Gatwick Airport: Industry analyst Chris Tarry looked at a number of the key areas that the Airports Commission has highlighted as central to the UK’s runways debate

• Leading aviation analyst Chris Tarry outlines the industry developments and emerging trends that point to the future shape of the aviation market

• Chris Tarry: “To dwell in the past rather than look at what is likely to happen in future will result in London’s aviation market failing to realise its full potential”

• Gatwick CEO: “Gatwick expansion is the only solution that focusses on the aviation needs of the future rather than the outdated patterns of the past”

LONDON, 2015-1-16 — /Travel PR News/ — As the Airports Commission’s public consultation on the UK’s next runway enters the final few weeks, new research by a leading aviation analyst outlines a series of industry trends and developments that offer a crucial signpost to where expansion is needed most.

Industry analyst Chris Tarry has looked at a number of the key areas that the Airports Commission has highlighted as central to the UK’s runways debate.

In his report released today, Tarry provides evidence demonstrating the growth of point-to-point travel, a decline in ‘hub’ transfer traffic flows across London, the continued dominance of low cost airlines and the emergence of the low cost long haul market, all of which are key factors that point to the future shape of London’s aviation market. Among Tarry’s key conclusions are:

Low Cost Carriers remain the industry’s “momentum airlines” growing at twice the rate of others – only Gatwick is best-placed to meet the needs of this dominant airline market

• Tarry says that LCCs remain the industry’s “momentum airlines” – they will continue to drive growth in the UK market and have a huge significance on where future capacity is needed
• The growth reported by LCCs in Europe has continued significantly faster (at least twice the rate) than their full service competitors, resulting in further market share gains
• The focus of LCCs is not only on growth but on taking a greater share of the business market where they are clearly achieving success

The new ‘Low Cost Long-Haul’ market continues to grow, fuelled by new generation aircraft and developing business models

• Tarry says: “It is inevitable that low cost long-haul airlines will continue to increase their presence in the market place”
• The Boeing 787 Dreamliner has already allowed Norwegian to launch ground-breaking low cost long-haul services from Gatwick to New York and Los Angeles
• Ryanair has indicated that it is again considering low-cost long-haul services using new generation long-haul aircraft and Lufthansa has announced two low-cost long-haul initiatives
• 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 5-10 years

Further growth in the Gulf is continuing to reduce the demand for London transfer traffic

• 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
• In particular, the number of direct services to North America operated by Gulf airlines (which bypass London) has grown from 759 round trips in 2004 to around 11,000 trips in 2014
• Compared to the Gulf, Tarry outlines how London & 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 increase in middle-classes in emerging Asian economies will drive significant demand for air travel – Airbus forecasts a tripling of this group from 1.41bn today to 4.45bn by 2033
• London’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

Chris Tarry’s report comes as Gatwick has announced its busiest ever in 2014, with record growth fuelled by Gatwick’s broad range of travel & airline models – from low cost carriers & European business travel, to long haul providers & emerging markets.

Leading aviation analyst Chris 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 CEO 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.”

Chris Tarry’s latest report released today can be downloaded here.

Ends

For more information contact:

Gatwick Airport press office

t: + 44 (0) 1293 505000
e: gatwickmedia@gatwickairport.com

About London Gatwick
Gatwick Airport is the UK’s second largest airport and the most efficient single-runway airport in the world. It serves more than 200 destinations in 90 countries for over 38 million passengers a year on short and long-haul point-to-point services. It is also a major economic driver for the South-East region, generating around 21,000 on-airport jobs and a further 10,000 jobs through related activities. The airport is 28 miles south of London with excellent public transport links, including the Gatwick Express. Gatwick Airport is owned by a group of international investment funds, of which Global Infrastructure Partners is the largest shareholder.

In its December 2013 interim report, the Airports Commission included London Gatwick and Heathrow on its shortlist of potential locations for a new runway in the UK. Expansion at Gatwick will best meet the UK’s aviation needs for the future, can provide the greatest economic boost with the least environmental impact, and a new runway can be operational by 2025. For further information, see: www.gatwickobviously.com

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