Airports suffer as airlines cut back
Mar 25 2009 by Chris Knox, The Journal
THE region's airports have had a tough time of it recently, with dwindling passenger numbers and the threat of greater taxes threatening the closure of even more routes to and from the region. Christopher Knox assesses the state of play.
THE ongoing recession has led to a number of high- profile victims within the region’s business community, with those businesses linked to big ticket purchases feeling more than a pinch.
Airports, once the benefactors of cheap flights and budget holidays, have become one of the biggest indicators of dwindling consumer sentiment, with passenger numbers taking a nosedive over recent months.
The biggest sign that the bubble has burst around the UK’s once booming travel industry was a report from the Civil Aviation Authority (CAA) showing that passenger numbers have fallen for the first time in 17 years.
The numbers show that UK airports handled 235 million passengers in 2008, which is 1.9% fewer passengers compared with 2007, with the final quarter of the year showing the biggest drop-off, despite the Christmas rush.
Newcastle International Airport saw a year-on-year dip in passenger figures in 2008, to just over five million, falling from 5.6 million in 2007.
This trend has already put serious pressure on some of the UK’s major airports, with BAA, operator of Heathrow Airport, recently posting underlying operating profits of £582m, 18% below last year.
Newcastle Airport, which publishes its own financial figures over the next few weeks, said that it does not expect to see growth on its 2007 profits of £17.7m, due to the “demanding economic climate.”
Airlines are now attempting to stem the tide of losses by withdrawing a number of key routes to and from the UK, with both Newcastle International and Durham Tees Valley Airport in the spotlight.
Durham Tees Valley has been particularly affected by the downturn, with Ryanair announcing last week that it was withdrawing its flights to Dublin, a decision which follows the more damaging news that the airport is losing its three daily flights to London, following bmi’s decision to cancel the services.
Although Newcastle still has six daily flights to London, the withdrawals from Durham Tees Valley have been seen as a major blow for the surrounding economy, with Prime Minister Gordon Brown raising their importance by debating the subject in the House of Commons.
Joe Docherty, chief executive of Tees Valley Regeneration, said: “We are obviously disappointed. It’s important that international businesses have access to international markets.
“Heathrow is the world’s biggest hub in terms of worldwide connections and the flights from Tees Valley helped to support, not only the airport as a business, but much of the surrounding economy.
“But we must remember that the airport has flights to Schiphol Airport in Amsterdam, which is quickly becoming a major international hub.
“However, this area of the North East has seen rapid growth as a centre for business over recent years and it is important that the airport re-establishes flights into London if this is to continue.”
The problems facing Durham Tees Valley have remained in the news ever since reports that it has launched a High Court bid for £12m in damages from bmi, after the airport said that the airline had breached its contract after cancelling the flights to and from Teesside in 2006.
However, there is hope for future growth at the airport in the shape of the £110m Skylink business park development, which will be available for general employment and is aimed at bolstering the site’s freight activities.
