Landing Fee Increase Is ‘Totally Unacceptable’ Says Steamship Company Chief Exec

Steamship Group Chief Executive Rob Goldsmith

Steamship Group Chief Executive Rob Goldsmith

The Chief Executive of the Isles of Scilly Steamship Company says a proposed 15% increase in landing fees at St Mary’s Airport is, “totally unacceptable.”

Rob Goldsmith has issued his statement following the Council’s Transport, Economic Development and Infrastructure Committee meeting yesterday, where councillors voted to recommend a 15% rise in landing fees.

That would add around £150,000 to the Steamship Company’s annual bill for using the airport.

Council Vice Chairman Steve Sims had proposed an even greater increase of 37.6%, but that was not supported by the Committee.

Mr Goldsmith said: “The Council has not been in touch with us to discuss this matter despite our repeated requests but we have heard that it will go to a vote for all members next week.”

He says the recommendation for a 15% increase comes on top of 10% last year, which the Steamship Company absorbed within their fares, and a total of 35% over the past three years.

“If this goes ahead, we would find this level of increase to be totally unacceptable and we will have to consider our options very carefully,” warns Mr Goldsmith.

Rob also criticised “a variety of other new charges” which he said were being introduced, such as on Sundays, which “would discourage us from trying to do the right thing to repatriate stranded passengers.”

Rob says, “We all need a safe airport which can fund its future needs but the financial projections have to be based on realistic assumptions or we will simply undermine the very market upon which its future viability depends.”

At yesterday’s meeting, Cllr Marian Bennett criticised the company, saying the operator “does not listen.”

But Mr Goldsmith says the Council has, “refused any form of consultation or engagement with us as the only commercial customer at the Airport.”

And he questions the Council’s financial management of the facility.

“We find it staggering that it can contemplate this level of increase if it claims its finances are being managed properly in the current low inflation environment.

Rob says the Council “is aiming to pass on the significant overspend in the Airport’s project costs to customers.”

But he adds there is no clarity about whether the charges would be adjusted back downwards if it’s successful in gaining additional grant assistance, as is hoped.

Mr Goldsmith goes on to say: “There seems to be a “blank cheque” mentality from the Council in regard to running the Airport without any sense of responsibility for its damaging impact on customers or the visitor economy.”

And he says even before these proposed increases, St Mary’s Airport charges were already amongst the highest in the country.

At almost 15% of the standard Land’s End ticket price, he says they represent “a completely disproportionate amount.”

“This is a massively higher proportion of the ticket price than airport fees constitute for any other domestic or international air fares and represents a serious impediment to trying to encourage further growth or new routes,” says Mr Goldsmith.

Rob says the Steamship Company is seeking “a much better partnership with the Council in ensuring that the Airport is viable in the future and we want to avoid conflict.”

He says the company would “invite and welcome a thorough dialogue to ensure that St Mary’s Airport charges are set using more realistic assumptions so that we can all avoid the vicious circle of damaging visitor demand and wider economic activity. “

Mr Goldsmith says the Company wants a “much more sophisticated approach” to ensure there is an incentive to increase the market, which he says would clearly benefit the Airport significantly.

“This type of arrangement is common-place at airports all around Europe but it is not something that can be done as a last-minute knee jerk reaction and it needs careful consideration with appropriate time to reach a mutually satisfactory outcome.”

Councillors are set to vote on the recommended increase in landing fees at next week’s Full Council.

Last year, the Transport Committee recommended a 5% increase in landing fees but this was doubled to 10% by the Full Council.

That will not be possible this year. Under new rules, only the TEDI Committee can actually set fees for the airport and any changes will have to go back to that committee for approval.

26 Responses to Landing Fee Increase Is ‘Totally Unacceptable’ Says Steamship Company Chief Exec

  1. John Allsop March 6, 2016 at 10:27 pm

    I have kayaks and i have been trying to get some more kayakers to come to the islands.They have now told me they are going to the I.O.M as in their opinion the I.O.M. is a cheaper option.Shouldn,t a 170% INCREASE in PROFITS allow fare reductions not increases. Increasing prices is easy but eventually you might recive 100% of nothing which isn,t very much , Every potential visitor who is put off from visiting the island because of the cost to get here takes his family somewhere else and they NEVER come here.

  2. Gandalf March 4, 2016 at 1:05 pm

    And the reason BIH were strapped for cash, Jeff, was because the IoSSCo decided to introduce Skybus in order to undercut BIH’s fares and create a new business for themselves. Since BIH’s departure Skybus fares have increased and the reliability and quality of service has decreased. After all what can you do now apart from travel with the IoSSCo ? All you need to do is ask yourself if the IoSSCo is acting in the best interests of the islanders by providing a reliable and sustainable lifeline to the islands or are they more concerned with the bottom line and profits. That is not the reason the IoSSCo was established initially by the islanders.

    Stuart Moore is absolutely spot on and the sooner someone on the Council does something about improving the link with the islands the more likely it is that the islands will have a sustainable future. Marion Bennett aside there seems to be little activity on the Council other than to accept the staus quo and see Scilly’s popularity with the holidaymakers who are the only real likely source of income continue to decline.

    • Treasuretrove March 4, 2016 at 2:29 pm

      BIH had been insolvent and in special arrangements with their creditors since 1983. It’s a shame they went but it was not down to Skybus…

      • Roger Ewe March 5, 2016 at 9:18 am

        Wake up …. So they registered all these companies to allow competition???????


        The IOSSCo and doing everything they can to prevent competition, so please don’t go on about how wonderful they are

        • Treasuretrove March 5, 2016 at 1:14 pm

          Roger, I was saying the departure of BIH was nothing to do with market share lost to the Steamship Group. Just look at the drop in visitors when BIH pulled out to see this.

        • Adam Morton, St.Martins March 5, 2016 at 1:49 pm

          They are only names which would come up in search engines for marketing purposes ,it is common practice. It doesn’t stop anyone else starting a rival business. What does stop it is the certain knowledge that one or both would be bankrupted which is hardly an incentive to potential investors! When competition comes I think it will be in the form of more unreliable summer sea services as that is the only ones that can make a profit which would give the SSco a taste of what everyone else has to contend with. Only those truly committed to the islands and prepared to see no return on their investment would support such a service & I don’t know anyone like that.

  3. Adam Morton, St.Martins March 4, 2016 at 8:54 am

    There isn’t much point in comparing other airlines because they all have better economies of scale, different service levels , better runways etc etc. There isn’t even much point in slamming the company over fares & costs because it won’t make the difference it needs to for the customer. What is wrong is all the inside wrangling & deals over non intervention in subsidy and grant funding for vessel replacement etc because these are the only things that can make a real difference to our economy & community.
    We don’t have many hard facts to go on except that the rout scheme came to nothing so vessel funding has to be raised from freight & fares only which is unprecedented. Or does it? The SSco CEO categorically stated that no grant funding would be sought or required for this purpose which is the SScos choice but hardly in the public interest as the alternative is crippling the economy and leaving the funding for less essential projects. Between 2012 & 2016 there have been meetings with the council & SSco representatives, what was discussed we can only surmise but the upshot of it was that the Council CEO completely played down the situation at a once in a lifetime opportunity in a meeting with the then transport minister. Every indication is, that the powers that be were represented on the table at the townhall transport public meeting;( Duchy, SSco & Council) that a deal was done over the future of the islands which accounts for the council’s inexplicable moves in relation to the SSco stated aims and the investment in Duchy property!
    The situation is further marred by the public with confusion over its perceived rights which allows the powers to ride roughshod over them. It boils down to basic lifeline service which I do not believe is adequately provided.
    for part of the year we DO have Scillonian fares at £20 a head which is comparable to the Scottish subsidised ones. The timetables & schedules leave a little to be desired but there is a service there. The air fares ARE comparable to similar ones of similar length destinations in Scotland and are for seven months of the year a choice of those requiring more luxury than the ship can provide! There is also £5 flights for those with medical needs at mainland hospitals.
    Where it fails IMO is over basic cost of living, winter basic service cover, reliability of medical flights, provision of royal mail service obligations. I don’t think this can be done without assistance from the Government/Europe and I don’t think they would have a case for turning us down EXCEPT that we are already getting much of that money which we are entitled to, through the Council who jealously guard it for their own agendas with the SScos blessing as it won’t then interfere with their interests which it need not of, if tackled properly if both parties could be bothered !
    Until the public can be bothered to look out for each other and come to a fair compromise, we aren’t going anywhere!Its all about meeting people half way. If you go to a bank with half the money, they usually lend you the other half, I am certain the Government would have looked favourably on a detailed proposal proving that it was fair and not just paying visitors holiday fares to benefit already wealthy accommodation owners! Instead it should be subsidising the overpriced groceries, fuel, bricks and mortar of those working on minimum wage doing jobs which others would rather not .

  4. Jeff Eastick March 3, 2016 at 6:39 pm

    Here we go again with someone blaming IOSSC for getting rid of BIH. They did nothing of the kind. BIH ducked out because they were strapped for cash and wanted the money from the sale of the Penzance Heliport.
    By all means criticise IOSSC for price increases in face of falling fuel costs but not for the demise of the helicopter service , which was never as reliable as people now try to make it.

  5. Robert March 3, 2016 at 5:07 pm

    I’d like for Mr Goldsmith to apologise for this childish outburst.

    Either evidence what the council is doing wrong and how it can rectify it, or issue a public apology to the people of Scilly for this inappropriate response to a necessary measure to secure the future of our ONLY airport.

  6. Jay March 3, 2016 at 4:44 pm

    You cannot blame ISSG for the location of Lands End Airport which is probably the most fog prone in the UK! They have been trying to help everyone by investing in the service with hardened runways, a nice new terminal and the acquisition of new aircraft etc and now new GPS approaches. Fares are bound to go up with inflation but the lower fuel price seems to have had little affect on these!

  7. Gandalf March 3, 2016 at 4:28 pm

    In answer to Robert if a helicopter service were to return then the airport at Scilly would not need a new runway. As Alec Hicks said it took 25 years for the IoSSCo to get rid of BIH and the monopoly that now provides the only transport link to Scilly is woefully inadequate both in terms of price and performance. Lands End to Scilly including parking £237 return – and if the wind blows or it rains too hard or there is fog then the flight will no doubt be cancelled in any event.

    A sensibly run Council would make transport to and from the islands its number 1 priority. As it is electric cars for St Mary’s now seems to be exercising them.

    • Stuart Moore March 3, 2016 at 4:47 pm

      Well said that person!

  8. Stuart Moore March 3, 2016 at 4:22 pm

    “we would find this level of increase to be totally unacceptable and we will have to consider our options very carefully,” warns Mr Goldsmith.”
    As a customer who has had to spend over £1500 with your company in the last 6 months, I’d like to consider ‘my’ options, but unfortunately your the monopoly provider so my only option is to begrudgingly continue to use your company.

    And seeing as your company accounts for over 95% of the traffic at the airport, why shouldn’t the council charge you accordingly, and why moan, because all you’ll do is pass the additional costs onto the customer.

    The service you provide is awful, its expensive, unreliable and often vomit inducing or terrifying depending on which method of travel is taken, and nothing matches up with train times.
    And then there are the freight charges, should your item of freight actually arrive, there is a fair to good chance that it will either be damaged and/or you will be over charged, and sometimes even charged for something you haven’t even ordered.

    And then there are the delays, but not to worry because Landsend will ‘cancel’ a delayed flight after 1hr 59mins and then ‘re-book’ it for a generic later time in order to avoid paying compensation or refreshment vouchers that have to be provided when a flight has been delayed for 2hrs.

    The only reason people use the ISSco is because there is no other option, my disdain for your company is such that I would gladly pay more to use another provider, which I did right up until BIH closed down, before that I avoided your company like the plague.

    I do wish the councillors would remove their heads from their respective backsides and force the officers to lobby HMG for a state subsidy, that way the ISSco would have to compete for the tender and ‘if’ they won it , they would then be forced to provide minimum levels of year round service which would be subject to compensation each time they failed, which would be most of it, especially in the winter months.

    I do feel that some councillors have far to much vested interest to work in the interests of the people they are supposed to represent,, with the exception of Cllr Bennett who has been the single voice of reason regards the islands transport issues.

    Please note my comments are directed toward the ISSco management and not the people on the ground who get to hold the poohy end of the stick.

    • Nanny Ogg March 4, 2016 at 8:09 am

      Well said Stuart.

  9. Robert March 3, 2016 at 9:10 am

    I’m unsure if Goldsmith doesn’t understand the problem faced by the council, or chooses to ignore it, but either way he ends up looking stupid, and the IOSSCO end up looking like a greedy mainland-based business with no interest in the islands.

    If BREXIT happens, there will be no EU grants to help the airport in 20 years.

    And if the reserves are low, then no new runway can be built.

    Maybe it’s a managed decline by the IOSSCO, and they are banking on moving all their trade to the new boat service by 2036, and so do not care about the long-term future of the airport?

    Would be interesting to hear from Mr Goldsmith what he thinks will happen in 20 years.

  10. Alec hicks March 3, 2016 at 8:11 am

    I thought the grant was free to sort out airport,we need another operator to the islands,it took 25 years for skybus to get rid of BIH

  11. St Just-Asking March 3, 2016 at 8:04 am

    Does anyone have a good word to say about the Isles of Scilly Steamship Group, their engagement with customers and stakeholders?, their relationship with island businesses.?, grants from the local fund they set up perhaps? The local jobs they provide? Their plans for providing replacement vessels? There must be a sense of goodwill somewhere?

    For the lifeline service, everything feels a little ropey!

  12. Christopher Wilson March 2, 2016 at 9:54 pm

    I’m not sure if I’ve missed something but haven’t the council decided *not* to run the airport anymore, but to hand it all over to the Duchy, so is this a way to screw as much out of the operator before they adios the service and hand it over to them? We are looking forward to seeing Scilly Today sharing the ‘secret’ report which they have shown should not be secret (thank you ST!!) will any balances that manage to be screwed out be handed over, I wonder?

  13. Pete March 2, 2016 at 9:09 pm

    Heathrow to Auckland via Los Angeles approximately 11423 miles. The fare works out at approximately 82 pence per mile. St Just to St Mary’s approximately 30 miles. The fare works out at approximately £2-72 per mile. Why such a discrepancy considering type of aircraft used and major airports used.

    • Jiohn Kelly March 3, 2016 at 9:21 am

      Quite simple, it’s down to economies of scale : servicing, etc., spread over 11,423 miles as opposed servicing, etc., spread over 28 miles.

      • Henry March 3, 2016 at 9:29 am

        A better comparison would be with air services between Great Britain and the Channel Islands, the Isle of Man or the Scottish islands… and still it’s all much much cheaper (per mile) than Skybus.

        We are being ripped off by a monopoly. We need either to break it up to allow free market competition to play out, or we need to regulate the monopoly (eg in the same way a water company monopoly is regulated on the mainland).

        It’s not rocket science, but instead of sorting it out, we have vested interests and general stupidity among our councillors. When it’s up on Youtube have a watch of the recent Transport committee meeting to see what I mean.

        • Snake Pliskin2 March 5, 2016 at 8:50 am

          If you think its that simple why not start your own competitive airline, instead of using an tired old excuse. Get over the fact that if it were that simple then they would be queueing at the door. Also surely to attract another airline then there must be a carrot, but obviously just complaining about ISSco having a monopoly is easier!

          • Accountant March 5, 2016 at 12:18 pm

            SP2 – Don’t rule out the possibility of a competitor, but more likely by sea than air as that is where the profit margin is.

  14. Harry March 2, 2016 at 6:55 pm

    Thanks for your input Mr Goldsmith, now show us the sums where fares don’t go down despite the oil price plummet?

    He does t care about what happens 20 years from now, he’ll be long gone by then, retired, and be laughing in his retirement villa in Barbados as the islands can’t afford to keep the airport open.

  15. Adam Morton, St.Martins March 2, 2016 at 5:17 pm

    Sorry but the SSco has put up nearly all its fares 12-25% and freight on groceries up 25%this year when they were already recording a 170% increase in profits AND fuel prices have dropped by a third so they haven’t got any room to preach!That said neither the company nor the Council give a damn whether any of its sustainable without subsidised assistance which they both bu****d up!
    The Council has made no attempt to make its services affordable and neither has the SSco , They might as well get together and carry on bankrupting the place, sooner they do it, the sooner we can start again with something that works for everyone!

  16. Mart March 2, 2016 at 3:52 pm

    This is coming from CEO of the company that has a monopoly on the islands and chooses to charge extremely high fares for its services! Pot or kettle Mr Goldsmith?