Newquay to London PSO Starts Again

A process to contract year-round flights under a Public Service Obligation has relaunched by Cornwall Council.

The new obligation is open for bids until 7 September 2021 to operate for year round flights for four years, commencing on 31 October 2021.

Earlier in the year, the process to contract year round flights between Newquay and London was unsucessful and has meant the number of flights between Newquay and London has dropped from 28 weekly in 2019 to 8 weekly in 2021 (5 weekly from Heathrow with British Airways and 3 weekly from Gatwick with easyJet). Furthermore, the 8 weekly flights are only proposed to operate for summer 2021 and not for the winter process. Without a Public Service Obligation (PSO) in place, the Cornish airport may end up without a link to London this winter.

Cornwall Airport Newquay has seen a number of new airlines and routes in Summer 2021 including BA CityFlyer, easyJet and Loganair launching domestic flights to the airport, allowing the airport to benefit from the COVID-19 travel restrictions and increased demand for staycations.

However, for Winter 2021, the number of routes from Newquay is proposed to drop considerably. This winter, only three airlines are currently proposing routes - Isles of Scilly SkyBus to St Mary's; Loganair to Aberdeen (via Manchester), Edinburgh and Newcastle; and Ryanair to Alicante. It is normal for airports and airlines to be busier during the summer months than the winter months, but not many airports in the United Kingdom have such a seasonal variation than Newquay. Therefore, without a regular London flight - the airport could suffer financially this winter.

What is contained within the Public Service Obligation document?
Most public service obligations across Europe allow one airline to operate between the city pair, in order to reduce the pressure of public funding and to maximise passengers to one airline in order for the route to remain operational. However, this PSO has an intriguing detail.

During the peak summer months of July and August, a rival competitor is allow to operate from an alternative London airport to Newquay. For instance, the winner of the PSO contract may want to operate to London Heathrow with year round flights. This would mean any other carrier would be permitted to launch a London to Newquay route, as long as they don't fly from London Heathrow.

There are 3 different options for potential bidders and so airlines have a lot to read and decide before submitting their bids.

Who is likely to bid for the route?

This is solely my opinion and is not a guarantee who will bid or not. I do not know if any airline has bid or will be yet nor what the contents of their bids are or would be.

1. British Airways
When Flybe collapsed in early 2020, British Airways announced a new summer seasonal route between London Heathrow and Newquay, which is operating in Summer 2021 too. This route only operates during the peak summer months, when demand is high and at present, supply is limited. What British Airways also has, is a hub at London Heathrow, which allows for European and Transatlantic routes to connect onto the Newquay service.

British Airways' smallest aircraft is the Airbus A319 - which maybe too large for a year round service. However, British Airways has a sister carrier - BA CityFlyer, based in London City, with smaller Embraer 190 aircraft. Additionally, operating to Newquay from London City would offer a convenient central London airport for point to point passengers, however, for connecting passengers - there are limited options from London City.

What also could benefit British Airways, is the terms of the contract. As an airline can fly from an alternative London airport during peak summer months, by operating a year round BA CityFlyer route from London City, the airline would be able to operate a summer seasonal London Heathrow to Newquay route too - thus becoming a dominant carrier between the two regions.

2. Eastern Airways
Eastern Airways has a number of bases across the United Kingdom and operate a range of aircraft which would suit this PSO contract - including 72 seat ATR-72 aircraft and 76 seat Embraer 170 aircraft. The airline also operates a summer seasonal route from Leeds/Bradford to Newquay, thus having a presence in the Cornish airport.

Eastern Airways do not currently operate to any London airport but have previously served London City and London Heathrow airports. The airline doesn't offer codeshares with many airlines which may be a hinderance in any future bid.

3. easyJet
easyJet currently operate five summer seasonal routes in 2020 to Newquay, with three of these on sale for 2021. One of these routes is from London Gatwick, where the airline plans to operate three weekly flights during the summer months.

Like British Airways, easyJet's smallest aircraft is the Airbus A319, which maybe too large for winter months on multiple daily flights. However, the airline has a major presence at London Gatwick and is seeing pressure from other carriers wanting slots at the airport - including low cost rival Wizz Air. A route like this, operating for four years, could be a way to safeguard slots until demand from more lucrative routes recover.

4. Flybe v2.0
Flybe recently announced it is planning to resume operations and recruiting for a Midlands base (https://seanm1997.blogspot.com/2021/06/flybe-eyes-midlands-base.html) but did hold remedy slots at London Heathrow for Winter 2019. If the airline wants to accelerate its launch, it may look into operating this PSO route which has a financial backing.

However, Flybe have not launched an operation yet and Cornwall Council may see the carrier as a risk for long term viability with no proven track record in its current format. It is unclear if the airline will offer codeshares which may be a hinderance in any future bid.

5. Loganair
Loganair are currently the largest airline at Newquay in terms of number of movements and second largest airline in terms of number of seats this summer (behind easyJet) and is forecast to be the largest airline in terms of movements and seats at Newquay in Winter 2021. The airline also offers the widest range of year round routes from the airport, with a large brand awareness across the United Kingdom.

Furthermore, Loganair have launched up to five daily flights from London Heathrow in Summer 2021 and Winter 2021, growing its brand in the UK's busiest airport and offering connections with a wide range of codeshares including British Airways and Emirates. Therefore, Loganair with its smaller regional aircraft (including the 49 seat Embraer 145 and 70 seat ATR 72) and codeshare partners could strike the right balance for the PSO.

Loganair do not own any 'grandfather' slots at London Heathrow, thus could be difficult for the airline to guarantee slots for future seasons. However, a number of airlines will want to safeguard their Heathrow slots and lease them to other airlines until international demand recovers. Therefore, Loganair could look into leasing slots for this service in order to operate a year round route.

What do I think is the best option for Cornwall?
This is a difficult question and one of merely opinion and not of any factual basis that this will be the chosen option.

Based on having aircraft which are suitable for year round flights, as well as brand awareness and codeshare partners, a Newquay to London Heathrow service operated by Loganair seems the most beneficial option. Additionally, with the clause regarding peak summer routes - it would also allow for easyJet to maintain its summer seasonal London Gatwick route and potentially encourage British Airways to switch its summer service onto BA CityFlyer from London City, thus offering the greatest potential for a number of carriers to operate flights during peak summer 2022.

Sources:
(1) https://procontract.due-north.com/Advert?advertId=f565692f-7cdd-eb11-810d-005056b64545
(2) https://www.bbc.co.uk/news/uk-england-cornwall-56664268
(3) https://www.bbc.co.uk/news/business-51474793