Council can no longer bear costs of loss-making Dundee airport
05.10.05
Dundee City Council is losing millions of pounds operating the city's airport - and has told the Scottish Executive it cannot bear the losses any longer. The Council is in talks with the Executive over a huge shortfall between the grant received and operating costs - which is set to widen as early as next year.
The council - which receives an Executive grant to operate the airport - is appealing to ministers for urgent assistance on the back of spiralling annual losses, expected to hit almost £2 million as early as 2007-8. That equates to about £30 per council tax payer in the region.
The airport costs more than £2m a year to run, but Executive assistance comes in at about £800,000, with the remainder of the bill being picked up by the region's council tax payers. The deficit could become greater from April 2006, when a 'technicality' will see the council's grant for the airport fall.
A Council spokesman declined to disclose the potential scale of the drop, but said it was 'committed to maintaining the airport for the benefit of businesses and our local community'. Stressing the airport's strategic importance to the economy of Dundee, he added: 'It's a key element of the future well-being of the city's regional economy in terms of economic development and tourism, being a key access point of golfing destinations.'
One scheduled service operates year-round from the airport to London City airport. The daily weekday return service - operated by Scotairways, 90 percent owned by Stagecoach tycoons Brian Soutar and Ann Gloag - carried 49,000 passengers in the year to the end of March.
A further 1,600 travelled on a seasonal service to Jersey this summer, and there were 268 private charter aircraft movements, helped by the staging of the (British) Open at St Andrews. That, however, is a far cry for the one million annual passengers generally needed for a commercial airport to break even.
The Executive could grant extra cash to alleviate the situation or off-load the airport on to Highlands and Islands Airports (HIAL), according to the Scotsman newspaper. 'The council's appeal to the Executive could result in extra cash to prop it up. But it's more likely that the council wants the airport taken off their hands and given to HIAL to run - something the Executive could do.'
All of HIAL's ten airports currently run at a loss. A HIAL spokesman declined to comment on any potential takeover of Dundee airport. An Executive spokeswoman said it was 'looking at ways of resolving the issue', following 'changes in the methodology used to calculate funding for the airport'.
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