EasyJet CEO, Carolyn McCall, again says there is no economic case for a Gatwick runway
Carolyn McCall, the CEO of EasyJet – the largest airline using Gatwick airport – has again said that there is no “economic reason” to build a 2nd runway at Gatwick. She believes it does not need to expand, because of a lack of demand from passengers. She would prefer a runway at Heathrow, as EasyJet and other airlines are “queuing up to get in”. They could make more profit there. Though the airlines want a new Heathrow runway, it is both physically, geographically, environmentally and politically very, very difficult indeed. Gatwick is also geographically and environmentally very, very difficult. For Gatwick to build a new runway, the cost would have to be paid by the airlines, which means flights costing more for passengers. As the budget airlines make thin profits (perhaps £7 per passenger after tax), adding on an extra £30 + to a return trip is utterly contrary to the low cost airline business plan. On dirt cheap flights, £30 extra is enough to matter. Even though easyJet is currently Gatwick’s biggest customer, Ms McCall said it had “never proved it can really be the kind of airport that Heathrow is.” Heathrow slot pairs can cost £25 million, but EasyJet got their Gatwick pairs for about £1 million.
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Gatwick does not need new runway, says easyJet chief
The head of Britain’s busiest airline has weighed into the debate over the future of airports by insisting there was no “economic reason” to build another runway at Gatwick.
Carolyn McCall, chief executive of easyJet, said the country’s second-busiest airport did not need to expand, because of a lack of demand from passengers. She insisted that an additional runway at Heathrow should be preferred choice of the government, claiming that airlines — including easyJet — were “queuing up to get in”.
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A spokesman for Gatwick said: “We have always maintained that easyJet’s position is based on its own narrow commercial interests.”
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Full Times article at
8.6.2015
http://www.thetimes.co.uk/tto/business/industries/transport/article4463332.ece
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Necessary rise in price per flight at Gatwick with a 2nd runway:
“In order to pay the cost of a second runway, the Commission states that passenger charges would rise from £9 at present to ‘between £15 and £18, with peak charges up to £23.’ ”
This is from the Airports Commission consultation document, November 2014, para 3.41.
https://www.airportwatch.org.uk/wp-content/uploads/Gatwick-Unwrapped-Jan-2015.pdf
See earlier:
Gatwick’s main airline, easyJet, questions Gatwick case for 2nd runway and does not want to pay higher landing charges
Carolyn McCall, CEO of EasyJet, the largest airline at Gatwick, has said passengers want expansion at Heathrow, not at Gatwick. Ms McCall said easyJet is “quite concerned” at the prospect that Gatwick’s landing charges would rise to pay for a 2nd runway. They are having confidential talks with the airports on future charges. EasyJet makes on average £8 profit per seat. If Gatwick’s charges doubled from the current £9 to an average of £15 to £18 (or even up to £23) as predicted by the Airports Commission, this would hit EasyJet’s economics. Ms McCAll said: “This whole issue of capacity should be about where the demand is. Airlines have to want to go into that airport, and the congestion we have is predominantly around the Heathrow hub. Passengers need to really value what this infrastructure brings, and if they don’t see any benefit it’s going to struggle.” A new runway risked emulating unpopular toll roads. “It will be years and years before [passengers] see any positive effect.” As one of the UK’s largest and fastest growing airlines, EasyJet’s opinion will need to be given careful consideration by the Commission.
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Willie Walsh says there is no business case for a 2nd Gatwick runway – BA has Gatwick’s 2nd largest number of passengers
Willie Walsh, the head of IAG, will not support a 2nd Gatwick runway, even if it is chosen by the Airports Commission or backed by the next government. He does not believe there is a business case to support its expansion, and there is insufficient demand from airlines for extra capacity at Gatwick. Mr Walsh campaigned heavily for a 3rd Heathrow runway before 2010, but has made frequent comments indicating he does not believe UK politicians will have the “courage” to build that. Willie Walsh says British Airways would resist higher landing charges, which would be necessary to fund a runway – either at Heathrow or Gatwick. (EasyJet has also said in the past they don’t want a new runway, if it means substantially higher charges – their model is low cost). BA would want lower costs, not higher costs, from a new runway. IAG’s shares have now risen as it has now made a profit at last, and will be paying its first dividend (and maybe some UK tax). Gatwick’s main airline is EasyJet with around 37% of passengers, and British Airways 2nd largest at around 14%.
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EasyJet says it would fly from Heathrow, “if it was right for us” debunking Gatwick’s Heathrow myth
Gatwick airport, in its bid to try to persuade the powers-that-be of its suitability as the site of a new runway, has often said that the low cost airlines would not fly from Heathrow. However, easyJet has now said that it would consider flying from an expanded Heathrow. Carolyn McCall, the chief executive of easyJet, said it would look at flying from Heathrow in future “if it was right for us”, and it if wasn’t too expensive. Gatwick claims that the increase in demand for air travel will be for short haul flights, mainly to Europe or countries adjacent to Europe. Heathrow claims the demand for air travel in future will be long haul. According to Gatwick’s chief executive, Stewart Wingate, Heathrow is inaccessible for low-cost airlines and charter carriers due to its high landing charges. But Ms McCall points out that easyJet already flies to and from other hub airports in Europe, such as Schiphol, Rome Fiumicino and Paris Charles de Gaulle. Though Heathrow has high landing charges, so do the other European hub airports. Ms McCall made her comments shortly after easyJet announced a 7-year pricing deal with Gatwick and revealed it is in discussions to take over the airport’s north terminal, potentially forcing out British Airways. It made no mention of a 2nd Gatwick runway.
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