Lull at London City airport stokes fears of coronavirus impact
Global business travel – and airline profits – are in deep trouble from coronavirus if the evidence offered at London City airport on a weekday morning is indicative of the sector’s travails.
On Wednesday, the business travel-dominated airport in the shadow of Canary Wharf had as many check-in staff as there were passengers, with customers reporting a decline in demand from European hubs such as Amsterdam and Frankfurt.
“The plane was half-empty,” said Andrew Ross, who works in construction in the Netherlands and flies from Amsterdam to London a few times each year. “I wouldn’t have expected it – it’s usually busier. But it was nice and quiet.”
Just landed from Frankfurt, Kim Vaughan said there were fewer than 30 passengers on her flight. “It was a bigger plane, and it was almost completely empty,” Vaughan said. Jilles Visser, a Dutch electrician on a work trip from Rotterdam, thought his BA-operated flight was “very empty”.
Barbara Bullmann, a teacher from Dortmund, was leading a group of 34 schoolchildren on a trip to their partner school in Scotland and was connecting through City airport on the way to Glasgow.
She said the school had discussed postponing the trip due to coronavirus concerns but had not wanted it to get in the way of celebrations to mark 30 years of exchanges between the Scottish and German schools.
Airlines have experienced a drop in global business travel, far beyond Asia and the original source of the outbreak, as companies have imposed travel restrictions and big industry events have been cancelled.
London City airport, which is owned by a Canadian investment consortium, carries 4.5 million passengers a year. Most of them fly to traditional business destinations, although on Wednesday passengers in corporate attire mixed with a few families and holidaymakers, plus a couple of solitary travellers wearing face masks.
Business travel differs from leisure travel, according to the aviation consultant John Strickland. “Once it is lost it is lost. I think some companies will have taken the chance to economise on budgets if they can,” he said. “Some events which can be substituted by a phone call or a video conference won’t be repeated.”
Strickland points to lost travel due to the cancellation of large trade shows including the ITB travel fair, which was due to take place in Berlin from 4-8 March, and Barcelona’s Mobile World Congress.
Business passengers generate the majority of revenue for airlines, even though 80% of travellers tended to take a flight for leisure purposes, said Chris Tarry, an aviation analyst.
“The business market is important as it is less sensitive to fares. The impact is more immediate as they book much nearer to the date. If there are travel restrictions that will break through to the airlines very quickly,” he said.
Airline shares have been among those badly affected by the deep sell-offs on financial markets at the end of February, as investors panicked that the spread of Covid-19 could dent global growth.
While the spread of coronavirus continues, the longer-term impact on passenger numbers is unclear. The aviation industry has previously experienced other severe drops in demand, such as those related to the Sars outbreak in 2003 as well as 9/11.
Analysts say many airlines are waiting to see how passengers react over the busy Easter travel period, a time when many go abroad for leisure.
“Once it is over, then we will see stimulation of the market – lower fares,” said Tarry. “At a certain point, price overcomes fear. People think, that is a bargain, I’ll go.”