London City Airport: the changing competitive landscape at the UK capital's most expensive airport

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 In the current winter schedule, Amsterdam has been replaced by Dublin as the number one destination by seats, with services now from all three of the airport's biggest airlines (British Airways, CityJet and Flybe).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.