Many regional airports doing badly – falling numbers of passengers and falling profits
Many of UK’s regional airports are not doing well – with the sale for only £1 of Prestwick, and the sale of Manston for little more recently. Over the past 5 years, with the recession, many have seen falling passenger numbers. Paul Kehoe, CEO of Birmingham airport, is quoted as saying nationalising airports (Prestwick and Cardiff) is not the answer. “If you’re nationalising (airports) – then something’s not working. Governments shouldn’t have to interfere.” A venture capitalist specialising in turnarounds says there are too many airports, and very few UK airports are profitable. Many of them therefore need to close. While airlines fight for customers, competitively cutting fares, the airports fear this passes the economic pain onto them. The proliferation of regional airports means that many have overlapping catchment areas, intensifying the scrabble for a limited pool of travellers. Airports have to keep their aeronautical charges low in order to keep airlines, and make little or no profit. Many regional airports were bought for high prices, and there was undue optimism about their growth – which has not materialised. However, some regional airports within reach of London may be used to increase the south east’s airport capacity.
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Regional airports grounded by drop in prices and traffic
By Jane Wild (Financial Times)
27.11.2013
http://www.ft.com/cms/s/0/8871a7fc-5680-11e3-8cca-00144feabdc0.html#axzz2m4DbP8XY
When Holyrood completed its takeover of Glasgow Prestwick at the weekend – the second UK airport to be nationalised this year – it highlighted the plight of many regional airports.
Prestwick’s sale by infrastructure investment firm Infratil for just £1 to the Scottish government after a commercial buyer could not be found hammered home how tough conditions are in the airport industry.
But the government’s intervention also illustrated the value of airports to the local economy. Airports typically support thousands of jobs and generate hundreds of millions of pounds of economic activity for their region. As with Prestwick, for many it is a case of airports being too big to fail, and industry experts say others are likely to follow it into government ownership.
Downward trajectory
Number of airport passengers in the 5 years 2008 to 2013 (approx) – taking each year as the 12 months September to September.
Belfast Internat: – 23.7% 2008 5.3 million 2013 4.0 million.
Belfast City: – 3.3% 2008 2.6 m 2013 2.5 m
Prestwick – 53.3% 2008 2.5m 2013 1.1m
Aberdeen + 1.6% 2008 3.3m 2013 3.4m
Liverpool – 22.6% 2008 5.4 m 2013 4.2m
Leeds Bradford + 11.1% 2008 2.9m 2013 3.2m
Manchester – 4.8% 2008 21.5m 2013 20.5m
East Midlands – 25.8% 2008 5.7 m 2013 4.2m
Stansted – 22.9% 2008 22.9 m 2013 17.7m
London City + 2.4% 2008 3.2 m 2013 3.3 m
Gatwick – no change 2008 35.1m 2013 35.1m
Southampton – 13.1% 2008 2.0m 2013 1.7m
Heathrow + 6.5% 2008 67.5m 2013 71.9m
Cardiff – 48.7% 2008 2.0m 2013 1.0m
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“As in any market-driven economy, there will be some that turn out to be uncompetitive. There will only be relatively few who can rely on rescues from local governments and cash-strapped councils.”
http://www.ft.com/cms/s/0/8871a7fc-5680-11e3-8cca-00144feabdc0.html#axzz2m4DbP8XY