March 21 (Bloomberg) -- Emirates, Qatar Airways Ltd. and Etihad, the biggest Arab carriers, are pouring capacity into the north English city of Manchester to win Asian traffic as British Airways funnels passengers via its crowded London Heathrow hub.
Emirates, the largest international carrier, said March 9 it would add a third daily flight to Dubai starting May 1 after existing services featuring an Airbus SAS A380 superjumbo were consistently full. The announcement came within days of Qatar and Etihad saying that routes from Abu Dhabi and Doha will go double daily from Aug. 1 and June 1, respectively.
British Airways scrapped long-haul flights from Manchester in 2008, opting to route people through Heathrow, Europe’s busiest airport, on nine daily shuttles. The U.K. company says it has no plans to revise the model, even though 13 scheduled carriers including Delta Air Lines Inc., Continental Airlines and Singapore Airlines Ltd. offer long-haul services from the airport, which claims a catchment of 20 million people.
“Our clients prefer flying from Manchester, so we’re very pleased with the new routes,” said Irene Hulme, who runs Travel by Design, a specialist in luxury trips to Australia, Asia and North America based in Alderley Edge, 5 miles from the airport. “People think twice about going via Heathrow. On some routes you can have a very long wait, which they find frustrating.”
Manchester was the busiest British airport outside London in 2010, attracting 17.6 million passengers, or 8.4 percent of the national total. That compares with 22 million in 2005, before the reduction in service by BA and U.K. rival British Midland or BMI, now owned by Deutsche Lufthansa AG. Heathrow handled 65.9 million passengers last year.
The airport, privately managed on behalf of its owners, the 10 boroughs of Greater Manchester county, estimates it will boost passenger numbers 4 percent this year, Chief Executive Officer Charlie Cornish said in an interview last month.
The Gulf carriers are targeting northern England as part of a growth splurge aimed at challenging British Airways and other carriers specializing in long-distance transfer traffic.
Emirates is building up a fleet of 90 A380s with a total of 45,000 seats as it seeks to direct price-sensitive passengers through Dubai, while Qatar has orders for 178 jetliners worth $35 billion and Etihad has 100.
New Planes, Lounges
Passengers have been lured by newer aircraft appearing on routes out of Manchester, Hulme of Travel by Design said. Emirates and Etihad also offer first-class seats on flights from the city, and both have their own premium lounges there.
The superjumbo service from Manchester -- the first in the world serving a regional city -- has been a top performer for Emirates, with the 517-seat plane flying full within two months of its introduction in September, the company said when announcing the third daily trip, which will be operated by a 237-seat Airbus A330.
Etihad’s addition of a second daily flight from August marks the ramp-up of an earlier plan to switch to 10 services a week, and Qatar Airways is adding capacity in Manchester as it terminates its service to London Gatwick, the secondary hub for British Airways, which has four daily shuttles there.
Emirates, which also operates to Dubai from regional airports in Glasgow and Newcastle upon Tyne, from which British Airways serves only London, and Birmingham, where BA has no flights, as well as from Heathrow, said capacity growth at Manchester shows that flying via modern hubs in the Middle East has become an “attractive option” for European travelers.
“The addition of a third daily flight indicates strong regional demand, but also reflects our commitment to regional gateways,” Salem Obaidalla, the carrier’s senior vice president for commercial operations in Europe and Russia, said by e-mail.
Unlike British Airways, which is strongest on North Atlantic routes and which recently merged with Iberia of Spain, adding connections to Latin America, the Gulf carriers are focused on faster-growing markets in Asia. Qatar Airways said when announcing its extra Manchester frequency that the route taps demand from populations living in and around the city for travel via Doha to India, Pakistan, Bangladesh and Sri Lanka.
Manchester Airport Managing Director Andrew Harrison said that while the exit of British Airways had led to “a little bit of negativity” from people who wanted to be able to fly long-haul with the national “flag carrier,” the expansion of the Gulf operators had filled the void, with Qatar’s switch from Gatwick especially encouraging and suggesting airlines are pursuing a “north and south strategy” for U.K. routes.
“We’ve always been a ‘non-aligned’ airport in terms of airline customers and that served us well when BA took the decision to retreat to London,” Harrison said in an interview. “We valued their business but we had to make new friends.”
Among other long-haul carriers serving Manchester, Finnair Oyj offers two flights a day and regards northern England as a “key market” as it seeks to establish Helsinki, the capital city of a nation with just 5 million people, as a hub for travel to northeast and southeast Asia from Europe, Fredrik Charpentier, the company’s U.K. sales chief, said today in an interview.
“People are discovering that it’s easier if you use an uncrowded hub like Helsinki,” he said. “Our challenge is spreading the word, because there are still a lot of people who look to Heathrow because that’s where you used to go from.”
Finnair serves nine Asian destinations including Beijing, Seoul and Tokyo via the shortest possible “great circle” route, with transfer times in Helsinki of as little as 35 minutes.
“The East is the market of growth and it’s where Emirates and Etihad are positioned,” said Peter Morris, an analyst at aviation consultant Ascend. “There is more connectivity out of the U.K. on Emirates to Asia and the Middle East than at BA.”
Still, re-establishing Manchester as a hub would probably be prohibitively expensive, London-based Morris said, while Willie Walsh, CEO of International Consolidated Airlines Group SA, BA’s parent company, said the carrier isn’t concerned.
“We’ve flown international flights from Manchester in the past but they weren’t profitable, so today we fly to Heathrow,” Walsh, who ran British Airways until January, said in an interview. “If the Middle Eastern carriers want to fly there and it’s a market we’re not serving directly, that’s competition. I have no complaints.”
IAG shares rose 1.7 percent today in London. Finnair fell 0.2 percent. The three main Gulf carriers aren’t listed.
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