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London Southend Airport Tempts TUI as Growth Push Gains Pace

London Southend Airport Tempts TUI as Growth Push Gathers Pace
Reclassified as “London Southend” by the International Air Transport Association on Aug. 1, a switch that will aid Internet bookings, the terminal aims to lure more carriers as major hubs including Heathrow struggle with overcrowding. Photographer: Jason Alden/Bloomberg

Oct. 1 (Bloomberg) -- Britain’s Southend airport signed up its third airline customer and is close to recruiting a fourth as the site 45 miles from central London on the North Sea coast seeks to establish itself as a new terminal for the U.K. capital.

German charter carrier OLT Express will fly to Dresden from Oct. 15 and the Thomson unit of TUI Travel Plc, Europe’s No. 1 tour operator, said it’s in final talks about operations to Palma on the Spanish holiday island of Majorca next summer.

Stobart Group Ltd., the owner of Southend airport, has spent 100 million pounds ($162 million) on upgrades including a longer landing strip as it seeks to revive what 40 years ago was Britain’s third-busiest aerodrome. Reclassified as “London Southend” by the International Air Transport Association on Aug. 1, a switch that will aid Internet bookings, the terminal added EasyJet Plc, Europe’s second-biggest discount airline, as a client in April and aims to lure more carriers as major hubs including Heathrow struggle with overcrowding.

“We have a strong local catchment area and capacity available at peak hours, which is rare,” Managing Director Alastair Welch said in a telephone interview. “It’s a simple, straightforward operation and passengers appreciate that.”

A combination of the EasyJet routes and 2012 Olympics has boosted flights to about 15 a day in recent months, versus only a dozen each week a year ago, Welch said. Traffic peaked in 1967 before declining as aircraft grew too large to use the runway.

Fuel Advantage

Southend’s less crowded terminal means passengers with hand luggage are able to reach the adjoining rail station 15 minutes after leaving their plane, Welch said. London travel times can match those of less distant airports, with trains reaching Liverpool Street in the City financial district in 53 minutes.

The airport also got its first on-site hotel today with the opening of a 129-bedroom Holiday Inn adjacent to the terminal.

In addition to Londoners, the airport in the county of Essex also draws people from nearby, which appeals to Thomson.

“We are working closely with Southend as part of our strategy to allow customers to fly to holiday destinations from their local airport,” spokeswoman Claire Borgeat said by e-mail.

Shorter Flights

Airlines operating to and from countries further east, like Bremen-based OLT Express, can also trim 15 minutes from flights because of the airport’s location, reducing fuel costs.

Southend currently ranks sixth among airports serving the U.K. capital, behind Heathrow, Gatwick, Stansted, Luton and London City. It attracted about 298,000 passengers in the 12 months through July, according to the Civil Aviation Authority.

While that’s a 12-fold increase from a year earlier, it’s only one-tenth of the 3 million who use City, which is six miles from the financial center but limited by a short runway. Welch said the airport is seeking 2 million customers a year by 2020.

Larger airports serving London are generally restricted by a government opposition to new runways in southeast England, with Heathrow and Gatwick already operating close to capacity.

The first airline to add scheduled flights since Southend’s purchase by Stobart for 21 million pounds in December 2008 was Ireland’s Aer Arran, which began services from Waterford in 2011 and added Dublin in May. Both routes are operated on behalf of Aer Lingus Group Plc, Ireland’s second-largest carrier.

Stobart shares were trading little changed today at 117.50 pence and have declined 2.4 percent this year, giving a market value of 407 million pounds.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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