Public funds 'are needed to lure new airlines to Capital'

In his first interview since being appointed chief executive of VisitScotland last month, Malcolm Roughead said that the route development fund (RDF) could help entice new airlines to Edinburgh Airport and bring the city links to the Middle East, Asia and Canada.

The fund – which gives a financial incentive for an airline to set up a new route and helps protect it from early year losses – was a key factor in persuading Emirates to set up a lucrative link between Glasgow and Dubai in 2004.

But the fund was dropped by the SNP when it entered Holyrood in 2007.

Mr Roughead said that RDF could help the city's tourism sector continue to grow. He said: "I think RDF has been very successful. Most would agree we have taken a step change; you only have to look at the airport and see who is in there compared to the past.

"There are routes I would like to see come into Edinburgh: some long haul and some short haul.

"It would be nice to see, for example, routes from Emirates, opening Edinburgh up to the east. And Canada is an interesting area; the same with some of the German and French routes we would like to see. It is not a huge amount (of new routes we want) because we have to bear in mind the capacity at the airport but we have ongoing discussions with BAA on who would bring the biggest benefit."

The fund helps airlines overcome the unprofitable early years of operating a route, when they can suffer heavy losses. Airline experts have said that Emirates' first three years in Glasgow were virtually free as a result of the then-Scottish Executive's funding.

When asked if the return of the fund could help attract more airlines, Mr Roughead said: "It is how you apply it and what it means because you want them to be in the position that they will become profitable.

"They are business people so they will be driven by opportunity. If they see the profit potential they will be driven by that. But we have got to be out there making the case for Scotland."

His comments came after he admitted that targets set in 2005 to grow tourism spending by 50 per cent were now unlikely to be achieved, although he said the sector remains "robust" and VisitScotland and partners are currently discussing what new growth "ambitions" to set.

He believes transport is key to helping that growth and had some support for the tram project – even if it only goes from the airport to St Andrew Square in the first stage.

He said: "We have had no negative feedback from visitors to say the construction work has stopped anyone coming to Edinburgh.

"Clearly the tram will be a welcome addition to transport but the sooner they can get it done the better. Going to St Andrew Square gives another option, although it is not as if (visitors] can't get there at the moment. But the more alternatives you can give the better."

Airport bosses have campaigned for the return of the RDF for several years. A spokesman for Edinburgh Airport said: "We would support what Malcolm is saying. A route development fund has been shown to be a key part of bringing Emirates to Glasgow and can make a big difference in bringing new routes."

Business case 'flawed'

A MOVE has been launched to stall the creation of a new marketing body for Edinburgh amid concerns about how much it will cost.

Opposition councillors said there are "serious gaps" in the business case for merging Destination Edinburgh Marketing Alliance (Dema), Edinburgh Convention Bureau (ECB) and Edinburgh Film Focus and creating Marketing Edinburgh.

In Marketing Edinburgh's business case, it is warned that council funding is likely to decline by 10 per cent in the next three years.

But it is claimed that the new firm could see its budget rise to 5m in 2013/14 through private sector funding. But there are fears that the current economic climate will make it difficult to raise private cash.

Councillor Norma Hart, economic development spokeswoman for the Labour group on the city council, said: "I just do not think that we should accept a business case that has such serious gaps without further scrutiny."