London Heathrow (LHR) airport is overrated

...if your journey starts or ends in Central London.

Sure, airlines have good reasons to want to fly into Heathrow, most certainly British Airways and the rest of Oneworld airlines, as it is an important hub for them (in 2007 47% of BA's traffic at London Heathrow was connecting).

Connecting traffic at Heathrow is also important for non-Oneworld airlines. CAA data for 2007 shows how of all airlines carrying over half a million passengers at Heathrow, connecting traffic was over 15% of their passage in all cases except in three (Swiss, Air France, and KLM, with Alitalia just above this mark). As expected, since they did not have a local partner, connecting traffic at Heathrow was relatively less important for Skyteam carriers).

I am not sure these numbers would still be valid for Star Alliance's carriers though, I guess that after BMI's demise and absorption by British Airways its share of connecting passengers will fall to Skyteam's levels.

Connecting traffic involving non-aligned carriers was 3.5M, however, 1.4M involved a Oneworld transfer, another million involved Star (most likely BMI, that is now gone) and transfer traffic between non-aligned carriers at LHR was less than one million passengers in total. These might still sound like big figures, but they are the aggregate of several tens of non-aligned airlines flying to LHR on that year and I suspect the Gulf carriers Emirates, Etihad, Gulf Air and Qatar Airways are responsible for a significant part of this traffic.

So, even if you are not in Oneworld, you can still benefit quite a lot from flying to an airport with lots of connections (I must say the connecting traffic figures for non-Oneworld carriers are higher than I was expecting...)

But is this extra traffic enough to justify the London Heathrow premium? I don't have enough information to be able to answer this question...but if you rely mainly in origin and destination traffic, and that means basically, people that start their journey in central London, I wonder why London Gatwick does not emerge as a more serious competitor to London Heathrow.

Will Gatwick airport finally get the credit its deserves?

I have been using London Gatwick a lot this year, traveling in and out of several locations in central London and I struggle to find the reasons why LHR would be a better option for a passenger that has London as the start or end point of his journey and that is not flying with a Oneworld carrier.

LGW might be slightly further away from London than LHR, but the difference is not huge (although maybe just far enough to discourage those that get to the airport by taxi?). LHR has the tube and the (in my opinion) overpriced Heathrow Express, but LGW has several fast mainline train options, with frequencies of no more than 15 minutes, that can take you to several points in central London (Victoria, Charing Cross, St.Pancras International, London Bridge) in about half an hour. It might be slightly more expensive than the tube and 10 minutes longer than the Heathrow Express but I think it beats both  hands down in terms of value.

My guess is that more and more people will warm up to the charms of Gatwick airport as pricing becomes more of a tool for rationing airport capacity in the South-East of England, at least until it solves its chronic shortage of airport capacity and a final decision is taken about the future of Heathrow (to check the different options, check this piece that was recently published on Flightglobal).

Barcelona airport (BCN) or how to cope with simultaneous demand and offer shocks

foto: Terminal 1 by Ricardo Bofill (from Creative Commons)

Barcelona airport got its new terminal last month, almost doubling its capacity overnight, this would be alright was it not for the simultaneous demand and offer shocks the airport is facing.

Although designed in times of double digit growth the new terminal opens when the airport is experiencing its first decrease in passenger numbers in a very long time (-15% in the first quarter of 2009 compared with the same period last year). Europe is in the midst of one of the worst economic crisis in living memory and this would be worrying enough for an airport that relies almost exclusively on short and medium haul traffic, but is even worse when considering that the Spanish economy is among the hardest hit by the crisis. Tourist numbers are plummeting and some airlines have been cutting services (Easyjet has reduced capacity, British Airways is axing its Gatwick services). Other factors are contributing to the fall in numbers, the new high speed train link between Barcelona and Madrid has taken half of the market of the densest and most profitable route from BCN.

The recent merger between Clickair and Vueling, with the resulting company controlled by Iberia, is expect to bring some rationalization on some routes where the two companies had overlapping services. In the long term this might result in a stronger company able to maintain its base at Barcelona (Mr.O'Leary would probably disagree...).

And talking about Ryanair, the offer glut has not prevented Ryanair from opening a new base at Reus (REU), about one hour drive south of the center of Barcelona, to add to its current base at Girona (GRO), about one hour north. It seems that Ryanair is doing well in Barcelona (surely helped by the popularity of the city among the European city-breakers and young travelers). there was even talk of Ryanair eyeing slots at BCN...we do not know whether has there been a firm offer but it seems that the company expected some concessions that Aena was not ready to grant.

There is certainly the concern in certain sectors of Barcelona business and political spheres about BCN becoming an almost exclusively low cost airport. Hence, the takeover of the the troubled airline Spanair, engineered by a Barcelona-based consortium with the support of Catalan institutions, with the objective of making it the "Barcelona airline" (Vueling might also have some claim to the title). The hope is that its membership of Star Alliance will help Barcelona to become an alternative Iberian hub (although smaller than Iberia and Oneworld's at MAD). A challenging task indeed!
The reality in the short term is that Spanair does not have any long range plane in its fleet, so the long haul hub might have to wait, however the recent success of some Star Alliance partners at BCN (like the Singapore Airlines connection) allow for some optimism. Maybe Spanair could be a regional distributor, in the South-West of Europe for its long-haul Star Alliance partners? or will it continue to be a feeder for Lufthansa (a sort of Air Dolomiti)? time will say...the truth is that if it is currently difficult for BCN to become a hub, it has never had it better, since it is the first time that BCN is the base of two airlines of a respectable size.

Therefore, and despite the crisis, I am bullish on the long run prospects of BCN. It is the gateway to a densely populated and relatively rich area, with a diversified economy and some of the top tourist destinations in Europe. The airport itself is very close to the urban center (although could be better connected by public transportation with its hinterland)and there might well be a latent under served demand for direct long haul travel that is currently flowing through other airports (mainly MAD).

The 747s of the image might never materialize (smaller planes like the 787 might stand a better chance at BCN) but as Ryanair has proven at Girona (from nearly 0 regular traffic to 5,5M passengers in just over 5 years) sometimes offer can create its own demand...