Move to low-cost traffic depresses airport profit

The percentage of passengers using Belfast International Airport to fly with low-cost airlines almost doubled during the past year, according to airport operators TBI.

The percentage jumped from 35 per cent in the six months to end September 2001 to 62 per cent for the same period this year. The loss of "full-service" passengers at Belfast was cited by TBI as one of the main reasons for a 23 per cent drop in first-half pre-tax profits.

The company owns and operates London Luton, Belfast International and Cardiff International airports. It also owns and/or operates a number of non-UK airports and airport-related businesses.

It is one of a number of parties that have submitted expressions of interest in operating a second terminal at Dublin Airport. Mr Dermot Desmond has built up a 5 per cent stake in TBI.

"Earning reductions are primarily attributable to the loss of flag-carriers from Belfast International Airport," the company said, as it announced pre-tax profits, before exceptionals, of £18 million sterling (€28.6 million) for the six months to end-September 2002. This compared with £23.4 million sterling during the same period last year.

The September 11th attacks in the US have hit flag-carrier services at all airports, while the low-cost airlines that are replacing them are paying lower airport charges.

"Belfast International Airport has seen the biggest switch from scheduled to low-cost traffic at any of our airports, following the withdrawal of British Airways and the scaling down of operations by bmi British Midland, on the one hand, and the development of activities by easyJet on the other," the company said.

"While overall passenger numbers were little changed during the period, at 2.06 million, (2001: 2.17 million), the proportion accounted for by low-cost traffic has risen from 35 per cent in 2001 to 62 per cent in the current year. Total earnings before interest, tax, depreciation and amortisation from the airport fell to £7.2 million sterling, down from £12.9 million sterling in 2001."

"The rapid development of low-cost operations has underlined the quality of facilities at the airport and the need to re-engineer airport operations to reflect the requirements of our changed customer profile. We expect only a marginal fall in total passenger throughput for the year as a whole."

The company says it sees opportunities to increase catering sales to passengers travelling with no-frills airlines. Figures for Belfast show that during the six months to Sept 30th, 2002, the amount netted from each passenger averaged £5.14 sterling. This compares with £6.45 sterling for the same period last year.

One in every two TBI passengers now flys on cut-price carriers such as easyJet and Ryanair. TBI finance director Ms Caroline Price said details of the discounts offered to airlines were commercially sensitive but they were open to carriers big and small if they added new routes.

TBI said in its statement that the percentage of passengers passing through its terminals and flying budget airlines had risen by 25 per cent during the half to September 30th, compared with last year, and now accounted for 49 per cent of its total passenger traffic.

TBI owns eight airports: Belfast International, Cardiff International, 71 per cent of London Luton, Orlando Sanford International, Florida, 90 per cent of Stockholm Skavsta, and three Bolivian airports.