BELFAST BRIEFING:SOARING FINANCIAL pressures, rising costs and losses which are about to hit sky-high levels – not exactly the ideal flight plan for a struggling regional airport.
But that is exactly the scenario facing Northern Ireland’s only council-owned airport this year,
The City of Derry Airport lies less than 50 miles from Belfast International Airport (BIA) and just under 60 miles from George Best Belfast City Airport as the crow flies.
In the right circumstances it can take less than 90 minutes to reach BIA from the Derry area by road and just under two hours to travel to Belfast City Airport. A proposition which is not wasted on Derry’s travelling population who are more than happy to bypass their local airport to take advantage of the wide range of flights now offered by BIA and Belfast city airport.
If passenger numbers were not enough to put the City of Derry Airport in the shade when it comes to its Northern Ireland rivals, then there are the financial facts to consider. Last year Belfast city airport was sold to ABN Amro Global Infrastructure Fund for £132.5 million. This represents almost four times what its previous owners Ferrovial paid for it in 2003.
Two years ago BIA secured a £100 million investment boost from Aer Lingus when it located its first base outside the Republic of Ireland in the North.
Compare this then to the City of Derry Airport which has literally cost local tax payers and the Irish and British Government millions of pounds since Derry City Council purchased what was a former second World War airfield in 1978. According to the council, the City of Derry’s operational deficit is now expected to rise from £1.7 million to £4 million.
Last year the council was also embarrassingly forced to close the airport for two days as a result of strike by UK public sector workers. The council says operational costs at the airport have increased due to a number of factors which include increased security, higher insurance and the need to recruit new staff to meet the UK’s Civil Aviation Authority’s requirements.
Derry council said staff training, increased marketing and loan charges relating to its share of investment in safety works at the airport, account for the rest of the increase in the operational budget.
The safety works cost a total of £11,136,103 – 75 per cent of which was covered by grants from the Irish Government and the Northern Ireland Executive.
The chief executive of Derry City Council Valerie Watts has warned that the council must act now to “consolidate services at City of Derry Airport to safeguard future growth and the employment the airport supports”.
The council has argued that the airport generates approximately £40 million into the local economy. But it has also highlighted that it needs to reduce the airport’s operational deficit by at least £600,000.
This raises a number of fundamentally important questions at this time. How is the council going to achieve this saving? Is a local council really the best organisation to be running a regional airport, particularly in the current economic climate? And what is the City of Derry Airport’s ultimate destination?
Last year at the fifth meeting of the North-South Ministerial Council Transport Sectoral Format in Tí Chulainn in Mullaghbawn, Derry City Council made certain commitments.
These included “the immediate incorporation of City of Derry Airport into a company wholly-owned by the council followed, within a period of 18 months, by either sale of equity of the company outright or by sale of the company, but with the council retaining control of the airport land through a long-term lease”.
That was nearly nine months ago and nothing has happened yet. In a statement the council said: “Derry City Council continues to make progress towards incorporation and it remains a policy priority for the organisation”.
Waiting for Derry City Council to decide what it is really doing with the City of Derry Airport is a little like being told your flight is delayed.
Explanations are one thing – but the really important information is how and when you are going to arrive at your chosen destination.
Derry City Council needs to register a new flight plan for the future of its local airport.
