Just like housing, London Heathrow is facing a supply-side and not a demand-side problem. They lack the runway capacity. Many more airlines and passengers want to fly to and through Heathrow. But, Heathrow just doesn't have enough runway slots to accommodate and she had been operating at 99% capacity for years now.
London politicians have been talking for years about airport expansion, but nothing happened. The latest Airports Government Commission is by Sir Howard Davies, whose final report isn't due till 2015. Even if its recommendations were accepted, it would take at least another 5 years before the additional capacity comes online. By that time, how much more would Dubai and other competitors have grown?
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| Heathrow - Severe restrictions during overnight hours |
Today, Dubai already hosts 125 Airlines to 239 destinations. The airport operates 24X7. They have a lot of land to expand, if needed.
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| Dubai Airport |
Furthermore, it is clear that Emirates Airline has global ambitions, to be the undisputed number 1 international carrier in the world by size. Emirates and its subsidiaries already operate a fleet of 222 aircraft. Her fleet is mainly wide-bodied. Emirates is by far the world's largest operator of the Airbus A380.
Their premium cabin products are also giving the likes of SIA a big fight for the money. For example, Emirates is the only airline that offers an onboard signature shower/spa for First Class passengers. They also have an onboard lounge, for both Business and First class cabins.
London needs to buck up. And all this talk about Dubai beating London is also a good reminder for Singapore. We can fall behind very quickly, if we do not keep charging ahead.
Happy Investing!
To queue for takeoff in London is an hourly affair. There can be as manay as 10 planes all waiting for their turn to take off or wait for incoming planes before taking off. Amsterdam Schipol and Frankfurt are all taking over as regional airports for Europe. That's the main reason that London is losing out. It is more of Heathrow losing share to these airports than actual loss to Dubai.
ReplyDeleteSingapore will still be the premier airrport in the region and has the best shopping in the world.
KLIA is far far away from posing any threat.
There is still something magical about London despite her airport shortcomings. Just look across the English Channel to Paris. Paris Charles de Gaulle Airport has 4 runways - tremendous capacity and doing quite well, but it hasn't stopped London Heathrow from being ahead of Paris CDG all this while.
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