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Point-to-point air travel growth, a decline in ‘hub’ transfer traffic flows across London, a continued dominance of budget airlines and the emergence of low-cost long-haul travel have been identified as key aviation industry trends.
Leading aviation analyst Chris Tarry looked at a number of the key areas that the government’s Airports Commission has highlighted as central to the UK’s runways debate.
In a newly-published report prepared for Gatwick, he highlights low-cost carriers as the industry’s “momentum airlines” growing at twice the rate of others.
The focus of these airlines is not only on growth but on taking a greater share of the business market.
The new low-cost long-haul market continues to grow, fuelled by new generation aircraft and developing business models.
Tarry said: “It is inevitable that low-cost long-haul airlines will continue to increase their presence in the market place.”
Aircraft orders placed by low-cost long-haul airlines in Asia will enable them to profitably serve Europe and London through low-cost long-haul services within the next five to ten years.
Further growth in the Gulf is continuing to reduce the demand for London transfer traffic, according to the research.
Tarry identifies a “seemingly inexorable increase” in the number of new routes announced by Gulf airlines that will further reduce the supply of connecting hub traffic across London.
The number of direct services to North America operated by Gulf airlines, which bypass London, has grown from 759 returns in 2004 to around 11,000 trips in 2014.
Compared to the Gulf, Tarry outlines how London and the UK remain poorly located for major connecting traffic flows – as a result London will continue to see a decline in transfer traffic.
However, London’s strength as a destination will maintain its status as the world’s best connected city through the growth of emerging market point-to-point traffic.
The capital’s attractiveness for this rapidly expanding demand will primarily be served by non-UK based carriers from China, India, Vietnam, Indonesia and other “ascendant economies”.
For the vast majority of passengers from these countries, London will be their final destination.
With demand originating from the ascendant economies or transferring at Asian hubs, the argument for expansion of hub capacity in London is weakened, the report claims.
Tarry said: “The only constant in the airline industry is change – against this background it is fundamentally important to recognise that the future structure of both demand and supply will be different from that of today.
“As this report highlights when considering additional capacity, to dwell in the past rather than to look at what is likely to happen in the future will result in an outcome where London’s aviation market fails to realise its full potential.”
Gatwick chief executive Stewart Wingate said: “Chris Tarry’s work is an invaluable part of the expansion debate, highlighting the key trends that show which way the industry is moving and where new capacity is needed most.
“The decline of hub traffic, the growth of point-to-point travel, the continued dominance of low cost airlines and the emerging low cost long haul market are all significant factors.
“Gatwick expansion is the best and obvious solution to meet these trends while also offering a flexible, future-proofed scheme that can adapt to the needs of an ever changing industry.
“Not only is Gatwick the only deliverable option, it is also the only forward-looking solution that focusses on the aviation needs of the future rather than the outdated patterns of the past.”