It’s been a quiet 18 months at London City airport, the Docklands-located airfield beloved of City slickers jetting into Canary Wharf and the Square Mile.
Thankfully for chief executive Robert Sinclair, however, those days now look increasingly as if they are over for good.
“We’ve certainly seen a material increase in passenger volumes from July into August, and now also into September”, he told City A.M..
And crucially for the airport, it’s not just people seeking a quick getaway to sunny Europe who are coming through its gates.
“We are also seeing a clear resumption in business travel as well”, he adds. “Historically, we’d see a shift from leisure to business travel literally from 1 September, and though that’s not happened with the same starkness as usual, it is definitely happening.”
“It is very clear that companies and business people are missing that face-to-face interaction and starting to actually travel again. [Homeworking] is not a recipe for a long-term, strong recovery in how businesses operate and how people operate. While there will continue to be an element of hybrid working we’re now seeing a very, very strong desire for people to get back into work.”
As a result, in recent weeks a number of City’s biggest partners, such as BA, Swiss, and Lufthansa, have begun to start up key business routes again as London’s business district comes back to life after a fallow year and a half.
‘Not out of the woods yet’
However, despite the recent surge in activity, like many airports City will most likely see fewer passengers in 2021 than in 2020, despite the success of the UK’s vaccination programme.
That’s largely because of the government’s much-maligned travel “traffic light” system, which has at times resembled more a drunken lurch than a coherent, coordinated policy.
The system has recently been revised – again – removing the somewhat baffling amber list, and bringing down the cost of testing upon returning home by replacing mandatory PCR tests with lateral flow tests from the end of October.
It’s long overdue, reckons Sinclair. The cost of testing in particular he describes as “exorbitant.”
The moves are welcome, then, but it’s clear that the UK’s aviation industry has been hit harder than international competitors.
He points to Europe, where the combination of a lack of internal travel restrictions and the use of Schengen-wide vaccine passport has seen demand return to around 70 per cent of pre-pandemic levels, while the UK still lags behind at 30-35 per cent.
“The industry needs to be given scope to open and to trade in full”, Sinclair says. “ At the moment that is not the case; we are actually one of the only industries in the country that are still subject to significant restrictions on its ability to operate.”
He added that a government cut to Air Passenger Duty (APD) on domestic flights, which is currently the subject of consultation, would also be a great help to City Airport, which has relied on its UK routes for trade while foreign travel has been in shutdown.
“If the government is minded to [cut APD] a very early implementation of that decision as quickly as possible and preferably before this winter would be extremely helpful.”
Strength of City could speed recovery
Like many companies in the sector, City does not expect demand to return to 2019 levels – when 5m passengers passed through the airport – before 2024 or 2025, such has been the damage of the last year and a half.
But the airport, he adds, does have an ace in the hole – the Square Mile itself.
“One of the most interesting things about the pandemic is how some sectors of the London economy, in particular the fintech industry, have been powering away, and these are what drive our business.
“London has not lost its appeal as a tourist destination, or a place to work or live. So with the strength of the London market we could see a fuller resumption sooner rather than later.”
But in the meantime City is working on some new projects that could altogether reshape the way we travel around London.
“We’re involved in a number of projects that are looking at the future of flight from a zero carbon perspective, such as electric vertical takeoff aircraft – air taxis”, he explains.
“We’re looking at how we can fit them into the London cityscape, possibly over the next two or three years.
“We believe that we can be a sort of a testbed for those future flight projects”, he finishes.