Job losses considered at cash-strapped Newquay Airport
Cornwall Council’s cabinet member for the economy has said job losses could be considered at Newquay airport due to rising costs.
Cornwall Council’s cabinet member for the economy has said job losses could be considered at Newquay airport due to rising costs.
The 650-acre site, which is owned by the council, has historically required a multimillion-pound annual taxpayer subsidy, with underlying operational trading losses often exceeding £4 million per year.
The council voted to axe the Public Service Obligation (PSO) air route between Newquay and London Gatwick earlier this year, which was partially subsidised by Cornish taxpayers. The decision was prompted by central government cutting its funding contribution, leaving the council to pursue commercial alternatives.
At a meeting of the council’s sustainable growth scrutiny committee today (Tuesday, June 16), its Conservative chairman Cllr Connor Donnithorne asked for an update on the running of the airport after Independent portfolio holder for economic regeneration Cllr Tim Dwelly said at a previous council meeting that “quite serious cost-cutting measures” were likely.
Cllr Dwelly said: “The big picture is that costs of running the airport have been rising. The figures last year, during a period when we still had the PSO and lost Eastern Airways, created about a £1.4m hole for the airport – unavoidable because the company Eastern Airways, which was operating the PSO route went bust.
“We are expecting an external report, which has been commissioned to look at the ways the airport is run in terms of its efficiency because we can’t continue to see rising costs.
“We are doing everything we can to bring revenue in on the surrounding land – factories, hotels, distribution centres and similar. That will all help in the long-run because that will mean more business rates and ground rents coming into this council.
“But, in the meantime, we do have to be running a lean machine at the airport and I am expecting that the study will require changes.”
He added: “The airport company itself is already proposing reductions in spends and increases in income. I believe, for example, that some of the car parking fees have been changed and there’s a considerable uptake in money from that, and it didn’t lead to people not parking there.
“I’m not going to beat about the bush here – we are going to have to expect a very major change in how the airport is run and that might mean that the number of jobs there or the hours may have to change. There is no point in pretending that’s not going to be at least on the table, but there’s nothing firm yet.
“I haven’t seen documents with proposals, but it’s something we are expecting.”
The results of the report into the airport operation should be announced in about a month’s time.
Cllr Dwelly verified that external consultants had been employed by the council to undertake the study into airport costs. He also told councillors that the managing director of the airport, Amy Smith, was leaving for a new job later this year and her successor will have to be employed.
He added that there was interest in new routes from the airport and new airlines flying from Newquay, but warned that the council has to ensure those routes are profitable.
Cllr Dwelly also said there was the possibility of introducing a cargo and freight licence at the airport.