A Personal View
Where now for the airport?
By Paul Gosling
Derry City Council is commissioning a master plan for the development of land at the City of Derry Airport. This is part of a flurry of activity around the future of the airport. A new operations manager will take up position soon and the council is in the process of appointing a general manager, responsible for increasing the airport’s commercial income.
All this is to be welcomed, even though it raises questions about why such a dynamic approach was not taken years ago. Meanwhile, discussions continue about how best to run the airport in the future, how it should be managed and who should own it. Despite criticisms of the council’s management, it should be remembered that the most successful regional airport in the UK is Manchester, which is owned by a consortium of ten local councils and managed privately on their behalf.
It is how an airport is managed that is pivotal, not who owns it. We should remember, too, that the largest owner of airports in the UK is the British Airports Authority – condemned for its management of Heathrow. Whatever critisisms Ryanair’s Michael O’Leary makes of Derry airport is nothing compared to what he says about BAA.
Nor should we ignore the significance of the airport as a driver of the local economy. The limited use of Derry’s airport as an industrial and logistics site contrasts with that of other small regional airports, such as Exeter – which has a similarly sized local population, yet much grander plans for local airport-based development.
Airports play a key role in attracting investments. I recently interviewed leading investment managers in England about location decisions and repeatedly they said that the proximity of a quality airport was a major factor, even the major factor. Manchester’s well managed airport is arguably the main reason for the city’s economic growth and social improvement over recent years.
But the task facing Derry’s council in developing our airport in the current economic circumstances is severe. Ryanair has just reported a quarterly loss and expects an annual loss for the first time in 14 years. At least 25 airlines have gone bankrupt in the last nine months. Regional airports in the United States are closing. This is probably the worst crisis for the airline industry ever, because of escalating fuel costs and the consequent fall in demand.
Ryanair is responding with aggression, trying to drive its ‘low cost’ competitors out of the market. “The era of dirt-cheap air travel is almost certainly over,” argued The Times this week. Yes we will see cheap flight offers continue for the time being, but perhaps only until just Ryanair and EasyJet are left standing in their market sector. No frills is here to stay, but with steadily rising prices.
Given the City of Derry’s unhealthy dependence on Ryanair, this is a worry locally. Asked how committed Ryanair is to Derry, an airline spokesman said only: “Our politic regarding route development remains the same: we will raise traffic and fly to airports that are competitive and offer low costs.” In other words, it will continue to push airports – such as Derry and Belfast City – to offer what Ryanair wants, making them compete aggressively.
We must also worry about the sustainability of some Ryanair routes. London Stansted appears to perform well and, I am informed, so does Glasgow, though it took some time to grow. But flights to the East Midlands and Bristol seem under-used and vulnerable, especially when the Birmingham route comes on stream. Ryanair confirmed that its flights into and out of Derry – even to Stansted – are below its 84% average passenger loading. This is partly because some seats must be kept empty for safety reasons, which will cease to be a factor later this year when the safety work at the airport is completed.
So it is both necessary and brave of the city council to look to develop the airport site at the present time. Developments to be considered include a second terminal building, a much larger retail quarter, a hotel, new logistics and other commercial operations on the site and – please, please, please – a second baggage scanner for hand luggage, to reduce queues. But in the current climate we had better keep our fingers crossed that all goes well.