Members to vote on Airport charges increase

March 16, 2018

Members will decide whether to increase commercial fees and charges at the Airport by 6% at next week’s Full Council meeting.

 

 Detail from photo by SCY TV

 

The recommendation from Craig Dryden, Senior Manager for Infrastructure & Planning, concerns the Passenger Load Supplement and fees relating to landing and freight for 2018/19.

 

Members will also discuss applying an incentive scheme whereby a discount of 3% is triggered once 98,000 passenger journeys have been recorded at St Mary’s Airport. The new reduced fees will apply only to commercial fees and charges for flights made after the target has been met and for the remainder of the 2018/19 year.  

 

If a 6% increase in passenger load supplement were to be passed entirely on to the customer, it represents an increase of 55p per passenger, not a 6% increase in the overall fare.

 

Craig’s report reads: “In setting commercial fees and charges for 2017/18, an assumption was made that passenger numbers would continue to rise and based on the most recent trends anticipated to reach 100,000. Unfortunately passenger numbers have fallen during 2017/18 and likely to reach only 92,000.

 

"This decline is partly attributable to operational and capacity issues experienced by both the Airport and Skybus during this period. Obviously, a drop in passenger numbers has had a corresponding impact on income. In addition, costs at the Airport have increased this year due in part to the unexpected replacement and repair of equipment and the costs of training a new Air Traffic Controller as part of the grow our own initiative.”

 

It went on: “In estimating the likely income for 2018/19 and following discussions with the Steamship Group, an optimistic view is that passenger numbers will reach around 98,000. This anticipated increase for the next financial year reflects a modest growth in the market based on recent trends (with the exception of this year), coupled with increased capacity and resilience to operations at both the Airport and the current sole operator Skybus and some improved reliability of flights in adverse weather conditions as a result of the partial implementation of EGNOS. Based on recent trends, it is anticipated that the amount of freight will total around 250 tonnes."

 

He concluded by recommending that commercial fees and charges for the Airport be increased by 6%to achieve the required level of income for the Airport, with a discount of 3% after passenger numbers reached 98,000.

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