Could London City be a better business option for Yorkshire as BA cuts frequencies to Leeds Bradford from London Heathrow?

The decision by British Airways (BA) to significantly reduce its capacity on its domestic route between London Heathrow and Leeds Bradford highlights that usage of slots at the UK hub continues to be based on their commercial value, as we still await final approval for the construction of a new runway at the airport.

BA has this week confirmed it will cut flights on the route, its shortest domestic connection in the UK, from 20 a week to just ten, reducing frequencies from an initial three a day when it was first launched to just daily, with a second rotation on what BA says are the “busiest days”.

This may come as no surprise to the many observers who saw the route as little more than as an avenue to protect the carrier’s pool of slots at the heavily-congested Heathrow Airport. However, it did have a pedigree having been previously flown by UK carrier bmi british midland up until the end of the last decade when increasing competition from an enhanced domestic rail product between London and Yorkshire resulted in its closure from March 2009.

The bmi decision was at the time influenced by its need to use its limited London Heathrow slots to serve more lucrative European and North Africa routes. But, in its last full year of operation (2008), it carried over 125,000 passengers on this route, highlighting a strong market that would also be stimulated by BA’s stronger connecting network.

Official data from the UK Civil Aviation Authority (CAA) data shows that over 715,000 passengers have travelled on the route since BA resumed service in Dec-2012 with annual levels peaking at 165,000 in 2016. Over the first eleven months of 2017 traffic levels were up +1.2% versus the same period the previous year, showing stable demand on the route.

CHART – The total number of passengers flying between Leeds Bradford and London Heathrow has risen on a daily basis since British Airways resurrected the former bmi British Midland route in late 2012Source: The Blue Swan Daily and UK CAA

Despite these numbers, BA says the frequency reduction is to “meet demand” on the route. It is clear that the competition with the railways is intense and attracting corporate travellers between Leeds and London away from the train was always going to be difficult for BA.

The success of this route was always about the connecting traffic with BA particularly targeting Yorkshire-based passengers flying to destinations across the world to destinations not currently available from Leeds Bradford. The Blue Swan Daily analysis last year highlighted Geneva, Brussels, Paris, Hong Kong and New York as the largest connecting markets during H1 2017.

While BA is retiming the morning service to maximise connection opportunities, passengers will ultimately see a reduction in transfer options and in some cases much longer waits, pushing many to perhaps travel across the Pennines  to Manchester where BA retains a multiple daily service to London Heathrow.

But, the data shows there has also been a sizeable market that used the air service for its local links and the question is could these passengers be better served with a more regular service to an alternative London airport. While Heathrow, would always be the best option due to its connection options, an alternative could be London City, directly linking the financial and legal communities of the south and north of England.

Leeds has become a business hot-spot following recent regeneration. For example, Leeds has the UK’s fastest growing legal sector as it establishes itself as the country’s second-biggest law hub, behind London. Office for National Statistics figures show the number of legal jobs in Leeds grew 20% between 2010 and 2015, four times the rate the sector grew in London.

BA has a dominant position at London City through its BA CityFlyer operation and already has links to among other UK points, Edinburgh and Isle of Man, both of which have strong financial communities. According to the CAPA – Centre for Aviation Fleet Database, the airline operates a fleet of 23 regional aircraft, dominated by the Embrear E-Jet family, including both the E170 and E190 variants.

CHART – BA CityFlyer operates a fleet of regional jet and turboprop equipment and although headquartered in Manchester, its main focus is at London City AirportSource: CAPA – Centre for Aviation Fleet Database (data: as at 08-Jan-2018)

Alongside a London City network that stretches to 30 destinations (including seasonal routes), BA CityFlyer is driving better utilisation of its fleet by using the aircraft on predominantly leisure routes from the UK regions (including Birmingham, Bristol, London Stansted and Manchester) at weekends when business demand in and out of London City is reduced and a time during which the airport is actually closed (from 11:30UTC on Saturdays through to 11:30 UTC on Sunday).

London City may suffer its own capacity constraints in the morning and evening peaks and traffic levels have stalled over the last year and actually slipping by -0.8% across the first eleven months of 2017 versus the same period last year.  But the operation of a 76-seat E170 or 98-seat E190 on an at least twice daily rotation to and from Leeds Bradford at these peak times could be a real option to help maintain Yorkshire’s business connectivity with the UK capital and avoid corporate travellers being pushed back onto the UK’s already overcrowded railway system.