Regional Air Connectivity Fund - 19 routes

[NickBarnes]

Thought i'd start a separate thread as their are 19 routes that have been applied for, and will go through a couple of stages, with announcement to be made in July

Please see link below for full list

https://www.gov.uk/government/upload...s-received.pdf

Link to Announcement

https://www.gov.uk/government/news/1...up-aid-funding

[runway30]

I am surprised to see City Wing on the list because they are not a licenced Air Carrier as defined by the EU.

[LEEDS APPROACH]

STATE AID FOR UNVIABLE ROUTES

How on earth is this legal? Private companies given tax payers money to help projects that cannot stand on their own two feet. Routes that do actually work (just) are not only not financially helped but in reality extremely damaged due to the few passengers that make them viable choosing the routes helped by state aid. It is a catch 22 unfair system of failure from an utterly clueless government when it comes to aviation.

For instance Newcastle to Belfast flights will now be damaged with a very real potential prospect of drop in frequency. It is often 2 or 3 passengers that can make a mid day service, for example, either profitable or not profitable.

This is because the government cannot seem to get it into their thick skulls that there are too many airports in this small country. The issue is not to pay for every little struggling airport but to make sure each region has an airport that is well connected and fit for purpose and then let the market and catchment decide.

I would put a very large bet on the Doncaster to Frankfurt route being given the go ahead (with tax payers money). This after one of the world's most successful airlines - easyjet could not make Amsterdam even work. Private companies given tax payers money while neighbouring private companies are given none.

[SWBKCB]

1. These are applications, not awards - nothing decided yet;

2. the aid is for start up only not long term;

3. Yes, it's legal - any grant will need to meet EU state aid rules

[NickBarnes]

From what I have seen, All Routes have to show they will be sustainable on their own after 3 years, any route that doesn't show growth or meet the expected demand will have the plug pulled even before the 3 years is up!

There is so much criteria that has to be met I can see a lot of those proposed not making it so I wouldn't worry to much

Yes we have a small country, that is coming ever more crowded!!!

[runway30]

How sustainable do we think Carlisle to Southend will be?

[EI-BUD]

Incredible;
Flybe suggested to relaunch Norwich Dublin, a route that they axed before and in order to meet passenger targets payed passengers to fly on the service to meet the numbers and then axed the route. SOU BCN was canned after they ran Vueling out of the market, yet double daily flights to MUC and LYS, sounds insane....

and as for Derry - Birmingham; been tried and tested and they axed it.

Carlisle will get a real chance at testing the market with reduced risk.

Surprised that Stobart has not applied for more routes ex SEN..

If Belfast City to Cork could be reinstated, which was previously a strong performer, and hit hard by recession and motorway etc. and the crash ultimately. I would see this as being a good option, sadly Stobart don't think so...

[NickBarnes]

Almost certainty those suggested Norwich services will not be operated by Flybe themselves using their aircraft, so smaller aircraft might work. But even still with it's history i can't see Dublin happening. Newcastle and Paris are the only 2 that might get it from NWI

As for Carlisle if Stobart have applied for those routes through the funding program, what happens if none of them get it? Will they try them without when it seems they need a bit of help?

as said all routes will be examined to their long term viability so a lot won't make it

[EK77WNCL]

If it includes a Lufty codeshare I wish DSA-FRA the best of luck, very very few international routes on there which is a real shame! I'd have loved to have seen NCL-FRA in place of... Say, MME-BFS/BHD.

I reckon quite a lot of those 19 will get through, if any don't I'd say they would probably be MME-BFS/BHD, DND-AMS and possibly SOU-LYS... Do they have a say on whether frequency can be reduced? Double daily is definitely too much I think.

I don't think many will last the 3 years though... If 10 out of the 19 made it I'd be very very surprised and probably call it a success. I think about 5 might make it. With a removal of domestic APD however! Very different story potentially!

I assume the new Scottish routes labeled "TBC" will be flown by the chosen operator of their beautiful new Viking twotters?

[philbky]

Originally Posted by EK77WNCL

If it includes a Lufty codeshare I wish DSA-FRA the best of luck, very very few international routes on there which is a real shame! I'd have loved to have seen NCL-FRA in place of... Say, MME-BFS/BHD.

I reckon quite a lot of those 19 will get through, if any don't I'd say they would probably be MME-BFS/BHD, DND-AMS and possibly SOU-LYS... Do they have a say on whether frequency can be reduced? Double daily is definitely too much I think.

I don't think many will last the 3 years though... If 10 out of the 19 made it I'd be very very surprised and probably call it a success. I think about 5 might make it. With a removal of domestic APD however! Very different story potentially!

I assume the new Scottish routes labeled "TBC" will be flown by the chosen operator of their beautiful new Viking twotters?

This is the Tory sop to the regions, a short term promise to offset the mega millions they are to spend on Heathrow. Most of these are not viable. In three years time this will have gone by the board.

[EK77WNCL]

Sorry to change the topic but I agree... And I saw an advert in a magazine that almost had me shouting Tesco down, something about a kid from "the regions" who bakes cakes and sells them to Peru or something like that and how "he wants a third runway at Heathrow" and the "it benefits us all" trollop...

But I agree these route applications are underwhelming... They'll never work with APD the way it is. I hope for another round sometime soon but I fear this is the only one we're going to get.

[Cozy F]

Have to say "underwhelming" is being very kind to this elaborate Government diversion off the real topic.

They have shafted the UK aviation, tourism and hospitality industries, particularly in the regions, for the past 20 years with a punishing air tax which makes the industry completely uncompetitive in European terms, and when they come under increasing pressure to do the right thing and follow the lead of other European countries by removing the tax, they throw out a feeble gesture to be seen to be paying some attention to the problem, rather than having the basic substance to fix it.

As has been said, half of these applications have no chance, with APD to be applied on both legs of the journey in the UK, while frankly for the other half, the joint external beneficiaries like AMS, PAR, DUB, FRA, MUC are all more than big enough to support these minor developments in their own right without taking a UK taxpayers' handout. But I guess that's why these places are thriving at the UK's expense.

Still tis the season - there's a vote afoot, and baseless spin is in the ascendency.

[jensdad]

"and as for Derry - Birmingham; been tried and tested and they axed it."


Is that not the whole point of the state - to provide public services that the free market isn't able to provide? Can't see anything wrong with that myself.


(I appreciate that this makes me a Stalinist by PPRuNE standards, so my tin hat is well and truly on.)

[Fairdealfrank]

This is because the government cannot seem to get it into their thick skulls that there are too many airports in this small country.

Really LEEDS APPROACH, you’re having a laugh. To quote John McEnroe: you can not be serious!

Wasn’t it you proposing that we have another airport (Church Fenton) on another thread?

Is that not the whole point of the state - to provide public services that the free market isn't able to provide? Can't see anything wrong with that myself.

Indeed it is. The UK is very unusual in having privately owned airports. In most countries they are owned by local governments, e.g. USA, or central government, e.g. most European countries. There's nothing wrong with government assistance for industries (including aviation) where the market fails. Only obstacle: the EU as usual.

(I appreciate that this makes me a Stalinist by PPRuNE standards, so my tin hat is well and truly on.)

Maybe, maybe not.

[01475]

Urgh. So many better things public money could be spent on. The only reasonable suggestions in that lot might be the Oban ones, from the point of view of social benefit.

[Barnstable]

DSA is indeed a good bet. The M18 link road will be complete in early January 2016, and the airport hasn't got a link to any major European hub. Whether Frankfurt would be successful when there's not even any direct public transport from DSA to Sheffield, and a taxi costs 40 quid, remains to be seen.

[pug]

I think the key point here is the routes selected will need to prove their viability as stand alone services, otherwise the funding will get pulled. Gives a new slant on the list..

[PAXboy]

pug

I think the key point here is the routes selected will need to prove their viability as stand alone services, otherwise the funding will get pulled. Gives a new slant on the list.

Indeed! So the carriers can project three years ahead? On paper that's a doddle as that's how the Greeks entered the Euro!

Given that in the past 30 years:-

1. Pax have found other routes domestically and to other hubs (MAN/GLA/FRA/AMS/CDG and then the middle east)
2. The LCCs have changed the short haul game
3. The ME operators have changed the long haul game
4. We are still trying to recover from the biggest financial crash since 1929

These routes are not going to be viable.

So, the govt, having sat back whilst LHR and BA trashed regional connectivity it's now time to artificially put it back? I thought the Tories liked the open market? Anyone would think there was:

• An election on
• Their mates in the airlines want some dosh

[Cyrano]

This whole thing makes very little sense to me.

The two routes which have been cited as beneficiaries of this fund so far are DND-STN and NQY-LGW. But both of these routes are PSOs, and as such they can be more or less totally funded.

Please correct me if I'm wrong, but I didn't think this latest tranche of 19 routes are being proposed for PSO support (which would require OJEU notification, open calls for tenders, etc.). Rather, they are just being put forward for "ordinary" support under this Regional Election Support Fund or whatever it's called.

So what level is this "ordinary" support? Well, have a look at the DfT guidance document, specifically 2.6 and 2.12(v):

Startup aid offered cannot exceed 50% of airport charge.

The UK would normally expect airports to have published airport charges on their website and for this to act as the basis
for the amount of revenue eligible for aid.

So, the available funding will be a maximum of 50% of airport charges, and only in the case of airports with <3 million passengers per year. (The document states that for airports between 3 and 5 million passengers per year, an individual case needs to be made to the EC demonstrating exceptional circumstances, and the bar is set very high.)

I look at the list of the 19 routes and I struggle to see many that would be moved from loss to profit by a 50% discount on landing fees and PSC at one end of the route. There are some (Carlisle) which have effectively been pre-announced and which are obviously looking for a bit of extra dosh to reduce the inevitable losses. There are others (LBA-EDI) which don't seem to be eligible unless some sort of "exceptional" case can be made. In general, flybe in particular seem to have just tossed a whole pile of possible future routes into the mix in the hope that some might be approved.

Is it just me or is this a heap of nonsense?

[Fairdealfrank]

So, the govt, having sat back whilst LHR and BA trashed regional connectivity it's now time to artificially put it back? I thought the Tories liked the open market? Anyone would think there was:

• An election on
• Their mates in the airlines want some dosh

The Tories love of the open market is very selective. Clearly when it comes to aviation, the market is hobbled by excessive APD, and the answer is always "no".