Hawks and doves: Unlike some European countries several major airlines compete in the UK domestic market. British Airways, bmi Group (bmi, bmi Regional and bmibaby), easyJet and Flybe all have significant competing shares. Flybe’s acquisition of BA Connect in 2007 made it second biggest after easyJet. Following its new deal with Loganair, it will move very close to the top position and if it ends up acquiring either bmi Regional and/or bmibaby, it will become the leading UK domestic airline by some way.
In 2007 the UK domestic air travel market ranked as the third largest in Europe with 25.5 million passengers, some way behind Spain (44.5 million) and just behind Italy (with 28.0 million). Germany with 23.8 million and France with 23.2 million are not far behind. However, while Spanish domestic traffic grew by 9% last year, and Italian and German domestic passenger numbers were up 8% and 6% respectively, UK domestic air traffic fell by around 2%. A significant factor in this was the increase in February 2007 of the government imposed Air Passenger Duty (APD) from £5 to £10 for short-haul flights.
Segmenting the UK domestic market into three separate categories reveals some significant patterns. Domestic routes from Heathrow and Gatwick grew slowly between 1996 and 2004 and have since started to decline to the extent that domestic passenger numbers from these airports in 2007 were 10% lower than in 2004. Domestic traffic from London’s secondary airports at Stansted, Luton and London City trebled between 1996 and 2001 thanks to easyJet, Go and Ryanair. Since 2003 domestic traffic across these airports has remained relatively stable.
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