Airports during the downturn

The industry is witnessing the largest short term downturn in living memory with large declining volumes and revenues.



Reported UK passenger figures for February are seeing declines of 5-20% but like any industry, some are seeing greater decline and some are better weathering the storm . Air freight throughput is witnessing even greater reduction with declines of up to 50% at some UK airports .

So is there a regional issue here? It appears not. The south eastern airfields seem to be suffering equally compared with other UK regions. Major hubs and regional airports are equally suffering with legacy supporters seeing the biggest volume declines, whilst the 'adapters'- airports supporting both low cost and legacy operators are maintaining a better position .

The hub airports have both a high cost base to manage and shareholders who expect returns on investment in line with their business maturity in the marketplace. They have been less encouraging of the arrival of low cost operators who, during the current climate are showing greater innovation than their legacy cousins.

However the low cost routes are not without their problems . Certain eastern European routes are suffering. On the legacy front, premium cabin business has fallen through the floor across Europe and beyond.


At the niche airport end of the business local authorities, having invested in infrastructure on the ground to promote new services are eager to see the positive fallout and local prosperity improvements delivered by the arrival of these carriers . There is no doubt that the arrival of new low cost operations has had the benefit of re vitalising some communities .


Those airports designed around hub strategies had their historic development backed by legacy carriers and designed around the concept of full service airline model . They provide infrastructure which now at least is in part deemed unnecessary by both low cost carriers and the customer base that uses them. The rows of terminal check-in desks are now at risk of being idle against a background of terminal check being replaced by on-line check in, which the public now embraces in order to avoid the airport queues.

To an increasing proportion of air travellers, many airports provide infrastructure with product oversupply . Hub airports are seeing migration of the value for money customer across to smaller airports with better proximity to the customers starting point or destination. Those whose competitive position would have been unimaginable 5 years ago.

So if there are winners and losers in this air travel cycle, is there a method of compartmentalising a winning airport model. Those who have strategically adapted to accommodate 'both churches' are fairing better. Those small niche ''community'' airports who invested to attract, whilst also seeing footfall reduction are still significantly ahead compared with their positions 3 years ago.

True its not all sweetness and light having to cope with dominant locos, who sometimes appear to have the petulance of a 5 year old child. Like any industry there are awkward business partners with excessive demands and business plans that cast aside the profitability of other business partners in the name of business success.

Will any keep their heads above water in 2009? Will business success in small negative territory be classified as 'job well done''for 2009? Who will end up with the highest annual footfall ?decline ?