Route Development & Rumours

[Matty_85]

Sorry but you can't just ignore macroeconomic factors I'm afraid. Airline travel is almost entirely a discretionary purchase (barring the small % of business passengers) so demand for flights is inextricably linked to the wealth of the catchment.

From ONS data the West Midlands (region not county) is only 86% of the UK average per head disposable income (and Birmingham itself is almost certainly lower than this due to large areas of deprivation).

So WM is not even at the average level, and then you have to consider that London is almost 40% above that average.

I know you didn't bring up London but surely you can see that airlines will go where the money is?

This has nothing to do with average incomes of the West Midlands region & the statistics you are using don’t go anywhere close to explaining why BHX can’t sustain a daily NY flight when we have successfully in the past. Actually it’s absurd to even try and draw parallels! It’s been easier for these legacy airlines to force us down to Heathrow instead of offering a decent direct TATL service from BHX & in my opinion with new efficient narrow bodies this has to change.

The only data relevant here is how many from the West Midlands region are having to use Heathrow or Manchester because BHX doesn’t offer direct flights. I know that data is almost impossible to collect (unless it’s connecting out of BHX) but trying to make out that the West Midlands is in such dire poverty that we couldn’t in any way support a single daily NY flight is bonkers! I think you may need to reset your very narrow view of Birmingham.

 

[Matty_85]

Not true Andrew, landing fees have nothing to do with it, BHX is simply too close to London & Manchester, 100 miles to an American is down the road !

It’s quicker (and possibly cheaper) to fly from Manchester to Heathrow and connect to a TATL flight than it is to commute by train to Heathrow from Birmingham. I’m just not buying this geographic argument one bit

 

[jfy1999]

I'm sure there is a market and historically it has supported flights but airlines must also believe that the passengers that make up that market are more than willing to travel to either Heathrow or Manchester or use one of their partners via a European hub. People are more willing to travel in general to catch a long haul flight.

It’s quicker (and possibly cheaper) to fly from Manchester to Heathrow and connect to a TATL flight than it is to commute by train to Heathrow from Birmingham. I’m just not buying this geographic argument one bit

The train isnt the main problem though. The M6 and M40 are the problem. People not only drive north and south for long haul, but for short haul too. i know people who drove to MAN for a Greek holiday. Others i know have driven to LHR/MAN for emirates flights simply because the ticket prices were cheaper.

It’s the same problem for Leeds, they keep losing potential customers to MAN via the M62.

It’s a vicious circle as the smaller airports which offer less choice of dates/flight times/airlines/prices to begin with are attractive to smaller numbers of people as a result.

 

[CM.]

What is this? Long haul can only happen from Heathrow and Manchester? Sorry I don’t see why long haul flights can’t happen at other UK airports. Something to the US from BHX wouldn’t go amiss. For people that like to travel to Heathrow and Manchester well good for them but some would rather fly from their local airports.

examples: Cardiff could do with a long haul link for direct flights into Wales. Same with Birmingham for the Midlands and Leeds/Bradford for Yorkshire. There just a few examples.

As nice as Heathrow and Manchester airports are they are not the only airports in this country so airlines shouldn’t just do long haul there because they are the biggest in the country. Other airports can have successful long haul flights to.

 

[Kevin Farnell]

seven Councils that own 49% majority stake in the airport,

49% is not a majority stake. It would have to be greater than 50% to be a majority.

So until a private investor comes in and takes over control of the airport, the airport is stuck with Councils, hence stagnation of growth and expansion.

Private investors already own a significant proportion of BHX's shares and have done so for many years. Their primary function is to provide dividends to their investors. Even if 100% owned by private investors, they may not see financial investment in BHX as a viable option. They will only do that if they are convinced that any investment will make money for them. Don't forget that BHX has seen significant investment over the last few years with a new control tower and extended runway etc. With the problems encountered over the last 18 months (and who knows how much longer), it may well be that investors will shy away from further investment in the short term.
As for landing fees, the only figures that we have are those published by BHX. What airlines really pay is confidential between BHX and the airline (airline A will not know what airline B pays) and you can bet that these will be lower than published figures for airlines with a large route network and/or based aircraft.

Kevin

 

[jfy1999]

What is this? Long haul can only happen from Heathrow and Manchester? Sorry I don’t see why long haul flights can’t happen at other UK airports. Something to the US from BHX wouldn’t go amiss. For people that like to travel to Heathrow and Manchester well good for them but some would rather fly from their local airports.

examples: Cardiff could do with a long haul link for direct flights into Wales. Same with Birmingham for the Midlands and Leeds/Bradford for Yorkshire. There just a few examples.

As nice as Heathrow and Manchester airports are they are not the only airports in this country so airlines shouldn’t just do long haul there because they are the biggest in the country. Other airports can have successful long haul flights to.

we’re certainly hoping that the a321neo will make that the case, but its worth noting that several airlines have pulled routes from MAN/Scotland to USA and left gaps, so there’s more of an opportunity for JetBlue in those markets than there would be in normal times

 

[Ash]

This has nothing to do with average incomes of the West Midlands region & the statistics you are using don’t go anywhere close to explaining why BHX can’t sustain a daily NY flight when we have successfully in the past. Actually it’s absurd to even try and draw parallels! It’s been easier for these legacy airlines to force us down to Heathrow instead of offering a decent direct TATL service from BHX & in my opinion with new efficient narrow bodies this has to change.

The only data relevant here is how many from the West Midlands region are having to use Heathrow or Manchester because BHX doesn’t offer direct flights. I know that data is almost impossible to collect (unless it’s connecting out of BHX) but trying to make out that the West Midlands is in such dire poverty that we couldn’t in any way support a single daily NY flight is bonkers! I think you may need to reset your very narrow view of Birmingham.

Of course economics are relevant, they are the greatest driving factor in airline route planning decisions. Anyway I never claimed that was the sole reason BHX can't sustain a TATL flight, in fact I listed many other points which other users have also made, but when passengers in city X have less to spend than city Y, it's not going to help your business case.

And yes the BHX catchment leaks like an old sieve, primarily down the M40 not by rail. It's an easy drive having done it many times and it's not going to be congested if you're setting out at 5am, which you would if you were catching one of the TATL departures of the morning bank out of LHR.

As for my "narrow view of Birmingham", I've lived here for 27 years so take it up with ONS if you don't like it.

 

[Matty_85]

Of course economics are relevant, they are the greatest driving factor in airline route planning decisions. Anyway I never claimed that was the sole reason BHX can't sustain a TATL flight, in fact I listed many other points which other users have also made, but when passengers in city X have less to spend than city Y, it's not going to help your business case.

And yes the BHX catchment leaks like an old sieve, primarily down the M40 not by rail. It's an easy drive having done it many times and it's not going to be congested if you're setting out at 5am, which you would if you were catching one of the TATL departures of the morning bank out of LHR.

As for my "narrow view of Birmingham", I've lived here for 27 years so take it up with ONS if you don't like it.

Economics are definitely not the greatest deciding factor in route planning and neither is a regions disposable income, it’s all about passenger & business demand. What you are effectively saying is there isn’t the demand here because out of 5.7 million people who live in the West Midlands region we wouldn’t be able to support a TATL connection because our disposable income isn’t great enough? That’s ridiculous.

The issue is clearly TATL carriers entrenching themselves at Heathrow with the attitude that ‘let’s make them come here’ that’s caused this, not lack of demand. A real carrier stepping in (not another Primera) would shake this up.

You can travel down to Heathrow but I believe we should be served locally as it once was & I’m sure it will be once again (at least New York)

 

[CM.]

we’re certainly hoping that the a321neo will make that the case, but its worth noting that several airlines have pulled routes from MAN/Scotland to USA and left gaps, so there’s more of an opportunity for JetBlue in those markets than there would be in normal times

This is true and I acknowledge that but the “smaller” airports have also had gaps left by the pandemic. I’ll use PIA as an example which was a disappointing loss for BHX.

 

[Ash]

Economics are definitely not the greatest deciding factor in route planning and neither is a regions disposable income, it’s all about passenger & business demand. What you are effectively saying is there isn’t the demand here because out of 5.7 million people who live in the West Midlands region we wouldn’t be able to support a TATL connection because our disposable income isn’t great enough? That’s ridiculous.

The issue is clearly TATL carriers entrenching themselves at Heathrow with the attitude that ‘let’s make them come here’ that’s caused this, not lack of demand. A real carrier stepping in (not another Primera) would shake this up.

You can travel down to Heathrow but I believe we should be served locally as it once was & I’m sure it will be once again (at least New York)

Do you really think that

passenger & business demand

is not a function of

a regions disposable income

???

 

[Kevin Farnell]

The issue is clearly TATL carriers entrenching themselves at Heathrow with the attitude that ‘let’s make them come here’ that’s caused this, not lack of demand. A real carrier stepping in (not another Primera) would shake this up.

I totally agree that TATL carriers are more than happy to let customers come to them. Why go to the expense of setting up another operation at another airport when your passengers will pay to transport themselves to your established operations?
Even if people choose to fly from BHX via a European hub, the chances are that will use an alliance partner, so another reason not to spend on another airport operation.
We also need to remember that both UA's and AA's services at BHX, fell well below that of those from LHR, with older aircraft that regularly had technical delays and no in-flight entertainment.
The one airline that offered great one-stop TATL destinations from BHX was Icelandair. I'm not sure what happened, but their pull out from BHX happened very quickly. Was this to do with Primera? Did BHX repeat the fable of the dog seeing the bone in it's moth reflected in the river, thus dropping it to try and get the reflected bone and so losing the bone it had?

Kevin

 

[Llandudno]

Economics are definitely not the greatest deciding factor in route planning

I think you’ll find economics is the majority of route planning.

Demand doesn’t necessarily dictate planning. There could be ‘demand’ for 2000 passengers a day on BHX-JFK, but if those 2000 people aren’t paying the right price, then that changes the entire demographic.

for example, I could find an A380, start a route from BHX to JFK, and sell all the tickets at £1 inc taxes. I have no doubt in my mind that I’d be fully booked, but would I be in business long? Definitely not. Yes, that an extreme example but shows how important economics are.

Subsidies and fee reductions also play a part in obtaining routes, which fall well within the economic category too. If airport X is offering a reduction of fees whereas airport Y a few miles away is not, which airport do you think has the advantage.

I have no doubt in my mind there is *demand* for a BHX-JFK route, but whether that route would make money, or as much money as another route plays a big part of the deciding factor. If say United have 1 aircraft spare to add a flight and you know you’ll make £10000 on a BHX flight, or £20000 on a LHR flight, which would you choose? It’s a no brainier.

it’s no good harking back to ‘the routes used to make money’, it’s a brave new world now and in a world where airports are vying to build back traffic, it’s more cut throat than its ever been.

So in summary, economics are everything. In the airline business, money talks.

 

[jfy1999]

This is true and I acknowledge that but the “smaller” airports have also had gaps left by the pandemic. I’ll use PIA as an example which was a disappointing loss for BHX.

Ok, but i was referring to USA flights specifically, not long haul in general. the pandemic wasn’t the reason why airports such as BHX, BRS, NCL, BFS lost their flights to the USA.

 

[CM.]

Ok, but i was referring to USA flights specifically, not long haul in general. the pandemic wasn’t the reason why airports such as BHX, BRS, NCL, BFS lost their flights to the USA.

I get what your saying as a lot of the US flights from the airports you mentioned were cut before the pandemic. But the pandemic will be a cause of why airlines aren’t offering any routes from these airports and only seem to be offering from larger airports.

 

[Coathanger16]

I think that maybe some of us are getting a bit ahead of ourselves. JetBlue only just launched their first ever TATL flight in the last week and we're already complaining that they aren't serving BHX?

Like it or not, there is a pecking order in the UK when it comes to long haul flights, are barring any regional cultural factors (i.e. Air India/Birmingham/large Indian community), airlines will follow that order when it comes to launching new long haul routes:

London
Manchester
Scotland
Birmingham
Other regional airports

JetBlue have launched Heathrow this year with plans for Gatwick in the coming months.

Plans for 2022 are to expand on those with more frequency, add Boston - LHR and launch routes to Manchester and Glasgow.

Even in normal times, airlines generally don't publicise their plans more than a year or two out - i.e. just because JetBlue haven't mentioned BHX, doesn't mean we're not on their radar.

Most airports are planning on 2022 being between 70% and 90% of pre-pandemic levels. Based on the last full year of United operations at BHX, that would equate to around 90 passengers per day in each direction, or about a 65% LF on JetBlue's A321LR. Hardly enough to entice JetBlue to operate from BHX yet.

JetBlue, United and American all have orders for A321LR/XLR due for delivery between now and 2025. Both United and American will have data about their respective routes from BHX and will be able to predict how profitable they would be operated on a new generation A321 vs their old B757's.

I don't know if it will happen, but the A321LR/XLR makes the economics much more favourable for airports like BHX. Still I wouldn't expect to see anything until after 2025 at the earliest.

 

[Poshgirl]

BHX has not lost PIA. Due to concerns over their safety culture (including pilots having false licences), the UK and EU banned PIA from their airspace.

HiFly now operating their flights in this region. Yes, traffic is down compared to pre-pandemic but it's good to see that air safety is being taken seriously.

 

[Matty_85]

I think you’ll find economics is the majority of route planning.

Demand doesn’t necessarily dictate planning. There could be ‘demand’ for 2000 passengers a day on BHX-JFK, but if those 2000 people aren’t paying the right price, then that changes the entire demographic.

for example, I could find an A380, start a route from BHX to JFK, and sell all the tickets at £1 inc taxes. I have no doubt in my mind that I’d be fully booked, but would I be in business long? Definitely not. Yes, that an extreme example but shows how important economics are.

Subsidies and fee reductions also play a part in obtaining routes, which fall well within the economic category too. If airport X is offering a reduction of fees whereas airport Y a few miles away is not, which airport do you think has the advantage.

I have no doubt in my mind there is *demand* for a BHX-JFK route, but whether that route would make money, or as much money as another route plays a big part of the deciding factor. If say United have 1 aircraft spare to add a flight and you know you’ll make £10000 on a BHX flight, or £20000 on a LHR flight, which would you choose? It’s a no brainier.

it’s no good harking back to ‘the routes used to make money’, it’s a brave new world now and in a world where airports are vying to build back traffic, it’s more cut throat than its ever been.

So in summary, economics are everything. In the airline business, money talks.

I see what you are saying but I just don’t agree, no region comes close to the disposable income of the SE and London so on that basis should no region have TATL flights? I actually think JetBlue would do very well from BHX considering their pricing is in line with what AA were charging (which as mentioned before was a really basic service as before).

I don’t expect the networks MAN or Heathrow has. But if smaller cities across Europe can be connected to at least NY I can’t see why the West Midlands can’t be serviced directly. This is more about airline entrenchment than it is about BHXs viability to support a NY route. Hopefully the right carrier will come along who’s willing to take the gamble

 

[Poshgirl]

There are historic as well as economic reasons why BHX lags behind. All comments are based on pre-pandemic situation and I realise that politics do prevail.

Location. Despite being the second city, it's too close to London and Manchester. Building the NEC was an attempt to increase air traffic; it's location is ideal. However, trade show visitors either take train from London after using LHR, or fly into BHX from AMS/FRA/BRU. Yes, BHX is one of the most expensive regional airports for airline fees. Emirates' President, Sir Tim Clark was instrumental in getting the runway extension. He viewed it as vital to secure A380 flights from BHX. Very convenient for him too, bearing in mind location of his UK home!

Now for some history.

For a long time, BHX would not have Ryanair. BHX management wanted an airport without LCC's. Don't know what caused the change of mind. Okay, we know that any Ryanair tenure can be short-lived. Moving on, I used to holiday in Cyprus. Flight only prices were ridiculous, seemed some fixing was going on. Monarch/TUI always wanted £300+. Was only when flight only became more popular that MON/TUI/TCX became cheaper, but there still seemed to be some collusion. Cyprus Airways comes along and undercuts them, around £200-230. Worst still, could get LHR-PFO £159 each, booking in January for June or September. Add on National Express coach for around £30 return. Okay, admit it was bit of a bind getting home but think you get the gist.

The Chinese flights didn't last long. Nor did Mahan Air. Will be interesting to see what happens with Turkmenistan now that Air India have returned. Is there an opportunity for AI to operate BHX-JFK?

 

[Llandudno]

I see what you are saying but I just don’t agree, no region comes close to the disposable income of the SE and London so on that basis should no region have TATL flights?

Im sorry but I think you are missing the point.

Aircraft are finite resources. This isn’t a question as to whether BHX is *able* to support a route, it’s about how much BHX could make next to another flight.
Remember when it comes to aircraft allocation, BHX isn’t just competing with London and Manchester. It’s competing with Paris, Frankfurt, Amsterdam, Dublin, Munich and so on. As stated earlier, if a United B767 can make X amount on BHX, but much more on Munich, then the aircraft will go to Munich. Whether we like it or not, London serves the U.K. That means even the likes of Manchester and Edinburgh loose out to London services. The fact that people from across the U.K. are so willing to travel to London means it’s a tough uphill battle for regional airports to convince airlines to start long haul flights, because don’t forget, that’s also potentially X number of passengers that now won’t be using those London flights. With slots and so on, they protect those Heathrow flights over regional ones.

another example of why demand isn’t the be all and end all, take Manchester-Bangkok. It was until recently (I don’t know how covid has effected markets since the report was published) the 3rd largest unserved long haul market in the world. So by the definition of ‘demand is the main factor in route planning’, then that route should absolutely be served. But due to the yield being relatively low on the route, it isn’t. So what stopped the route being served? Economics.

Back to the point though, your original statement was that economics are not the main factor in route planning. And as stated in my replies, economics are absolutely the most important.

 

[rollo]

Some good points on her and certainly got the forum buzzing.

For me it is obvious that for BHX or anywhere else is it is a combination of firstly economics and then geography. The latter is clear to me in that Birmingham at roughly one hundred miles between London and Manchester it finds itself between a rock and a hard place.
If you look at other countries of similar size in Europe say Germany long haul is from Frankfurt or Munich, Spain Madrid or Barcelona, Italy is Rome or Milan, France as usual is different its really just Paris meanwhile smaller countries such as Belgium, Denmark, Sweden, Netherlands etc its the capital city The UK follows the Pattern with London dominating plus Manchester.

Most importantly the economics decide the reality for airlines or any other business for that matter if you can make say a notional profit per passenger to New York of say £50 from BHX or £100 from London its a no brainer and this will surely drive every airlines decision and generally when I've looked at fares in the past London has offered significantly cheaper fare along with many more flight timings.

It's long established that people will travel up or down the M6/M40 for long haul, Orlando for example (not a business route obviously)and is a classic case that Virgin or whatever do not need to serve Birmingham, Leeds, Bristol Newcastle etc.

On a more positive note looking to the future the A321LR/XLR may well open up opportunities for regional airports but we've been here before.