Heathrow or Gatwick? anna.aero reveals key trends as runway decision gets closer

Heathrow or Gatwick

anna.aero looks at the facts regarding operations and trends at Heathrow and Gatwick and laments how the perceived economic benefits of one or two runways (anything up to $500 billion) would pay off over a quarter of the national debt. As each tries to make the most convincing case for why it should get the new runway, it seems there’s only one way to find out: FIGHT. Both airport CEOs, Wingate (LGW) and Holland-Kaye (LHR), will also present at Future Travel Experience Europe 2015, an anna.aero sister initiative taking place in Central London, 2-4 February.

With the Airport Commission decision on where London will get its new runway only a few months away, the war of words between Heathrow and Gatwick appears to be escalating as each tries to make the most convincing case for why it should get the new runway. So this week anna.aero has decided to present a range of factual data about the two airports.

Making great use of existing runways

Let’s start with some basics. Heathrow is the world’s third-busiest airport (after Atlanta and Beijing) although it recently lost its status as the world’s busiest international airport to Dubai. It is also the world’s busiest two-runway airport. Gatwick ranks somewhere between 30th and 40th among all world airports, but is the world’s busiest single runway airport. So both airports make great use of what they’ve got, both need an additional runway, although sadly only one is on the agenda.

Chart - London Heathrow & Gatwick 1994-2014 Annual passengers (millions) per runway

Source: UK CAA.

Passenger numbers per runway at Heathrow and Gatwick for the last 20 years show that since around 1997 the two airports have handled similar numbers of passengers per runway, rising from 30 million per runway in 1998, to over 36 million per runway, with Gatwick managing a record-breaking 38.1 million on its single runway in 2014. Just-released traffic data for 2014 shows that, while Heathrow traffic grew a modest 1.4%, Gatwick’s traffic surged ahead by 7.4%. In 2013 both airports had grown by between 3% and 4%.

London Heathrow (LHR) London Gatwick (LGW)
Annual passengers 2014 (versus 2013) 73.4m (+1.4%) 38.1m (+7.4%)
Number of runways 2 1
Connecting traffic share of total (Table 1*) 36.7% 7.3%
Share of passengers travelling for business / leisure (Table 2.1*) 29.5% / 70.5% 13.3% / 86.7%
Share of passengers UK originating / Foreign originating (Table 2.1*) 39.8% / 60.2% 71.2% / 28.8%
Source: UK CAA website, *UK CAA Passenger Survey 2013.

Staying connected

Connecting traffic accounts for over one third of passenger numbers at Heathrow, but less than 10% at Gatwick. One claim that has been made is that hub traffic is declining at Heathrow. However, according to UK CAA Survey data, connecting traffic was 36.3% at Heathrow in 2003 and, since 2008, it has hovered between 34% and 38%. In both 2012 and 2013, the figure was just below 37%, indicating no decline in connecting traffic.

Almost 30% of Heathrow’s throughput is business traffic but, with the remaining 70% travelling for leisure, that means that Heathrow still handles more leisure passengers in absolute terms than Gatwick. According to the CAA survey, only around 13% of Gatwick passengers are travelling on business; around one in seven.

In terms of where passengers come from, only around 40% of passengers using Heathrow are originating in the UK, while at Gatwick this figure is over 70%. This suggests that in 2014 UK-based passengers accounted for 29 million passenger movements at Heathrow and 27 million at Gatwick – not a huge difference. However, for passengers originating outside of the UK, four times as many used Heathrow (44 million) as used Gatwick (11 million).

British Airways and easyJet dominate (surprise)

Now let’s take a look at the leading airlines at each airport. At Heathrow, British Airways is the clear leader offering more than seven times as many seats in 2014 as its nearest rival, Virgin Atlantic Airways. However, BA still accounts for less than half (48%) of all scheduled seats at the airport, where a total of 15 airlines account for 80% of seats; a total of 84 airlines served the airport in 2014.

Chart -  Top 15 airlines at Heathrow in 2014 Total scheduled seats departing and arriving (millions)

Source: Innovata / Diio Mi.

At Gatwick, easyJet has been determined in acquiring available slots and building its presence from nothing in 1998, to being the leading airline a decade later. Norwegian only began serving Gatwick in October 2007, but is now the third busiest airline, with an 8% share of seat capacity, and a route network of 30 destinations, including three US cities. In total, the top 15 airlines account for 95% of scheduled seats at Gatwick, with 52 airlines operating scheduled services at the airport in 2014.

Chart - Top 15 airlines at Gatwick in 2014 Total scheduled seats departing and arriving (millions)

Source: Innovata / Diio Mi.

Unsurprisingly, British Airways is very much in favour of a third runway at Heathrow. easyJet also supports expansion at Heathrow (!) claiming Gatwick charges could rise to pay for construction. Having worked hard to attain its dominant (and profitable) position, easyJet also potentially has more to lose than to gain by an additional Gatwick runway, as it does not benefit from connectivity in the way BA does at Heathrow (remember up to 38% of passengers using Heathrow change planes, most of them connecting with BA services).

Analysis of seat capacity from both airports in 2014 by country market reveals the importance of the US at Heathrow. Almost 20% of all seats departing Heathrow were bound for the US. Meanwhile, UK and German destinations were virtually tied for second place with around 8% each. Among the top 15 country markets from Heathrow, six were outside of Europe (shown in light green). While passengers heading to the US, India, Canada, Hong Kong and South Africa were most likely to be ending their journeys in those countries, many passengers heading to the UAE (Dubai and Abu Dhabi) would be connecting onwards to other destinations. In total the top 15 country markets account for 70% of all seats, with 79 countries served during 2014.

Chart - Top 15 country markets at Heathrow in 2014 Total departing seats (millions)

Source: Innovata / Diio Mi.

At Gatwick, 13 of the top 15 country markets are in Europe, with Spain leading the way, followed by the UK, Italy and France. Popular holiday destinations such as Greece and Turkey also make the top 15. In total, the top 15 country markets account for 77% of all seats, with 70 countries served during 2014.

Chart - Top 15 country markets at Gatwick in 2014 Total departing seats (millions)

Source: Innovata / Diio Mi.

Over 250 new services started at Heathrow and Gatwick since 2010

Heathrow and Gatwick used to be owned and operated by the same company, the glamorously-titled BAA. However, since December 2009, the airports have been competing with each other, with Gatwick now owned and operated by Global Infrastructure Partners. Since then, the two airports combined have seen the launch of over 250 new services with Gatwick responsible for almost 180 and Heathrow for a further 80 (this is not the same as the number of new destinations, as a significant proportion of new services were launched on routes already served by other competing carriers).

Chart - London Heathrow & Gatwick 2010-2014 New services launched each calendar year

Source: anna.aero’s New Route Database.

A year-on-year analysis of schedule data for the peak month of August reveals the comings and goings of airlines at London’s two busiest airports. Some of these carriers (such as Aegean Airlines at Gatwick) began operations before the year indicated, but were not operating flights during August. Since 2012, the only airlines to cease operating from Heathrow are those that have encountered serious operational issues: bmi was put up for sale and then absorbed by British Airways, Cyprus Airways ceased operations at the beginning of this year and Libyan Airlines has been banned from operating in EU airspace since last December. Cyprus Airways had already moved its London flights to Stansted having sold its last Heathrow slots to American Airlines (for over $30 million!). Despite the scarcity and high price of Heathrow slots, airlines that have found a way into the airport since 2012 include Aeromexico, airBaltic, Avianca and Philippine Airlines, with Vietnam Airlines set to start operations at the end of March from Ho Chi Minh City and Hanoi.

Comparison period (August) Heathrow gained Heathrow lost Gatwick gained Gatwick lost
2010 v 2009 Aegean Airlines, Arik Air, Azerbaijan Airlines, Brussels Airlines, China Airlines, China Eastern Airlines Air Seychelles, Atlas Blue, Kibris Turk Hava Yollari, Northwest Airlines, Rossiya, Yemenia Yemen Airlines bmi British Midland, Cubana, Pegasus Airlines, Royal Air Maroc, Royal Zimbabwe Airlines, transavia.com, Tunisair, Viking Airlines African Star Airways, Atlas Blue, Bellview Airlines, Brussels Airlines, Caribbean Airlines, Rossiya
2011 v 2010 TAAG Angola CSA Czech Airlines, Libyan Airlines, Olympic Air airberlin, Aerosvit, Hellenic Imperial Airlines, Iceland Express, Rossiya, Sunwing Airlines, Tor Air Afriqiyah Airways, Air Southwest, Air Zimbabwe, bmi British Midland, Ghana International Airways, Mexicana, Qatar Airways, transavia.com, Tunisair, Viking Airlines, Wind Jet
2012 v 2011 China Southern Airlines, germanwings Air Transat, Blue1, China Airlines, Continental Airlines, Iberia, Kingfisher Airlines, Syrian Arab Airlines, TAAG Angola Aeroflot, Air China, Air Nigeria, Air One, Air Serbia, Atlantic Airways, Caribbean Airlines, Hong Kong Airlines, Lufthansa, Turkish Airlines, Vietnam Airlines Adria Airways, Cimber Air, Cubana, Delta Air Lines, Hellenic Imperial Airways, Iceland Express, Malév, Royal Air Maroc, Royal Zimbabwe Airlines, SAS, Tor Air
2013 v 2012 Aeromexico, Libyan Airlines bmi British Midland Afriqiyah Airways, Air Arabia Maroc, Gambia Bird, Germania, Icelandair, Iraqi Airways, Royal Air Maroc, Vueling, WOW air Aeroflot, Aerosvit, airberlin, Air Moldova, Air Nigeria, Air One, Estonian Air, Hong Kong Airlines, Iceland Express, Korean Air, Rossiya, Sunwing Airlines, US Airways
2014 v 2013 Avianca, Philippine Airlines Adria Airways, Air One, flynas, Livingston, Nouvelair Tunisie Air Serbia, Atlantic Airways, Bulgaria Air, Iraqi Airways, Lufthansa
2015 v 2014 Vietnam Airlines Cyprus Airways, Libyan Airlines Aegean Airlines, Garuda Indonesia, Iberia, SmartWings, Tunisair Afriqiyah Airways, Air China, Air One, flynas, Gambia Bird, Livingston, Vietnam Airlines
Source: anna.aero analysis of Innovata / Diio Mi data for August of each year 2009 to 2015. Airline names that are underlined started operations at the airport after 2009.

In the last five years, Gatwick Airport has attracted services from some 40 new (or returning) airlines, many more than Heathrow’s 15. Several of these new carriers at Gatwick, underlined in table, have since withdrawn their operations, although there are a great variety of reasons for this which have nothing to do with airline choice between competing London airports, especially the changes and troubles at various airlines ranging from bmi, airberlin, Malév etc. Indeed, the table also indicates that several carriers rebound – Air One, Tunisair, Caribbean Airlines, Adria Airways and many others have all returned; it is understood Qatar Airways may return to Gatwick this summer with a daily flight.

Two (runways) for the money?

It’s pretty obvious to anyone that both airports are clearly running close to maximum capacity and both are highly vulnerable to disruption (such as sudden bad weather or an operational emergency). An additional runway at both airports would considerably help with reliability as well as creating opportunities for significant traffic growth, and benefits to the UK economy of somewhere around a whopping £300 billion ($500 billion). To get this figure we combined the Airport Commission’s estimates of the economic benefit of each runway – a total exceeding £340 billion – and ‘slightly’ discounted the total to account for overlaps – in truth nobody knows what the actual figures are, but it is safe to say the benefits would be an absurdly huge boost to the UK economy and competitiveness, were any political party able to explain it to the electorate.


Comments

  1. Andrew Sharp says:

    Heathrow Express alone carries around 6m passengers a year to and from Heathrow: at Gatwick, over 36% of passengers use rail (so that’s about 14 million). So rail is easily the second largest carrier at both airports!

  2. sim says:

    airBaltic is not flying to Heathrow. So it is mistake in table “Heathrow gained”.

    • Hi Sim. Sorry about that. According to Innovata / Diio Mi airBaltic has been the “marketing” airline since 31 March 2013 for a daily flight at 10:40 departing LHR for Milan Linate (LIN) which is operated by a British Airways A319! However, this is clearly a BA flight and does not appear in airBaltic’s website so I’m not sure how it crept into the data. We try and weed out any obvious anomalies in the data but that one escaped us. Apologies. We have now removed it from the table.

  3. PhilLC says:

    new runways should be built at both airports; its the only sensible decision to allow for growth for the next 15 years or so…and then add a runway at Stansted…

  4. Adam Simmons says:

    Your comments about easyJet – no connecting passengers – is an interesting one. the majority of LCCs now offer a connecting service but Ryanair and easyJet steadfastly refuse to do so. I live a long way from a hub and invariably have to rebook onto a connecting flight rather than use a through ticket. Is there any information on how much of each LCC’s traffic is generated by connecting flights? Best regards.

  5. Tim Empson says:

    The analysis of passengers per runway is interesting but does not mean Gatwick is as near capacity as mixed mode is more efficient. A better measure would however have been movements per runway as Heathrow likely has a larger plane size that Gatwick.

  6. MB says:

    Heathrow should get two more runways to the west of the current airport set about 30 degrees off the current pair which would enable operations like Barajas Airport. It would mean losing the Wraysrbury Reservoir as well as burying the M25 under some of the expansion but a condition of this could be to require the airport operator to fund a replacement reservoir somewhere else and any related works to the M25. With a bit of imagination regarding runway operations and night time curfews the effect on local residents and beyond could be minimised. Adding a third runway parallel to the existing pair will restrict the ability to do any of this. Gatwick should be given another runway too.

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