UK regional airports and airlines are being urged to bid for government funding of up to £17.5 million in the next year to help launch new routes. The support is part of a package for up to £56 million funding for new routes over next three years
This ‘start up aid’ will be made available from the Regional Air Connectivity Fund which was announced by the UK government in June 2013 and is open to airports with fewer than five million passengers per year. This fund has already been partly distributed to support strategic routes to London from Newquay and Dundee but is now being extended to bids for more routes.
The £56 million is available to cover three years of financial support for start-up aid, with £17.5 million being made available to bids in 2015/16 and around £20 million a year for each of the remaining years. The aid will create new routes, boosting connectivity, increasing trade and supporting jobs in the regions.
“Smaller airports are vital to local economies and ensuring they thrive is a key part of our long term economic plan,” said UK Aviation Minister, Robert Goodwill. “I want to encourage the industry to apply to expand their routes, to generate UK growth and jobs, as well as boosting our trade links with countries all over the world.”
“Smaller airports are vital to local economies and ensuring they thrive is a key part of our long term economic plan.”Robert Goodwill
UK Aviation Minister
The fund makes support available for airports handling less than five million passengers per annum, although those which have more than three million passengers a year will require “very strong evidence” to demonstrate that funding of the route is a "duly substantiated exceptional case".
The Department for Transport has submitted its 'Draft Protocol for UK start-up aid for airports handling fewer than 3 million passengers per annum' for clearance. Upon clearance of the protocol the UK Government will be able to awarded start-up aid to an airline that complies with the protocol without further notification to the EC.
The EC guidelines also allow for start-up aid to be provided for air routes between 3-5 million passengers per annum but only in "duly substantiated exceptional cases". Cases will need to be individually notified to the EC and only upon receiving clearance can funding be made available.
The Department of Transport says discussions with the Commission have not identified what evidence would need to be provided but have indicated that the bar is likely to be set “very high”.
The Regional Air Connectivity fund was created by the Chief Secretary to the Treasury, Danny Alexander who as Liberal Democrat MP for Inverness, Nairn, Badenoch and Strathspey is fully aware of the important role such support plays in maintaining essential air services from the regions.
“As a Highlander, I appreciate the immense value of regional air routes to people living in remote communities across the UK. This fund has already supported valuable services like Newquay’s London route, which has a return of 2.5 for every pound invested, making it great value for taxpayers too. I hope this further funding will help other areas sustain economically important connections too,” he said.
To apply for the funding, airports and airlines will have to provide evidence to show their proposed route will generate local benefits and represents value for money. The initial application stage will run for five weeks, closing on February 25, 2015. Ministers will announce a shortlist of bids in March 2015. A list of successful bidders will then be published in June.
Guidance explaining how airlines and airports with fewer than 5 million passengers per annum can apply for start-up aid for new routes is available here via the Department for Transport.
In the chart, below, we highlight those airports in the UK that currently handle less than five million passengers per annum using UK Civil Aviation Authority (CAA) data for the 12 months to November 2014.