Newquay Airport – what has it done for us?

Newquay Airport has always had its supporters, those who think we should get shot of the place as quick as possible and those who question the amount of subsidy the airport receives which allows it to operate. On the latter, the subsidy is a moot point to some (or many?) when it comes to the difficult budget decisions the Council is facing in the next few years.

Before I go on it will be worth doing a quick history of  why Cornwall Council owns the airport. Back in April 2004 the former Cornwall County Council took over responsibility for operating Newquay Cornwall Airport. This was following the withdrawal by the former Restormel Borough Council, which had previously owned the facility. Then in November 2005 the MOD announced that military operations at St Mawgan would end on August 2008 and in December Cornwall Airport Limited took over control.  As a result of this,  the County Council applied for a licence from the Civil Aviation Authority (CAA) to operate the airport as a civilian facility.  This included a new air traffic control landing system and tower, new Aerodrome lighting on the runway and taxiway, a new runway surface, improvements to the terminal building and a new Newquay Cornwall Airport Fire and Rescue Service with purpose-built fire station.

The County Council then spent approximately £76m transforming the former military airfield to a fully compliant civil airport – of this £49m came from European funding, with £27m coming from the Council.  The European funding agreement committed the Council to having an operational airport for the next twenty years. If the airport was to close before the 20 years was up, the Council could have to repay the £49m.

The Airport has been operated by Cornwall Airport Limited (CAL), a Private Limited Company wholly owned by Cornwall Council, since 2008 and the Council currently pays an annual subsidy to support the Airport. In 2009/10 the subsidy was £4.007m but this year is less than £3m, despite the worst economic aviation recession in 60 years. The council commissioned a detailed cost review in 2013 to see if the airport was being run as efficiently as possible. The report showed that over £850,000 had been taken from the cost base over the last few years and said that CAL were doing a good job.

So why not sell the airport? Well you can only sell an airport if there is someone willing to buy it. The Council did test the market to see if anyone was interested prior to the last unitary election, but no buyers came forward. So that pretty much rules out the option of selling. To look at the national context of why no-one was interested could be the reason several airports run by the private sector either closed (Manston in Kent, Bristol Filton and Blackpool is on notice to close) or brought back into the public sector because they were not viable. (Cardiff and Glasgow Prestwick).

Flybe operate three departures a day to London Gatwick. However, in May 2013 Flybe decided to sell its slots at London Gatwick (putting at risk the Airport’s vital London service), Newquay Cornwall Airport held discussions with other possible airlines to service the London route but unfortunately was unable to find a commercial partner. Feedback from possible operators stressed that the route was not commercially viable to them all year round because flight prices would be too high to achieve the required passenger numbers.

As a result of this, the Council and the LEP, with the support of local MP’s have lobbied central government to grant a Public Service Obligation (PSO) for the Airport. Which the Council has been granted subject to the tendering process.  Which means those who operate from the airport will receive a subsidy and therefore make the Newquay / London route viable. This is important as the only air services between London and Cornwall are to and from Newquay. A survey of Newquay Airport carried out by the Civil Aviation Authority and CAL showed that about 30% of the Gatwick route were business passengers – ar ound 30,000 passengers per year.

Of course, Newquay / London route is not the only route this airport services, and each route is important to the airport. The more routes the less subsidy the airport will require, but for this to happen we need more airlines to operate out of the airport. Wouldn’t it be great if there was a greater international offer available?

Many business leaders have stressed the importance of the Airport and the connectivity it provides. Passenger surveys carried out identified that about 24% of trips would not be made in the absence of an air service, and all business benefits from these trips would be lost. The alternative modes of rail and car involve significantly longer journey times. But around 70% of users are for leisure use too, so if this airport stopped operating their would be an impact on the tourism sector too.

Another factor of why the airport is important is because supports over 400 jobs, of which 150 direct jobs at the airport. Research shows that the overall economic impact of the Airport is currently around £54.5m a year. This is based on a figure of £5.9m of GVA resulting from efficiency benefits for local businesses; £28.1m of GVA resulting from the 83,500 tourist trips made through the airport and £20.5m of GVA resulting from the full-time jobs supported by the airport. The loss of this would have a significant impact on the Cornish economy.

Finally, the airport is also the site for Aerohub – England’s only aerospace focused Enterprise Zone (EZ). Aerohub is one of 24 Enterprise Zones set up by the Government to create future centres of excellence in key industries such as aviation, pharmaceutical, offshore energy and automotive.  EZ’s have the opportunity to attract investment, support development and create jobs through a combination of business rate discounts (worth up to £275,000 over five years for each business in the zone), simplified planning procedures and superfast broadband links.  

The Aerohub is led by the Cornwall and Isles of Scilly Local Enterprise Partnership and Cornwall Council – as the owners of the airport and surrounding land.  It covers 650 acres with ample development opportunities, including hangars, office space and a business park.  So far it has attracted seven new businesses and created more than 130 jobs since its inception in 2012.  The long-term aim for the Enterprise Zone is to unlock further growth of both the aerospace and space sectors in Cornwall.

So as you can see, the continuing operation of the airport is so important to many aspects of Cornwall’s economy and simply closing it, or not safeguarding its future will have far-reaching consequences for Cornwall.

 

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