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BA considered replacing its Jersey-Heathrow link with a separately branded low-cost carrier flying between the island and Gatwick, it can now be revealed.
On Tuesday, the flag carrier signed a five-year deal with Ports of Jersey which secured services to and from Heathrow.
To justify providing financial support to British Airways, Ports commissioned research group Oxford Economics to work out if it made sense to plump for Heathrow over the Gatwick alternative.
The forecasting company concluded that the strength of onward connections from Heathrow will support business travel growth and boost productivity in Jersey, equivalent to £123m in GDP by 2025, a rise of 2.4%.
Alternatively, if BA runs a low-cost subsidiary from Gatwick, Oxford Economics conclude, business travel growth would slow over the medium term, reducing Jersey’s potential GDP output in 2025 by £79m, a dip of 1.5%.
Pictured: Ports of Jersey were offered the possibility of a British Airways low-cost subsidiary flying between the island and Gatwick.
If BA chose not to run a service to Jersey over the medium term, GDP could be £91m lower in Jersey by 2025 than it otherwise would have been, a fall of 1.8%.
The group forecast that, by 2025, passengers arriving from Heathrow on a BA flight will boost GDP by £74m and 1,200 jobs. Alternatively, running a subsidiary service from Gatwick would reduce the economic impact to £55m.
Oxford Economics conclude that “good connectivity into Heathrow is a unique selling point for high-net-worth individuals and businesses who are thinking of locating in Jersey, and is also essential for individuals and businesses who are already based on the island.”
Pictured: Oxford Economics estimate that a Heathrow connection will increase the island's GDP by £123m by 2025.
It adds: “The banking industry is the key component of Jersey’s financial services sector. High-net-worth individuals who have chosen to reside in Jersey are an important client segment of Jersey banks.
“Expanding the connectivity of these individuals to their business interests around the world will help maintain Jersey as an attractive place to reside and is a key selling point for other high-net-worth individuals who are considering relocating to the island.”
The group estimates that the maintenance and enhancement of a BA Heathrow service would increase business travel activity by 13% by 2025, but this would be 9% lower with a subsidiary Gatwick service, or -10% without any BA service.
OE forecast that, by 2025, the BA Heathrow service will account for 49% of all available seats to London, reaching 600,000 within three years.
The low-cost Gatwick option would give 104,000 fewer seats than Jersey-Heathrow by 2025.
Heathrow offers 138 onward connections compared to Gatwick’s 68. OE argues that the west London airport is much better for financial services with flights to the Middle East, South Africa, the Far East, East Africa and the US, particularly New York.
By using an “air connectivity score” which quantifies how easy it is for passengers to reach other economic centres from a particular airport, Jersey scored 232 in 2019, pre-pandemic, but with a Heathrow service, this will rise to 344 by 2025.
Without BA, this would fall to 125, rising marginally to 133 if the carrier ran a low-cost operation to Gatwick.
The UK accounted for 90% of all air visitors to Jersey in the year before the pandemic struck, with 44% of these passengers coming from London airports.
OE forecast that flights by BA to Jersey could support up to 115,000 arrivals a year by 2025, while flights by a low-cost BA Gatwick operation could support 86,000 arrivals by then.
By 2025, spending by visitors who travel to Jersey using a BA service from Heathrow could equate to £52m, or 21% of all inbound tourist spend. At the moment, it is £38m.
As mentioned, adding ‘multiplier impacts’, such as spending money with suppliers who, in turn, pay wages and tax, a BA Heathrow service would support a tourism GVA of £74m and 1,200 jobs.
In 2019, on a pure connectivity basis, flights from Jersey to Munich and London Gatwick were the most important services offered from the island, accounting for 26%.
Of course, in these days when BA still flew to Gatwick, very few islanders connected through Germany and Gatwick had a 35% share of all seats, a country mile ahead of any other airport. Dublin and Manchester were the next most important destinations, accounting for 9% and 8%, respectively.
Pictured: Heathrow offers 138 onward connections, many of those with BA itself.
On a relative connectivity score, Jersey is well-connected for a European island but, with 232 points, is two behind the British Virgin Islands. This is dwarfed by the UAE’s 421,965 points and Hong Kong’s 403,673.
Using a different scale - air connectivity per 1,000 people - Jersey has a score of 2 compared to the Cayman Islands’ 111, Luxembourg’s 31, Mauritius’s 14 and the BVI’s 8.
BA announced last August that it was launching a low-cost subsidiary at Gatwick. It launched last week, operating to 35 European destinations, including Nice, Amsterdam and Larnaca. The new services have been branded and known as British Airways.
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