Connect Preview – Do airlines make more profit at French regional airports?

Feb 21, 2017


From Wednesday 22nd to Friday 24th of February, the European regional airline/airport industry will descend upon Ajaccio in Corsica for the 2017 Connect conference. Our Director of Airports, Iain Smith, will be delivering a presentation using RDC’s new Apex Profit module to examine the strengths of the regional airport industry. The following is a quick preview of the fascinating new data Iain will be presenting at the conference on Wednesday at 11:00.

Regional airports are all too often overlooked by low cost carriers (LCCs) when undertaking route development. We frequently see viable competition-free opportunities passed over in favour of putting extra aircraft on to highly congested routes, chasing a share of a market that initially seems attractive but forces the airline to charge very low fares to achieve market share.

Analysis of the latest profitability data from Apex’s new Profit module, clearly shows how thin margins are at major airports compared to regionals. The chart below displays all French airports by profit per passenger for a basket of Europe’s largest LCCs. Interestingly, all four of the Corsican airports rank in the top six by this metric.

Graph showing French airport profitability for a basket of Europe’s largest LCCs

Figure 1 – French airport profitability for a basket of Europe’s largest LCCs

Corsica is of course, a special case. Not only is it a very attractive leisure destination (seasonal capacity allows for higher average fares) but it is also an island, meaning that there is minimal competition from other transport modes. However the trend of regional airports outperforming majors is not limited to Corsica. Of the 43 airports in our database, the first airport with more than 10 million annual seats ranks 28th (Marseille). The Paris airports of Charles De Gaulle, Orly and Beauvais fall towards the bottom of this list with the LCCs operating on comparatively thin profits. The French market is not alone in this phenomenon, Apex data shows similar patterns in Germany, Italy, Spain and many regional airports through Scandinavia and Eastern Europe.

Clearly, If LCCs could have a better understanding of the superior margins that are available to them at regional airports, it would help to re-focus capacity away from low-yield high-capacity markets and provide great benefits to the airlines, the airports and the regions they serve. Similarly if regional airports have access to this data, they will be better placed to negotiate more appropriate rates with their airline partners and will not feel obliged to offer and maintain heavy discounts. The tide may be about to turn back into the favour of regional airports so it’s an ideal time for airports to understand their market dynamics and encourage airlines to share the benefits they can offer.

If you are attending Connect this week and would like to see Iain’s full presentation, he will be speaking at 11:00 on Wednesday 22nd, or feel free to visit the RDC stand #L. If you are not able to attend Connect but would like to learn more about the Apex Profit module, please get in touch, we would be glad to give you a full demonstration of the software.

Daniel Irvine


Daniel Irvine
Aviation Analyst

View team