Come fly with us … we’re cheaper

Date: 05/04/01

SMALL regional airports are on a roll thanks to the phenomenal success of low-cost, no-frills airlines and increasing congestion at the major hubs.

Carriers led by Ireland's Ryanair fly to small airports to take advantage of low landing fees, while established airlines such as British Airways and KLM are launching short-haul European services from regional airports to avoid their crowded hubs and protect their market from the newcomers.

Ryanair recently chose Charleroi near Brussels as its first base in continental Europe and plans to add two more in the next three years as it attempts to double passenger volumes to more than 14 million by 2004.

The major hubs still retain a stranglehold on long-haul traffic but are facing tough competition from regional airports such as Manchester, Munich, Lyon Satolas and Milan Malpensa. This has put a fancy price on second-tier airports, particularly in Britain which boasts a lively mergers and acquisition market.

In the past four months alone, TBI, an airport management company whose portfolio includes Orlando Sanford International in Florida and Skavsta near Stockholm, recently bought Barclays Bank's 65% stake in Luton airport, the easyJet hub north of London.

Grupo Ferrovial, a Spanish construction company, and Macquarie, an Australian bank, paid €375 million for Bristol International Airport, and Manchester airport paid National Express, a bus and rail company, €385 million for East Midlands and Bournemouth airports.

Small regional airports are on a roll thanks to the phenomenal success of low-cost, no-frills airlines and increasing congestion at the major hubs.