Mavericks turn tables at Cork Airport

Any regular reader of this column will know I have a tendency to crank on about Cork Airport.

Part of that has been frustration with such an underperforming infrastructure asset proximate to the city.

Some of it relates to the fact that a huge mistake was made funding an all-new terminal, which saddled the airport with excessive debt for years.

The news is altogether more interesting and positive in recent weeks.

The decision by CityJet to launch a Cork-London City direct service was one important positive shift from the remorseless sequence of route culls and cutbacks.

The second, even more exciting move, is the decision by Norwegian Air International (a subsidiary of Norwegian Air Shuttle) to commence direct service from Cork to New York and Boston during 2016.

The latter is a remarkable heel against the head. Cork, unlike Shannon and Dublin, has no customs pre-clearance facilities, so the logistics of Atlantic flights are more challenging. Moreover, none of the incumbents flying from Ireland to the US have been willing to develop Cork links.

It has taken maverick disruptors to change the momentum in Cork. Bjorn Kos, the CEO of Norwegian Air Shuttle, is known for thinking outside the box.

He bought all-new long-haul Boeing 787s to kick off low-costs flights from Gatwick a couple of years ago. He continues to grow the Norwegian’s short-haul network around Europe with a mega order from Airbus and Boeing.

In Cork, Norwegian will deploy 142-seat Boeing 737s with a number of business class seats and larger belly fuel tanks to operate the Boston and New York legs.

Once the carrier takes delivery of all new MAX aircraft, the successor for the venerable 737, they will be deployed at Cork too.

Mr Kos believes regional cities can sustain so-called thin routes because the new technology airplanes are very cheap to operate and can be made profitable with low absolute passenger numbers.

It is now up to the tourism and business interests in Cork and the Irish-American ecosystem in New York and Boston to help make this service a success.

Direct links from the US East Coast to Cork have clear and unequivocally positive implications for foreign direct investment and tourism in the area if the flights are filled.

On shorter hops, CityJet has opted to join the competitive battle in Cork by focusing on airports where it has competitive advantage.

CityJet operates Avro RJ aircraft that can fly to the short-runway London City Airport which cannot be serviced by the bigger B737s and A320s flown by Ryanair and Aer Lingus.

Next year, CityJet is looking at destinations from Cork to Southern Europe that may be attractive for its aircraft and not so much for others.

CityJet is undergoing a renaissance since Pat Byrne returned to direct the company. Aside from progress at Cork, it has also negotiated a deal to provide feeder services to SAS in Scandinavia and some fleet replacement is underway too.

With fuel costs low currently, and likely to remain so well in to 2016, airlines such as CityJet and Norwegian have room to manouvere profitably and establish new routes and services.

Cork needs to keep the hammer on, now. Aer Lingus, under IAG, is exploring new routes and connections and has recently upped frequencies and service from Cork. More of that would be welcome.

Ryanair is still in the hunt for a costs deal that would unleash its scale in the south too.

All of these developments once again underscore the benefits of competition in the transport industry.

The separation of Shannon Airport gave it new life from which it has grown and prospered in the last two years.

CityJet and Norwegian are putting it up to the incumbents. Aer Lingus has a new licence to grow with IAG and Ryanair is uber competitive on a permanent basis. Cork is fighting back. Long live liberalised markets.

Joe Gill is Director of corporate broking with Goodbody Stockbrokers. His views are personal.


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