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Council discusses funding proposals for City of Derry Airport

04 July 2018

Members of Derry City and Strabane District Council’s Governance and Strategic Planning Committee today agreed to continue to lobby relevant Government officials and Ministers to ensure urgent and immediate access to the £2.5m Route Development Fund, set aside by the NI Executive in September 2016.

Members were advised of the urgency of this funding being made available to ensure the continuation of the London Stansted PSO at the City of Derry Airport after May 2019.

Members also agreed to continue engagement with key stakeholders, including the UK Government, NI Executive and Irish Government, in relation to the sustainability and funding of the airport beyond 2021, whilst other critical transport infrastructure projects were progressed and completed.

The future needs of the Airport with regard to the management support beyond March 2020 was also discussed, with members agreeing a mechanism and timeframe for the procurement of these services.

Presenting the report to the committee members, Lead Finance Officer with Derry City and Strabane District Council, Alfie Dallas, outlined the crucial role of City of Derry Airport and its role within existing regional and local strategies, including the Strategic Inclusive Growth Plan. Its importance in terms of the economy and employment and detail in relation to its current operational position and outlook were also highlighted.

In his report he informed members of the need to access the £2.5m route development fund set aside by the NI Executive to enable the London Stansted PSO to continue after May 2019. He explained: “There is an urgency attached to this request, in that a tender or renegotiation process needs to be progressed in order to ensure that the London PSO route can continue in operation beyond May 2019. To enable this to be progressed, the required funding must be confirmed by late August/ September 2018. Failure to do so will mean the London route will cease and the airport will no longer be sustainable beyond May 2019.”

With regard to the medium to long term situation, Mr Dallas said it was vital that discussions in relation to sustainability of the Airport are advanced and developed with other key stakeholders, to include the UK Government, Northern Ireland Executive and Irish Government. This is not only to maintain existing connectivity but also to ensure regular connectivity to a key airport hub in the North of England with international connections, for at least a further five-year period, whilst critical transport infrastructure (A5 and A6) is progressed and completed and roads connectivity to the North West is significantly enhanced. 

He also highlighted the major challenges facing smaller regional airports and City of Derry Airport in particular, with similar facilities in Ireland and Scotland benefitting from significant Government subsidies and zero Air Passenger Duty.

Details of the current annual funding operation subsidy of £2.145m and the capital loan charge subsidy of £1.3m for the Airport were provided at the meeting, with Mr Dallas explaining that should the NI Executive funding be made available, the UK Dept for Transport funding confirmed, and the existing commercial routes sustained, Council’s current annual subsidy will be sufficient to fund the airport until 31 March 2021.

He said: “Given the other significant financial pressures facing Council and the other City and Region growth aspirations which require funding, it is proposed that a reduction in Council subsidy beyond 2021 forms an inherent part of the medium to longer term sustainable funding discussions with Government.”

Derry City and Strabane District Council Chief Executive John Kelpie, welcomed the recommendations and said that the short-term and medium-term future of the airport is key to the Council’s objectives set out in the Strategic Growth Plan. This will see real transformation and regeneration for more integrated, sustainable and accessible transport.

“Support from our stakeholders is essential for the City of Derry Airport if we are to make the wider city region accessible and an attractive and competitive proposition for inward investment and tourism growth. The Airport remains an important regional gateway that plays an essential part in the future development of the North West City region,” he concluded.

The full report is available to view at www.derrystrabane.com/