A package of financial support to ensure Exeter Airport can avoid the ‘worst case scenario’ of closure is set to be signed off by councillors this week.
The double whammy of both the collapse of Flybe, as well as the COVID-19 pandemic, has led to the significant impact on the Airport, leaving it facing an existential threat to its future.
When Flybe, who accounted for 75 per cent of the passengers numbers at the Airport, went in to administration on the March 5, it led to the loss of 931 jobs locally. This was then followed by the coronavirus crisis with passenger numbers down by 94 per cent during August.
East Devon District Council’s cabinet, when they meet on Wednesday night, will hear the combination impact of the collapse of Flybe and the COVID-10 pandemic has left the Airport in a fundamentally different place, with passenger numbers this year are expected to be below between 80% and 90% down for the year, a clamp down on any non-essential expenditure, with 96 employees facing redundancy.
They will be asked to approve a package of measures to support the Airport, including a further deferral of £180,000 business rate relief, forward-funding the Airport’s share of the Long Lane enhancement scheme to the tune of nearly £750,000, and to endorse the concept of a sustainable aviation cluster centred on Exeter Airport.
Project director Andrew Wood, in his report to the cabinet, said: “The package of support is in place for the Airport to help counteract the impact of the lockdown, promote recovery and chart a course to a more sustainable future.”
He states that the proposal is high risk, but that the Airport is a significant employer and economic driver for the District, it had been significantly impacted by the Covid-19 pandemic, and the scale of job losses are unprecedented.
He adds: “Passenger numbers at the Airport in May 2019 were 97,000 and in May 2020 the equivalent figure was just 9. From the beginning of the financial year to the end of the July passenger numbers dropped by 99.5% compared to the same period last year.
“As we emerge from lockdown commercial flights have now recommenced from the Airport. But this is nowhere near the scale that might otherwise have been expected with passenger numbers down by 94% during August. Whilst some former Flybe routes have been picked up by alternative operators such as Logan Air and Blue Island, other key routes including to Paris and Amsterdam are not currently being operated. The flying programme continues to be further impacted by the uncertainties around quarantine restrictions.
“The in combination impact of the collapse of Flybe and the Covid-19 pandemic has left the Airport in a fundamentally different place. Passenger numbers this year are expected to be below between 80% and 90% down for the year. In turn this has led the Airport to critically review their business plan and to clamp down on any non-essential expenditure. Furthermore the Airport is currently consulting on making 96 redundancies. The potential for over 1,000 jobs losses in and around the Airport is unprecedented.”
His report says that more widely, the Devon economy is not likely to return to pre- Covid-19 levels of performance until 2027 and employment rates will not recover until 2030 without significant investment between local partners and Government.
It adds: “This paper puts forward proposals for short term financial support in terms of business rate relief. This will help to cushion the impact of the current situation and potentially also assist in recovering from the loss of Flybe in terms of securing alternative investors/operators. Moreover the additional funding from the Enterprise Zone programme for the Long Lane project will enable the scheme to go ahead and facilitate improved public transport and cycling connectivity.
“The most obvious alternative option would be not to provide any form of public sector backed support. The Airport does though face an existential threat currently. In the worst case scenario the Airport would close. This would lead to further large scale job closures, reduce business rate revenues and also diminish the connectivity of the region.
“Furthermore if the propensity of local residents to fly was not diminished, this would lead to longer trips (e.g. to Bristol) to access flights with the potential for a higher carbon footprint accordingly.
“It is not possible to say categorically that the package of support outlined in this report will stave off the threat facing the Airport. But it will help to cushion the impact of the pandemic.”
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The range of the measures that the cabinet are being asked to support will aid short term recovery, ensure infrastructure improvements can continue to be progressed and work towards the strategic objective of developing a sustainable aviation cluster can be completed.
If agreed, the measures would see the proposed business rate relief request within State Aid limits to be funded through the Enterprise Zone programme, increasing the budget for the Long Lane project by £1.1m, and recommends to Council the borrowing of up to £3.7m against ring fenced business rate income to implement the scheme.
The Long Lane Enhancement Scheme will widen the road that runs past Exeter Airport and down to Hampton by Hilton hotel, which will enable a new Airpark – one of the four planned ‘Enterprise Zones’ – to come forward, as the current ‘unfit for purpose’ road prohibits its development
The Long Lane scheme includes the construction of a T junction, rather than a initially proposed roundabout, at car park 1 at the airport. The carriageway between car park 1 and the Flybe Academy/Hampton by Hilton hotel will then be widended to ensure a road width of 6.5m and footway is achieved and to ensure tie-in to the proposed roundabout junction.
And while Long Lane is being widened, a new road to connect Silverdown Office Park to the FlyBe Academy access road, known as the “Silverdown Link”, will be built. Once the Long Lane works are finished, the Silverdown Link will become a permanent bus and cycle only link.
The previous £2.55m budget for the Long Lane scheme was agreed by the cabinet in March – on the same night that Flybe’s collapse was confirmed.
The Airport were due to fund South West Water to the tune of nearly £800,000 for the installation of a proposed deep sewer system, with work to take place at the same time as the Long Lane enhancement.
Those works will still take place, but would be funded by Enterprise Zone Board, with the Airport to repay the cash at a later date.