Airports

Published by: Key Note Publications Ltd

Published: Jun. 1, 2007 - 134 Pages

Table of Contents

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

Aviation Revenues

Commercial Revenues

MARKET TRENDS

ECONOMIC TRENDS

Population

Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 2002-2006

Gross Domestic Product

Table 2: UK Gross Domestic Product at Current and Annual Prices (£m), 2002-2006

Inflation

Table 3: UK Rate of Inflation (%), 2002-2006

Unemployment

Table 4: Actual Number of Unemployed Persons in the UK (million), 2002-2006

Household Disposable Income

Table 5: Household Disposable Income per Capita (£), 2002-2006

MARKET POSITION

Great Britain

Table 6: Use of Passenger Transport Within Great Britain by Mode (billion passenger kilometers and %), 2002-2006

Overseas

UK Passenger Movements

Table 7: Passenger Movements Into and Out of the UK by Air and Sea (000 and %), 2004-2006

Leading Tourism Destinations

Table 8: The Top Ten Tourism Destinations in the World by International Tourist Arrivals (million and %), 2003-2005

Busiest International Airports

Table 9: The World's Busiest Airports by International Passenger Traffic (million passengers and %), 2006

Table 10: The World's Busiest Airports by International Freight Traffic (million tonnes and %), 2006

2. Market Size

THE TOTAL MARKET

By Value

Table 11: Total UK Airport Revenues (£m), 2002-2006

Figure 1: Total UK Airport Revenues (£m), 2002-2006

By Volume

Table 12: Terminal Passengers, Aircraft Movements and Freight Moved at UK Airports (million, 000 and 000 tonnes), 2002-2006

BY MARKET SECTOR

Table 13: UK Airport Revenues by Type (£m and %), 2002-2006

REVENUES FOR BAA LTD

Table 14: BAA Ltd — Revenues by Type (£m), Years Ending 31st March 2003-2006 and 9 Months Ending 31st December 2006

Figure 2: BAA Ltd — Revenues by Type (%), 9 Months Ending 31st December 2006

Aeronautical Revenues

Table 15: BAA Ltd — Aeronautical Revenues (£m), Years Ending 31st March 2003-2006 and 9 Months Ending 31st December 2006

Commercial Revenues

Table 16: BAA Ltd — Commercial Revenues (£m), Years Ending 31st March 2003-2006 and 9 Months Ending 31st December 2006

Table 17: UK Net Retail Income for BAA Ltd by Product Area (£m), Year Ending 31st March 2006 and 9 Months Ending 31st December 2006

3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES

Table 18: Concentration in the Commercial Airport Industry by Share of Terminal Passengers (%), 2002-2006

Table 19: Concentration in the Commercial Airport Industry by Share of Freight Volume (%), 2002-2006

EMPLOYMENT

Table 20: Estimated Employment by the UK's Major Airport Operators (number of employees), 2004-2006

REGIONAL VARIATIONS IN THE MARKETPLACE

The North of England

The Midlands

The South West

The South East

Scotland

Wales

Northern Ireland

Channel Islands

HOW ROBUST IS THE MARKET?

LEGISLATION

Domestic Legislation

European Regulation

International Regulation

KEY TRADE ASSOCIATIONS

Airport Operators Association

Airports Council International

Civil Aviation Authority

4. Competitor Analysis

THE MARKETPLACE

Passenger Services

Table 21: Terminal Passengers at Major UK Airports (000 and %), 2002-2006

Aircraft Movements

Table 22: Aircraft Movements at Major UK Airports (number and %), 2002-2006

Freight Services

Table 23: Freight Moved at Major UK Airports (tonnes and %), 2002-2006

MARKET LEADERS

BAA Ltd

Company Structure

Heathrow

Gatwick

Stansted

Glasgow

Edinburgh

Aberdeen

Southampton

Current and Future Developments

Financial Results

Birmingham International Airport Ltd

Company Structure

Current and Future Developments

Financial Results

London City Airport Ltd

Company Structure

Current and Future Developments

Financial Results

The Manchester Airport Group PLC

Company Structure

Manchester Airport

East Midlands Airport — Nottingham, Leicester, Derby

Bournemouth International Airport

Humberside International Airport

Current and Future Developments

Financial Results

Newcastle International Airport Ltd

Company Structure

Current and Future Developments

Financial Results

Peel Investments (UK) Ltd

Company Structure

Liverpool John Lennon Airport

Durham Tees Valley Airport

Robin Hood Airport Doncaster Sheffield

Sheffield City Airport

Current and Future Developments

Financial Results

TBI PLC

Company Structure

London Luton Airport

Belfast International Airport

Cardiff International Airport

Current and Future Developments

Financial Results

OUTSIDE SUPPLIERS

MARKETING ACTIVITY

Main Media Advertising Expenditure

Table 24: Main Media Advertising Expenditure by Airports (£000), Years Ending December 2002-2006

Trade Exhibitions

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

CIVIL AVIATION AUTHORITY SURVEY

CUSTOMER PROFILE

All Travellers

Table 25: Penetration of Air Travel Among British Residents in the Last 12 Months (% of adults), 2002-2006

Table 26: Penetration of Air Travel Among British Residents in the Last 12 Months by Number of Flights Taken (% of adults), 2006

Table 27: British Residents Who Had Travelled by Air in the Last 12 Months by Sex, Age and Social Grade (% of those who had travelled), 2002-2006

The Most Popular Destinations

Table 28: British Residents Who Had Taken At Least One Flight in the Last 12 Months by Destination by Sex, Age, Social Grade and Region (% of adults), 2006

Holiday or Pleasure Travellers

The Most Popular Departure Airports

Table 29: The Most Popular Departure Airports for British Holiday or Pleasure Travellers in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2006

The Most Important Factor Determining the Choice of Flight and Airport

Table 30: The Most Important Factor Determining the Choice of Holiday or Pleasure Flight and Airport in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2006

Business Travellers

The Most Popular Destinations

Table 31: British Residents Who Had Taken One or More Flights for Business in the Last 12 Months by Destination by Sex, Age, Social Grade and Region (% of adults), 2006

The Most Important Factor Determining the Choice of Flight and Airport

Table 32: The Most Important Factor Determining the Choice of Business Flight and Airport in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2006

7. Current Issues

POLITICS

Airport Master Plans

Passenger Charges to Rise

Transatlantic Air Fares Set to Fall

Government Doubles Air Passenger Duty

PRODUCT DEVELOPMENT

Drive to Reduce Noise and Improve Fuel Efficiency

Heathrow Airport's Terminal 5 to Open in 2008

Routes and Destinations

Passenger Numbers by Nationality of Carrier

PUNCTUALITY

Scheduled Flights

Charter Flights

CORPORATE ACTIVITY

LEGISLATION

Civil Aviation Act 2006

Economic Regulation

THE ENVIRONMENT

Energy Efficiency and Use of Renewable Sources at Airports

8. The Global Market

MARKET SIZE

Table 33: Worldwide Airport Passengers, Cargo and Aircraft Movements (000 and 000 tonnes), 2006

Airport Passengers

By Region

Table 34: Worldwide Airport Passengers† by Region (000), 2006

By Airport

Table 35: Worldwide Airport Passengers† by Airport (000), 2006

Cargo Volumes

By Region

Table 36: Worldwide Air Cargo† by Region by Volume (000 tonnes), 2006

By Airport

Table 37: Worldwide Air Cargo† by Airport by Volume (000 tonnes), 2006

Aircraft Movements

By Region

Table 38: Worldwide Aircraft Movements† by Region (000), 2006

By Airport

Table 39: Worldwide Aircraft Movements† by Airport (000), 2006

FORECASTS

9. Forecasts

INTRODUCTION

Economic Forecasts

Population

Table 40: Forecast UK Resident Population by Sex (000), Mid-Years 2007-2011

Gross Domestic Product

Table 41: Forecast Growth in UK Gross Domestic Product in Real Terms (%), 2007-2011

Inflation

Table 42: Forecast UK Rate of Inflation (%), 2007-2011

Unemployment

Table 43: Forecast Actual Number of Unemployed Persons in the UK (million), 2007-2011

Air Travel Forecasts

Table 44: Terminal Passengers at 36 Major UK Airports† (000), Year Ending 31st March 2007

FORECASTS 2007 TO 2011

Table 45: Forecast UK Airport Revenues, Terminal Passengers, Aircraft Movements and Freight Moved (£m, million, 000 and 000 tonnes), 2007-2011

MARKET GROWTH

Figure 3: Actual and Forecast Terminal Passengers at UK Airports (million), 2002-2011

FUTURE TRENDS

Future Development Plans

Aberdeen

Belfast International

Birmingham

Bournemouth

Bristol

Cardiff

East Midlands

Edinburgh

Gatwick

Glasgow International

Glasgow Prestwick

Heathrow

Leeds Bradford

Liverpool

London City

Luton

Manchester

Newcastle

Stansted

10. Company Profiles

Baa Ltd

Birmingham International Airport Ltd

London City Airport Ltd

The Manchester Airport Group Plc

Newcastle International Airport Ltd

Peel Investments (uk) Ltd

Tbi Plc

11. Consumer Confidence

METHODOLOGY

KEY FINDINGS THIS QUARTER

THE WILLINGNESS TO BORROW

Confidence Improves

Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007

Willingness to Borrow Slips Slightly

Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), February 2006-2007

SPENDING FROM SAVINGS

Slight Increase in Spending from Savings

Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant November 2004 Prices (£ and £bn), February 2006-2007

Saving Grows in Relative Importance

Table D: The Average Amounts Adults Are Confident Spending to Purchase Expensive Items (£ and %), February 2006-2007

12. Further Sources

Associations

General Sources

Government Sources

Bisnode Sources

Abstract

The total revenues generated by UK airports reached an estimated £2.92bn in 2006 — an increase of 3.5% on 2005 and a 23% rise since 2002. The number of passengers at these airports also increased in 2006, despite a small decline in the number of aircraft movements, and this helped to boost revenues across the industry as a whole.

The two main sources of income for airports are aviation revenue and commercial revenue. Commercial revenue accounts for the larger proportion of turnover, supported by the extensive catering and retail operations that are in place at the leading airports. The growth and contribution of aviation revenue to airport turnover are limited by government restrictions on the level of aviation charges that can be made by the largest airports.

In March 2007, the Office of Fair Trading (OFT) announced that it was referring BAA to the Competition Commission for investigation. The referral had been expected after the OFT announced in June 2006 that evidence of poor customer satisfaction and the need for greater competition to reduce costs had been identified. The investigation could lead to a break-up of BAA's key London airports: Heathrow, Stansted and Gatwick. Airlines have been pushing for a break-up of airport ownership for some time.

The UK airport sector continues to be the focus of takeover and merger activity. The latest airport to be put up for sale is Leeds Bradford International Airport, which is currently owned by five West Yorkshire local authorities. This follows the acquisition of BAA PLC by Airport Development and Investment Ltd in June 2006, and the December 2006 purchase of London City Airport by Global Infrastructure Partners. In January 2007, Devon County Council sold Exeter Airport to Regional and City Airports Ltd for £60m. The company is part of the engineering group Balfour Beatty.

UK airport capacity is expected to continue to increase over the next 5 years, in order to meet rising consumer demand for air travel. New passenger facilities, including the opening of Terminal 5 at Heathrow Airport in 2008, will contribute to this growth. The substantial expansion plans that have been published by many of the other leading airports should similarly provide a boost to the sector over the period to 2011 and beyond.

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