The UK Department for Transport has received 19 applications from airlines and airports wishing to access $56 million of funding from the government's Regional Connectivity Fund for the promotion of new routes. UK regional airports and airlines have been urged to bid for government funding of up to £17.5 million in the next year to help launch new routes in the country.
This ‘start up aid’ has been 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 has been 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 help 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. “The range and ambition of the bids shows how smaller airports can transform their local areas with new connections and trade links. This announcement builds on the government’s commitment to ensuring smaller airports grow, boosting both local and national economies.”
UK regional carrier Flybe has applied for nine routes while Links Air, Stobart Air, bmi regional and CityWings have also made applications for support from the Regional Air Connectivity Fund. Flybe has applied for aid to operate services from April 1, 2016 from Norwich to Dublin, Exeter and Paris; from Southampton to Lyon and Munich; from Leeds Bradford to Edinburgh and Newquay; between Dundee and Amsterdam and between Birmingham and Derry (from October 25, 2015).
Stobart Air has requested aid for daily services from Carlisle to Belfast, Dublin and Southend from April 1, 2016; Links Air for weekday double daily links on Norwich-Newcastle, Durham-Belfast and Oxford-Edinburgh the routes; City Wings from Derry to Dublin and bmi regional between Doncaster Sheffield and Frankfurt.
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 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 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 someone from the north of Scotland, I appreciate the value of regional connectivity for businesses and communities, which is why I created the Regional Air Connectivity Fund. I’m delighted that so many regions across the country are set to benefit from improved connections, boosting trade and tourism,” he said.
“This fund boosts regional economies, so is also great value for the taxpayer; the Newquay to London link that I announced last year has a return rate of nearly 3 pounds for every pound invested, benefitting people across the UK. I hope these routes, if successful in the bidding process, will be well used and will support stronger economic growth across the country,” he added.
The announcement of those routes which have passed the initial application stage has been delayed to allow the department more time to consider the relevant evidence before determining whether the route meets the European Commission guidelines. The announcement of a short-list of routes that have met the criteria of the initial application stage will now be made in early May.
Those routes that are successful at this stage will then move forward to the strategic and economic appraisal stage, with successful bids being announced in July 2015. 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.
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 last calendar year.