Regional airports at Westminster

No APD for PSO.

Clashing with the World Aviation Festival the House of Commons Select Committee met last Wednesday to discuss regional aviation.

Chaired as usual by Hugh Merriman the industry guests were Clive Coleman, Director, Regional and City Airports (Norwich etc); Brian McClean, Director of Communications and Sustainability, AGS Airports (Aberbeen, Glasgow & Southampton); and Kay Ryan, Chief Commercial Officer, Loganair.

All three explained the costs and challenges of the last three months highlighted Brian McClean noting that pre pandemic AGS were carrying 13m passengers as a Group.  This year the largest airport, Glasgow will finish up with 1.9m.

There was a suggestion that for PSO (Public Service Obligation) routes APD (Airport Departure Tax) be dropped at least in the initial stages to encourage people to use the flights.

Clive Coleman made the point bearing in mind that there were separate rules for England and Scotland.

“We have always sought a new approach to PSO routes that would allow initial funding, but operating region to region to make the routes sustainable and financially viable for the airline, ultimately, to operate on a fully commercial basis.  We think that it is a good recommendation to break the link that means they all have to be London-centric in England, because there are long distances. For example, Exeter to the north-east of England is a long way by train. For day-to-day business, an airlink is the only viable solution. We think that kind of option would help to make a sustainable route and would increase frequency.”

Kay Ryan summed it up: Are routes at risk? Yes, they are. It is early days with the recovery but, as Clive said, a temporary APD holiday for some might be worth a review, or indeed the scheme that the Northern Ireland Government had in place for their airports this summer, where they gave financial support based on load factor. That completely takes into account the size of aircraft. To maintain frequency throughout the summer, there was a subsidy in place if your load factor fell below a certain level. It was a very good scheme. It was very straightforward and easy to manage and monitor. It certainly helped us keep aircraft flying into Belfast.

A full transcript can be found here

https://committees.parliament.uk/event/6210/formal-meeting-oral-evidence-session

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