Rising Cost In Air Travel Have 2 England Airports Concerned For Their Future

Local authorities in the Tees Valley are seeking talks with Ministers after regional partners were told they were unlikely to gain Government guarantees for landing slots at Heathrow for flights from Durham Tees Valley Airport (DTVA).

Even if a Public Service Obligation (PSO) application to the Department for Transport succeeded, an independent report by aviation experts warns it could cost the North East an initial £21.5m and up to £2m a year subsequently.

In March 2009, following 30 years of operation, bmi withdrew its air service between DTVA and Heathrow. Following that decision One North East commissioned experts at RDC Aviation to examine whether there was scope for an application for this route to be served under PSO regulations. These allow for slot ring-fencing and state-funded support to be offered for the provision of air services.

RDC Aviation has now reported back to the Agency and this report is currently being discussed with regional partners.

The RDC report says a decline in passenger numbers on the Heathrow service, along with increases in charges at BAA-owned London airports and higher Air Passenger Duty, have suppressed demand at regional airports, including Durham Tees Valley airport.

The report explores the practicality of making a PSO application to Government and concludes it is unlikely that an application would meet the Department for Transport’s criteria and would be costly to implement.

Even if a PSO was approved and was not challenged, the report says its first year of operation could cost £21.5m if slots have to be purchased at Heathrow to offer a business schedule from DTVA. Ongoing support to keep the route open would be between £1m and £2m per year, with around £80,000 required every three years in tender and support fees. The region would be expected to pay the full amount of any subsidy.

John Lowther, Director of the Tees Valley Joint Strategy Unit, said: “In our discussions with Government the possibility of seeking to establish a Public Service Obligation designation for the Durham Tees Valley-Heathrow route was identified as one of the possible approaches which could be considered.

“That is why, working with ourselves, One North East commissioned an independent organisation to examine the feasibility of gaining designation which would effectively ‘ring fence’ landing slots at Heathrow for a Durham Tees Valley service.

“The conclusion of the report is that designation of the route is not a practical option both on costs grounds and uncertainty as to whether the route would meet the Department for Transport’s criteria.

“However, the report did underline once again that a key factor which threatens all regional services into Heathrow – and has in fact led to a steep decline in regional flights over recent years – is the pricing system operated at Heathrow which effectively means it costs just as much for small regional service aircraft to land there as it does for the much larger aircraft operating on international routes.

“That, we believe, is an issue which we must again raise through our local MPs and the Regional Minister – and indeed we believe it has much wider implications than the impact on Durham Tees Valley since the pricing system at Heathrow affects the viability of services from all regions outside the South of England.”

Alan Welby, Director of Strategy at One North East, said: “We recognise the major contribution that regional air services play in the development of our economy.

“Following the withdrawal of the bmi service from Durham Tees Valley Airport, the Department for Transport identified a PSO designation as a possible avenue to be considered. This independent report concludes that this is unlikely to be a practical solution.”

Topics: Air passenger duty, air service, aviation, cancelled flights, Department for Transport, Durham Tees Valley Airport, flights, Heathrow, PSO, Public Service Obligation

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