UK Government announces £3.8 m funding for a Londonderry to Stansted (BMI Regional) air route
The UK government has announced £3.8 million (2 years) for a Londonderry to London air route, as the current operator Ryanair will stop operating the route at the end of March. BMI Regional has been chosen as the preferred operator for the route between City of Derry Airport and Stansted, following a competitive tender process by Derry City & Strabane District Council. Flights begin on 2 May 2017, and the government will fund the route over the 2017/18 and 2018/19 financial years. The new service will include two return flights each day, except for Saturdays which will have one flight each way. Lord Admad believed that the 13 weekly flights will “allow business passengers to get to central London and complete a full day’s work before returning home.” The UK government maintains regional airport links through the Regional Air Connectivity Fund, which “can be used to protect important regional air connections to London which may otherwise be lost.” [As they are unprofitable]. Derry already has a route through the Fund, to Dublin. In December 2015 the DfT announced that 11 successful bidders had been awarded support from the Fund, for routes. The intention is that airlines, with the subsidy, can build up the routes that are not viable so they become profitable in a few years.
The UK government has today announced £3.8 million for a Londonderry to London air route, following the decision by current operator Ryanair to stop serving the air link at the end of March.
BMI Regional has been chosen as the preferred operator for the route between City of Derry Airport and London Stansted, following a competitive tender process by Derry City & Strabane District Council.
Tickets will go on sale from 9 March 2017 with flights commencing on 2 May 2017, and the government will fund the route over the 2017/18 and 2018/19 financial years.
The new service will include two return flights each day, except for Saturdays which will have one flight each way.
Aviation Minister Lord Ahmad of Wimbledon said:
“The UK government has worked closely with Derry City and Strabane District Council to protect this important route to City of Derry Airport. £3.8 million UK Government funding will allow 13 return flights to connect Londonderry to London every week. The new service will allow business passengers to get to central London and complete a full day’s work before returning home.”
This is the first ever government backing for a public service obligation (PSO) in Northern Ireland. [That does not appear to be true. There is a link, in the article below, about a link from Derry to Dublin, unless that is paid for by Ireland? ] The government maintains regional airport links through the Regional Air Connectivity Fund, which can be used to protect important regional air connections to London which may otherwise be lost. [As they are unprofitable].
New regional air routes offer fast journeys across UK and Europe
From: Department for Transport and Robert Goodwill MP
2 December 2015
Aviation Minister Robert Goodwill backs routes to bring new business and visitors for whole country.
Aviation Minister Robert Goodwill has welcomed the new domestic and international routes that will start in 2016 from regional airports across the UK.
The Chancellor announced in last week’s Spending Review that 11 successful bidders had been awarded support from the Regional Air Connectivity Fund. These new flights will offer fast journey times within the UK and also introduce new routes to Europe for the first time.
Robert Goodwill said:
Our smaller airports are vital engines for local economies, connecting the UK and opening up opportunities. That is why the government is backing new regional air routes to drive investment and benefit hardworking people across the country.
The start-up aid bidding competition was open to airports with fewer than 5 million passengers per year and allows air routes that are not currently commercially viable today to be introduced early, giving time for airlines to build passenger numbers and deliver a more sustainable service.
It is anticipated that the flights will begin from Spring 2016.
Start-up aid of up to £7 million is being provided through the Regional Air Connectivity Fund. The fund already supports strategic routes to London from Newquay and Dundee.
Regional airports infographic.
The full list of successful routes are:
Carlisle Belfast City – Stobart Air
Carlisle Dublin – Stobart Air
Carlisle Southend – Stobart Air
Dundee Amsterdam – Flybe
Derry Dublin – Citywings
Newquay Leeds-Bradford – Flybe
Norwich Exeter – Flybe
Norwich Newcastle – Linksair
Oxford Edinburgh – Linksair
Southampton Lyon – Flybe
Southampton Munich – Flybe
There is a lot about Public Service Obligations, and the Regional Air Connectivity Fund, from Parliament from March 2015.
Public Service Obligations
21. A Public Service Obligation (PSO) is an arrangement by which a governing body or other authority runs an auction for subsidies which allows the winning company a monopoly to operate an air service for a period of time for the given subsidy. PSOs are used in cases where there is insufficient revenue for routes to be profitable in a free market, but where it is socially, economically and/or politically desirable to maintain the transport link. In short, PSOs allow the state to subsidise air travel that is not commercially viable.
22. PSOs must be offered for tender in the Official Journal of the European Union and bidding is open to any transport operator registered in an EU member state. The winning tenderer usually receives a monopoly on the route, but they may have to conform to one or more conditions of service, such as the type and size of aircraft, the timing of services, maximum fares or service quality.
23. In 2014, the Government introduced a policy to promote the use of PSOs to maintain routes from smaller airports to London which might otherwise be lost. The funding stream for that policy is known as the Regional Air Connectivity Fund. In June 2014, the Government announced support from the Regional Air Connectivity Fund to maintain the air link between Dundee airport and London Stansted until 2016 through a PSO agreed with Dundee City Council. In October 2014, the Government announced a second new PSO to maintain the Newquay to London Gatwick air link, which was agreed with Cornwall County Council.
24. On 22 January 2015, the Government extended its PSO policy to include state support for new air routes rather than simply supporting existing routes at risk of closure. It made £56 million available over the next three years to fund PSOs that support new air routes. Airports and airlines were invited to bid for this funding, with the first round of applications closing on 25 February 2015. The DfT should regularly report on the number of applicants and of successful applications to the Regional Air Connectivity Fund to support new air routes and publish this information on its website.
25. State support for air transport is governed by European Commission aviation state aid guidelines. PSOs can only be implemented with the agreement of the European Commission. The DfT has submitted a “Draft protocol for UK start-up aid for airports handling fewer than 3 million passengers per annum” for clearance by the European Commission. If the European Commission agrees this protocol, the DfT will be able to award start-up aid for air transport to airports handling fewer than 3 million passengers per annum without further reference to the European Commission. The DfT should set out a timetable for negotiations with the European Commission on its “Draft Protocol for UK start-up aid for airports handling fewer than 3 million passengers per annum” to allow smaller airports and local authorities that are considering accessing the Regional Air Connectivity Fund to plan effectively.
….. and there is much more at