Airline Shareholders Take Notice Before Next Q… A Crash Landing May Be Coming

This will not be a Sully landing !

Britain’s airports were hit by recession and high fuel prices last year, with 4.6 million fewer people taking to the air, the first passenger decline in 17 years.

The escalating cost of jet fuel in the first half of 2008 pushed up ticket prices while recession delivered a further blow to the air travel market in the second half. The 1.9 per cent decline in passenger numbers was the first drop since 1991 and only the fourth since the end of the Second World War, the Civil Aviation Authority (CAA) said.

London’s airports were hit particularly badly, with Stansted showing a 6 per cent drop, equivalent to 1.4 million passengers. Gatwick reported a 2.8 per cent drop as some airlines based there — including XL, the holiday group, Zoom and Oasis — went into bankruptcy.

London’s loss was Paris’s gain as Aeroports de Paris, which operates Charles de Gaulle and Orly, increased passenger numbers by 0.8 per cent.

The big fall in passenger numbers at Stansted and Gatwick is a serious concern for BAA, which owns them. BAA has put Gatwick up for sale and its price tag of about £1.8 billion could fall if bidders believe that passenger numbers will continue to decline. BAA is likely to be forced to sell Stansted when the Competition Commission delivers its report on airport ownership this month. It is expected to find that BAA’s ownership of Heathrow, Gatwick and Stansted has been bad for passengers and airlines.

Traffic is likely to continue to decline, Harry Bush, the CAA group director of economic regulation, said: “The fall in passenger numbers is to be expected in light of the worsening economic situation during 2008. The early indications are that the larger falls seen in the last quarter of 2008 are continuing into the new year, with the prospect of declining traffic in 2009 overall.”

Not all airports in Britain suffered a drop in passenger numbers. Luton, for example, managed to increase traffic by 255,000 people, a 2.6 per cent gain. London City managed a 12 per cent rise, although the CAA said that its growth had slowed dramatically in the final quarter. The CAA highlighted that domestic air travel had fallen by 4.8 per cent, or 50 million journeys, as passengers switched to trains.