London route vital for Dundee airport, says report

Dundee's link with London is vital for the city's airport, a new report has claimed. Picture: TSPL

The transport authority’s blueprint for the main airport for Tayside has warned that, while its short-term future seems assured, it appears likely that co-ordinated strategic support may be needed to secure its survival in the medium term.

The airport, now operated by Highlands and Islands Airports Ltd (HIAL) has suffered a major decrease in passenger numbers in recent years. From a highpoint of nearly 80,000 passengers in 2008, an estimated 50,000 passengers now use the airport.

Report

The report states: “Although investing in non-passenger based commercial activities at the airport could materially increase current levels of revenue in percentage terms for virtually no additional operating cost, at Dundee this element of the commercial strategy will only ever make a modest overall contribution because of the physical constraints of the site. It is unlikely to be the solution for the airport’s on-going operating deficit.”

The report identifies five key areas for the airport to address:

• Marketing the airport to carriers to provide frequent and affordable routes

• Creating an attractive airport environment for airlines and customers

• Raising awareness of the airport within the Dundee area

• Maintaining a high quality service that attracts repeat users

• Securing support of key local businesses and stakeholders

‘Mothballing’

The Transport Scotland scoping study report states “With commercial air passengers representing the largest source of the airport’s revenues, if the current London City route were to be withdrawn and not replaced, the short-term prospects for the airport would be likely to include a requirement for rising levels of subsidy over and above the current estimate of £2.7m per annum. If the airport is to remain open in these circumstances, a figure between £3m to £3.5m seems more realistic.

“The only alternative would be to close the airport to passenger services and lay-off the additional staff required to service them. Complete mothballing of the airport - at which point it would be returned to Dundee City Council under the terms of the lease - followed by an attempt to re-start scheduled passenger operations at some later date outside the HIAL umbrella, would potentially involve significant start-up costs and regulatory and licensing risks.”

The report outlines a programme of short term initiatives that could be rolled out over the next year, focused on stabilising current airport revenues as well as increasing passenger numbers and revenues.

Challenge

Keith Brown, the Scottish Transport Minister, said: “This report lays out a raft of measures that could help secure the immediate future of Dundee Airport, as well as help it realise its full economic potential.

“The airport faces a challenge in the increasingly competitive aviation market, so it’s important we look at all the available options to encourage more passengers and businesses to use it.”

He continued: “Securing the future of the service between Dundee and London is the top priority for the airport and the Scottish Government. This study also highlights a number of commercial opportunities – like engaging with companies in the offshore renewables sector – which could give Dundee Airport a unique place in Scotland’s aviation industry.

“The Scottish Government is committed to working with Highlands and Islands Airport Limited, Dundee City Council and existing businesses at the airport to secure its future. We will consider all the recommendations outlined in this report as we look to maximise the potential of Dundee Airport.”

Opportunities

Councillor Ken Guild, Dundee City Council’s leader, said: “We are working closely with the Scottish Government, Highlands and Islands Airports and a range of partners to try and secure the future of Dundee Airport. The London service, in particular, has been an important factor in the continuing long-term regeneration of the city. We are especially keen that this service is retained, and we are working hard to achieve this.”

He added: “The council is pleased that this new report identifies methods and options that can be put in place to help support the facility.”

Inglis Lyon, Managing Director of HIAL, said: “There is no doubt that Dundee Airport faces a number of competitive challenges. However, there are opportunities which we are currently pursuing to attract new business to the airport, including renewables and general aviation, and efforts to attract new scheduled services continue.

“HIAL is committed to working with public and private sector partners to develop new commercial opportunities.”