Declining Cork airport needs new direction

Stephen Rogers and Eoin English examine Cork Airport’s decline and its attempts to take off again

WITH the loss of yet another route this week and a continued decline in passengers going through Cork Airport, the ability for the airport to compete on a level playing field with Dublin and Shannon is once again being questioned — but what lies behind Cork’s apparent passenger decline and are the problems surmountable?

Last night, Fianna Fáil leader Micheál Martin became the latest to claim that: “Dublin and Shannon are surging ahead while Cork Airport is in decline under this Government.

“Development of operations out of Cork Airport is simply not a priority for this Government,” Mr Martin said. “Passenger numbers have been consistently falling and there has been a lack of promotion of the airport.”

It is true that, on first viewing, the disparity between passenger-figure growth at the country’s three main airports, as Cork declines, appears stark.

From a peak of 3.25m passengers in 2008, Cork airport looks set to drop to 2.1m this year. Shannon has seen a slight increase, from 1.3m passengers in 2012 to 1.4m last year. Dublin Airport handled 20.17m passengers in 2013 — up 6% on 2012. Cork has seen its passenger numbers slump by almost 5% since the start of the year alone, with July figures down almost 6%. That compares to a 15% increase in passenger figures at Shannon for the first six months of 2014.

However, if one delves behind the headline numbers, there are a number of factors which have lead to the decline at Cork.

The biggest impact between 2008 and now has been the loss of the Cork-Dublin route which, at its peak, accounted for half a million passengers per year.

In the last 12-18 months, it has been the loss of Wizz Air, which used Cork as its only Irish hub to a number of Eastern European locations and which accounted for 11% of the market. When Ryanair came in for a piece of its action, Wizz Air departed. With Wizz Air gone, Ryanair then moved those flights to Shannon. That is estimated to have cost Cork Airport 70,000 passengers this year so far, and will reach 150,000 by year end.

If it wasn’t for a combinations of those factors alone, aviation sources believe the airport might have been talking about growth this year.

In the almost exactly eight years since the fanfare of the first passengers travelling through Cork’s new terminal, commentators have frequently referenced not only the repayment of the €113m cost of the terminal but also the continued control of the airport by the Dublin Airport Authority, as reasons for the stifling of growth in Cork.

Joe Gill, an expert on the aviation industry recently wrote in this newspaper: “In the same way that puppies are not just for Christmas, expensive airport terminals are in place for decades and carry with them residual borrowings. This is the key legacy item that is holding back Cork Airport’s development now, because the capital plus interest costs of that debt are restricting the airport’s ability to compete for new traffic.”

Mr Gill said anyone who wants to ignite air traffic in Cork — an airport reliant on short-haul traffic — must formulate a way to sharply reduce the debt attached to the terminal project. “If it can be cut then the lower costs of running the facility can be converted to lower prices that attract airlines. Without finding a solution to that debt I suspect the growth trajectory in volume at the airport will be pedestrian.”

Cork Airport is charging €8.60 per departing passenger while other airports of similar size across Europe charge upwards of €9.

Airport sources say Cork is holding its own with regard to its flights to and from Britain. However, Europe is a stumbling block. Part of the reason for that is that Shannon, free from Dublin Airport Authority and debt-free, is able to offer discounted charges to airlines.

In February of this year, Ryanair shelved plans to increase its services at both Cork and Kerry airports. At the time, its outgoing deputy chief executive Michael Cawley said charges remained too high. The bad news for Cork came at the same time as Ryanair added 300,000 and 80,000 extra passengers at Shannon and Knock alone.

The airport has gone on the offensive on two fronts. Firstly, with a strong passenger density in Cork county, it has begun trying to market to all of the 1.6 million people living within 90 minutes of the airport. Secondly, it is pitching even more strongly to airlines for European, and even US routes.

Next month, it will attend the World Route Development Forum in Chicago, where it has meetings set up with 15 airlines. According to Kevin Cullinane, head of communications, those include airlines which the airport management have met before, as well as a number of new contacts. They also include airlines which could start transatlantic routes from Cork.

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