UK airport passenger numbers drop 6.3%

By Kevin Done, Aerospace Correspondent

Published: February 11 2009 02:00,

The number of passengers using UK airports fell sharply in January, as demand for air travel continued to fall and airlines cut capacity and removed some unprofitable routes.

The sharp traffic decline along with the problems for potential bidders of raising debt finance are making the sale of BAA airports, led by the disposal of Gatwick, a fraught process for the UK group and Ferrovial of Spain, its majority owner.

BAA, which operates seven UK airports, said it handled 9.4m passengers in January, a 6.3 per cent decline from the same month in 2008 and the tenth successive year-on-year decline in monthly passenger numbers. The number of flights to and from the seven airports, which include Heathrow, Gatwick and Stansted, fell 7.5 per cent year-on-year in January.

The decline in air traffic is hitting BAA at a very difficult time, as it seeks to find a buyer for Gatwick, the second busiest airport in the UK, and shortly before the Competition Commission is expected to demand that it should also sell Stansted and either Edinburgh or Glasgow airports. The competition watchdog, which is expected to publish the final report on its investigation into BAA within weeks, believes that the group’s monopoly of the leading airports in London and Scotland should be broken up in order to foster more competition in the airports market.

The BAA traffic figures released on Tuesday showed that both Gatwick and Stansted were being hit hard by falling passenger and flight volumes.

At Gatwick, the number of passengers handled last month fell 10.8 per cent year-on-year as the grip of recession tightened. By comparison passenger volumes in the 12 months to January at 33.9m were 3.6 per cent lower than a year earlier. Traffic at Gatwick has been falling steeply year-on-year since September.

The airport has been affected by the transfer of a large number of its US long-haul services to Heathrow as a result of the US-European Union “open skies” treaty, which opened Heathrow to full competition for all US and European carriers for the first time in March last year. Some of its carriers also collapsed into bankruptcy last year. Both American Airlines and Continental Airlines have closed their Gatwick bases, and British Airways has transferred several US long-haul services from Gatwick to Heathrow and is shrinking its short-haul operations.

Gatwick is proving increasingly attractive for the low-cost carriers, however, with EasyJet adding new routes from the airport and Aer Lingus setting up its first operating base outside the island of Ireland at the airport.

Traffic at Stansted airport, the most important airport for low-cost airlines in Europe, is also being hit hard, particularly by the reduction of capacity at Ireland’s Ryanair during the winter months.

Volumes have been falling at Stansted for 15 months in succession, also undermining the timing of BAA’s plans to build a second runway there. The group said passenger numbers at Stansted fell 11.2 per cent year-on year to 1.29m in January, representing a 19 per cent decline in two years.

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