7. Stakeholder Consultations
7. Stakeholder Consultations
Introduction
7.1. The study brief notes that the primary interest in the airport amongst local stakeholders can be found amongst the business community in the key sectors of the Dundee economy. As described in the preceding chapter these include a number of businesses with UK-wide and international markets, tourism interests, the Universities and other public sector organisations that have some propensity to fly. In order to capture focused, up to date qualitative information on the travel needs of these organisations and the local business community to set alongside the analysis of historic CAA data in Chapter 5, the consultancy team undertook a series of one-to-one interviews by phone and in person, during February 2013, based on a structured set of questions and recommendations on who to approach from:
- the local Chambers of Commerce
- economic development personnel within Dundee City, Angus and Perth and Kinross Councils
- S.C.D.I.
- Bank of England - Agency for Scotland, and
- Scottish Enterprise regional account managers
7.2. As indicated in Chapter 5, based on discussions with HIAL's Commercial Manager and contact with officials in Transport Scotland, we have not yet spoken in detail either to Cityjet or to other potential airlines, as we feel that to approach them formally without clear propositions might prove counter-productive. So although we have had some indirect feedback from Aer Lingus Regional, Loganair, Local Travel Agents and HIAL, how we take forward this important component of the work is something we will wish to discuss with the Client Group once they have considered this report.
7.3. As part of these discussions it may also be useful to explore the value of a wider market assessment using a Survey Monkey questionnaire; we are aware that this technique has been very useful in raising local interest (especially if promoted by local media) and giving airlines additional confidence about market demand. For example, Manston Airport had over 10,000 responses to their survey regarding a potential new service to Amsterdam, with the result that KLM are committed to start double daily operations on 2 April, even though Manston's core catchment population is arguably slightly smaller that Dundee's, with just as much competition - from Gatwick, Heathrow and Stansted.
Wider Stakeholder Consultations
7.4. In addition to the 'travel behaviour' focused stakeholder consultation reported below, there has also been a programme of information gathering discussions with other stakeholders having a direct interest in future development options for the airport and the recommendations emerging from this study. These included Dundee City Council, TACTRANS, HIAL, Scottish Enterprise in Glasgow and the Defence Infrastructure Organisation (DIO), but also organisations who make use of the facility, directly or indirectly, including CI Travel, Tayside Aviation, Perth Airport and some private aircraft owners. We also received significant help from the current Airport Manager Derrick Lang and the former lead officer for the Council Gordon Fleming. The feedback of all these consultees is reflected as appropriate in different sections of this report
Air Travel User Consultations
7.5. In terms of businesses that currently, or prospectively could, provide passenger demand for Dundee Airport, consultations focused on enhancing our understanding of:
- Current and historic use of air routes from Dundee.
- Use of other Scottish airports.
- Factors determining choice between different Scottish airports including price elasticity.
- Potential changes to underlying demand for air travel.
- New air services out of Dundee that might be beneficial to their organisation.
7.6. In total 28 organisations were consulted: some face-to-face, others by telephone. They are listed in Table 7.1 below. Most of them employ large numbers of people i.e. more than 100 staff, while some have more than 1,000 employees. A number of the organisations, while headquartered in Dundee, have a Tayside-wide remit (e.g. NHS) and a few have quite substantial travel budgets, with staff making over 500 outbound return flights per year.
7.7. Perhaps reflecting their size, the vast majority of those we interviewed book flights via a local third party travel agency. Those that are part of a wider organisation use a national level agency. Companies whose main or sole site is in the area tend to use a local travel agent; others use a combination of travel agency and staff booking individually.
7.8. Where travel agents are used the specification given to them is reasonably broad. It tends to include the required destination and timings of travel, rather than stating specific flights. The agent then provides a number of options for the customer to choose from.
7.9. Few consultees have specific environmental policies that constrain their amount of air travel. The main constraint on travel is the need to remain 'on budget', which is reflected in the core issues we identified. Some have introduced video-conferencing facilities. However, this has had - at least to date - no significant impact on the number of flights.
Destinations Required
7.10. A majority of consultees make international flights as well as domestic ones. In general, the numbers of international ones are small in number emphasising the importance of hub access to meet these needs. However, in two cases they exceed the number of domestic flights made. The most commonly cited international destinations were:
- United States-to a range of airports, mostly in the north/north east.
- France-Paris CDG, Clermont Ferrand.
- Ireland-Dublin, Cork.
- India.
Heathrow appears to be the most common hub airport used, although Gatwick and Amsterdam were also mentioned.
7.11. London is clearly the main destination for point-to-point flights. Many consultees make at least some use of Dundee-London City, however, increasingly it forms a minority of the total number of flights they make to London. Where consultees use an airport other than Dundee this is overwhelmingly Edinburgh; the exception are those who are based in the north of Angus who are more likely to fly out of Aberdeen.
7.12. There are a small number (around five) of high volume users of the Dundee-London City service. These organisations are headquartered in the area and, therefore, tend to have more senior management with a very high value of time. However, these companies also make significant use of Edinburgh-London services, including those to London City - for some this is to fly to Heathrow to catch a connecting flight.
7.13. Birmingham is the main regional UK airport that local stakeholders interviewed were using. A number of them had used the flybe Dundee-Birmingham service. However, the number of annual return trips per company was generally low (less than 50 in almost all cases). The return fares paid ranged between £150 and £240, but we understand that the top fare could be around £500 (although none of our sample appear to have been paying this).
7.14. The following domestic destinations were also mentioned during the interviews:
- Cardiff/Bristol.
- Manchester.
- Belfast.
However, the demand for flights to these regional airports appeared lower than to Birmingham.
Leakage of Catchment Demand
7.15. Our sample as a whole make clear that local businesses and public sector organisations are making a much a higher number of flights to London from Edinburgh rather than Dundee. The interviews suggest the main reason for this is cost. Some consultees cited Dundee return airfares as being around £200 higher than those from Edinburgh.
7.16. It appears that Dundee-London City fares are £300-£500 if booked one week in advance. Fares booked three months in advance are £190 (recognising that there are very few such tickets available). This compares to £100 on Edinburgh-London City and one-week advance return ticket prices to other London Airports of £120-160 with easyJet and £200-400 with BA.
7.17. Some of the larger volume users of the Dundee service receive a corporate rate via a local travel agent. However, this does not significantly reduce the fares that are paid and overall, fares appear to be considerably cheaper on Edinburgh-London services (by up to 50%). This is particularly the case for the no frills services to Gatwick, Luton and Stansted; less so for flights to London City and Heathrow.
7.18. It would appear that for many consultees, the airfare almost always outweighs the financial and time cost of surface travel to/from Edinburgh airport, even though on occasion their staff may use a Dundee flight even though it is cheaper to fly out of Edinburgh. This is to avoid an overly long working day for the staff member.
7.19. The one-way journey from Dundee to Edinburgh takes around 1-1½ hours by road, but is not perceived to be an arduous drive, even in peak periods when the approaches to the Forth Road Bridge can become busy. The cost of a taxi is around £70-80 one way. One stakeholder we interviewed claimed a hire car cost as little as £10 one-way for large organisations that have discounted rates; we are a little sceptical about this but figures of £30-40 are probably realistic. Rail is generally not used, as this requires onward transport from central Edinburgh out to the airport.
7.20. Thus, when the lower airfares out of Edinburgh are included, the total travel cost to fly from Edinburgh is often materially lower than from Dundee. So the main issue with surface travel to Edinburgh is the journey time, rather than the financial costs or it being a difficult journey to make. It can mean an early start from home for the first flights out of Edinburgh. It can also mean a long day trip with travel back from Edinburgh Airport at its last leg. This is in a context where most organisations' staff live locally (i.e. in Dundee, Angus or north east Fife).
1.1. 7.21. The second major reason for flying out of Edinburgh the stakeholder consultation identified, is what is now seen as the poor timings of the Dundee-London City services. On only one day of the week does the first flight arrive into London City before 10.00 ; and the flights back North are at either 16.20 or 20.25 which means either quite a short or long day in London. But between Tuesday-Friday there is no opportunity to make a day trip from London to Dundee. This is because the first flight north arrives around 1800. Wider stakeholders, as well as users, believe this is reducing inbound travel by passengers who would otherwise be willing to pay high fares for the convenience of flying into Dundee; these people are now flying into Edinburgh and taking a taxi to Dundee in order to make a day trip.
7.22. In the case of the air link to Birmingham, terminated by Loganair in December last year, the service was seen as cost-effective. Its timings allowed a day trip to be made with a full working day at the Birmingham end. These companies now use the Edinburgh-Birmingham service, and it is notable that Flybe have recently announced they will be increasing frequency on this route, which may help address the general requirement for at least one night to be spent away from home. On occasion companies have used the Edinburgh-Manchester to access parts of the Midlands because of this, as historically the timings on the latter route are better than those on the Birmingham service.
7.23. Finally, a number of organisations are at least considering more use of rail for longer journeys. One travel agent reported that their corporate customers' spend on rail has increased 20% in the last year, probably reflecting disgruntled former air passengers opting not to use the air service to London City because of the high fares. They expect it to increase again in the next 12 months. This includes use of both daytime trains and sleepers. However, use of the sleeper rather than air appears to be at the discretion of the individual traveller rather than set by company policy.
London Airport Preferences
7.24. A number of businesses-but not a majority-see an advantage in the Dundee service flying into London City rather than another London airport. This reflects where they are travelling to in the capital rather than the onward connections available at City Airport. It is seen as convenient for access to: the City of London's financial sector; central London for meetings with funders, partners and advisers; and companies that are part of their group.
7.25. Others do not see a particular advantage in linking with London City. This is because they are travelling to a final destination that could be reached more easily from another London airport.
1.1. 7.26. Consultees were asked to consider if the Dundee-London City service no longer operated, what other London airports serving the capital might provide an acceptable alternative. The most popular one was Gatwick. In order of frequency the other responses were:
- Stansted.
- Luton.
- Heathrow.
- Southend.
7.27. These choices mainly reflect the respondents' final destination when making point-to-point flights to London. Opportunities for connecting flights at each of the airports appear to have been less of a factor. This could reflect the number of consultees who make few or no international flights via London at present.
Other Potential Destinations
7.28. Consultees were then asked to state what, if any, new scheduled services from Dundee would be of most use to their organisation. For point-to-point travel, the most common one was Birmingham. This was followed by Manchester, and then a small number of responses for each of Belfast, Cardiff, Gatwick and Southampton.
7.29. Responses in relation to a service to a hub airport were dominated by Amsterdam, which was mentioned by a large proportion of the sample. The most common other ones, albeit few in number, were Paris CDG, Dublin and Heathrow.
7.30. It is worth keeping in mind, however, that the forgoing reflects a qualitative overview of demand for business travel. In terms of personal travel it is likely that London again (and especially Heathrow), Belfast (because of the scale of the student population from Northern Ireland), Dublin and Amsterdam would be much more prominent as desired destinations. In terms of leisure destinations, the Channel Islands clearly have a following as demonstrated by the commitment of the local travel agent, but so would sun destinations like Palma de Majorca or southern Spain, a view again confirmed by the local travel industry representatives.
Price Elasticity
7.31. Consultees were then asked what premium they/the market in general would be willing to pay on their return air fare to fly from Dundee rather another Scottish airport (in this context Edinburgh). The premium would reflect: reduced journey time; reduction in surface transport costs; and shorter time at Dundee airport prior to boarding.
1.1. 7.32. The most common response was a premium of £50-£99; this was stated by nine respondents. The other responses were:
- £100-£149 (4 respondents).
- Less than £50 (3).
- £150-£249 (1).
7.33. Whilst the forgoing would normally be too small a data to draw any statistically robust conclusions from, the stakeholders responding between them represent a material share of the current users. Since the replies received are in line with the hypothesis set out in paragraph 7.18, even though the absolute number of responses are small, they nevertheless seem to us to provide good grounds to draw the conclusion that a premium of £60-80 would seem like a sensible working assumption, for route planning purposes depending on the carrier involved and service timings and quality.
Demand vs Supply
7.34. That said, there was no consensus amongst business consultees on the likely trend in the number of flights likely to be required in the medium term from Dundee. Some saw no change. In contrast, a number expected their flight numbers to decrease, albeit modestly, due to budgetary pressures. Others expect an increase in line with their general business growth. The universities expect to see a requirement for more international flights as they increasingly internationalise their operations.
7.35. The most significant users of the Dundee-London City service would see the greatest impact if it was to be discontinued, although it appears they are small in number.
7.36. There is stated demand for flights to other destinations-notably Amsterdam. However, there was a general realisation that only a limited range of destinations could be financially viable, especially given the services available from Edinburgh.
Other Comments
7.37. A number of respondents also mentioned that the airport was important in the overall "offer" to visitors, students and potential investors.
7.38. Very few respondents saw a need for non-aviation uses at parts of the airport site. This reflects its proximity to the city itself where, it was felt, there is an adequate existing/prospective supply of hotels and other commercial property.