24th January 2022
STANSTED REPORTS LOWEST PASSENGER NUMBERS FOR 23 YEARS
Reduction in business travel could be permanent
Stansted Airport handled just 7.1 million passengers in 2021, the lowest number since 1998, reflecting the dramatic reduction in air travel caused by the Covid-19 pandemic. (Note 1) Prior to the pandemic (2019) Stansted handled 28.1 million passengers, four times as many as last year.
Stansted is not, of course, alone in seeing a huge reduction in passenger numbers over the past two years. All UK airports have been affected to a similar extent as international air travel – for both business and leisure – has been decimated.
Figures released by the Office of National Statistics (ONS) show that both outbound and inbound tourism have declined by about 75% because of the pandemic.
This decline in tourism has had an unexpected benefit for the UK economy, with a favourable impact on the balance of payments of £26 billion in 2020, and a similar figure expected in 2021 (Note 2). Much of this money, instead of being spent on overseas holidays in countries such as Spain, Portugal and Greece, has been diverted to the UK economy and spent, for example, on home improvements and furnishings, as well as ‘staycations’.
This helps explain why UK GDP is now even higher than before the pandemic, and employment levels are also at a record high. It is also reported that VAT receipts are well ahead of expectations. This may be because there is no VAT on air travel but spending on home improvements, furnishings and staycations are all subject to VAT, benefitting the UK exchequer.
It is widely expected that overseas tourism will recover strongly as travel restrictions are eased but this may not be the case with business travel. An article in the Financial Times earlier this month (Note 3) highlighted the decline in air travel caused by the Covid-19 pandemic and reported that a quarter of business travel will not be coming back.
The pandemic has shown companies that a great deal of business travel can easily be replaced by ‘Zoom’ meetings. Business leaders also point out that reducing business flights helps protect employee health and wellbeing and improves productivity, as well as generating substantial savings in travel budgets.
In addition, almost all major UK PLCs now have a commitment to help tackle climate change by reducing carbon emissions, and one of the best ways to do this is to reduce business flights.
Stansted Airport Watch chairman Brian Ross commented: “Business travel has been declining for many years alongside the improvement in video-conferencing technology and the pandemic has accelerated that trend. Airlines depend on business travel for a significant proportion of their profits and so it’s bound to be a worry for them if they are facing a major permanent decline.”
- Stansted passenger numbers for 2021, as reported by MAG on 17 January, can be found at https://mediacentre.magairports.com/. Historic passenger numbers can be found on the CAA website https://www.caa.co.uk/data-and-analysis/uk-aviation-market/airports/uk-airport-data/.
- See ONS ‘Travel Trends’ for 2020 and quarterly bulletins on overseas travel and tourism at: https://www.ons.gov.uk/peoplepopulationandcommunity/leisureandtourism/articles/overseastravelandtourism2020/2021-05-24 and https://www.ons.gov.uk/peoplepopulationandcommunity/leisureandtourism/bulletins/overseastravelandtourism/previousReleases.
- Financial Times, 14 January 2022 – see https://on.ft.com/323yN9P.
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