Much attention has been lavished on the rise of Europe's low-cost airlines. But it is not only the carriers which are cutting costs. Following fast on their heels comes the rise of the low-cost airport. It is a development that the the major carriers and their hubs might do equally well to watch.
In all but a few of the major capitals there is now a downtown or secondary airport busy reinventing itself as a lower-cost alternative to the main city hub. Belgium's tiny little Charleroi has re-emerged from its image makeover as Brussels South, complete with scheduled services from Ryanair. In Stockholm, Skavsta has done much the same and others are following suit with new brands and fierce new marketing drives.
They have a receptive audience among the low-cost carriers.Given that their philosophy centres on point-to-point service at minimum cost, there is little to gain from paying a premium price for the network potential and high-yield traffic offered by a major hub.
Keen to lure in new scheduled business, secondary airports have clearly begun to wake up to their new potential, targeting new carriers with the promise of lower landing fees and, perhaps more importantly, the virtues of faster turnarounds and fewer delays. For example, taxi times at an airport such as London Luton are typically half of those at a major hub like London Heathrow.
Current estimates suggest that Europe's no-frills carriers are indeed operating with something like a 25% advantage against the majors in terms of aircraft utilisation. That in turn provides a significant chunk of the 30-40% cost advantage that they have managed to open up against the traditional carriers on operating costs.
It is no surprise that the first wave of Europe's low-cost pioneers headed for secondary airports in London - where markets were dense but deregulated. Debonair and easyJet selected Luton, essentially a charter airport with ambitions to grow its scheduled business, while Ryanair and go have colonised Stansted, then languishing as London's small and largely unloved third hub. At both airports the carriers have a presence they could not have dreamed of at Heathrow or Gatwick.
When easyJet decided to look for a second UK base further north, its choice was not Manchester, now making its way into Europe's big league, but smaller rival Liverpool. The carrier adds that it still nurses hopes of finding an airport ready to give it a dedicated "easy" terminal - airport marketeers take note.
Worried by the high costs of its Brussels base (including Belgium's famously high employment costs), Virgin Express too has set up a second home at Shannon in Ireland.
It is true that the carriers have not been so adventurous outside the UK. The likes of easyJet have tended to play safe abroad, sticking with the bigger, more familiar, city hubs. But such caution is not universal. Ryanair, largest of Europe's low-cost challengers, has made it an article of faith to avoid use of mainstream hubs wherever possible. Its growing European route network to destinations such as Paris, Brussels or Stockholm have all been to obscure second airports. It argues that the simple sum is whether or not the route can support a couple of profitable daily services.
The evidence is that customers too are warming to these secondary airports, as confirmed by a piece of research into the low-cost phenomenon carried out this summer by the Consumer Association, the UK's influential consumer watchdog. Interviews were conducted with a mix of leisure and business travellers at Dublin, Glasgow, Manchester and Stansted. The convenience of the local airport came second only to cost as the main reason for choosing an airline.
Naturally, the research comes with warnings attached. Very different answers may have come from the same questions at a major hub. But their is no doubt from the survey returns that the speed and convenience of a local airport can prove a significant selling point to the customer.
The big disadvantages inevitably centred on a lack of destinations and frequencies. But that may prove to be a less intractable problem to overcome than the issues of congestion faced by the major hubs, especially given the environmental caps being imposed on future expansion. At the very least, it should be an interesting battle to watch.
Source: Airline Business