News: Analysis of Likely Contenders for Durham Tees Valley flights

Flights > News > # 990 (26/09/2006)

As the dust settles on BmiBaby's hasty withdrawal from Durham Tees Valley airport, industry gossip continues about the most likely airline or airlines which are going to fill their shoes.

Here is the Flightmapping.com list of potential contenders:

Flyglobespan

Flyglobespan are the favourites to set up a new base in Durham, following the Scottish airline's aggressive expansion in recent months. When Flyglobespan announced that they would start flights from Durham to Tenerife in November, they said they expected more routes to be announced in the future. One of the biggest stumbling blocks for any airline in establishing a new base is to put in enough new routes to make the economies of scale (especially in marketing, but also in recruiting and aircraft usage) worthwhile. Most no-frills airlines have at least two aircraft at each of their UK base airports, but Flyglobespan intend to start flights from Aberdeen next year with just one Boeing 737. They might easily follow suit at Durham, and grow operations further if demand warrants it.

Likely destinations: Selection of the most popular performing routes already available from Flyglobespan's bases in Edinburgh and Glasgow. Initial focus on Mediterranean sunshine destinations, and possible additional flights to the Canaries.

Domestic routes: Unlikely, following the airline's previous withdrawal from the UK domestic market.

Easyjet

At the recent World Low Cost Airlines Congress, Easyjet chief executive, Andrew Harrison, complained about how airport charges were the airline's single biggest operating cost. Whereas there is little any airline can do to reduce staffing or fuel costs, airport costs can be significantly lowered by switching to a lower priced provider. Easyjet have already pulled back on several routes from Newcastle, and have faced a summer of staffing problems on top of the security problems which have affected all airlines. Jet2 have recently turned up the heat in Newcastle by opening up several routes which sees them competing directly with Easyjet. Considering that any airline is always going to have difficulty moving into a new market, the possibility of a Newcastle-based airline moving their operations down the road to Tees Valley has to be given some serious thought.

Likely destinations: Any move of base operations would have to be backed with a significant expansion of routes in order to present the change as good news for the travelling public. The route network would have to include almost all of the existing destinations which Easyjet serve from Newcastle, together with some new ones. These might well include link ups to other Easyjet strongholds such as Nice or Barcelona, or even a link into Easyjet's new base in Madrid.

Domestic routes: Durham Tees Valley to Stansted would look very unappealing to any traveller based on Tyneside, as there would be lengthy journeys to and from the airport at both ends. Flights from Durham Tees Valley to Gatwick, which is now Easyjet's largest base, might make a lot more sense, as it would enable them to tap in to numerous locations south of the River Thames, as well as providing (generally) faster access to central London. Flights from Newcastle to Bristol and Belfast would probably remain on Tyneside, but be operated by aircraft based in the destination airports.

Jet2

Jet2 might have just announced even more flights from Newcastle, but we expect negotiations over these routes were well underway when the BmiBaby pullout was announced. Jet2's new Spanish routes from Newcastle seem to be turning up the heat on rival Easyjet just as much as they are rubbing salt in the wounds of BmiBaby's departure from Durham. The airline has already built up a steady network of routes from Blackpool, despite having established a base in Manchester last year, so can they really be discounted from offering flights from Durham and Newcastle?

Likely destinations: In addition to the usual holiday spots, we might expect to see city break destinations like Prague and Paris, together with an attempt to take on KLM by offering cheap flights to Amsterdam.

Domestic routes: London Gatwick could be a possibility, as the airline already operates flights there from Manchester, but we doubt this would be a priority.

Flybe

Flybe Chief Commercial Officer, Mike Rutter, recently commented on how the airline wanted to focus on UK domestic routes. We could see potential for several routes into Durham Tees Valley being opened up from Flybe's other UK bases, but many of these already offer flights to Newcastle. In any regional market where more than one airport is available, Flybe have always gone for the hub which is closest to the main centres of population - i.e. Belfast City over International, Glasgow International over Prestwick, Southampton over Bournemouth and Birmingham over Coventry or Nottingham East Midlands. Alternatively, Flybe have set up shop in places where there is little competition, either due to physical boundaries (Jersey, Guernsey), or where the catchment area is too small to attract larger rivals, but the city is sufficiently far from other airports to generate a good customer base (Exeter, Norwich).

If suggestions that BmiBaby are moving out because disposable incomes are lower in the North East than they are in the Midlands are true, then we would expect much of the same reasoning to apply to Flybe. Whereas many of the other regionally focused no-frills airlines tend to operate older fleets, Flybe have spent significant sums on new aircraft. Even if these new planes might be very fuel-efficient, Flybe will want to see a decent return on the capital they have invested, and there are numerous routes that they can open up from Birmingham or Southampton, where they might well be able to command significantly higher fares.

Flybe can compete against 737-operating rivals on routes where a high frequency is just as important as price - for example on flights between Birmingham and Scotland. Durham Tees Valley already has high-frequency links into Amsterdam and London, but there are very few other cities where there might be sufficient demand for Flybe to offer a significant frequency advantage. Paris would certainly spring to mind as one such possibility, but it remains to be seen how many other international destinations Flybe could make work from here.

Flybe have a habit of announcing new routes up to six months before they actually start, and even though the airline has more Q400 turboprops on order, in addition to the Embraer 195 jets which are due to commence operations in October, we doubt that they would have the spare capacity to start up any base operation before the start of next year's summer season.

Likely destinations: Paris and other French regional cities, Geneva, a limited number of Spanish holiday destinations such as Málaga and Alicante.

Domestic routes: Belfast, Southampton, Jersey, Guernsey and Newquay.

Ryanair

Ryanair chief executive, Michael O'Leary, might chomp at the prospect of other airlines failing whilst his company continues to reap record profits, but just because one competitor steps out of the way does not necessarily mean that Ryanair will come in and fill their shoes. Sure, Ryanair might look like the most obvious candidate if one takes the simple assumption that Newcastle International is the main hub airport for the region, and Durham Tees Valley is the low-cost alternative. We understand that Ryanair's Rome flights were popular, and that this route was only pulled because of operational reasons, but with the airline also reducing frequency on its Tees Valley to Dublin flights, how much interest are they likely to have in opening up more routes?

The no-frills giant's current focus seems to be on opening up more bases in continental Europe - speculation is rife about the airline wanting to set up camp in Madrid or Riga. Ryanair's director of new route development, Bernard Berger, recently told Flightmapping that the airline didn't have any major expansion plans from the Northeast, because the catchment area was not large enough to sustain demand.

Ryanair are already very good customers of the Peel airports group, having set up a major base at Liverpool, and open a couple of routes into the new Doncaster Robin Hood airport. We would certainly expect Michael O'Leary's negotiators to use the opportunity that BmiBaby have given them to drive a good deal with the airport operators, and operate a few routes in to Teeside from other Ryanair bases, such as Pisa, Marseille and Frankfurt Hahn. A base could certainly follow at some stage, but we doubt that the Northeast of England is that high up Ryanair's priority list, and we also doubt that Peel would have the need to grovel hard enough to make Ryanair an offer they couldn't refuse.

Likely destinations: Links with any of Ryanair's existing mainland European hubs. If a hub was opened, we'd expect to see a watered-down version of the airline's Liverpool base. Up-and-coming southern European destinations like Granada, Nimes and Alghero in Sardinia, or perhaps destinations like Santander in northern Spain would be most likely.

Domestic routes and Ireland: Flights to London are unlikely to appeal to Ryanair's business model, and there are few other cities in England or Scotland which would support regular flights from Durham using Ryanair’s larger Boeing 737-800 aircraft. If an attractive deal on handling fees is offered, and establishing a base at Durham Tees Valley gave Ryanair some crucial critical mass, then we would expect to see the frequency of Dublin flights go back up, and the possibility of new routes to Londonderry and Shannon.

Thomsonfly

Thomsonfly already have a substantial base presence at several UK regional airports, in addition to their charter operations, which are now moving further over towards the low cost model. Following on from the airline's rocky start in Coventry in March 2004, and the establishment of bases in Bournemouth and at the new Doncaster Sheffield airport last year, Durham Tees Valley would seem like a logical place for Thomsonfly to set up shop.

However, Thomsonfly have recently announced a substantial route expansion largely focused around the more traditional holiday airports like Manchester and London Gatwick. Parent company TUI's UK managing director, Pete Rothwell, had commented last year on his desire to move the airline into more established markets, especially around the London area. As Thomsonfly appears to be much more focused in other areas, we think that it is less likely that they would want to commit the necessary investment to set up a base in Durham.

Likely destinations: Similar route network to the airline's current base in Doncaster, focused largely on Mediterranean holiday destinations, but also including Grenoble for access to the Alpine ski resorts, and Paris Orly.

Domestic routes and Ireland: Jersey might be a possibility, but other routes would be unlikely, especially as the airline has previously pulled out of several routes to Ireland from elsewhere in the UK.

No base airline

There is every chance that no new airline will announce a base operation at Durham Tees Valley before the end of the year. However frantically airport management work to find a replacement, airlines already have committed to schedules and marketing budgets, and even though many carriers can quickly move onto one particular route, it takes a great deal more time and planning to set up a base operation.

Conclusion

As we think it likely that Flyglobespan were already making plans to offer more routes from Durham before the BmiBaby announcement, we would still place them as the favourites. Most of the other airlines listed above would probably be much more likely to make a switch at some stage next year, rather than in the immediate future.

We also have to consider the possibility of more than one airline coming in at the same time. No-frills airlines don't usually like to collaborate with each other, but there might well be some routes which will be more suited to smaller aircraft, and others where slightly larger jets would be more appropriate.