Monday, March 16, 2009

Airport expansion plans questioned as demand for flights falls for first time in 17 years

UK airports handled 235 million passengers during 2008 according to figures published today by the Civil Aviation Authority (CAA), a fall of 1.9% on 2007 and the first decline in passenger numbers since 1991.

It is only the fourth time passenger numbers have declined since the end of World War Two.

The decrease in passengers is most marked for the final quarter of the year, with November passenger numbers having the largest monthly drop of 8.9 per cent year on year and December passenger numbers declining by 7.9 per cent.

The figures will almost certainly call into question government plans to expand UK airport capacity, and breathe life into Conservative proposals to invest in high speed rail instead.

Commenting on the statistics, Dr Harry Bush, CAA Group Director of Economic Regulation, said: “The fall in passenger numbers is to be expected in light of the worsening economic situation during 2008. The combination of business failures, such as those of XL Leisure Group and Zoom Airlines, together with a fluctuating oil price and the economic downturn has had a marked effect on the numbers of trips being taken. The early indications are that the larger falls seen in the last quarter of 2008 are continuing into the New Year, with the prospect of declining traffic in 2009 overall, which, if it occurs, will be the first time since World War Two that UK passenger numbers have fallen for two consecutive years. Current economic trends make this outcome more likely than not.”

At the London airports - Heathrow, Gatwick, Stansted, Luton and London City - the fall was two per cent overall, with the largest decline in both absolute and percentage terms at Stansted (with a 1.4 million drop in passengers, representing a 6.0 per cent decline). Conversely, Luton served an extra 255 thousand passengers or 2.6 per cent more than 2007 and London City saw its fifth consecutive year of double-digit growth with a 12 per cent overall increase (although growth slowed to just 2 per cent in the fourth quarter of the year): it is now handling 2.4 per cent of all London passengers.

At the regional airports - those other than the London airports - traffic contracted by 1.8 per cent to 98 million passengers. Manchester airport, the largest regional airport, saw passenger numbers fall by 3.8 per cent whereas Birmingham airport grew by 4.8 per cent.

In 2008, 25 million passengers took domestic flights. This represents a fall of 4.8 per cent (1.2 million) on 2007, a trend that has been apparent for a number of years and is driven in part by greater competition with domestic rail services. Passenger numbers on charter airlines have been declining in recent years, and the 2008 total of 29 million represents a decrease of 9.3 per cent (3 million) on 2007. Scheduled airlines handled 1.6 million fewer passengers (0.8 per cent) during 2008 (206 million).