Cork Airport is in a competitive market but quality and better business always win out. Through improved marketing abroad, it will thrive again, writes Kevin Toland.
There are a number of myths surrounding Cork Airport and it is important when discussing the airport’s current position that we focus on the facts.
There is a myth that management in Dublin doesn’t want Cork Airport to succeed.
This is not true. It’s a core business within the Dublin Airport Authority (DAA) and we are firmly focused on returning it to passenger growth.
There is also a myth that the debt is somehow holding the airport back.
This is also untrue. The debt, which was incurred as we invested €200m to build an entirely new terminal next to the existing runways, has and is being serviced by DAA. It has had no impact on day-to-day operations or pricing structure.
Cork Airport is the key gateway to the south of Ireland and is the State’s second largest airport after Dublin, with a strong local and regional hinterland of about 1.2m people living within a 90-minute drive of the airport.
Last year, it welcomed 2.1m passengers, a decline of 5% on 2013 figures. Passenger numbers declined by about 110,000 in 2014. The movement of a number of central European routes from Cork to Shannon Airport resulted in the loss of about 102,000 passengers.
We have indicated previously that this year is likely to see a further 5% decline in passenger numbers. However, we are expecting the airport to return to passenger growth in 2016.
Cork Airport is a hugely efficient airport operation, providing award-winning services 24/7 with a staff of 235 people. It has the country’s second largest route network, with flights to 44 scheduled destinations, and excellent links to three European hubs — London Heathrow, Paris Charles de Gaulle, and Amsterdam Schiphol. It has more routes and destinations than any other airport in the State, apart from Dublin, and is about 30% larger than the Republic’s third largest airport.
It does, however, face some significant challenges. Much has been made of the fall in passenger numbers at Cork since the peak during the Celtic Tiger in 2008. Since then, passenger traffic has declined by 35% or 1.1m passengers. Traffic at Shannon has declined by 55% or 2m passengers since its traffic peak.
The economic recovery that is being experienced in Dublin is taking longer to permeate to the regions, but there are strong signals that things are now turning. As Cork Airport is particularly dependent on the domestic market for its business, it was most exposed to this slower recovery in the regions.
Domestic traffic accounted for about half a million passengers at Cork Airport at one point, or 15% of its total traffic. The improved road and rail links between the two cities means that this business will never return to anything approaching that level, even if a Cork-Dublin air service is restored in the future.
There is also a particularly competitive airport market in Munster with Cork, Kerry, Shannon, and, to a lesser extent, Waterford airports all competing for the same passengers. Short-term tactics by one airport operator are clearly distorting the market at present.
I know from my days in the dairy industry that operators with ageing facilities will often discount heavily and use alternative income streams to support a business. But, ultimately, quality and a better business always wins out.
That is one of the reasons that I’m very positive about Cork Airport’s long-term future. Cork has Munster’s best airport infrastructure and provides a wonderful customer experience in world-class facilities. Cork is the most efficient airport operator in the region and also has the strongest hinterland.
Cork Airport is the natural international gateway to the south of Ireland, which is one of this country’s best tourist destinations. It is also perfectly positioned at the start of Ireland’s Wild Atlantic Way and the southern tip of Ireland’s Ancient East, both of which are being strongly promoted by Fáilte Ireland.
We need to add new routes and grow passenger numbers at Cork and I am confident we can do so. Cork has added new routes this year and we’re expecting to announce further routes for next year.
Cork Airport’s passenger charge of €8.60 has not increased in 10 years and is 17% cheaper than Dublin Airport. New routes at Cork pay no charges whatsoever in the first year of operation, as the airport shares the risk of launching a new service with its airline customer. The full charge only applies in year six of a new route, meaning that the average airport charge for the first five years of a new service is just €3.50.
But Cork Airport alone cannot guarantee passenger growth. We’re just one element of a wider aviation system. For our part, we run the airport as efficiently as possible, constantly promote Cork to new airline customers, and encourage our existing partners to grow their business in the county. We also strive to provide an excellent product for both passengers and airlines.
Ultimately, airlines make the final decision on which routes to operate. Airlines have to have enough people travelling to support a service and those customers have to pay enough for their tickets to make each route viable.
We work with airline partners to promote their services and assist them to help them sell more seats, but the existing routes at Cork and any new services need to be supported by the travelling public.
From our standpoint, it is clear that one element of the current mix isn’t working. Two out of every three passengers that use Cork Airport are Irish residents. The inbound tourist market into Cork and the wider region is seriously underperforming.
Given the wonderful tourist product available in Cork and the south of Ireland, it is astonishing that only about one in three passengers using the airport live abroad. That statistic is all the more concerning given the inbound element includes Irish citizens living overseas as well as foreign visitors.
There is no doubt that we need more targeted and better promotion of Cork and the south of Ireland region overseas. Google ‘Cork tourism’, for example, and you’ll get competing websites from Cork City Council, Cork County Council, a West Cork tourism site, and a link to Fáilte Ireland’s local information office in Cork city. Search for ‘visit Ireland south’ and it’s no better.
We are willing to play a leading role in tackling this issue. But to solve the problem we also need agencies such as Tourism Ireland and Fáilte Ireland and all of the local tourism industry stakeholders to work together to deliver a proper joined-up action plan to grow visitor numbers.
Cork Airport also needs support from the local region. Some of the recent online chat descended into overly negative commentary and this was beginning to damage the airport’s attempts to grow traffic.We all want the same thing — a vibrant growing Cork Airport — and we’ll happily take constructive criticism. But the notion that Cork Airport was in danger of closing was complete nonsense.
Cork Airport will continue to focus on winning sustainable business and doing what is right. I am certain that this strategy will expand the route network and return Cork Airport to passenger growth for the long-term benefit of the airport, the region, and the State.
Kevin Toland is the chief executive of the Dublin Airport Authority
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