Irish tourism has enjoyed a boom period over the last five years, this is reflected in significant growth at Dublin Airport, however, Shannon Airport’s share of the airline passenger market appears to be slipping.
Dublin Airport has increased its share of the Irish airline passenger industry by 4.2% over the last five years, a period that coincides with a massive tourism boom in the country.
While the capital has the obvious advantage of a higher density population in its catchment area, the Dublin Airport Authority (DAA) has also been aggressively marketing its services in the Midwest region since Shannon Airport Authority (SAA) parted ways from the group. Consequently, Shannon’s share of the passenger market appears to be slipping.
Prior to separating from the DAA, passenger traffic at Shannon had declined dramatically from 3.6 million to around 1.5m. At the time Transport Minister Leo Varadkar revealed that the SAA had a new business plan to grow passenger numbers to 2.3m in 2017 and 2.5m in 2021.
“Quite frankly,” said the now Taoiseach, if Shannon can’t achieve that number by 2021, then there is no future”.
So Shannon set out on the road to independence with lots of ambition. The timing of the newly independent entity coincided with the emerging tourism boom. By the start of this year, overseas visitors had increased by more than 3.5 million while 2016 was a record year for the sector with 9.6m tourists, a trend set to continue this year.
Given these circumstances, it might have been expected that Shannon would be on course to meet its own targets, but figures released by the CSO and IAA tell a different story.
Over the summer, fora.ie reported that Shannon Airport is seeking to contract a business consultant to “improve overall competitiveness” so that it can become a “challenger brand” in Ireland.
Shannon wants to create “a renewed commercial strategy and brand framework” to increase passenger spend and encourage repeat visits from travellers.
According to the narrative, Shannon Airport’s annual report revealed that the facility handled just over 1.7 million passengers last year, “well below the 2.2 million who travelled through Cork”.
It was noted that revenues were down some €400,000 on the previous year and passenger numbers remain a long way off the 3.6 million using the facility ten years ago when Shannon was part of the Dublin Airport Authority.
In an attempt to increase revenue, Shannon Airport needs a business consultant to formulate a “brand vision that conquers the Irish market”.
A short-term contract is on offer to the successful applicant who is expected to examine the present retail offering. A new branding operation is set to begin in October coinciding with work on a new duty-free section.
The article also quoted the Shannon Group’s head of retail, Darren Smyth, speaking at a Retail Excellence Ireland conference earlier in the year. – “Shannon Airport has had very little investment for the last 30 or 40 years and there are parts of it like Moscow in 1980.”
In fact, the DAA invested €40 million in a terminal extension that opened in 2000 allowing an increased capacity of up to five million passengers.
Regarding Ireland’s airline passenger market, the Central Statistics Office reports that Dublin controlled 80.2% of airline passengers in 2012 while Shannon’s share was 5.4%. By 2016 Dublin’s share had increased to 84.6%, while Shannon’s slumped to 5.1%.
While Shannon is aiming to become a “challenger brand’ among Irish airports, Dublin Airport recorded 3.1 million passengers in July alone.
Last year a record 27.9 million passengers used Dublin Airport, 2 million more than in 2015. In contrast, Shannon’s 1.71 million passengers in 2015 increased by just 2% to 1.74 million in 2016.
Corresponding with the tourism boom, the Irish Aviation Authority (IAA) confirmed that July 2017 was a record-breaking month for handling flights in Ireland.
Commercial terminal flights increased by 4.1% at Dublin Airport and 2.6% in Cork while Shannon recorded a 4.1% decrease for the same month.
Dublin’s gain, it would seem, is Shannon’s loss. Meanwhile, the IAA believes that Dublin is on course to handle 30 million passengers this year.
During the summer Dublin Airport served 165 destinations to facilitate the booming tourism market. Cork Airport offered routes to and from 40 destinations while Shannon operates scheduled flights to 27 destinations.
An airport’s core business is connecting people with places. Today’s discerning customer seems to want more routes and more destinations. Satisfying that demand, while investing in better marketing of its existing services, remains the Shannon Group’s biggest challenge.