Bristol Airport's Origins and Evolution

Introduction

Bristol airport is a private company limited by shares that traces its origin way back to 1927 when a group of individuals in the United Kingdom sensitized the public to subscribe to a course that would later see the birth of Bristol airport (Bristollive, 2019). Prior to acquiring the name Bristol airport, it underwent a number of changes in both ownership, name and organization. For example, in mid-1997, the airport’s name changed from Bristol Lulsgate airport to Bristol International Airport (Bristol Airport, 2017).

Ownership

Prior to its rebranding, Bristol Airport remained a property of Bristol City Council. Bristol International Airport was subsequently rebranded to Bristol Airport in March 2010 thereby gaining a new logo, described by the airport's owners as being a representation of people, place and region (Bristol Airport, 2017). The airport also had a new slogan christened “Amazing journeys start here.” Bristol airport to date remains a public airport under the new ownership and management of a group of individuals coming together to further a common goal, the Ontario Teachers’ Pension Plan. Bristol Airport is registered as a private company limited by shares thereby implying that the liability of members of the pension plan is limited to the amount of unpaid shares, if any, on their contribution towards the scheme (Ribbeck, 2014). In January 2001, the airport was purchased by a joint venture of Macquarie Bank and another company for £198m. Ontario Teachers' Pension Plan also made two substantial share acquisition in 2002 and 2009 by acquiring fifty percent of shares from shareholders (Bristol Airport, 2017). The period building up to September 2014 saw Ontario Teachers’ Pension Plan agreeing to buy Macquarie Banks’ remaining 50% shares in the airport thereby acquiring full ownership.

As far as organization of Bristol Airport is concerned, the airport does not deal or operate any jet ways, so aircraft must park on the apron and passengers either are carried by bus or walk to their flights (Thompson, 2016). To reduce the need of buses and to make the airport journey easier, convenient and enjoyable, Bristol airport management opened a walkway, 450 m high, to the west of the terminal building to connect it to eight other new pre-boarding zones, at a total cost of £8 million. In 2012, management established a base at the airport and in 2013, the Bristol airline added new routes to Italian and German hub airports intended for business travellers (Weir, 2010).

Markets served by Bristol Airport

Bristol airport through its airlines serves different countries. Under this category, this report tries to highlight the different types of airlines and various market destinations that fly to and from Bristol airport (Weir, 2010).

Airlines for Short, medium and long distance destinations

Bristol Airport is home to many and trusted airlines that ply different roots at low and affordable costs. Operators such as EasyJet and Ryanair which offer low cost flights both run their services from Bristol airport offering low and affordable cost options to many exciting places. Air France, Air Malta and Air Southwest both operate flights out of Bristol Airport (Weir, 2010). Bristol Airport also operates internally by serving a wide range of United Kingdom destinations ranging from Aberdeen in the North to Channel Islands in South west. Brussels Airlines, Aurigny, Eastern Airways and Continental Airlines all fly out of Bristol Airport well KLM, Flybe, OLT, Sky Bus and SAS (Ribbeck, 2014).

Market Destinations

In United Kingdom and Ireland, Bristol port serves; Channel Islands and more so Jersey and Guernsey respectively. In England, Bristol airport serves Newcastle and Isle of Man while in the Northern Ireland, Bristol Airport serves Belfast. It also serves the Republic of Ireland in particular Cork airport, Knock, Shannon and Dublin with six connections. In Scotland, Bristol airport serves Aberdeen, Glasgow, Edinburgh and Inverness (Weir, 2010). Bristol Airport serves Europe as well. In Austria for example, it serves Innsbruck, Vienna and Salzburg. In Belgium, Bristol airport serves Brussels with more than two hundred connections to its name while in Bulgaria, Bristol serves Sofia and Bourges (Bristol Airport, 2017). In Canary Islands, Bristol airport boasts of four destinations including Lanzarote, Tenerife, Gran Canarias and Fuerteventura. In Croatia, it serves Split, Pula and Dubrovnik while in Cyprus, it links the countries through Larnaca and Pathos. In Czech Republic, Bristol has its destination at Prague. In Denmark, it is Copenhagen that is the travel destination for Bristol Airport while in Finland or Lapland, Bristol has destination at Ivalo, Kittila, Enontekio and Rovaniem (Ribbeck, 2014).

Bristol airport has several destinations in France including Bergerac, Beziers Chambery, Bordeaux, Limoges, Marseille, Lyon, Montpellier, Nantes, Nice, Paris and Toulouse. In Germany, it is Berlin and Cologne as the destination for Bristol Airport while in Gibraltar, it is the City of Gibraltar (Thompson, 2016). In Greece, Bristol Airport serves Athens, Crete, Corfu, Kos, Kefalonia, Preveza, Rhodes, Skiathos, Santorini, Thessaloniki and Zante. In Hungary, it is Budapest that serves as travel destination for Bristol while in Iceland, it is in Reykjavik. Italy is another favorite destination for Bristol Airlines and it serves Bologna, Genoa, Milan, Catania, Naples, Rome, Pisa, Turin, Venice and Verona. It serves Kaunas in Lithuania as well as Luga in Malta (BBC, 2010). In Netherlands, Bristol Airport serves Amsterdam with over two Hundred connections while in Poland, Bristol serves Katowice, Krakow, Gdansk, Poznan, Rzeszow, Warsaw and Wroclaw. In Portugal, Bristol serves Faro, Madeira, Porto and Lisbon while in Romania, it is Bucharest that serves as Bristol’s destination. In Spain, Bristol links Alicante, Barcelona, Madrid, Girona, Almeria, Bilbao, Ibiza, Majorca, Menorca, Murcia, Malaga, Lleida, Reus, Seville and Valencia while in Sweden, it serves Are Ostersund and Stockholm. In Switzerland, Bristol serves Geneva and Basel while in Turkey, It serves Dalaman, Bodrum and Antalya (BBC, 2010).

In Africa, Bristol airlines especially the low cost flights provide for chartered flight to Tunisia, Egypt, Gambia, Morocco, Tunisia and Senegal. Chartered flights are also available for the Canary Islands and the United States of America. Good value flights are guaranteed to internal and European destinations due to plenty of good low cost flight operators (Rivera, 2017).

Extent of Competition

Bristol airport faces competition both commercially and financially from a number of airports in the United Kingdom. The office of fair trading conducted a research on the abuse of market dominance by both Bristol airport and Exeter airport on the focal routes and catchment areas (Reuters, 2007). The report for example indicates that if everybody in a particular area exclusively uses one airport, probability is high that these passengers will unlikely switch in response to a price change than if a big chunk of the passengers in that same area makes use of another airport. Thus, the significance or importance of the overlap between the two airports’ catchment areas can be informative of the likely extent of competition between flights from Bristol and Exeter airports (Exeter Airport, 2019). Dublin route for example, the office of fair-trading concludes that Bristol Airport in many occasions constrains flights from Exeter airport.

For the Guernsey route, the Office of Fair Trading considers the fact that Exeter Airport's catchment area is bigger and extends to Avon suggesting that flights from Bristol Airport are more likely constrained. This is the same situation with flights plying the Jersey route even though in this route, flights from Bristol are weak constraints. As for the Manchester route, according to research sample, only forty passengers travel from Bristol Airport as compared to two hundred and ninety nine (299) from Exeter Airport. For Leeds Bradford route, there is no overlap between the catchment areas of Bristol and Exeter airports suggesting that flights from either Exeter or Bristol Airport are unlikely to be a competitive constraint (Exeter Airport, 2019). Bristol airport also faces competition from Newquay Cornwall airport especially on inbound flights (Newquay Airport, 2019). The United Kingdom authorities have said that due to its location and key role in tourism, Newquay Cornwall airport does fairly compete with its three closest rivals being airports of Bristol, Exeter, and Plymouth and particularly Bristol airport as far as outbound traffics are concerned. Unlike the airports of Exeter, Plymouth, and Bristol, which have strong outbound traffics, Newquay Cornwall Airport takes advantage and dominates inbound flight (Plymouth Airport, 2019). Another competition it faces is from Vienna Airport, which is based in Austria. It offers transportation services and operates through four major segments: Airport, which deals with the operation of the terminal facilities, movement of passengers and equipment required for passenger and handling of baggage. There is also the handling segment that deals with handling of passengers and aircrafts on schedule and charter flights as well as handling general aviation aircraft and passengers (Vienna Airport, 2018). There is Retail and Properties department that deals with real estate and center management on matters business of the Company as well as providing a range of services aimed at supporting airport operations like shopping and parking. The last segment deals with technical services and construction management of the company.

Financial performance of Bristol airport

Sources of revenue

Turnover at Bristol airport has approached £150m thanks to a fifteen per cent rise in passenger numbers. This growth is attributed to a number of new routes from main and key airlines as well as the extension of the West and the East Terminals. According to an account filed for Bristol Airport Ltd, turnover was at £90m in the year ending 31st December 2016 from £78 m in 2015 (FlightGlobal, 2019). Profit before tax also increased to £40 m from £31 m the year before. Passenger numbers has grown to eight point six (8.6) million, up fourteen per cent on previous years and ahead of the United Kingdom average of six point seven (6.7) per cent.

Bristol Airport attributes majority of growth from low cost flights. EasyJet, one of the low carriers has seen an increase in passenger volumes by more than fifteen per cent through the addition of several aircraft while Ryanair passenger number, another low carrier, rose by fourteen per cent after expanding its network from the main Bristol airport. Wizz Air also has increased its routes from two to four, with new services to Sofia and Warsaw in Bulgaria and Poland respectively (Baltazar et al., 2018). WOW air also launched a flight in 2016 to Reykjavik in Iceland. Expenditure on projects more so capital rose by £11 m to £33 m during 2016, as a result of the construction of the West Terminal extension being the largest project. The west terminal opened in stages during 2016 and the final phase in early 2017 at a total cost of £26m (Bristollive, 2019). Another source of revenue for Bristol airport is a Hampton by Hilton branded hotel which has since opened its doors for business at Bristol airport main building in February 2017. The 201-room hotel became the first to be erected and based at the Bristol airport. British Airways also operate flights from Bristol airport for the first time in close to ten years, with their services to Ibiza, Malaga and Palma in Spain and to the city of Florence in Italy from May 2017 (Bristol Airport, 2019).

Commercial revenue per passenger due to strong growth in car park along with increase in spent per head in beverages and food outlets. Also increase in charter and full service flights also are a major source of revenue for airbus (Koç & Durmaz, 2015). Bristol Airport has chosen to implement the concept of the Concessionaire Analyser+ (CA+) software solution that enables them to improve an analysis of their concession-based commercial business and management thereby making it easier to increase non-aeronautical revenues (Weir, 2010). Data collection from sales will be fully automated making use of a number of methods available within the CA+ solution and most importantly giving or allowing concessionaires to continuously use their existing or available systems without interruption (Kim et al., 2017). The concessionaire Analyse+ Business Intelligence module then allows the commercial team at Bristol Airport to obtain better and useful insights on revenue and sales modes and cooperate with their concessionaires to improve and better performance (Fuerst & Gross, 2018). It also provides an overall improvement as far as commercial management of Bristol airport is concerned through efficient automation of sales and other data collection, management of contract and analysis therefrom, replacing manual input of data and numerous spreadsheets that dominates most airport commercial department while collecting more detailed and accurate data (Robert et al., 2018).

Profitability

As per the Bristol Airport Limited profit and loss account for the year ended 31st December 2017, profit at Bristol airport stood at £32 Million. This has been the trend. However, the consolidated profit and loss account for the year ended 31st December 2016 was a loss for the company. The current statement of financial position was calculated based on the going concern theory implying that the company does not intend to make loses but uses the current state to predict their future within a period of one year (BBC, 2010). Turnover at Bristol airport has hit £150m thanks to a fifteen per cent rise in passenger numbers. This growth is attributed to a number of new routes from main and key airlines as well as the extension of the West and the East Terminals. According to an account filed for Bristol Airport Ltd recently, turnover was at £90m in the year ending 31st December 2016 from £78 m in 2015. Profit before tax also increased to £40 m from £31 m the year before (Bristol, 2019).

Strengths and weaknesses at Bristol Airport

Bristol airport has many airlines and it boasts of a number of low cost budget including Easy Jet airlines. Easy Jet airline is one of the leading low budget carrier connecting many leading cities in United Kingdom and Europe and serving over forty six million passengers last year operating on over 500 routes (Fuerst & Gross, 2018). The airports served by Easy Jet has over two hundred and ninety million people within one hour interval between the airports. Vienna airport is more organized than Bristol airport and as a result of this organization, Vienna airport handles more than thirty million (30) passengers a year. This means that in terms of financial and commercial field, Vienna airport is way above Bristol airport that handles close to nine (9) million passengers only in a year (Bristol, 2017). Considering that passengers are the main source of revenue for most of these airports, this implies that the larger the capacity of passengers, the larger the profit (Vienna Airport, 2018). Their choice of colour orange used on all their aircrafts and advertising material distinguishes from their competitors and is well and widely recognized. Their slogan is also cheerful making their customer to not want to change their travel partner (Graham & Morrell, 2016). Easy Jet airline is as one of the leading passenger carriers in Europe. It is also a leading brand in the United Kingdom. Easy jet is known for providing quality service at affordable and competitive prices as well as having the fastest turnaround time of less than of thirty minutes to getting their flights ready and available for the next departure. This helps them provide quality service that is reliable, efficient and hassle free (Cahill et al., 2017).

Easy Jet airline have user friendly website that is easily navigable and offers customers breakdown of the price to enable them calculate and book flights online. Also all online promotions and advertisements are e-mailed to customers and all other parties who have checked in on their website and requested such information. This feature enables them to widen their customer base thereby attracting more passengers (Bezerra & Gomes, 2016). Moreover, Easy Jet provides a range of other services such as accommodation including hotels, hostels and apartments, car rental free travel guides and car parking and insurance to their customers as well as information regarding destination to their customers (Eshtaiwi et al., 2018). Bristol airport and in particular Easy Jet do not serve food for longer flight hauls. Also, Domestic and inbound travelling have become highly and seriously competitive and Easy jet has to compete with many leading and established competitors as well as many others who fly on restricted routes only (Koç & Durmaz, 2015). These competitors normally restrict pricing of Easy Jet by offering competitive and affordable rates resulting to smaller profit margin for Easy jet.

The future of Bristol airport

There are ideas in place to have large new car parks and to introduce changes to A38, introduce more arrivals area and a four or five storey extension to the terminal main building (Millett, 2019). The following are the proposed changes aiming at an increased revenue and commercial activities:

Proposed expansion of the terminal main building to create an extra fourteen thousand square metres of space including four storey extension to the western side of the airport.

Proposed arrivals area to the south of the terminal main building.

A multi-storey car park.

More roads to fit more cars for customers and other players.

A new taxiway for planes.

These changes and proposal seek approval for the airport to handle up to 12 million passengers a year by the mid-2020s pointing to a safer future at Bristol airport as far as financial and commercial performances are concerned.

Conclusion

Bristol airport Limited company that manages Bristol airport is largely on the right path as far as financial and commercial activities of the airport are concerned. A scrutiny of the financial statements of the company over the past five years points to a steady increase in profit making. This is a result of developments that the company has undertaken which it intended to maximize and which in deed has maximized profit for the company. The company has also revolutionized its commercial sector by introducing Concessionaire Analyser to manage and oversee a number of commercial activities that are to increase revenue for the company. Bristol airport also boasts of a number of leading airlines that provide low carrier budget that are easily affordable to most customers. As a result, this has seen an increase in customer base across the United Kingdom and major cities in Europe and an overall rise in revenue. Bristol airport has proposed a number of new developments which it considers as going concerns. As a result of these numerous intended developments, the financial and commercial performance of Bristol airport can be said to be safe and with these developments, Bristol Company projects a fair competition platform from and with other established airports.

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