capacity in the UK.

Cheers

Here’s a novel thought – privatize US airports.

For more years than many of us can remember the US Government has had a secret tax on airlines. The tax 8-10% on airline tickets was designed to cover the cost of airport and airways improvements including terminals and runways. Actually it was used to provide billions of dollars in funds that went directly to the federal coffers and never to the intended purpose. When the money didn’t get to the airports – local authorities within the States and cities who own and run the airports started to institute PFCs – Passenger Facility Charges. These charges now comprise a revenue form for the airports. But not necessarily for the use they were intended. The situation of poor management by the FAA and the lack of funding has resulted in capacity constraints in the US Air Transportation System at the airport level. This is now the bottleneck and not a solution in sight.

So now I would like to suggest an alternative solution to the problem in total. Rather than yet another half hearted attempt at a solution – I think we should try and address the problem once and for all.

So my proposal is straightforward and I hope simple. Privatize the airports.

This has occurred in many different parts of the world but the US model seems to not have adopted this novel idea. However the concept is not so easy given the different ways in which funding attempts are handled. There needs to be both an obligation and a method to ensure that funding occurs on a regular and consistent basis. To this end the privatization needs to also cover a long term set of goals – meeting the needs of growth and safety. The only way this is going to happen is if there is a secure funding method that kick starts the whole process. So the recommendation is to add Government backed bonds rather than funding from the Government. But from the moment that is offered then the revenue to the Feds ceases and the funds can then flow correctly.

This will require the US Congress to be able to make some smart decisions. Lets hope that this can happen soon. Then finally we can get new infrastructure – gridlock will be relieved… sometime this century. We can but hope

Cheers

Timothy

Mass Confusion at UK Airports with new bag rules

Congrats to the UK Powers that be and the airlines for not being smart.

As a result you have 2 separate sets of rules to check before you can know if you have the ability to carry on 2 bags.

So here are the T2 recommended rules to live buy.
1. CHECK the airline's policy for the specific airport you are using
2. Don't believe what people tell you - check with the airline via the phone
3. Don't assume that the rules are the same as the USA - they are not.

The following airports from today (Jan 7th) have the ability to allow up to 2 pieces per pax. UK airports that are now kitted out to cope the new regime include; London Heathrow, Manchester, Glasgow, Edinburgh, Aberdeen and Inverness. Easyjet has said only a single piece no matter which airport (specifically this means Gatwick pax are screwed.)

Stansted is TBD as are other UK airports. Changes are supposed to be in place "later this year". Remember that Stansted has absolutely NO PLANS for an IRIS fast track retina scan system. So chances for a 2 bag limit being in place before summer is remote.

Cheers

Timothy