Tresco Owner Calls For Airport Funding Debate
Tresco’s owner has called for a debate over the future of St Mary’s airport after councillors voted to balance it’s books with increased airline charges.
Cllr Robert Dorrien Smith wants the Full Council to look at how the airport is funded and it’s likely that passing the airport to a private operator could be one option.
The call for a debate was made after councillors were told they needed to, “take responsibility” for the airport’s future after consistently failing to put money aside for infrastructure improvements.
Airport finance has been contentious recently. Last year, some members were angered when they learned that the runway faced closure without major repairs for which there was no money. A separate airport management group wrestled control from the General Purposes committee soon afterwards.
Diana Mompoloki, who secured around £5m in improvement grants, told the Council Transport Committee that they were, “lucky” to be getting a grant to resurface the runway. She warned they can’t always have a, “begging bowl out,” while head of finance Iain McCulloch pointed out that the grant was effectively a subsidy.
As future grants are uncertain, airport manager Howard Cole presented members with a timeline of repairs and replacements for future years. In addition to the £1.06m annual outgoings, these are fixed costs even when there’s no income because of cancelled flights, the airport also needs to also set aside a further £200,000 a year. It will need to bring in £1.26m annually.
Diana advised that funders would want to see that the Council had ring-fenced cash for future work. They would need to be assured that grants were going to a sustainable business.
Raising the money will come from increased charges.
Iain McCulloch explained that St Mary’s Airport is unique because 92% of our airport’s income came from operator fees. Other regional airports can generate 40% of income from other income such as car parking fees and shopping.
Last year, Cllr Marian Bennett successfully spoke against a recommendation to raise landing fees. Cllr Richard McCarthy said he felt that was mainly a concession to stop British International Helicopters pulling out.
Now members heard that a 24% rise in fees for conveying each passenger, up to £7.68 per person, is necessary.
Cllr Dorrien Smith agreed with the principle of building future reserves but he challenged the timeline for replacing equipment. He felt fire engines and navigational gear should last longer than was outlined. He wanted a private sector operator’s view of the “conservative” costings, adding that £200,000 a year was “a heavy burden” and a cost that would be passed onto passengers.
Skybus chief executive Jeff Marston suggested that fares would increase because of the rise in fees. The average Land’s End single airfare in 2012 was £60 and 25% already went to St Mary’s airport, he said.
At the moment, the airport needs to be self-sustaining. But Cllr Dorrien Smith wants to investigate a Council subsidy because of the impact the airport has on the community.
Robert warned that increased fares could bring, “a viable airport and an unviable community.”
Every business could suffer from a lack of footfall from which it would be hard to recover, he warned. And Cllr Bennett added that diminishing numbers of visitors could mean businesses had less cash to invest in improvements.
But Iain McCulloch advised that the airport couldn’t make a deficit and Diana explained that if all the Council tax income was used, it would only shave £22 of a single fare and there’d have to be other savings, for instance the sports hall would have to close.
Members agreed the increase in charges but wanted the amount put aside for repairs to be assessed annually.
Howard Cole told the committee that it was in everybody’s interest to have a fully functional and financed airport. He said that he was “from the islands and loves the islands” and that he had presented a budget outlining what his team feel is needed to run the airport in a safe and efficient way.