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Europe rules airport subsidy can continue

By Cornish Guardian  |  Posted: February 26, 2014

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NEWQUAY Cornwall Airport has escaped a European Commission ruling which bans state subsidies for regional airports.

It is understood that Cornwall Council will be able to continue subsidising the airport – to the tune of about £3 million a year.

The guidelines say any airport handling fewer than 700,000 passengers a year may never be profitable, and therefore can request aid from local authorities. The report states: "As under the current market conditions, airports with an annual passenger traffic of below 700,000 may face increased difficulties in achieving full cost coverage during the transitional period, the guidelines include a special regime for those airports, with higher aid intensities and a reassessment of the situation after five years."

The airport currently handles fewer than 200,000 passengers a year. Responding to the announcement, Alex Folkes, Cornwall Council's Cabinet member for finance and resources, said: "The commission has agreed to allow ten years for transition and to raise the threshold for subsidies to airports with fewer than 700,000 passengers a year."

He said the council did not believe that the airport was the intended target of the new rule. "The case was aimed at low-cost carriers who use smaller airports on the outskirts of big cities and are subsidised to do so," said Mr Folkes. "The council is committed to reducing its annual subsidy to the airport, which it will achieve through passenger growth and new inward investment leading to job creation. Newquay Cornwall Airport is good for jobs, good for skills and good for Cornwall," he added.

Cornwall councillor Julian German, portfolio holder for economy and culture, said he believed the European Commission's decision was "something of a fudge". He said it delivered the message that the council could continue providing money to the airport as long as it avoids telling the commission.

Larger airlines claim the ruling is unfair as the aviation industry should be treated as a business by restoring a level playing field in the sector and stopping the race for subsidies.

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  • wringer  |  February 26 2014, 7:44AM

    Oh yippee!! lets all celebrate £3,000,000 of mine and your money each and every year going to prop up an airport with falling passenger numbers that even the EU says can never be profitable!