London Stansted Airport
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London Gatwick Airport
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- 3048m x 46m
- Airlines currently operating to this airport with scheduled services
- Air Moldova
Aurigny Air Services
Cargolux Airlines International
Silk Way West Airlines
Thomas Cook Airlines
- Airlines currently operating to this airport via codeshare
Owned and operated by Manchester Airports Group, it having been sold by Heathrow Airport Holdings Ltd (BAA) on 28-Feb-2013, London Stansted Airport is the third largest airport serving Greater London and is located in the District of Uttlesford in Essex. Hosting regional and international passenger and cargo services for over 20 airlines, London Stansted is a major hub for low-cost and charter airlines including Easyjet, Ryanair, Thomas Cook Airlines and Thomson Airways.
Location of London Stansted Airport, United Kingdom
Ground Handlers and Cargo Handlers servicing London Stansted Airport
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Fuel & Oil Suppliers servicing London Stansted Airport
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1,136 total articles
67 total articles
Both Ryanair and easyJet recently reported strong progress during the quarter ended Dec-2014. Both demonstrated that losses in the traditionally weak winter period are narrowing. Ryanair even looks set to report a profit for its winter half year and raised its guidance for FY2015 (March year end).
Ryanair cautioned that high levels of fuel hedging would limit profit growth in FY2016, especially as it expects lower fuel costs to add to downward pressure on fares. easyJet too has fairly high levels of fuel hedging. Nevertheless, both look well positioned to take further market share from higher priced legacy carriers, building on initiatives around product and service quality and targeting business travellers (although they are at different stages in these areas).
Where there is a marked contrast between Ryanair and easyJet is in average revenue per passenger. Ryanair's lower costs allow it to sustain lower fares profitably. For many years, the two have mainly attacked different markets, but head to head competition between them is on the increase. In this report, we analyse the extent of their overlap.
Ryanair CEO Michael O'Leary's latest musings about a possible low cost transatlantic project indicate that he believes any such operation would need average fares below EUR100. This raises the question of just what is a sustainable fare in this market? Until recently the exclusive preserve of legacy full service carriers, the North Atlantic has witnessed the entry of LCC Norwegian over the past year.
However, it was always possible to find relatively low fares and Norwegian's pricing, while lower than that of premium airlines such as British Airways, does not appear to be substantially lower than the average all-inclusive economy fare of AEA member airlines between Europe and North America.
Mr O'Leary's thoughts suggest he would aim for a discount of 60% or more to legacy airline fares. This would undoubtedly drive volume. It would also be greater than the equivalent average discount offered by Ryanair in short haul. However, it may be difficult to find and sustain the cost savings necessary to make this profitable on long haul routes, even with a high fare premium cabin as part of the model.
Ryanair increased its profits substantially in 1QFY2015, as revenue per seat grew faster than cost per seat. By comparison with the same quarter a year earlier, revenues and profits were assisted by the inclusion of Easter in 1Q this year, but the underlying trends still looked favourable.
In spite of its caution over the outlook for average fares in 2H, Ryanair has raised its profit guidance for FY2015, based on higher traffic and load factors and lower cost per passenger than previously expected.
This is in contrast with its profit warning last autumn (and with more recent profit warnings from a number of European legacy carriers) and gives some comfort that its strategic shift to increase the emphasis on customer service may be starting to work.
easyJet has recently concluded long term deals with Gatwick and Luton airports, its two largest London bases. The Gatwick deal follows a change in economic regulation that encourages a more tailored approach and the Luton agreement follows a change of concession ownership and a commitment to capacity expansion.
Last year, easyJet reached a similar agreement with Stansted, which is no longer subject to economic regulation. easyJet also operates from Southend, the smallest London airport, albeit not under a long term contract.
easyJet's London airport deals give it both a high level of visibility over airport charges and real flexibility about where to deploy its capacity. It has thrown an effective lasso around the UK's capital, and now appears to have tightened its grip on the rope.
The regular quinquennial review of airport charges at London’s three biggest airports has finally come to its conclusion. As always, this has been an exercise in attempting to reconcile the irreconcilable. Nevertheless, with the publication of its final decisions on 10-Jan-2014 (not to be confused with its ‘final proposals’, published in Oct-2013), the UK’s Civil Aviation Authority (CAA) has ruled a line between the wishes of the airlines and airports.
After very substantial price increases in the previous regulatory period, the clamour from airlines for the CAA to place more aggressive caps on airport charges for the period 2014 to 2019 appears to have been heard. At Heathrow and Gatwick, the CAA’s price caps are below inflation. Not low enough, say the airlines, but their comments do not have the same vehemence as in the past, while these two airports sound genuinely dismayed by the decisions and by the changes since Oct-2013.
At Stansted, price regulation is to be abandoned altogether as the CAA now judges that the airport no longer has substantial market power after long term agreements, incorporating price discounts, were struck directly with the main airlines there.
The UK’s Airports Commission, tasked with looking into the need for additional UK airport capacity, has reached an important provisional conclusion. On 7-Oct-2013, the Commission’s Chairman Sir Howard Davies said: “We will need some net additional runway capacity in the south east of England in the coming decades”. Relying only on existing runways would “produce a distinctly sub-optimal solution for passengers, connectivity and the economy”.
Meanwhile, campaign group Stop Stansted Expansion is seeking to launch a legal challenge to the Commission’s work. This is on the grounds that one of the Commission’s former members, ex-CEO of Manchester Airports Group Geoff Muirhead, who stepped down in Sep-2013, may have been able to influence it in MAG’s favour.
This illustrates one of the difficulties in making decisions about future airport capacity. Whatever its final recommendations in 2015, it will be impossible to reconcile the different views of national politicians, local politicians, airlines, airports, environmental campaigners and NIMBY-ism (‘not in my back yard’). Nevertheless, the UK’s future as a global aviation hub demands that a clear decision be taken.