London City Airport turns to leisure market as homeworking hits business travel

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The boss of London City Airport has turned to the holiday market, as the corporate travel market struggles to rebound from the coronavirus pandemic and the rise of homeworking.

Alison FitzGerald, who was appointed chief executive earlier this year, told the Financial Times she hoped to offer leisure flights from the hub throughout the year, without alienating the corporate executives the airport was built to serve.

Constructed in the shadows of the Canary Wharf financial district, and located just seven miles from the City of London, London City Airport opened in the late 1980s with a focus on the business travel market.

It has grown its share of leisure traffic over the past decade, from about a third of its passengers using the airport in 2015 to half this year.

But the decline of the business travel market has hit hard, with global spending on trips not forecast to return to pre-pandemic levels until 2027 on an inflation-adjusted basis, according to the Global Business Travel Association.

Many airlines have also consolidated their short-haul flights at larger hubs such as Heathrow and Gatwick following the pandemic. London City expects to handle about 4mn passengers this year, down from 5mn in 2019.

FitzGerald said corporate travellers had not returned in the same numbers as before the pandemic, with one-day trips to European capitals particularly badly hit.

But she said people were also increasingly mixing business and leisure trips, and travelling for longer. “It’s becoming quite difficult to work out who is a business traveller . . . we are seeing people travel differently,” she said.

With the airport’s leisure flights concentrated over the summer, FitzGerald is looking to boost the number of flights to winter sun destinations, as well as longer routes. She also held out the possibility of a return to flights to the US east coast, after British Airways cancelled its business class-only flight to New York from the airport during the pandemic.

The airport has a relatively short runway and planes have to make a relatively steep descent to avoid London’s skyscrapers, meaning only certain aircraft can land there, such as the Embraer 190 operated by BA.

“We are very seasonal at the moment. And we want to use the next generation of aircraft to unlock more leisure routes and longer range destinations,” FitzGerald said.

Despite its slow recovery from the pandemic, the airport succeeded in August in persuading the Labour government to increase annual passenger capacity from 6.5mn to 9mn by 2031.

Ministers, however, refused to give the go-ahead for additional flights on Saturday afternoons.

Fitzgerald said she was “disappointed” about the Saturday flights, but the airport would not appeal against the decision.

In the longer term, she said the industry would need to decarbonise to avoid more regulation, and pointed to passenger caps at Amsterdam Airport Schiphol and Dublin as possible risks ahead.

“That’s one way of doing things. I don’t think that necessarily encourages the trajectory to decarbonisation. It is a bit of a sledgehammer” she added.