1 Introduction
Scope
1. In this inquiry, we defined a smaller airport
as one with a Civil Aviation Authority (CAA) licence which handled
fewer than 5 million passengers per annum. The nine busiest UK
airports—London Heathrow, London Gatwick, Manchester, London
Stansted, Edinburgh, London Luton, Birmingham, Glasgow and Bristol—fell
outside the scope of our inquiry. The 40 or so smaller airports
that were in the scope of the inquiry ranged in size from Newcastle,
which handled 4.4 million passengers in 2013, to Lydd, which handled
1,000 passengers.[1] We
also considered smaller airports which did not handle scheduled
passenger flights but which hosted services such as business aviation,
express air freight, general aviation or helicopter operations.
2. Smaller airports host a range of aviation services
including scheduled services to domestic and international destinations,
lifeline passenger services to geographically isolated locations,
chartered holiday flights, freight and cargo operations, flying
schools, helicopter operations and aircraft maintenance.
Value
3. Smaller airports are economic enablers. They allow
businesses and people to transport themselves, visitors, customers
and products nationally and internationally, which facilitates
both exports and internal investment. In addition, smaller airports
are themselves employers and often provide a focus for clusters
of aviation-related businesses. For example, Newcastle airport
provides 3,200 onsite jobs and supports a further 8,000 jobs in
the north-east region. It generates some £650 million each
year for the north-east economy. Similarly, more than 2,000 people
work at Liverpool John Lennon airport, which contributes around
£170 million annually to the local economy.[2]
Smaller airports are crucial to the maintenance and growth of
regional economies.[3]
4. Smaller airports also provide essential lifeline
connectivity for geographically isolated locations such as Orkney,
Shetland and the Hebrides. Such services are generally not commercially
viable and require state support. In 2014, we examined the social
and political case for subsidising such services in our Report
on Passenger Transport in Isolated Communities.[4]
Viability
5. Smaller airports grew rapidly in the late 1990s
and early 2000s. Over that period, airports outside London grew
more rapidly than those serving the capital, because passenger
numbers increased in line with the expansion of low-cost, short-haul
airlines. Passenger numbers at smaller airports began to decline
in 2005. That trend was exacerbated by the 2008 recession, since
when smaller airports have suffered disproportionately compared
with larger airports.[5]
John Spooner, Chairman, Regional and Business Airports Group,
observed that "small airports caught pneumonia when the rest
of the country caught a cold."[6]
The Department for Transport (DfT) acknowledged that "recent
economic conditions have been challenging for the UK's aviation
sector."[7]
6. Smaller airports are relatively fragile commercial
entities. While they operate from fixed locations and catchment
areas, airlines and other aviation businesses are highly mobile
and can swiftly adjust or relocate their services in line with
demand. Smaller airports that rely on services provided by a single
airline are especially vulnerable to fluctuations in market conditions.
In response, some smaller airports have diversified the range
of aviation-related activities conducted from and at their sites
to maximise resilience and commercial viability. Darren Caplan,
Chief Executive, Airport Operators Association (AOA), pointed
out that "Bournemouth has successfully diversified; they
have one third commercial, a third general aviation and a third
cargo. Humberside has gone strongly into helicopters to supplement
its income. Biggin Hill and Farnborough both have a strong aerospace
component on their sites."[8]
7. Since the 2008 recession, Bristol Filton, Coventry,
Plymouth, Penzance and Manston airports have all closed either
completely or to commercial traffic. In addition, Blackpool closed
to commercial traffic in the course of our inquiry.[9]
Although the circumstances varied in those cases, the closures
were ultimately a result of airport owners and/or airlines concluding
that commercial services were no longer viable. Iain Osbourne,
Group Director for Regulatory Policy, CAA, asserted that "it
is very hard to kill an airport".[10]
He argued that uncommercial airports often "drop down to
a semi-dormant state" but are "still there … disciplining
the market."[11]
The argument that a dormant airport is still economically significant
because airlines might choose to fly from it in the future cannot
be sustained if temporarily uncommercial airports are developed
for housing, as happened at Bristol Filton and has been proposed
at Manston [see paragraph 45]. Because airports, by their nature,
occupy large, flat sites, they are attractive to developers, especially
in areas of high housing demand.
8. The UK contains a relatively large number of airports
in a fairly small geographical area. Indeed, it contains more
airports per head than comparable EU member states.[12]
The Under-Secretary of State, DfT, Robert Goodwill MP, observed
that "we live in a vibrant, competitive environment, unlike
many parts of Europe where local authorities control their airports
… I am very comfortable with the fact that we have a large
number of airports."[13]
The Chartered Institute of Logistics and Transport (CILT) spelled
out the practical consequences of the Minister's observation:
Smaller airports vary in terms of financial viability,
but there are a number which are not and probably never will be
profitable. There are some regions where there are more airports
than are really needed, and where the case for public financial
support is not strong. An airport cannot survive if airlines and
other aircraft operators do not want to use it.[14]
9. We welcome the range of consumer choice provided
by the comparatively large number of smaller airports in the UK.
The Government is rightly cautious about making direct interventions
in this market, which rewards enterprise and provides consumers
with competitive prices and choice. There is no case for a general
policy of state intervention to keep all smaller airports open.
1 Civil Aviation Authority, UK Aviation Statistics 2013 Back
2
Q10 Back
3
Airport Operators Association (SMA 020); Department for Transport
(SMA 039) paras 19 to 21 Back
4
Transport Committee, Fourth Report of Session 2013-14, Passenger transport in isolated communities,
HC 288 Back
5
Q6 Back
6
Q32 Back
7
Department for Transport (SMA 039) para 7 Back
8
Q32 Back
9
Blackpool airport closed to commercial traffic in October 2014. Back
10
Q24 Back
11
Q32 Back
12
Department for Transport (SMA 039) para 14 Back
13
Q200 Back
14
Chartered Institute of Logistics and Transport (SMA 038) summary Back
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