Is Heathrow about to lose its crown? The battle for Europe's busiest hub is neck and neck

[Aviador]

Is Heathrow about to lose its crown? The battle for Europe's busiest hub is neck and neck.

"We all know Heathrow has been running flat out at near total runway capacity, but the latest data shows it is on the absolute precipice of being overtaken as Europe’s busiest airport by Istanbul.

In May, LHR and IST were practically deadlocked, separated by just over 3,000 passengers (both drawing around 7.12 million for the month). While Istanbul is enjoying a 2% year on year boost, Heathrow saw a 1.2% dip, prompting management to trim their full year forecast down to between 80.1m and 84.5m passengers.

The driver behind the numbers is pure network economics. Ongoing Middle East volatility has led to a major 25% drop in LHR's Middle Eastern sectors as airlines reroute, add flight times, or adjust frequencies. While carriers are mitigating the hit by upgauging to larger, higher-capacity widebodies on transatlantic routes and capturing a rise in connecting traffic, the yield pressure is real EBITDA is projected to drop by roughly £147 million.

With the government reviving the Third Runway consultation to hit a 2035 target, it feels like LHR is completely stuck in a regulatory bottleneck while newer mega-hubs out east are unconstrained and ready to sprint ahead. Can upgauging to bigger aircraft protect LHR's crown, or is a slip to number two inevitable until a third strip is actually built?

 

[Silvercity]

Is Heathrow about to lose its crown? The battle for Europe's busiest hub is neck and neck.

"We all know Heathrow has been running flat out at near total runway capacity, but the latest data shows it is on the absolute precipice of being overtaken as Europe’s busiest airport by Istanbul.

In May, LHR and IST were practically deadlocked, separated by just over 3,000 passengers (both drawing around 7.12 million for the month). While Istanbul is enjoying a 2% year on year boost, Heathrow saw a 1.2% dip, prompting management to trim their full year forecast down to between 80.1m and 84.5m passengers.

The driver behind the numbers is pure network economics. Ongoing Middle East volatility has led to a major 25% drop in LHR's Middle Eastern sectors as airlines reroute, add flight times, or adjust frequencies. While carriers are mitigating the hit by upgauging to larger, higher-capacity widebodies on transatlantic routes and capturing a rise in connecting traffic, the yield pressure is real EBITDA is projected to drop by roughly £147 million.

With the government reviving the Third Runway consultation to hit a 2035 target, it feels like LHR is completely stuck in a regulatory bottleneck while newer mega-hubs out east are unconstrained and ready to sprint ahead. Can upgauging to bigger aircraft protect LHR's crown, or is a slip to number two inevitable until a third strip is actually built?

Heathrow should have a rail link so more of the UK can access it easily. Many regions are unconnected by air, and have been for years. A direct rail spur into Heathrow would improve this

 

[Qing4theloo]

Both airports, London and Istanbul, are the busiest airports in their respective countries. When comparing them, there are two factors to consider: "local" users and "hub" users.

By "local", I mean users who travel to the airport using local rail, buses, metro etc.
Istanbul is government owned, so it has an interest in investing in local public transport so that access is easy for at least the people of Istanbul and the North-west of Turkey. Heathrow (as Silvercity has pointed out) is only accessible easily from London itself. Getting there by public transport from anywhere else in the country is pure hassle. Much easier to hop over to Amsterdam, Paris, Frankfurt or wherever from our local airport, and get the long-haul from there (Dublin if you're going West).

Istanbul was built recently on under-used land, about 20 miles outside the city centre. The old main airport, Ataturk, was in a built-up area, and had no further space to expand. But because airports in Turkey are government owned, the government was able to build a new airport, and also provide the infrastructure in terms of motorways and rail/metro links. It was also able to compel all the airlines to move their flights to the new airport by simple expedient of closing the immigration and customs facilities at the old airport.

This is not going to happen with Heathrow as it is privately owned, and any new airport would be in competition (c.f. Filton), not to mention issues with building on Green Belt land. Of course, we have had various proposals to build a new airport near the Thames estuary, but we will always come up against these barriers of public vs private finance and ownership. Who would pay for some completely new rail links?

As far as hub travellers go, Turkish Airlines have made Istanbul a hub (arguably first choice hub) for passengers going East from practically the whole of Eastern and central Europe. In contrast, who uses Heathrow as a hub? Much of the UK is too close to fly to Heathrow. As for going West from continental Europe, most people can fly directly from their own countries.

In conclusion, I suspect the third runway will come, but we won't see it before 15-20 years of missed deadlines/overruns and spiralling costs. It's just the reality of getting big projects done in the U.K. In the meantime, passenger figures at LHR will grow more slowly or not at all, as Brexit causes more and more big North American corporations to move their EMEA operations to mainland Europe (and Ireland).