Longhaul from Bristol

[Aviador]

Devolved or not, it's fair to say I don't agree with it. In this case it disadvantages a neighbouring region only an hours drive away. What would be fair would be to remove the Severn Toll charges which would put the airports on either side of the bridge on a level playing field leaving market forces to decide where passengers want to fly from not politicians.

 

[Jerry]

Devolved or not, it's fair to say I don't agree with it. In this case it disadvantages a neighbouring region only an hours drive away. What would be fair would be to remove the Severn Toll charges which would put the airports on either side of the bridge on a level playing field leaving market forces to decide where passengers want to fly from not politicians.

The tolls are coming down by the end of 2018 which is good timing as the Qatar flights will be in full swing by then and politicians are always messing with the market trying to create jobs in places where there aren't and providing all sorts of incentives and cutting APD is the same as it will help to create jobs in other areas of the country.

 

[Foxlimayankee]

I also looked at the TUI packages to Barbados and Jamaica from CWL and BRS in winter 2018/19
CWL-BGI Coconut Court Barbados resort 14 nights 9/12/18 £1410 per person with APD without £1332.
BRS-BGI same resort 14 nights 27/1/19 £1560 per person.
CWL-MJB Club Hotel Riu Ochos Rio resort 14 nights 19/2/19 £1598 per person with APD without £1520.
BRS-MJB same resort 14 nights 2/4/19 £1697 with APD.

29/3/18 to 2/4/18
CWL-AGP with Vueling direct £104 with APD without it's £91
BRS-AGP with Ryanair direct £119 with APD

CWL-BHD with Flybe direct £74 with APD without it's £61
BRS-BFS with Eastjet direct £76 with APD

CWL-PMI with Vueling direct £132 with APD without it's £119
BRS-PMI with Ryanair direct £90 with APD

I also looked at Venice and Rome on 31/3/18 to 3/4/18
CWL-VCE with Flybe direct £75 with APD without it's £62
BRS-VCE with Ryanair and Easyjet direct £76 with APD

CWL-FCO with Flybe direct £129 with APD without £116
BRS-FCO with Easyjet direct £175 with APD.

Jerry you've just proven that reducing APD makes absolutely no difference, because all of those prices, with the exception of PMI, are cheaper from CWL than BRS! If Airlines can currently operate from CWL at prices cheaper than BRS, with APD still in play, then it proves that abolishing APD in order to make the cheaper prices from CWL even cheaper just to get passengers through the door is unfair. If CWL was notably more expensive and Welsh travellers were at some kind of disadvantage and had to use BRS to get decent fares then there may be an argument.
But then many would argue, is it the Airlines that are at CWL that are making the prices high? EZY and FR have a much lower cost base than BE, yet BE remain competitive at CWL.

 

[Jerry]

You could also argue then that giving Wales control of APD won't make a difference to BRS anyway so why not devolve it? If CWL is cheaper even with APD and not making a difference to BRS growing is it going to make a difference with APD devolved?

 

[Coathanger16]

Until the government can be shown evidence that reducing or abolishing APD would be counteracted by a proportional increase in passengers to make up for the reduced tax income, they are very unlikely to do anything with APD.

Perhaps a change of tact is required. Why exactly do people want APD to be reduced? Passenger numbers have been growing steadily since the end of the recession, so can it really be argued that APD is putting people off flying?

As I said in an earlier post, the short haul APD is negligible really but the long haul APD can be significant. Perhaps an idea could be to have a "tax grace" period for new long haul routes - say no APD is paid for the first year of operations for any new long haul routes. This would improve airline yields in their first year until they've established a presence and are attracting sufficient passengers.

Apparently one of the benefits of APD was that it was supposed to offset somewhat the environmental impact of aviation. However passengers flying on a 787 pay the same amount of tax as passengers flying on a 747. Perhaps a factor could be applied so that APD is higher on less efficient, more polluting aircraft as an incentive for airlines to retire them...?

 

[TheLocalYokel]

Until the government can be shown evidence that reducing or abolishing APD would be counteracted by a proportional increase in passengers to make up for the reduced tax income, they are very unlikely to do anything with APD.

Perhaps a change of tact is required. Why exactly do people want APD to be reduced? Passenger numbers have been growing steadily since the end of the recession, so can it really be argued that APD is putting people off flying?

As I said in an earlier post, the short haul APD is negligible really but the long haul APD can be significant. Perhaps an idea could be to have a "tax grace" period for new long haul routes - say no APD is paid for the first year of operations for any new long haul routes. This would improve airline yields in their first year until they've established a presence and are attracting sufficient passengers.

Apparently one of the benefits of APD was that it was supposed to offset somewhat the environmental impact of aviation. However passengers flying on a 787 pay the same amount of tax as passengers flying on a 747. Perhaps a factor could be applied so that APD is higher on less efficient, more polluting aircraft as an incentive for airlines to retire them...?

Osborne when chancellor admitted that APD was just a tax pure and simple.

When Westminster devolves APD powers to Scotland (and Wales in the future?) it subtracts from its block grant to these countries a sum that is equal to the amount of APD these countries raise. Scotland seems set on renaming APD ADT (air departure tax) and levying a rate set at around 50% of the UK's APD but that's its decision and it will be the one to have to find the lost revenue. The same would apply to Wales. Westminster isn't concerned as it will not lose out.

It might be thought that the Scottish and Welsh governments are well funded if they can afford to reduce APD rates but the UK government can't (Wales say they will scrap APD and have not said they will replace it with something else).

The Azores criteria which deals with EU state aid says that member states cannot vary tax rates in a way that is favourable to individual regions. What can be done is the devolution of tax powers to regional authorities that bear a sufficient degree of fiscal and economic autonomy from central government. This is defined in detail and is how Scotland and Wales have/are getting tax powers (but not APD in Wales - yet anyway). There is no part of England that currently bears such autonomy. Consequently all of England (and Wales at the moment) have to be treated in a similar fashion for APD. Your idea about new long haul routes might be legal so long as it applied everywhere in England and Wales.

A couple of years ago the Westminster government was going to seek the views of the European Commission as to whether APD rates could be varied according to congestion but if they ever did any answer they received was not made public so far as I'm aware.

Of course, after Brexit the EU state aid regulations might not apply. It depends on the deal the UK makes with the EU as part of the leaving process.

 

[Jerry]

Of course, after Brexit the EU state aid regulations might not apply. It depends on the deal the UK makes with the EU as part of the leaving process.

That is the thing after Brexit depending on the type of deal then it could be that instead of trying to get APD as an incentive the Welsh government may then be able to just offer money as an incentive to say someone like Delta or Thomas Cook to operate long haul from Wales.

 

[Finger66]

We will not be too badly off after Brexit. Europe cant live without us just as we cant live without Europe. But it will be great to make our own decisions whether as the UK as a whole or as independent countries. Politics have so much to answer for. They are vital but at the same time ruin so much! I dont think there is a Brexit argument 1 way or another but what I do know is we have to live with the decision and make the best of it, which we will!

 

[Finger66]

One thing I will add to this is that those of us up at LBA would love some longhaul, just as you in Bristol would, but if someone op BRS - LBA I would be just as delighted as its far more sustainable!

 

[Coathanger16]

Your idea about new long haul routes might be legal so long as it applied everywhere in England and Wales.

Indeed - I don't think that any region should get any kind of preferential treatment.

That is the thing after Brexit depending on the type of deal then it could be that instead of trying to get APD as an incentive the Welsh government may then be able to just offer money as an incentive to say someone like Delta or Thomas Cook to operate long haul from Wales.

The issue with that is whether or not their is sufficient demand to operate the route without the cash incentive. The Welsh government can't continue to give cash to airlines indefinitely, so if the route isn't viable without the cash incentive the airline will just pull out when the cash stops coming in. Equally, the route may be viable without the cash incentive but will CWL offer the greatest return on basing an aircraft there. Take Thomas Cook for instance, are they going to get a better return from operating an aircraft from Cardiff to Orlando, or Manchester to a N.American destination. No offence to CWL, but it'll likely be the latter.

 

[Foxlimayankee]

From what I'm told, TUI's SFB route is performing better than expectations and is one of the best performing routes. That's very fluid in that it could be the best perform UK-SFB route, could be one of the best performing TUI routes from BRS, or could be one of the best in the whole network, I don't know.
What would be interesting to see is the comparable prices of BRS-SFB against BHX/MAN/LGW-SFB. I would suspect that BRS prices are more expensive as competition is less in the region and some will pay a bit more to fly from a local Airport. I would also suspect the TUI have taken some passengers that would potentially also fly BA, VS, DY or MT to Orlando. I would therefore dispute the fact that MT would make less money out of CWL if the same theory is applied. Orlando was a huge market pre 2010, when at it's peak there was a weekly 767 and A330, along with a high density 747 during the peak summer months, over 1000 seats a week, and then the FCA flights from BRS at the time on top of that.

 

[Jerry]

Indeed - I don't think that any region should get any kind of preferential treatment.



The issue with that is whether or not their is sufficient demand to operate the route without the cash incentive. The Welsh government can't continue to give cash to airlines indefinitely, so if the route isn't viable without the cash incentive the airline will just pull out when the cash stops coming in. Equally, the route may be viable without the cash incentive but will CWL offer the greatest return on basing an aircraft there. Take Thomas Cook for instance, are they going to get a better return from operating an aircraft from Cardiff to Orlando, or Manchester to a N.American destination. No offence to CWL, but it'll likely be the latter.

Any deal cab have a fixed time period ie 5 years could be put on it so any routes would be given time to bed in. Who's to say it won't succeed? Problem for CWL is the airlines aren't giving it a try. The Flybe base is an example of an airline giving CWL commitment and and succeeding.

 

[TheLocalYokel]

One thing I will add to this is that those of us up at LBA would love some longhaul, just as you in Bristol would, but if someone op BRS - LBA I would be just as delighted as its far more sustainable!

BRS does have some weekly long haul charter routes in summer: TUI to Cancun and Sanford, with Punta Cana joining next summer. TUI also operates year-round to Sal, Cape Verde with a second Cape Verde route, Boa Vista, starting next year. What BRS lacks is long haul scheduled routes.

Some years ago I wondered why easyJet didn't begin a BRS-LBA route. At that time their BRS-NCL was operating up to 4 x daily and carried over 260,000 passengers annually. In recent years the route has reduced in frequency and annual passenger numbers have slumped to 165,000. The train is doubtless the main culprit with an hourly service between Bristol and Newcastle via Leeds. A BRS-LBA with easyJet looks unlikely now. bmi regional might be thought to have been/be an option but they've shown no public interest.

I would therefore dispute the fact that MT would make less money out of CWL if the same theory is applied. Orlando was a huge market pre 2010, when at it's peak there was a weekly 767 and A330, along with a high density 747 during the peak summer months, over 1000 seats a week, and then the FCA flights from BRS at the time on top of that.

I have no doubt whatever that such flights would be full from CWL. I remember that one month in August 10-15 years ago 10,000 passengers used Cardiff-Florida. As you will know better than most, getting an acceptable yields for such flights is the important thing. I was always surprised that when Thomson and First Choice merged ten years ago the CWL summer transatlantic programme was axed in favour of BRS. Up until then CWL usually had the lion's share of such routes with TOM and Airtours as well as chartered carriers for smaller tour companies. First Choice concentrated more on BRS than on CWL.

You could also argue then that giving Wales control of APD won't make a difference to BRS anyway so why not devolve it? If CWL is cheaper even with APD and not making a difference to BRS growing is it going to make a difference with APD devolved?

The professionals at CWL want APD devolution. The professionals at BRS don't. This seems a pretty strong indication that APD would benefit CWL whilst detracting from BRS.

I'm not a believer in artificially manipulating the jobs market by taxation and other government benefits. What often happens is that few new jobs are created but existing jobs move from one area to another as companies take advantage of a more agreeable fiscal climate.

If I was looking to open a new airline base on Severnside an APD-free CWL would be a very attractive prospect. On short haul I would take nearly £2,000 more on every outbound flight from CWL with 150-seater size aircraft, even if I charged the same fares as I would have done from BRS. Long haul would give me about £15,000 per flight on a 200-seater aircraft. This is based on full flights although I might use a 180-seater and expect to average at least 150 per flight.

Let's look at Qatar. Let's assume they begin modestly and average 150 per outbound flight. That's nearly £12,000 per flight, around £80,000 per week, about £320,000 a month and nudging £4 million a year. In an APD-free Wales they could pocket that every year whilst still charging a similar range of fares as they do at BHX and would have done at BRS had they gone there.

Imagine how much more TUI would make with their 20-weeks' season flights to Cancun, Sanford and Punta Cana, and weekly flights to Sal and Boa Vista. They'd be averaging probably 260-290 passengers on most of these flights so the APD take would be high - £2-3 million in a year.

Both Qatar and TUI would appreciate the flexibility of not having to hand over APD to the Treasury. They could trouser all of it or reduce fares by a little or a lot to attract more punters, depending on circumstances.

 

[Jerry]

Imagine how much more TUI would make with their 20-weeks' season flights to Cancun, Sanford and Punta Cana, and weekly flights to Sal and Boa Vista.

At CWL Sanford is probably the only route they could do weekly and given CWL's history of Orlando TUI could operate 1 weekly flight at both airports and fill both flights. Even with APD if done weekly they would never fill Cancun, Punta Cana, Sal and Boa Vista. Why would they shift those flights and risk running 60% or 70% load factors and then lose any advantage of APD. Yes they could run those flights as monthly specials (which would probably be the best option at CWL) but why do that when you could fill an aircraft every week at BRS.
Personally i'd imagine CWL's target would be a scheduled flight to NYC with preferably a US3 or if not them TCX or Primera or Norwegian and try and get a codeshare with Flybe going to help feed those flights. That type of flight wouldn't impact BRS much as they don't have one. As regards to short haul then it could attract another airline to CWL or Ryanair may setup a base and maybe CWL would get a TCX year round base but even that would have a minimal effect and many routes simply would not work at CWL and BRS would still be the dominant airport which is want there owners want. In a way you have to wonder if it would be worth the BRS owners to buy a stake in CWL. The government could hardly turn them down.

 

[TheLocalYokel]

CWL used to have regular weekly flights to the Dominican Republic when BRS had none at all.

In the 1990s and early 2000s CWL was the dominant transatlantic summer charter airport for Severnside and never had any trouble filling flights. When TUI and First Choice merged they axed the CWL flights but retained those from BRS which had been operating for only a year or two. Presumably the yield was the reason.

Not having to hand over APD to the Treasury would make a big difference to TUI's yield at CWL.

I once did a blog musing what would be the result of CWL and BRS in joint ownership. That was before the WG bought CWL. The idea would not have got past the competition police - when the BRS owners became preferred bidders for EXT at the time it was being privatised there was such a fuss in Devon that the EC became involved leading to the BRS owners deciding to withdraw.

From what BRS said at the time they would have used BRS and EXT as complementary airports and not run down EXT as was the fear in Devon. My blog about BRS and CWL ignored competition issues and wondered how the two might be used. That was about ten years ago when CWL looked as though it would grow and grow as BRS was doing.

I suspect that CWL would have to show it was likely to be profitable, including any debt provision that an incoming investor would have to take into account , as well as being capable of sustaining substantial investment in terminal infrastructure before an investor such as OTPP became interested.

 

[kraktoa]

A friend was extolling the virtues of Zanzibar as a holiday destination.

So decided to check flights into ZNZ and lo and behold Qatar Airways has regular scheduled flights. Started looking at flights from CWL to ZNZ from June 2018 and it does not recognise the route. Even worse is the airline website. Practically non functional on ipad.

 

[Jerry]

A friend was extolling the virtues of Zanzibar as a holiday destination.

So decided to check flights into ZNZ and lo and behold Qatar Airways has regular scheduled flights. Started looking at flights from CWL to ZNZ from June 2018 and it does not recognise the route. Even worse is the airline website. Practically non functional on ipad.

It does come up on the app.

 

[kraktoa]

Ok. Will download the app.

This may very wellbe my first flight out of CWL on Qatar Airways.

 

[forest1979]

A lot has been said about APD and devolving it to Wales. I'm of the opinion that it isn't likely to happen anytime soon or as long as the Welsh government is a major stakeholder in the airport. There was a chance for that to happen recently and it didn't regardless of the fact it has been to other parts of the UK (wrongly in my opinion) Outside of the 'possible' devolvement of APD, surely Bristol has enough levers to pull over CWL in securing scheduled long haul? Populations, wealth, passenger numbers, business?? I could create a long list from a commercial perspective of why airlines should try Bristol and some other posters have touched on this. Money obviously talks but even with the savings from APD, CWL would have to go someway to fill a number of such routes.
As for BRS, I think the airport needs to get it's house in order and have a full and proper plan if it is serious about LH routes. I think some of their issues in my opinion unfortunately comes down to runway length and the restrictions this poses for airlines, even with new aircraft coming on board. If extending the runway is off the table then I think any LH is limited as we have already seen.
If I was in charge I would have a plan to bring in Turkish airlines as some starting competition for the Qatar route out of CWL. They have a good network and appropriate aircraft for Bristol. I would still be courting Qatar BTW and possibly Etihad. They only have flights out of LHR, MAN and EDI as far as I know and with Dreamliner and A350 options, they fall into the category of aircraft Bristol can handle or will be able to... As for the US, Norwegian would be a good bet I feel over attracting a US carrier. I think they (US Carriers) are unreliable as we have see at other UK airports outside of LHR when it comes new routes and pulling out.
I hope that in the new master plan they cover in detail serious LH ambitions, airport capacity to achieve this and runway.
Finally, how is it all these devolved powers stop when it comes to England? Thought I would just get that in there 🙂

 

[Jerry]

surely Bristol has enough levers to pull over CWL in securing scheduled long haul? Populations, wealth, passenger numbers, business?? I could create a long list from a commercial perspective of why airlines should try Bristol and some other posters have touched on this.

Which you would have thought would have secured Qatar but didn't. Maybe for some airlines working in conjunction with a government may give them more security on some routes. In 2011 was Delta Airlines ever linked to BRS? I believe they wanted a subsidy to operate out of CWL? If they had the aircraft ready why didn't they approach BRS? Or did they? I think Primera Air would be a better bet than Norwegian as they may well want some sort of subsidy as well. With Turkish are they any different from KLM? They don't provide a 1 stop service to Australia and New Zealand which is an important market. Maybe trying to get KLM to change to 737s would be better?

Finally, how is it all these devolved powers stop when it comes to England? Thought I would just get that in there 🙂

Have a referendum and get devolved assemblies for the regions!🙂