Chairman Says Restrictive Duchy Lease Affecting Airport Viability

airport runway 2015“The sooner we’re shot of the airport, the better.” That was the view expressed by Council Vice Chairman Steve Sims at Tuesday’s public meeting in the Wesleyan Chapel, where councillors explained their decision to hand back the St Mary’s airport lease to the Duchy of Cornwall.

That opens the way for the Duchy to appoint a commercial operator to run the facility.

Councillors explained it was driven by their lack of ability to run the airport commercially and the highly restrictive lease conditions imposed by the Duchy.

Council Chairman Amanda Martin told islanders that the Duchy imposes a ‘profit cap’ as part of the lease.

She said that means if they make any money over a set threshold they have to “hand it over to the Duchy” and the cap was “sufficiently low to make it not reasonable.”

Amanda said this had been in place since the mid 1980’s and wasn’t sustainable.

If the Duchy hasn’t managed to find a commercial operator by the end of the one-year notice period, Amanda said the Council would step in to continue operations. And she said this would provide them with an opportunity to renegotiate the lease.

Council Chief Executive Theo Leijser focussed on the inability of the Council to run commercial operations like the airport.

He said the authority had “struggled to have meaningful discussions” with other operators to run services.

And he said the current airline Skybus doesn’t connect properly with other transport routes on the mainland.

Theo was asked why the Council’s own report, commissioned from experts Parsons Brinkerhoff, said that no operators in the UK either had the correct aircraft or the commercial interest in operating out of St Mary’s.

At the time, Radio Scilly reported that the consultants had spoken to all UK airlines using aircraft that could land here, including Loganair, Manx and Guernsey airline Aurigny. None of them were interested in adding the route.

But Cllr Martin said the Channel Islands operator had shown interest and Theo replied that it was, “four years ago and things had moved on.”

Other members of the audience asked why the Council was concerned about the Duchy’s profit cap if the airport wasn’t making any money anyway.

The senior Manager responsible for the airport, Craig Dryden, said it “just about broke even” last year.

But Craig said they were faced with increasing costs due to more safety compliance, as well as falling passenger numbers, down last year to 93,000 from the peak a decade ago of 130,000.

The Council’s accounts show the airport was in the red by £170,000 last year, although Theo explained this was due to the money spent on the refurbishment.

One islander felt that the only way a commercial operator would be able to make a profit is to “basically sack people” and raise money through car parking and concessions like gift shops.

But Cllr Martin said, “that wouldn’t be our problem.”

Cllr Gaz O’Neill said he was “flattered” that so many people think the Council were the best people to run the airport.

There was some confusion over whether the public money invested in the airport would have to be paid back, and whether the Council could recover the £600,000 it overspent on the refurbishment project last year.

Theo said if the airport continues under it’s present purpose, then no repayment of the grants would be required.

But he didn’t know if the Council could recover their extra costs.

Cllr Steve Sims hoped that the European funders would meet the cost of the overspend and he thought there could be an announcement about that on New Year’s Eve.



13 Responses to Chairman Says Restrictive Duchy Lease Affecting Airport Viability