Flybe announces London Heathrow as its fifth London airport, but will its various operations from the UK capital in S17 be sustainable?

Flybe London Heathrow

Flybe’s Executive Chairman, Simon Laffin, and London Heathrow CEO, John Holland-Kaye, announced on 20 December the news that from 26 March the airline will operate daily flights from Aberdeen and Edinburgh to the UK’s busiest airport. Heathrow becomes the UK airline’s fifth London airport operation, with the new links to Scotland facing strong direct competition from British Airways, as well as intense indirect services from the likes of easyJet and Ryanair.

Flybe is an airline that has made many significant changes to its network during the past few years, some of which have been successful and others that have not, such as its two Q400-based operation at Bournemouth which lasted just one season (S15). At the end of December, the airline confirmed that from 26 March it will commence flights to London Heathrow from Aberdeen and Edinburgh, taking over the slots that were freed-up by Virgin Atlantic Airways’ Little Red operation which unsuccessfully tried to break the British Airways monopoly on both sectors. What is interesting is that Flybe has not taken up the route that Little Red flew to Manchester, an airport which is a Flybe hub. Nontheless, with this announcment, it means that for S17 Flybe will be operating to five of London’s airports: City, Heathrow, Gatwick, Stansted and Southend.

Intense competition on 22 routes next summer

The table below identifies Flybe’s 22 routes that it will operate from London in 2017 plus the direct and indirect competition each one will face.

London airport Route (WF) Direct competition (WF) Indirect competition (WF)
City (LCY) Aberdeen (12)   LHR – British Airways (45), Flybe (18); LGW – easyJet (12); LTN – easyJet (5)
Amsterdam (2) CityJet (52), British Airways (32), KLM (23) LHR – KLM (70), British Airways (54); LGW – easyJet (53), British Airways (21); LTN – easyJet (38), Vueling (14); STN – easyJet (22); SEN – easyJet (13)
Belfast City (23)   LHR – British Airways (37), Aer Lingus (21)
Düsseldorf (17) British Airways (15) LHR – British Airways (40), Eurowings (26)
Edinburgh (30) British Airways (54) LHR – British Airways (76), Flybe (25); LGW – easyJet (29), British Airways (23); STN – Ryanair (26), easyJet (25); LTN – easyJet (22)
Exeter (7)    
Jersey (11)   LGW – British Airways (33), easyJet (22); LTN – easyJet (5); SEN – easyJet (4)
Gatwick (LGW) Newquay (17)   STN – Flybe (7)
Heathrow (LHR) Aberdeen (18) British Airways (45) LGW – easyJet (12); LCY – Flybe (12); LTN – easyJet (5)
Edinburgh (25) British Airways (76) LCY – British Airways (54), Flybe (30); LGW – easyJet (29), British Airways (23); STN – Ryanair (26), easyJet (25); LTN – easyJet (22)
Stansted (STN) Newquay (7)   LGW – Flybe (17)
Dundee* (11)    
Southend (SEN) Budapest (3)   LHR – British Airways (28); LGW – easyJet (10), Norwegian (3); STN – Ryanair (21); LTN – Wizz Air (32)
Caen (5)    
Cologne Bonn (6)   LHR – Eurowings (16); STN – Eurowings (14), Ryanair (12)
Dubrovnik (2)   LGW – British Airways (9), easyJet (9), Monarch Airlines (5), Norwegian (2); STN – easyJet (4), (3); LTN –easyJet (2)
Figari (2)   LGW – easyJet (1)
Groningen (8)    
Lyon (4)   LHR – British Airways (21); LGW – easyJet (13); LTN – easyJet (6)
Milan Malpensa (5)   LHR – British Airways (21); LGW – easyJet (41); STN –Ryanair (14); LTN – easyJet (14)
Perpignan (2)   STN – Ryanair (4)
Prague (5)   LHR – British Airways (33); LGW – SmartWings (14), easyJet (13); STN – Ryanair (9), easyJet (7); LTN – Wizz Air (8)
Rennes (12)   LGW – Vueling (3)
Reus (3)   LGW – Thomas Cook Airlines (2); STN – (4), Ryanair (3)
Venice Marco Polo (2)   LHR – British Airways (14); LGW – British Airways (27), easyJet (27), Monarch Airlines (4); LTN – easyJet (5); LCY – British Airways (4)
Vienna (3)   LHR – British Airways (34), Austrian Airlines (28); LGW – easyJet (13); STN – Eurowings (6); LTN – easyJet (4)
Zadar (2)   STN – Ryanair (3)
Total WF Flybe = 242 Direct competition = 297 Indirect competition = 1,826
Source: OAG Schedules Analyser data for w/c 13 June 2017. WF = Weekly Frequency. *Loganair franchise agreement with Flybe ends 31 August.

Of the 22 routes that Flybe will be operating from London next summer, only four will not be facing any direct or indirect competition, with only one of those, City-Exeter, not being flown on one of the airline’s franchise agreements. It should also be noted that the Lognair-operated Stansted-Dundee service will not be flown under the Flybe brand past 31 August, the date when the franchise agreement between the two carriers ends. Another note is that the City-Cardiff service, which was converted from its previous four-week stint when the Seven Tunnel was shut for repairs to a year-round service, is not yet scheduled or on sale for next summer. Finally, its route between Cornwall Airport Newquay and Gatwick will only face itself as competition, as the carrier also serves Stansted from the UK regional airport.

What is quite evident is the intense competition that Flybe will be facing from London next year. Of the 242 weekly one-way flights that Flybe will operate from the UK capital, there will be 2,123 competing services flown by other airlines. This number does not take into account operations to other airports in cities at the far-end of the sector, such as flights to Belfast International, Milan (Linate and Bergamo) and Venice Treviso, airports where Alitalia, easyJet and Ryanair all offer services to from various London airports. So with so much competition from London, it maybe hard for Flybe to gain a share of the market in order to make it sustainable to operate.

Southend expansion brings nine new destinations to the Flybe network

Although operated by Stobart Air, Flybe’s expansion from Southend next summer brings nine new airports to the airline’s network: Budapest, Cologne Bonn, Dubrovnik, Figari, Prague, Reus, Venice Marco Polo, Vienna and Zadar. OAG schedules currently indicate that these services will be flown on Flybe’s 88-seat E175 fleet. The carrier has operated to Cologne Bonn and Dubrovnik before, albeit from Birmingham for both, along with Exeter and Southampton for the latter. To get a better understanding of the decision to serve these routes, has looked into each market’s traffic from London between 2010 and 2015 (full-year data for 2016 not yet available).

Source: CAA. *Includes data for multiple airports in city.

Source: CAA. *Includes data for multiple airports in city.

Below are some highlights for each market during the period analysed:

  • Budapest: The market between London and the Hungarian capital has grown on average 10% year-on-year since 2010. Luton is currently the biggest airport in the market, with just under 36% of traffic in 2015 using Wizz Air between London and Budapest. However, the fastest growing airport for traffic to Budapest is from Stansted, with traffic up between 2015 and 2014 by 26%, with Stansted’s share of passengers going from 25% to 28% in that time.
  • Cologne Bonn: Traffic between London and the German city has grown on average by nearly 12% year-on-year, with Stansted being the most popular London airport of choice, welcoming 368,000 of the 662,000 passengers that flew between the two cities in 2015. In the same year Gatwick had 16% of passengers, while Heathrow welcomed 26%. easyJet ended services between Gatwick and Cologne Bonn in March 2016. At its peak (2013), the easyJet service carried 46% of passengers between London and Cologne Bonn.
  • Dubrovnik: The average annual growth to this destination from London between 2010 and 2015 was 11%. Up until 2011, Dubrovnik was served from Luton by Wizz Air three times weekly, with the airline carrying 8.4% of traffic on the city pair. In 2015 Gatwick was the strongest airport in the market, with it welcoming 91% of passengers across four airlines: BA; easyJet; Norwegian and Monarch.
  • Figari: The French city on the Mediterranean island of Corsica is second smallest of the new markets that Flybe will enter from Southend, with just over 11,300 passengers flying between London and Figari in S16 (no winter services). 72% of those passengers flew on easyJet’s weekly (Saturdays) flight from Gatwick, with the rest flying on BA’s charter flights from Heathrow. 2015 was the first time in four years that Gatwick has had a service to Figari. Flights since 2010 have also been flown from Stansted on Ryanair (S10 and S12). In 2010, a total of 24,500 people flew between London and Figari, the strongest year in the time analysed. Only easyJet flights are bookable for S17 along with Flybe, however it is not yet known if BA will run its Heathrow charter flights.
  • Lyon: The city pairing with London welcomed over 500,000 passengers in 2015, with Heathrow being the most popular London airport with 46% of traffic. Average year-on-year growth of 2.2% since 2010. easyJet does serve Lyon from Southend, however the weekly (Saturday) service is currently on sale until 22 April.
  • Milan: Largest market that Flybe will enter, with 2.4 million passengers flying between London and Milan’s three airports in 2015. Heathrow, which has connections to both Linate and Malpensa, is the strongest airport for traffic, with it welcoming over 900,000 Milan passengers that year. Since 2010, traffic between London and Milan has grown on average by 3.0%. All of London’s airports, excluding Southend, currently has a direct service to Milan.
  • Perpignan: The French regional airport is the third smallest market that Flybe will enter. Ryanair carried just over 52,300 passengers between Stansted and Perpignan in 2015, down 0.2% on 2014. Apart from Stansted, no other London airport has had a direct service to Perpignan in the period analysed. Overall since 2010, the connection to Perpignan has seen annual traffic grow on average by 2.3%.
  • Prague: Traffic between the capital of the UK and Czech Republic has grown on average 8.1% year-on-year since 2010, with Heathrow being the strongest London airport with 38% of traffic, however it had 51% of traffic in 2010. Stansted is the fastest growing London airport in the market, with traffic to London’s third largest airport between 2015 and 2014 growing by 64%, with its market share rising from 22% to 29% in that time.
  • Reus: Most unsuccessful of the new markets Flybe is entering, with an average year-on-year decline in traffic of 7.0%. Not only is Flybe a new entrant into this market next year, but is also commencing flights from Stansted, one month before Flybe will begin. Stansted is currently the most popular airport for passengers to Reus, with it occupying 53% of the market in 2015, up from the 43% market share it had the year before.
  • Venice: The only market that was flown directly from all six London airports up until the end of 2015, with easyJet ending its Venice Marco Polo flights from Southend in 2016, a route it had operated since 2013. Average year-on-year growth in traffic between 2010 and 2015 of just over 10%. Gatwick is the most popular London airport of choice for flights to Venice, with it handling 56% of traffic in 2015. Stansted is the second most popular, with 266,000 passengers flying with Ryanair between it and Treviso in 2015, commanding around 23% of the market.
  • Vienna: Welcomed 916,000 passengers in 2015, with Heathrow and Gatwick being the only airports in the time analysed to offer a direct service. However Luton (easyJet) and Stansted (Eurowings) have welcomed direct services to the Austrian capital during the past year. The UK-Austria capital pairing has been stagnant between 2010 and 2015, with an average year-on-year increase in traffic of just 0.4%, however with these new services in 2016, growth on the sector will have perhaps picked up.
  • Zadar: The second Croatian market that Flybe will fly from Southend along with Dubrovnik, Zadar is also flown to directly from Stansted with Ryanair. Between 2010 and 2015, traffic on Ryanair’s service has fluctuated between +85% (2011 v 2010) and -20% (2012 v 2011). Overall the average year-on-year change in traffic for Ryanair between 2015 and 2010 is just under 13%.

So overall Flybe is entering a mixture of markets that are all seeing various changes in growth, with the average annual growth across all 12 between 2010 and 2015 being 7.5%. However, the smallest markets that it is entering – Zadar, Reus, Figari and Perpignan – have not seen strong market growth compared to the rest of the routes the carrier will enter. Along with these services seeing competition from Ryanair at Stansted (excluding Figari), the nearest rival airport to Southend, it maybe difficult for Flybe to capture part of the market that will allow both operators to be profitable. However looking at ticket prices (9 January) for departures in June to Perpignan as an example, the variation in ticket price between the two airlines is just £2.77 (excluding additional fees), with Ryanair offering a rate of £56.98 and Flybe £59.75 (based on 4 June departure and 8 June return). So by offering similar fares, Flybe is at least able to attract potential customers from its Irish counterpart.

Depsite being at five airports, Flybe is only London’s 18th largest airline

Flybe is not the only airline to be operating from multiple airports in London. British Airways (Heathrow, Gatwick, City and Stansted) and easyJet (Gatwick, Luton, Stansted and Southend) both operate from four, while Ryanair (Gatwick, Stansted and Luton) operates from three. However, these three carriers are the top three operating from the capital, while Flybe, despite its expansion, will only be the 18th largest airline in the UK capital in relation to seats, sitting just behind SWISS, but ahead of Delta Air Lines.

Can Flybe paint the town where Little Red failed?

When Virgin Atlantic’s Little Red flew between Heathrow and Aberdeen, Edinburgh and Manchester, the Aer Lingus-operated services failed to achieve one month in the operating period between March 2013 and May 2014 where load factors were above 50%. Its best performing month in that time was April 2014, where it achieved an average load factor of nearly 48%. All three domestic routes flown by Little Red were served between three and six times daily. What is also not known is how many passengers on Little Red’s services connected onto Virgin Atlantic long-haul sectors. Flybe will be aiming to capture a share of the transfer market to and from Heathrow, with what it calls its “One Stop to the World” connectivity with codeshare and interline partners including Virgin Atlantic and Singapore Airlines. Flybe will operate into Heathrow’s Terminal 2 (Star Alliance excluding Aer Lingus), ideal for Singapore Airlines connections.

Unlike Little Red, Flybe offers services to London City from both Aberdeen and Edinburgh. Another factor to take into account is that since Little Red’s failed attempt to crack the UK domestic market from Heathrow, Ryanair has re-entered the UK capital-Scotland market with multiple daily flights between Stansted, Glasgow and Edinburgh, growing the competition on one of Europe’s strongest domestic markets.

Current schedules show that Flybe will be operating into Heathrow on its 78-seat Q400s, making it the smallest aircraft operating at the airport. This means that for S17 Flybe will be offering just over 15,000 monthly one-way seats to and from Europe’s busiest airport. What this reveals is that it cannot carry the same amount of passengers that Little Red did from Heathrow (60,000+ passengers in May 2014), however it highlights that it can at least capture the same market size and gain high load factors on the fleet it is planning to fly to Heathrow. Again like its Southend operation, only time will tell to see if Flybe will make a success of its new Heathrow venture. Looking at current ticket costs (on 9 January), a return fare in June on Flybe between Heathrow and Edinburgh is £100.48, while BA is showing a ticket price of £83.96, £16.52 less than its new rival. So with BA already offering more daily flights and lower fares in S17, Flybe will have a tough job in this market to turn a profit.

Flybe's London network for S17.

Flybe’s London network for S17. Overall the carrier will be flying 22 routes from the UK capital in S17, with nine of those being new foreign markets for the regional airline.  However looking at the current outlook in certain markets and competition ticket prices, this map could change again for S18.


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