Outside Influences

[Jerry]

FlyBe pulled out of Gatwick and Virgin pulled out of Heathrow!

Wasn't Flybe more forced out of Gatwick than pulled out? I believe because of them putting up the charges for smaller aircraft?

 

[Dobbo]

Wasn't Flybe more forced out of Gatwick than pulled out? I believe because of them putting up the charges for smaller aircraft?

That sounds familiar.

One of the points circled was the issue of why you would build extra runway capacity in the south east if it requited regional connecting flights to fill the capacity (at least initially). This obviously cuts across a number of factors, including regional, pollution and noise.

 

[Coathanger16]

I'm sure I read somewhere that Manchester serves 18 domestic destinations. It trounces the London airports on connectivity at least in terms of destinations.

That is of course somewhat double edged as Heathrow and Gatwick will argue that they don't have the domestic feed due to runway constraints, a somewhat flaky response given that FlyBe pulled out of Gatwick and Virgin pulled out of Heathrow!

Worth pointing out that Flybe fly to 10 of those 18 domestic destination, and that Flybe recently only secured access to Heathrow with a limited number of slots. Its not totally out of the question that Flybe would increase their presence at LHR if new capacity is made available.

As pointed out elsewhere, Flybe quit Gatwick due to high charges (plus they have to pay APD on domestic flights). Virgin 'Little Red' at Heathrow failed to ever achieve decent load factors, yet BA (and flybe) operate domestically from LHR perfectly fine so I'd suggest it was more down to Virgin than domestic demand as to why they pulled out.

 

[Aceshigh]

I'm not that sure the FlyBe ops put of Heathrow have been a success. There had been a zero clamour for further expansion and no pr puff pieces.

 

[Dobbo]

I'm not that sure the FlyBe ops put of Heathrow have been a success. There had been a zero clamour for further expansion and no pr puff pieces.

As I understand it, the slots are remedial (?) ones from the former BMI. I think BE can only sell them once they have used them for a period of time (4 years I think?) and that is the payoff for them, rather than any operating profit on the route.

 

[Coathanger16]

As I understand it, the slots are remedial (?) ones from the former BMI. I think BE can only sell them once they have used them for a period of time (4 years I think?) and that is the payoff for them, rather than any operating profit on the route.

They are 'leftover' from BMI yes, but I think the way it works is that when an airline acquires them they have to be used on domestic routes for a minimum of 5 years. After that the slots 'properly' become the airlines and they can use them however they wish.

I'm not that sure the FlyBe ops put of Heathrow have been a success. There had been a zero clamour for further expansion and no pr puff pieces.

Are Flybe the kind to do pr puff pieces trumpeting their success? They did make a big fuss about using Northolt for domestic flights during the Airports Commission though...

 

[Dobbo]

They are 'leftover' from BMI yes, but I think the way it works is that when an airline acquires them they have to be used on domestic routes for a minimum of 5 years. After that the slots 'properly' become the airlines and they can use them however they wish.

Exactly, the point I was trying to make is that when the slots "properly" belong to BE, they make their money by selling them.

It's no real surprise, p2p will be low (competing with BE/BACF to LCY and BA) and transfer traffic will be relatively low yield and probably low in number. Nevertheless, they clearly make sufficient money over the piece.

 

[David_itl]

Little piece on the lack of Brexit negotiations hampering airlines though today's news may see some progress on this front https://uk.reuters.com/article/uk-b...nt-to-set-out-its-brexit-vision-idUKKBN1E11WS

 

[Dobbo]

I'm no fan of brexit (I can see the potential upside) but the bargaining position is such that it would be remarkable for any major aviation issue to manifest itself.

Hopefully we won't see any such issue!

 

[Aceshigh]

Interesting that BA have slashed their offering from Leeds. In some cases it's now one a day which really is a "slot sitter".

Suspect Manchester might pick up some traffic ?

 

[Aceshigh]

Somewhat left field but apparently one seventh of the World population are possibly going to watch the Manchester derby tomorrow. If only the two Manchester clubs and sky could promote the city as well as the game......

 

[Coathanger16]

It's the best connected airport in the UK by a country mile

Yes it is a very well connected airport, but do all these flights allow single bookings for onward connections, and if so how well are they advertised? For instance looking at skyscanner for flights from Southend to New York, a flight with a connection via Manchester is the 15th down the list (majority are via Dublin). Compare that to Southampton to New York, and via Manchester is the top result...? It's all very well having these flights, but if they don't show up on search results, are people going to use them to connect to other flights?

"But hang on hasn't BA just canned 50% of LBA slots based on 50% load factors "

Out of interest, what's the average capacity on a domestic flights from Manchester compared to Heathrow. A Saab340 that Loganair uses has 34 seats, whilst an A319 that BA uses has ~140 seats. Appreciate not all domestic flights from MAN are on Saab's, but you get the idea...

Look at it from BA's end - they have a finite number of slots (ok they may acquire 1 or 2 new ones very infrequently), so how do they launch new routes? Leave LHR as it is with 2 runways for another 10,15,20 years and you'll likely even see the number of services to EDI/GLA reduce. Does that mean there's no/less demand. Hardly. It will be interesting to see what BA & Flybe do domestically if LHR gets a third runway.

Sorry to go off topic from Loganair, but as you can probably tell I get just a tad frustrated when people make these rather pathetic snipes about BA/LHR (and any other airport for that matter)

 

[Aceshigh]

You may say pathetic snipes.

I say considered analysis!

Your opinion .
My opinion .

 

[Dobbo]

I wouldn't expect any "big bang" explosion of regional flights in a LHR R3 scenario. It is accepted that any new runway capacity would take several decades to be filled, and you only need to look at BA's LBA route and BE's EDI route to see the latent demand is not there for tens of new regional routes.

One of the NW runway scheme's fatal flaws is that it cannot be built in phases to account for growth, it must all be built (and therefore the capital expenditure incurred) in one go. This adds to the financial impossibility of delivering that particular scheme and why HHL seems now to be looking at cheaper alternatives including the Heathrow Hub proposal, together with a shorter runway further to the east (which would result in further property destruction). Each of these schemes would permit phased development.

 

[Coathanger16]

to see the latent demand is not there for tens of new regional routes

Yet there is demand from Manchester for more than 8 regional routes...?

One of the NW runway scheme's fatal flaws is that it cannot be built in phases to account for growth, it must all be built (and therefore the capital expenditure incurred) in one go. This adds to the financial impossibility of delivering that particular scheme and why HHL seems now to be looking at cheaper alternatives including the Heathrow Hub proposal, together with a shorter runway further to the east (which would result in further property destruction). Each of these schemes would permit phased development.

This is the part I don't get. What exactly are the 'phases' for say Heathrow Hub's (extended runway) scheme? It's not exactly like they'll extend the runway a little bit to allow a few more flights, then keep on extending it every time they want to increase the number of flights. Both LHR Hub and HAL schemes will have to build the entire runway in one go. What else is there in LHR Hubs scheme that can be phased that HAL's scheme can't? If you actually looked at HAL's original submission to the Davies Commission, their plan was to open the new runway by 2025/26, then open T6 and expand T2 in phases up until 2040/50. Very much sounds like phased construction to me...

I say considered analysis!

Considered here meaning looking at things through 'MAN tinted glasses'?

Again sorry to have gone off topic. Up to the moderators whether you want to move these last couple of posts to a more relevant thread.

 

[Dobbo]

Yet there is demand from Manchester for more than 8 regional routes...?

It's about price point. I'd say LHR's fees are significantly higher than MAN's (now and in a future R3 scenario) and this makes a lot of routes uneconomical.

 

[Silvercity]

Sorry to sound ignorant but what is HAL ?

 

[EGCC_MAN]

Heathrow Airport Limited.

 

[Aceshigh]

The domestic feed into Heathrow is all about supply and demand. Yes there is "probably" demand although the demise of Virgin Red and the BA LBA route doesn't exactly shout success, but as Dobbo says the critical element is the price point.

If it's impossible to make any money on leeds Liverpool Humberside Teeside etc no one us going to operate the service.

The only airlines who could make a go of it are RYR EZY BA and FlyBe if capacity becomes available , but then the landing fees will have to come down to make those routes work, but it's a contradiction because all the economic analysis suggests they will actually go up.

 

[Coathanger16]

It's about price point. I'd say LHR's fees are significantly higher than MAN's (now and in a future R3 scenario) and this makes a lot of routes uneconomical.

Fair point - though I think Flybe would argue its more the APD that still gets applied to domestic routes thats the real problem. Obviously removing that would help all UK airports.

Though then again, MAN is able to sustain at times 9 daily flights to LHR even with their large and growing long haul network. Surely as those long haul flights don't exist from airports such as Liverpool, Doncaster, etc, those airports would have better chance of supporting some flights to LHR. I sense the recent news at LBA will come up again here, but I firmly believe what has happened there is down to LHR being slot constrained and hence BA are trying to make the best use of aircraft & slots.

The domestic feed into Heathrow is all about supply and demand. Yes there is "probably" demand although the demise of Virgin Red and the BA LBA route doesn't exactly shout success, but as Dobbo says the critical element is the price point.

Yes and no. Obviously if the demand isn't there then a route isn't going to work. There seems to be much attention being drawn to getting all the northern cities connected to MAN. If there's enough demand to warrant doing that, then I'm pretty sure there's enough demand to warrant a few daily flights to LHR. Different airlines also have different 'benchmarks' for what determines a successful route, plus different airlines have different overheads. Thats the reason why there has been such a boom in LCC's as their overheads are much cheaper than legacy airlines hence allowing them to offer lower fares. Then consider how much is it going to cost BA to operate an A319 from Leeds to LHR, compared to Flybe operating a Dash 8? I'd wager that latter will be cheaper.

The only airlines who could make a go of it are RYR EZY BA and FlyBe if capacity becomes available , but then the landing fees will have to come down to make those routes work, but it's a contradiction because all the economic analysis suggests they will actually go up.

Unless I'm mistaken, the jury's still out on that one. Didn't Davies suggest ring fencing slots for domestic flights? What would be the point in that if their too expensive for airlines to operate? Equally aren't the CAA essentially only allowing LHR the go ahead if charges remain at a similar level to now?

I'm not pointing fingers at anybody, but is there a concern that if LHR expands, allowing new slots for domestic flights, that that might draw away passengers from MAN's catchment?