easyJet has said it had to slash fares to keep Aberdeen flights busy amid the North Sea downturn in the first half when increases in passenger numbers lagged the growth rates recorded on routes serving Edinburgh and Glasgow.
The Budget airline used fare cuts to prop up demand for Aberdeen flights in the six months to March as the fallout from the crude price resulted in a big change in conditions in what had been a buoyant market.
“The routes are not what they used to be,” said Sophie Dekkers, head of easyJet’s UK business, referring to flights between Aberdeen and Gatwick and Luton airports.
Noting that demand for flights had softened, Ms Dekkers added: “Loads are fairly stable but we are getting those volumes by reducing the fares.”
The comments provide the latest evidence that the effects of the North Sea downturn are rippling through the North East economy. Deep cuts in spending by oil and gas firms have resulted in heavy jobs losses in the area and reduced demand for services.
However, Ms Dekkers noted passenger volumes on easyJet flights serving Aberdeen increased by 11 per cent in the six months to 31 March. That compared with a 7 per cent increase across the UK.
The company increased capacity by 5 per cent to capitalise on Virgin scrapping its Little Red short-haul service.
Edinburgh passenger numbers increased by 18.9 per cent year on year, while Glasgow volumes increased by 12.5 per cent.
Inverness flights performed well.
Ms Dekkers noted behavioural trends in Scotland were similar to those seen across the UK.
easyJet revealed it lost £24m in the first half citing external shocks to demand from terrorism events relating to Sharm el-Sheikh, Paris and Brussels. It made £7m profit last time.
However, demand for flights to airports serving Mediterranean beach resorts, such as Malaga and Alicante, has boomed as UK consumers have warmed again to old favourites.
Growth in passenger numbers at Scottish airports partly reflected the success of routes linking them with London.
easyJet increased the capacity on services between Edinburgh, Glasgow and London by around 19 per cent.
It added four routes connecting Glasgow and Edinburgh airports with European centres. easyJet will launch a Glasgow Marseille route in June. The service between Glasgow and Morocco will end that month. Concerns about terrorist activity in nearby Tunisia weighed on demand.
Ms Dekkers said easyJet is on course to carry 6.3 million passengers on services to and from Scotland in the current year, up from around 5.4m last year. easyJet could add more routes to and from Scotland this year.
Led by chief executive Carolyn McCall, easyJet said trading would remain tough in the third quarter as demand continues to be impacted by the terrorist bombing at Brussels airport in March.
However, the group said: "Demand for air travel continues to grow, despite recent disruptive events."
Lower fuel costs have helped.
The group said air fares would remain low over the summer, after falling by 6 per cent year-on-year in the first half. Aberdeen, Glasgow and Edinburgh fares fell around 6 per cent annually.
It expects to grow full year passenger numbers, revenue and profit.
easyJet plans to increase its annual dividend by 50 per cent.
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