London City Airport
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- Hartmann Rd
- United Kingdom
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- Other airports serving London
- London Biggin Hill Airport
London Gatwick Airport
London Heathrow Airport
London Luton Airport
London Stansted Airport
- 1508m x 46m
- Airlines currently operating to this airport with scheduled services
Aurigny Air Services
- Airlines currently operating to this airport via codeshare
- Air France
All Nippon Airways
KLM Royal Dutch Airlines
London City Airport serves the London financial district and is a major business aviation facility. The airport is located on a former Docklands site three miles from Canary Wharf and six miles from the City of London. The only airport actually within London, London City is the fifth-largest airport serving the city and its operations are restricted to STOL (Short Take Off and Landing) aircraft. The airport serves over 30 business centres across Europe and North America and a small number of leisure destinations in Europe.
Location of London City Airport, United Kingdom
Ground Handlers and Cargo Handlers servicing London City Airport
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Fuel & Oil Suppliers servicing London City Airport
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583 total articles
30 total articles
The late Jan-2015 profit warning from Flybe, the UK's largest regional airline, is a reminder that no restructuring programme ever follows a smooth path. Over the past couple of years, the airline has made good progress with cost reduction, repaired its balance sheet with fresh equity and a Gatwick slot sale, trimmed its network, exited a loss-making Finnish joint venture and rebalanced its fleet plan towards turboprops. In spite of its focus on the UK regions, it has also entered London City, London Southend and London Stansted.
However, the competitive response to its London City entry has been stronger than it anticipated and, although most of its network faces no airline competition, LCCs are its main competitors on routes where there are other airlines. This puts pressure on yields (although the impact on revenues is partially offset by Flybe's raised load factor). In addition, leasing costs associated with Embraer 195 jets that Flybe no longer wants are weighing on its results.
In this report, we consider these issues in the context of a review of Flybe's strengths, weaknesses, opportunities and threats.
London City Airport (LCY) reported an increase of 7.7% in passenger numbers to 3.65 million in 2014, its highest ever number and ahead of forecasts according to CEO Declan Collier. The airport attributed the growth to increased business confidence, helping to return business travel to pre-recession levels. Traffic also received a boost from the entry of UK regional airline Flybe just before the start of the winter 2014/2015 schedule at LCY.
Flybe's entry into London City, at a time when CityJet has been reducing capacity, has given a significant boost to domestic capacity and also had an impact on the list of top routes. In the current winter schedule, Amsterdam has been replaced by Dublin as the number one destination by seats, with services now from all three of the airport's biggest airlines (British Airways, CityJet and Flybe).
A number of routes have been cut this winter by airlines at London's most expensive airport (as defined by aeronautical revenue per passenger), although Flybe's entry tips the balance in favour of routes opened. The high cost of operating at the airport will lead to further route churn, but the strategy seems to be working.
A couple of months after acquiring regional airline CityJet from Air France-KLM, new owner Intro Aviation faces a crucial decision about replacing CityJet's fleet of ageing BAE regional jets. This is likely to provide the key to turning around the heavily loss-making airline, whose main base is at London City. In spite of this being a high yield market from which to operate, and in spite of capacity cuts, the final years under Air France-KLM ownership were characterised by weakening unit revenues.
Decisions about rebuilding the network in a manner better suited to CityJet's market, and better able to bolster unit revenues, will depend to a great extent on its final choice of aircraft.
Moreover, the fleet choice should also have a considerable bearing on unit costs in the future. With three manufacturers in the running (Bombardier, Embraer and Sukhoi), the airline may shortly be able to provide a clearer view of how its negotiations are progressing.
Announcing his first set of annual results as Flybe CEO, Saad Hammad declared that the airline had been "reborn" in FY2014. It was certainly a year of great significance in Flybe's 35 year history. The company returned to profit after three years of losses and successfully raised GBP150 million in fresh equity, avoiding what was starting to look like a looming bankruptcy and buying more time to complete its restructuring.
The return to profit was built on network rationalisation and a seat capacity reduction in the core Flybe UK airline. This was accompanied by a significant headcount reduction which led to lower costs. Load factors were driven up by the capacity cut and lower fares, leading to higher revenues per seat and a slight increase in total revenues. Losses were also reduced at Flybe Finland, the joint venture with Finnair.
Importantly, too, Mr Hammad and the rest of the new management team seem to be bringing about a cultural change in Flybe, with a brand re-launch and his talk of 'Purple Power'.
In Homer's epic tale The Odyssey, it takes Odysseus 10 years to return home after the Trojan War. Although CEO Adam Scott's first attempt to start Odyssey Airlines began around nine years ago, he will he hoping for a smoother journey after the planned launch of all-business class flights between London City Airport and New York in 2016.
Odyssey's business model is based mainly on the convenience of London City and the deployment of the Bombardier CS100 in a 40 seat configuration. It will compete with British Airways' 32 seat A318 business class-only service from the same airport, in addition to multi-class services from BA, American, Virgin Atlantic, United and Delta from Heathrow.
History has not been kind to premium-only operators on the North Atlantic, whose share of global premium revenues is declining. In spite of this less than encouraging backdrop, Odyssey is not the only airline planning all-business class operations between Europe and North America. Following our recent analysis of Dreamjet's forthcoming launch between Paris and New York, in this second of two reports we look at Odyssey's prospects.
The North Atlantic and Europe are suffering a fall in their share of world premium traffic revenues. Moreover, the North Atlantic market has consolidated in recent years, to be dominated by the immunised joint ventures within the three global alliances (plus the new Delta-Virgin Atlantic JV).
So why are two new European all-business class transatlantic services currently planning to enter this market? It may be possible for a differentiated product, tapping into a defensible and large enough sector of this market, to succeed if its business plan is well devised and well executed. However, history is not attractive for a new entrant and previous attempts, before the global financial crisis, saw the rise and fall of Eos Airlines, MAXjet, Sliverjet and L'Avion.
In this first of two reports, we review the defunct all-business class transatlantic airlines and the all-business class services of existing network carriers. We also look at the business model proposed by Dreamjet, which plans to operate between Paris and New York this year. In part two, we will consider Odyssey Airlines, which plans to start up from London City to New York in 2016.