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Dundee Airport transfer 'not cut and dried'

28.02.06

Moves to have Dundee's Airport transferred to the ownership of Scottish Executive-owned Highlands and Islands Airports Limited (HIAL) in a bid to ease pressure on the city's budget are not cut and dried. Based at Inverness Airport, HIAL owns the facility at the highland capital, together with nine other small airports.

Although not commenting specifically on the move, the Executive has confirmed Holyrood officials are involved in talks with Dundee City Council 'on the future arrangements regarding the operation of Dundee Airport'. However, a spokesman for transport minister Tavish Scott's department also stressed today that discussions are at 'a very early stage'.

Dundee City Council is hopeful the current dialogue could lead to HIAL spreading its wings outwith the Highlands and Islands. Negotiations for such a development were given the unanimous backing of city councillors after they considered a report by senior officials.

Although it does receive a funding contribution from the Executive, the airport has been using growing amounts of city council cash annually to finance its operations. Rising running costs and the pressure on Dundee's local authority budget have heightened the need for action.

The cost of running the largely under-utilised facility during the 2006/7 financial year has been put at £2.225 million. The Executive will contribute just over £800,000 to this, leaving the city council with a hefty bill. It is not clear yet what implications the current discussions between city council and Executive might have on the funding and subsidy for the coming financial year.

Recent changes by the Executive in conditions relating to its Route Development Fund appear to have made a transfer deal involving HIAL a realistic prospect. The removal of a requirement that supported services must operate at least five round trips a week in favour of a three round trips condition and the airport also now being allowed to use RDF cash to support domestic services, means Dundee may be a more attractive proposition for expansion under HIAL.

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