Airline passenger news and views

The market pundits often claim that prices go up and down in response to market demand.  In the case of Stansted, the opposite is true and demand for its services are falling as its charges continue to increase.

Already, Ryanair has significantly reduced its Stansted based services and Air Berlin has moved its Hannover and Nuremberg services to Gatwick. Multiple other airlines are following this trend and Air Asia X's budget long-haul Kualalumpur service is another casualty.

Stansted was one of the great success stories for budget travel. An underutilised airport in Essex within easy reach of London was transformed into a vibrantly busy hub under the control of Spanish owned BAA. 

Progressive increases in charges levied on the airlines eventually broke the proverbial camel's back and the now the decline is potentially irreversible.

Stansted's ability to recoup income from its passengers is also limited because the mix is dominated by budget travellers, who tend not to be big spenders in the airport's shops and restaurants.

BAA also have an investment blackhole in that they have built up a land bank around the airport in the hope of a second runway expansion that is now not going to happen in the foreseeable future.  Add this to BAA's other regulatory problems of forced sales of either Edinburgh or Glasgow and we have the beginnings of a crisis.

Will Stansted survive? I think that question hangs in the balance. Certainly BAA have to recognise that their era of expansion is at an end.  

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