First things first, what is presented here is an opinion so please read it and take it for what you will, any ideas presented would have to be researched further.
A Council Run Airport
Which sounds odd to start off with, a rate payer funded airport. The budget for 2015/2016 stands at around £3.5m for the running of the airport, how that’s broken down is anyone’s guess. Like Manchester Airport, City of Derry is run as a split out company with Derry City Council being the sole shareholder. It’s halfway over it’s 10 year contract to Parsons Brinkerhoff to run the airport. The airport master plan, last published in 2012 from what I can see, is revised every 10 years. The aim is to have 1.2m passengers annually by 2020.
The two remaining airports in the province, Belfast International and Belfast City are privately owned by ADC & HAS and ABN AMRO respectively.
An Airport In Decline
LDY Pax Figures – Jan 2010 – Dec 2015
It’s not a great time for council run City of Derry Airport (LDY). The passenger numbers have been in decline for a while and it’s very difficult to say which way things could go for the airport.
My original hypothesis for the decline was due to the increase of popularity of The Airporter coach service but the more I thought about it the more I thought I was wrong, not being able to get passenger volumes (I didn’t ask directly to be clear) also brought that line of investigation to a close. Ultimately I don’t think it’s The Airporter’s existence that’s causing the problem at hand.
Interestingly the decline was happening before the UK City of Culture year, that failed to peak the incoming airport traffic. The July/August peaks were consistent but in slight decline which could be caused by social/economic influence like income, increased cost of living etc. The cost of holidays are still expensive and when price is a big issue most are willing to fly from anywhere where the price is right. By 2015 City of Derry forecast was expecting 550,000 passengers for the year, up from a dip from 2014 post City of Culture. If you compare July/August over the five year period the UK City of Culture didn’t make much difference at all.
||Combined Jul/Aug Pax Vol.
||Prev Yr Diff.
The drop in July/August 2015 is more than an average month of passenger volume for 2015 itself (23,710), it’s like it lost an entire month’s worth of traffic overnight.
The biggest concern is the holiday market collapse in 2015 where there is a marked decline and a large contributing factor to the collective drop is passenger numbers from 2014 to 2015. So what could be the causes of that decline and what could be possibly done to revive it.
Routes in Decline
Since the 2012 City of Derry Airport master plan was published the number of routes has declined. The Dublin route stopped in 2011 when the Irish agreement to have a flight to Dublin was closed. There hasn’t been one since though it’s due to start again this year with City Wings.
The mix of airlines causes concern personally, having 80% of your passenger volume served by one airline is a risk. Ryanair currently serve that traffic but the obvious concern over the next two or three years is the opening of routes from Belfast International. There’s much talk of what could potentially happen if Ryanair transfer or close routes from City of Derry, it was one of the first questions I asked myself too.
At present the routes served from Derry are London Stansted, Glasgow, Liverpool and Faro. The airport’s focus is regional traffic with holiday traffic for the summer months (traditionally served by Falcon Holidays).
From the Passenger’s Perspective
An airport has to market to a number of different sectors: airlines, ground handling suppliers, other airports for routes and most importantly the passengers themselves.
Air passenger duty is a tax, a fact of life as it currently stands. While there’s a lot of talk of passenger volumes rising if the APD was scrapped for short haul (APD was dropped on long haul flights) people will still want to fly and will pay. Whether the passenger numbers rise when APD is scrapped is one that can be happily debated elsewhere, personally I don’t this it will make much difference.
Short Haul Convenience
One of the major put offs for me personally is that I can’t fly from Derry to London in a day. This is important for any business traveller, important to be out and back in a day where possible.
Ryanair’s flight from Derry to London Stansted is a good example of that. The arriving flight is the only flight in and that provides the only flight out for the day. One of the key benefits of the EasyJet flights from Belfast International, or FlyBe flights from Belfast City, is the return leg on the same day. The earlier the better too, can I be at a meeting in the centre of London for 9:30am? From Derry, not yet…… some live in hope.
Where short haul flights have no same day return option they are traditionally difficult to market to customers. So for the time being I’ll be on the road at 3:30am to get my 6:25am flight from Belfast International. Trust me, if I could keep the lie in, I would.
Route Choice Is Everything
The route mix of an airport is critical to it’s success for it’s target catchment area. Now to be fair the 2012 master plan’s dreams were promising with wanting to have routes to Paris, Frankfurt, Munich, Pisa, Rome, Barcelona, Malaga, Lanzarote, Amsterdam and a list of UK destinations such as Leeds Bradford, Bristol, Southampton, Newcastle, Heathrow and Gatwick.
If you read that list and lived in Derry, well you’d be happy to fly from your local airport any day.
Anyone from Derry City Council or City of Derry Airport are reading this, Tenerife South want to talk… they have you down as a desired airport still. (Aena’s marketing team are on +34 913 211 052).
So What Can Be Done?
There’s a number of positive things that could be done to improve matters.
Increasing Routes from City of Derry
Key is the route choice, it has to increase. The primary focus being on UK routes such as Newcastle, Leeds Bradford, Manchester (which FlyBe served in 2011), Southhampton and obviously Heathrow and Gatwick. Not just that, they have to be served as return flight in the same day for business travellers. This is going to be difficult as essentially City of Derry Airport is the end of a spoke in a a Hub and Spoke system, another point I’ll raise shortly.
Secondly summer traffic, historically the reliance has been on the holiday company charter traffic. City of Derry is missing out on this market at the moment and it needs to find a way to boost it. For Belfast International EasyJet, Jet2 and Thomas Cook serve the same European destinations so there’s choice of departure days and prices available. The rise in customers buying flight/hotel deals online has risen and the likes of AirBnB make the notion of a package holiday a lot different from what it was. The airport has to find airlines that will serve these routes without being tied to package holidays. Plus the additional benefit could be from European visitors coming into Derry to visit, everyone should benefit during the summer months.
At present the airport can realistically handle two Boeing 737’s on the apron at anyone time. The 2012 master plan wanted to increase that, I think four is a good number in an attempt to double the capacity without overloading the terminal capacity.
There’s little mix of shopping facilities in the terminal at present, it’s mainly a large seating area which gets blocked up when people are queuing to board Ryanair flights. Four aircraft on the apron with four departure gates. While the peak volume hour wouldn’t shift drastically (@ 350,000 pax (at 55% departure volume as the master plan states) the standard departure hour is 65.9, peak would be 1.2x from that so 79.1 per hour).
An expansion of the terminal would be of benefit to the external spend per passenger. A better range of facilities such as Duty Free, restaurants and bars would increase the dwell time spend. In the larger airports there’s a two hour window of opportunity to catch that spend, with small airports such as City of Derry that’s vastly reduced. The key is a mix of facilities to increase spend. It would also boost jobs in the area.
Embrace Hub and Spoke
The three Northern Ireland airports have the appearance of being in competition with each other. A radical approach would be for City of Derry to be acting as a feeder airport into Belfast International. Here’s my rational, hypothetically I want to travel from Derry to Newark, at present that means either driving or getting a coach to Belfast International or Dublin. Theoretically I should be able to check in locally in Derry and fly to either BFS or DUB to my connecting flight.
Okay, so it’s a long shot but that’s what expected if I wanted to travel to Dubai for example, it’s over to Heathrow (not served by Derry either) then onto Dubai. Derry can’t operate as an island, it has to connect to the major hubs whether they be Belfast, Dublin (happening soon) or Heathrow/Gatwick. If it can address that market then passenger numbers will rise as a result.
What I’ve presented is hardly a deep analysis and it doesn’t take into account important factors such as environmental impacts and noise pollution for example. What’s clear though is the master plan from 2012 hasn’t gone the way anyone had hoped and I’m some serious questions are being asked or being mulled over.
City of Derry Airport shouldn’t close but it needs to market itself realistically to the catchment area it serves. It should be an airport working with other local airports to market Northern Ireland and the Republic as a whole. The routes are key to making this happen and reducing the reliance on one airline must be worked on with the current climate. If City of Derry can offer a good mix of same day return departures on domestic routes and an expanded low cost entry to European destinations then there’s a good chance that customers would return. Improved terminal facilities would increase dwell time spend and increase the local employment.
It’s easy to sit and play armchair judge and listening to some politicians they’d rather see City of Derry close and increase the passenger numbers to Belfast International, the reason for that is simple, Dublin is way more popular than Belfast International on long haul routes and with far more destinations available.
I believe City of Derry need to refocus the business plan and the master plan. Yes it will take investment to expand terminal capacity and attract new airlines to operate from there. I’ve not even talked about the lack of cargo traffic or the upturn in private air traffic, so there’s scope there too if desired.
With Routes 2017 being hosted in Belfast next year City of Derry Airport has a chance to pitch itself as the airport that aligns itself with the other airports, providing the whole province the ability to travel where it needs to go.
Now if only I could get a ticket…..
City of Derry Passenger Data 2010-2015: https://dl.dropboxusercontent.com/u/2698672/cityofderry-2010-2015.xlsx
Talkback with William Crawley: http://www.bbc.co.uk/programmes/p03gypxc
City Of Derry Masterplan Nov. 2012: https://www.cityofderryairport.com/wp-content/uploads/2012/11/Masterplan.pdf