Airports

Published by: Key Note Publications Ltd

Published: Jun. 1, 2009 - 132 Pages

Table of Contents

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

Aviation Revenues

Commercial Revenues

MARKET TRENDS

Air Passenger Numbers

Regulator Orders Sale of Airport

Air Passenger Duty Increases Again

Consumer Price Index for Air Transport

Table 1.1: Consumer Price Indices for Transport Services (%), Year Ending December 2008

ECONOMIC TRENDS

Population

Table 1.2: UK Resident Population Estimates by Sex (000), Mid-Years 2004-2008

Gross Domestic Product

Table 1.3: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2004-2008

Inflation

Table 1.4: UK Rate of Inflation (%), 2004-2008

Unemployment

Table 1.5: Actual Number of Unemployed Persons in the UK (million), 2004-2008

Household Disposable Income

Table 1.6: UK Household Disposable Income Per Capita (£), 2003-2007

MARKET POSITION

Great Britain

Table 1.7: Use of Passenger Transport Within Great Britain by Mode (billion passenger kilometres and %), 2004-2008

Overseas

UK Passenger Movements

Table 1.8: Passenger Movements Into and Out of the UK by Air and Sea (000 and %), 2006-2008

Leading Tourist Destinations

Table 1.9: The Top Ten Tourism Destinations in the World by International Tourist Arrivals (million and %), 2007

Busiest International Airports

By Passengers

Table 1.10: International Passenger Traffic at the Leading International Airports (000), 2008

By Freight

Table 1.11: International Freight Traffic at the Leading International Airports (metric tonnes), 2008

2. Market Size

THE TOTAL MARKET

By Volume

Table 2.1: Terminal Passengers, Air Transport Movements and Freight Moved at UK Airports (million, 000 and 000 tonnes), 2004-2008

Figure 2.1: Terminal Passengers at UK Airports (million), 2004-2008

Figure 2.2: Air Transport Movements at UK Airports (000), 2004-2008

Figure 2.3: Freight Moved at UK Airports (000 tonnes), 2004-2008

By Value

Revenue

Table 2.2: Total UK Airport Revenues (£m), 2004-2008

Figure 2.4: Total UK Airport Revenues (£m), 2004-2008

Revenue per Passenger

Table 2.3: Average UK Airport Revenue Per Terminal Passenger (£), 2004-2008

BY MARKET SECTOR

Table 2.4: UK Airport Revenues by Type (£m and %), 2004-2008

REVENUES FOR BAA LTD

Table 2.5: BAA Ltd — Revenue by Type (£m), Years Ending 31st March 2004-2005 and 31st December 2006-2008

Aeronautical Revenue

Table 2.6: BAA Ltd — Aeronautical Revenue (£m), Years Ending 31st March 2004-2005 and 31st December 2006-2008

Table 2.7: BAA (SP) Ltd — Aeronautical Revenue by Airport (£m), Years Ending 31st December 2007 and 2008

Commercial Revenue

Table 2.8: BAA Ltd — Commercial Revenue (£m), Years Ending 31st March 2004-2005 and 31st December 2006-2008

Table 2.9: BAA Ltd — Retail Income at London Airports (£m), Year Ending 31st December 2008

3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES

Table 3.1: Concentration Levels in the Commercial Airports Industry by Share of Terminal Passengers (%), 2004-2008

Table 3.2: Concentration Levels in the Commercial Airports Industry by Share of Freight Volumes (%), 2004-2008

EMPLOYMENT

Table 3.3: Estimated Employment by the UK's Airport Operators (number of employees), 2005/2006-2007/2008

REGIONAL VARIATIONS IN THE MARKETPLACE

Table 3.4: Number of Terminal Passengers at Airports in the UK by Region (000 and %), 2008

South East

Table 3.5: Number of Terminal Passengers at Airports in the South East of England (000), 2004-2008

North of England

Table 3.6: Number of Terminal Passengers at Airports in the North of England (000), 2004-2008

Scotland

Table 3.7: Number of Terminal Passengers at Airports in Scotland (000), 2004-2008

The Midlands

Table 3.8: Number of Terminal Passengers at Airports in the Midlands (000), 2004-2008

South West

Table 3.9: Number of Terminal Passengers at Airports in the South West of England (000), 2004-2008

Northern Ireland

Table 3.10: Number of Terminal Passengers at Airports in Northern Ireland (000), 2004-2008

Wales

Table 3.11: Number of Terminal Passengers at Airports in Wales (000), 2004-2008

Highlands and Islands of Scotland

Table 3.12: Number of Terminal Passengers at Airports in the Highlands and Islands of Scotland (000), 2004-2008

HOW ROBUST IS THE MARKET?

LEGISLATION

Airports Act 1986

KEY TRADE ASSOCIATIONS

Airports Council International

Airport Operators Association

Civil Aviation Authority

4. Competitor Analysis

THE MARKETPLACE

Passenger Services

Table 4.1: Terminal Passengers at Major UK Airports (000 and %), 2004-2008

Air Transport Movements

Table 4.2: Air Transport Movements at Major UK Airports (000 and %), 2004-2008

Freight Services

Table 4.3: Freight Moved at Major UK Airports (tonnes and %), 2004-2008

MARKET LEADERS

BAA Ltd

Company Structure

Heathrow

Gatwick

Stansted

Edinburgh

Glasgow

Aberdeen

Southampton

Current and Future Developments

Financial Results

Birmingham International Airport Ltd

Company Structure

Current and Future Developments

Financial Results

Highlands and Islands Airports 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 International Airport

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 Holdings (Airports) Ltd

Company Structure

Liverpool John Lennon Airport

Durham Tees Valley Airport

Robin Hood Airport Doncaster-Sheffield

Current and Future Developments

Financial Results

South West Airports Ltd

Company Structure

Current and Future Developments

Financial Results

TBI PLC

Company Structure

London Luton Airport

Belfast International Airport

Cardiff Airport

Current and Future Developments

Financial Results

OUTSIDE SUPPLIERS

MARKETING ACTIVITY

Main Media Advertising Expenditure

Table 4.4: Main Media Advertising Expenditure by Airports (£000), Years Ending December 2004-2008

Exhibitions

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

CUSTOMER PROFILE

All Travellers

Table 6.1: Penetration of Air Travel Among Residents of Great Britain in the Last 12 Months (% of adults), 2004-2008

Table 6.2: Penetration of Air Travel Among Residents of Great Britain in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2007 and 2008

Number of Flights

Table 6.3: Penetration of Air Travel Among Residents of Great Britain in the Last 12 Months by Number of Flights Taken by Sex, Age, Social Grade and Region (% of adults), 2008

Holiday Vs Business Travellers

Table 6.4: Penetration of Air Travel Among Residents of Great Britain in the Last 12 Months by Purpose of Visit by Sex, Age, Social Grade and Region (% of adults), 2008

Most Popular Departure Airports

Table 6.5: The Most Popular Departure Airports Among Residents of Great Britain Who Had Taken at Least One Flight in the Last 12 Months (% of adults), 2007 and 2008

Table 6.6: The Most Popular Departure Airports Among Residents of Great Britain Who Had Taken at Least One Flight in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2008

Most Important Factors Determining Choice of Airport

Table 6.7: The Most Important Factors Determining the Choice of Flight and Airport Among Holiday Travellers and Business Travellers Resident in Great Britain in the Last 12 Months (% of adults), 2008

Table 6.8: The Most Important Factors Determining the Choice of Flight and Airport for Holiday Travellers and Business Travellers Resident in Great Britain in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), 2008

Most Popular Destinations

Table 6.9: The Most Popular Destinations Among Residents of Great Britain Who Had Taken at Least One Flight in the Last 12 Months for Holiday or Personal Reasons by Sex, Age, Social Grade and Region (% of adults), 2008

7. Current Issues

EUROPE

EU Emissions Trading Scheme

Use-or-Lose Take-Off and Landing Rules Relaxed

POLITICS

Regulator Orders Sale of BAA Airports

Review of UK Airport Economic Regulation

Third Runway at Heathrow

Stansted Airport Revenues Could be Affected

Aviation Duty/Air Passenger Duty

Airports Must Put Passengers First

INDUSTRY TRENDS

Grim 2009 for Airline Industry

CORPORATE ACTIVITY

8. The Global Market

OVERVIEW

MARKET SIZE

Table 8.1: Worldwide Airport Passengers, Cargo and Aircraft Movements (000 and 000 tonnes), 2008

Airport Passengers

By Region

Table 8.2: Worldwide Airport Passengers by Region (000), 2008

By Airport

Table 8.3: Worldwide Airport Passengers by Airport (000), 2008

Cargo Volumes

By Region

Table 8.4: Worldwide Air Cargo by Region by Volume (000 tonnes), 2008

By Airport

Table 8.5: Worldwide Air Cargo by Airport by Volume (000 tonnes), 2008

Aircraft Movements

By Region

Table 8.6: Worldwide Aircraft Movements by Region by Volume (000), 2008

By Airport

Table 8.7: Worldwide Aircraft Movements by Airport (000), 2008

FORECASTS

9. Forecasts

THE ECONOMY

Gross Domestic Product

Table 9.1: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2009-2013

Inflation

Table 9.2: Forecast UK Rate of Inflation (%), 2009-2013

Unemployment

Table 9.3: Forecast Actual Number of Unemployed Persons in the UK (million), 2009-2013

Population

Table 9.4: Forecast UK Resident Population by Sex (000), Mid-Years 2009-2013

AIR TRAVEL

FORECASTS 2009 TO 2013

By Volume

Table 9.5: Forecast Terminal Passengers, Air Transport Movements and Freight Moved at UK Airports (million, 000 and 000 tonnes), 2009-2013

By Value

Table 9.6: Forecast UK Airport Revenues (£m), 2009-2013

Figure 9.1: Forecast UK Airport Revenues (£m), 2009-2013

MARKET GROWTH

Figure 9.2: Growth in UK Airport Revenues (£m), 2004-2013

FUTURE TRENDS

Sale of BAA Airports Should Lead to Increased Competition

More Airlines Could Go Out of Business

Long-Term Forecasts for Air Passenger Growth

10. Company Profiles

BAA Ltd

Birmingham International Airport Ltd

London City Airport Ltd

The Manchester Airport Group PLC

Newcastle International Airport Ltd

PeEL Holdings (Airports) Ltd

TBI Ltd

11. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Key Note Sources

Abstract

After more than a decade of steadily rising terminal-passenger numbers at UK airports, the worsening economic situation in 2008 contributed to a downturn and the number of terminal passengers at UK airports fell by 1.9%. The combination of business failures, such as those of XL Leisure Group and Zoom Airlines, and fluctuating oil prices also had a marked effect on the numbers of trips being taken.

Despite the declining number of terminal passengers, total revenues generated by UK airports reached an estimated £3.4bn in 2008, which represented a 13% rise on 2007. The main factor boosting the value of the market in 2008 was the substantial increase in BAA Ltd's turnover, which is estimated to account for more than 70% of UK airport revenues in a typical year. The two main sources of income for airports are aviation revenue and commercial revenue. In 2008, aviation revenue, which includes aircraft runway movement charges and aircraft parking charges, accounted for the larger proportion of the total.

In March 2009, the Competition Commission confirmed the break-up of the airport operator BAA and ordered the sale of Gatwick and Stansted. In the final report of its 2-year investigation, the Commission also instructed BAA to sell either Edinburgh or Glasgow airport. The airports must be sold within 2 years and in sequence, starting with Gatwick, followed by Stansted, then Edinburgh or Glasgow. The sale by BAA of Gatwick is already under way.

The Department for Transport (DfT) has announced that passengers' needs should be put first, under new measures designed to improve the air-passenger experience and the economic regulation of airports. Under the plans, the aviation regulator, the Civil Aviation Authority (CAA), will be given a new primary duty to promote the interests of passengers. Air passengers will be represented by a new champion — Passenger Focus — as is the case for rail and bus users. The CAA will also be given a new secondary duty to ensure that airports meet their environmental obligations.

The global recession is expected to affect the UK air transport sector once again in 2009, with the number of terminal passengers at UK airports forecast to fall for the second year in succession. As such, it will be the first time since 1945 that UK passenger numbers have fallen for two consecutive years. In the longer term, the number of terminal passengers at UK airports is forecast to rise sharply, in line with increasing demand for air travel and the introduction of additional airport capacity.

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