Derry Airport exit strategy call rejected

The chairman of City of Derry Airport have said he believes an exit strategy to effectively shut down the airport would damage the north west economy.

Wednesday, 7th September 2016, 10:34 am
Updated Wednesday, 7th September 2016, 2:19 pm
City of Derry Airport.

Roy Devine was responding to comments by Independent Councillor Paul Gallagher - disputed by the majority of other Councillors.

Colr. Gallagher said that the airport seemed like a “vanity project” and that in the context of the airport as a business the question had to be asked over why there was no exit strategy.

The majority of Councillors however disagreed, and pledged their support for the airport, stating that it was a vital piece of infrastructure for the north west.

They speaking following a presentation on the current business plan for City of Derry Airport at the Council’s Governance and Strategic Planning Committee meeting sitting at the Guildhall on Tuesday.

It emerged that passenger numbers have declined at the airport due to the closure of routes and a number of external factors.

During the meeting, airport chiefs spoke of the challenges currently facing the Airport, and the opportunities it was pursuing.

The airport is still running at a loss, with a £2,145,000 subsidy from ratepayers in the current financial year, although this is less than the subsidy allocated in previous years.

Airport bosses said that subvention from Derry City & Strabane District Council would continue to be necessary for at least the next five years.

There are currently 75 permanent staff at the airport, and airport bosses said that its economic value to the region is £15.7m.

Mr Devine however told the Committee there were currently a number of pressures impacting on the airport.

He said that over the past few weeks there had been discussions with the current sole operator at the airport- Ryanair- and “hopeful” discussions with other potential operators “which could lead to a number of outcomes”.

He said that Ryanair were growing their business at Belfast International and that the Gatwick service there “is having an impact on our Stansted service here in Derry”.

Airport Manager Tom Wilson told the Committee that Air Passenger Duty was also impacting, with the £13 per journey tax - which has been abolished south of the border- sometimes costing more the rest of the fare.

A report brought before the committee states that in discussions with airlines, this tax was often cited as the reason for reducing capacity or for not adding growth at City of Derry Airport.

Passenger numbers in Derry have also been impacted by a reduction in ‘summer sun’ capacity and the loss of the Birmingham route, as well as airports in the south stepping up their offering and marketing.

The report presented before the committee also states: “A continuing challenge is that the Ryanair aircraft, the B737-800, is too large for the CoDA routes.

“Whilst it can create low ticket prices through economies of scale, the demand is sufficient for only one daily rotation.”

In terms of capacity, City of Derry Airport now has enough land and buildings to accommodate 750,000 passengers a year- three times the number of passengers currently using it- and has a catchment area of 575,000 people.

Mr Devine said the Airport Committee remained committed to its aims of improving air access to the north west of Ireland and to “act as a key economic driver for this region”, with a key objective to reduce the subvention from the Council.

The airport said commercial income had increased markedly at the airport.

Mr Devine said that “growing routes a City of Derry is challenging,” with plans for a Dublin route recently scrapped due to external economic factors.

Independent Councillor Paul Gallagher said that the information brought before the council “concedes larger planes can’t be accommodated, that there was a lack of access to funding and that there was an inability to develop more routes”.

He also asked whether the positives, in terms of less subvention was being asked for, was linked to a reduction in routes.

“I don’t see any evidence of value to the local economy,” he said. “When you look at this as a business plan, the much that is getting conceded, you would have to ask why is their not an exit plan?”

He also claimed that the airport seemed like “a vanity project for this area”.

Mr Devine responded that the business plan does not concede anything, but “just tries to articulate the circumstances we find ourselves in”.

Speaking about the subvention, he added: “it’s a fact that will have to be considered by the council and a decision made if it is something the council wants to maintain going forward.”

“I acknowledge,” he added, “that things are challenging but I do believe there are better days ahead and better opportunities ahead, and we ask for the forbearance of the council to get us through that.

“The airport is a vital piece of infrastructure for the North West, and speaking in a personal capacity, I think the city would be much poorer for not having it,” he added.

UUP Councillor Derek Hussey asked when the Council envisaged breaking even, and was told that this was not considered possible within the current plans up to 2020/21.

DUP Councillor Thoams Kerrigan said there was a need, collectively, “to go out and sell ourselves more”.

“I think it is a major link we need to keep open,” he said.

Sinn Fein Councillor Eric McGinley said: “We firmly believe the having an airport is an asset for the region. What we won’t be doing is conceding that the airport should close just because Colr. Gallagher thinks it’s a good idea.”

Independent Councillor Gary Donnelly meanwhile said: “it’s beginning to look like we are flogging a dead horse.”

SDLP Councillor John Boyle disagreed. He said: “We need connectivity to other parts of these islands first and foremost.

“We have a very poor road infrastructure into this area,” he said, adding that it was “ludicrous” for “anyone to suggest we should give up and walk away”.