Glasgow Airport North America route importance flagged

[Iain]

No, it’s because the airlines are not interested enough at the moment.

That's another way to deflect and absolve AGS of blame. If they're "not interested enough" part of that is because what AGS is offering isn't interesting them enough.

They can’t incentivise airlines to choose one airport to land at rather than the other. But Stuart Patrick and a Glasgow business consortium could.

And the people who can most incentivise airlines to choose GLA are AGS, the people who actually own and operate the airport - but clearly they aren't doing that well enough.

[Bearsden]

No, it’s because the airlines are not interested enough at the moment.

That's another way to deflect and absolve AGS of blame. If they're "not interested enough" part of that is because what AGS is offering isn't interesting them enough.

They can’t incentivise airlines to choose one airport to land at rather than the other. But Stuart Patrick and a Glasgow business consortium could.

And the people who can most incentivise airlines to choose GLA are AGS, the people who actually own and operate the airport - but clearly they aren't doing that well enough.

I agree with both of Iain's comments

The purchase price paid for AGS ten years ago and owners' required return on investment set an EBITDA bar which left little in the bank to finance significant incentives to develop / retain routes. The closure of Ryanair's small base unbeknown to GLA management on the same day that EDI's base was expanded was for me the key turning point pre Covid. Any incentives would undoubtably cost money in the short term and direct revenue in the long term but the bottom line is protected in due time with an increase in indirect revenue and the fixed costs being spread over a larger denominator and longer term a widening gap over the competitors.

I noticed that Andy Cliffe has been quoted "Over the past 10 years, Macquarie and Ferrovial have played a central role in unlocking our full potential." . . . Does he mean 'We are a domestic, a few international hubs for transfer traffic, and outbound holiday airport group . . . that's it, don't expect any more.' Or does he mean 'We meximised our EBITDA and Macquarie and Ferrovial didn't take a bath on the sale.'

As I have said in this forum before, paying £1.53 billion for AGS next year doesn't change the EBITDA bar.

[Clive]

No, it’s because the airlines are not interested enough at the moment.

That's another way to deflect and absolve AGS of blame. If they're "not interested enough" part of that is because what AGS is offering isn't interesting them enough.

They can’t incentivise airlines to choose one airport to land at rather than the other. But Stuart Patrick and a Glasgow business consortium could.

And the people who can most incentivise airlines to choose GLA are AGS, the people who actually own and operate the airport - but clearly they aren't doing that well enough.

That isn’t clear, with respect. As you know aviation charges are a small part of the deal and of course GLA bosses will be bending over backwards to land any USA links. It would be fairly obstinate to assume otherwise especially given that we now accept that the North American airlines can happily serve the Scottish market from Turnhoose.

[Iain]

That isn’t clear, with respect. As you know aviation charges are a small part of the deal and of course GLA bosses will be bending over backwards to land any USA links. It would be fairly obstinate to assume otherwise.

So you're saying that Stuart Patrick and the Chamber of Commerce (who I doubt have large amounts of cash at hand) could successfully financially incentivize airlines to fly to GLA, but AGS, the actual owners and operators of the airport can't. I'm sorry, that doesn't make any sense.

There is a wide range of evidence that charges, discounts, financial incentives etc. do make a difference. For instance how else would PIK (and many similar airports) exist if low charges and incentives don't matter? You've mentioned that you think FR might have signed a new deal at PIK last year - do you think that this deal is more expensive than they could get at GLA and they're flying to PIK cause it's better than GLA, or are they there because it's cheap?

I do agree that some airlines see these things as more important than others, but even large high-end carriers can be attracted with incentives. A clear example of this is the large incentives handed out by the Welsh government to QR to fly to CWL. Moreover, articles I've linked to in the forum show the welsh government is planning to give £206 Million to CWL management over the next 10 years so the airport can provide charge discounts and incentives to airlines to start new routes. So they clearly believe financial incentives and charge discounts work.

given that we now accept that the North American airlines can happily serve the Scottish market from Turnhoose

Who's "we"? I never said that - and if we read the article the start of the thread it's pretty clear that Stuart Patrick and the chamber of commerce - and indeed Andy Cliffe - don't believe that either.

As I have said in this forum before, paying £1.53 billion for AGS next year doesn't change the EBITDA bar.

How does this bar sit for other UK airport sales, including EDI? It would appear a number of owners have paid high prices for UK regional airports recently, so should they not hit similar issues?

Both ABZ and SOU seem to be much smaller than the aiports that the new owner currently operates - and indeed even GLA is a bit smaller. As such I wonder how the two smaller airports will fit in their portfolio. Maybe they're looking to get into operating smaller airports, but I do wonder if in time they might divest themselves of ABZ and SOU, a move which should also recoup some of their initial outlay.

[Clive]

That isn’t clear, with respect. As you know aviation charges are a small part of the deal and of course GLA bosses will be bending over backwards to land any USA links. It would be fairly obstinate to assume otherwise.

So you're saying that Stuart Patrick and the Chamber of Commerce (who I doubt have large amounts of cash at hand) could successfully financially incentivize airlines to fly to GLA, but AGS, the actual owners and operators of the airport can't. I'm sorry, that doesn't make any sense.

There used to be a group of business leaders, council and airport boss and other stakeholders who met to do just that. Can’t remember what it was called but it was during Amanda’s time. I don’t know if there’s still anything similar. But yes, Stuart Patrick and Glasgow and Renfrewshire councils should be doing this to develope the business case for any airline wanting to serve Glasgow and the west.

There is a wide range of evidence that charges, discounts, financial incentives etc. do make a difference. For instance how else would PIK (and many similar airports) exist if low charges and incentives don't matter? You've mentioned that you think FR might have signed a new deal at PIK last year - do you think that this deal is more expensive than they could get at GLA and they're flying to PIK cause it's better than GLA, or are they there because it's cheap?

We can’t know the details but if PIK charged zero and GLA matched it then maybe the maintenance facilities swung it. Or maybe EDI have a golden handcuffs deal under which Ryanair can’t grow at GLA. We’d all love to know because not basing at GLA and not going gangbusters here on all the open goals doesn’t add up otherwise.

I do agree that some airlines see these things as more important than others, but even large high-end carriers can be attracted with incentives. A clear example of this is the large incentives handed out by the Welsh government to QR to fly to CWL. Moreover, articles I've linked to in the forum show the welsh government is planning to give £206 Million to CWL management over the next 10 years so the airport can provide charge discounts and incentives to airlines to start new routes. So they clearly believe financial incentives and charge discounts work.

They do but airport charges are small and of course there are incentives offered to get desirable new starts. As I said before, it’s daft to assume otherwise.

Sadly ScotGov can’t aid one airport like the Welsh Govt can in Wales, because we have a number of competing airports operating on a commercial basis.

given that we now accept that the North American airlines can happily serve the Scottish market from Turnhoose

Who's "we"? I never said that - and if we read the article the start of the thread it's pretty clear that Stuart Patrick and the chamber of commerce - and indeed Andy Cliffe - don't believe that either.

Well I’m glad. That makes about 4 of us. Of course there must be a case to serve the likes EWR or JFK from GLA even if it’s just for those who don’t want to use EDI.

[Planeenthusiast]

Well I’m glad. That makes about 4 of us. Of course there must be a case to serve the likes EWR or JFK from GLA even if it’s just for those who don’t want to use EDI.
[/quote]

UA and DL both received incentives to operate to/from GLA. They both ditched GLA to concentrate and grow significantly to/from EDI. Incentives help for sure but they’re not everything. It’s pretty clear the right people were and are not at GLA to secure significant new or regain business. The new owners may have plans to change this of course. It’s going to be really tough to secure/win American routes given how established the legacy carriers are at other airport.

[Bearsden]

[/quote]
How does this bar sit for other UK airport sales, including EDI? It would appear a number of owners have paid high prices for UK regional airports recently, so should they not hit similar issues?
[/quote]

The 2023 P&L for EDI shows an Operating Profit of £144.7m (52%) compared to GLA £38.7m (30%) so higher volumes and higher indirect revenue returns make a huge difference eg an inbound passenger from the USA might hire a car and is very likely to maximise duty free purchases and buy some overpriced shortbread etc

[billyg6]

UA and DL both received incentives to operate to/from GLA. They both ditched GLA to concentrate and grow significantly to/from EDI. Incentives help for sure but they’re not everything. It’s pretty clear the right people were and are not at GLA to secure significant new or regain business. The new owners may have plans to change this of course. It’s going to be really tough to secure/win American routes given how established the legacy carriers are at other airport.

I'm sure the new owners won't go into this blindly , and with Jetblue being their biggest customer at other airports , I wouldn't be surprised to see an early effort to shift them to Glasgow. If one airline can be moved , hopefully serving two or three destinations , then a whole new can of worms will be opened !

[TonyM90]

I don't see any way GLA takes long haul business from EDI at this point. I wish it could, but I'm sorry I just don't see it, especially with the push towards pre-clearance. Also as far as new business we should have a chance, but the airlines have been acting like sheep for ten years instead of thinking for themselves. If you take Breeze for example, to me, back of a fag packet business analysis, it makes far more sense to go into an open market like GLA and corner that market than go to EDI and be a fringe player with all the direct flights to the main airports, plus the far greater number of stop over options. I think people within GLA catchment would be more willing to tolerate flying into Providence or White Plains or something if it means avoiding a drive to Edinburgh or using connections and there is strong enough demand to fly to these cities without relying on further connectivity. NYC for sure year round, BOS/New England seasonally, for instance. Likewise going into English or Irish regionals as opposed to going to LHR/LGW or DUB. Why even bother? Its a completely saturated market and the approach Norwegian took a few years back as regards to flying from those to secondary airports didn't exactly pay off.

We can get some LCC business back if the management are aggressive enough, that is no longer a priority for EDI, especially a lot of the outbound stuff which competes just as well at GLA despite much lower frequency service at the moment.

[Speedbird Julie]

UA and DL both received incentives to operate to/from GLA. They both ditched GLA to concentrate and grow significantly to/from EDI. Incentives help for sure but they’re not everything. It’s pretty clear the right people were and are not at GLA to secure significant new or regain business. The new owners may have plans to change this of course. It’s going to be really tough to secure/win American routes given how established the legacy carriers are at other airport.

I'm sure the new owners won't go into this blindly , and with Jetblue being their biggest customer at other airports , I wouldn't be surprised to see an early effort to shift them to Glasgow. If one airline can be moved , hopefully serving two or three destinations , then a whole new can of worms will be opened !

JetBlue won't be coming to GLA, unfortunately...