Bid to revive cash support for air routes

Published on Saturday 25 April 2009 15:27

A FUND that poured millions of pounds into supporting direct flights in and out of Scotland could be revived after Scottish Enterprise revealed that it is investigating ways of overturning a ruling by the European Commission.

The Route Development Fund (RDF), which enabled airlines to launch new routes that were otherwise uneconomic, was scrapped two years ago after bureaucrats in Brussels ruled it was unlawful. But Jack Perry, chief executive of Scottish Enterprise, said the agency is examining whether a decision in favour of Ryanair could have an impact on Brussels' stance against the RDF.

The Commission told Ryanair in 2004 that financial incentives, reductions in airport charges and landing fees granted to Ryanair to establish a base at Charleroi in Brussels "constituted state aid" and "were incompatible with the common market". But last December the European Court of First Instance annulled the ruling. The court said it was "vitiated by an error of law".

Perry said: "We are examining whether that decision has any bearing on the RDF. If it does we will see if the RDF could be resurrected. The RDF is a great example of pump-priming working."

The RDF was established in November 2002 by Scottish Enterprise, the Scottish Government, Highlands and Islands Enterprise and VisitScotland to improve business connections and in-bound tourism all year round. But it was seen as contravening European guidelines on airport funding and was shelved by the SNP in its first budget in 2007.

Prior to the RDF, the majority of international traffic to Scotland was routed through hub airports, such as Heathrow.

The fund contributed to a dramatic improvement in Scotland's direct international air network. A total of 63 routes were offered 6.8m of support from the RDF between 2002 and 2007 and 52 went ahead. Of those, 12 are still receiving funding and a further 21 are continuing to operate despite their RDF support running out, which Perry says is a sign that they are economically viable.

Routes continuing to operate without RDF support include Glasgow to Dubai – which marks its fifth anniversary this week – Edinburgh to New York, Edinburgh to Cologne, Prestwick to Gothenburg and Aberdeen to Copenhagen.

Moves to revive the RDF would receive support from businesses which have long complained Scotland's economy was held back by a lack of direct flights to key destinations.

Last month the managing director of Edinburgh Airport called for the fund to be re-established to help Scotland tackle the downturn. Gordon Dewar told the Edinburgh Tourism Action Group's conference: "It is unfortunate that such a fund existed in the years of plenty, but is now absent when it is needed most."

The Scottish Government says it continues to work with airlines to encourage new routes to and from Scotland.