Cornwall - Newquay Airport Expansion - The Case Examined - Elizabeth Baines - Chapter 1

Newquay Airport Expansion:

The Case Examined (Revised
Edition)

A report by Elizabeth Baines

Commissioned by Groundswell Cornwall

© Groundswell Cornwall 2007

www.groundswellcornwall.org

 

 

 

Chapter 1

Newquay
Airport:
Background

 

Summary

 

1. Newquay airport has operated under deficit for a number of years.
   Increasing air passenger capacity will not clear this deficit in the
   future. (1.1, 1.3)
2. Obtaining the CAA
   license will require major additional investment. The license has yet to
   be issued. (1.2)
3. While passenger numbers at Newquay Airport
   are planned to increase, this will not necessarily transfer into an
   operational surplus. (1.3)
4. Investment in Newquay Airport by Cornwall County
   Council will be made with the aim of obtaining the CAA
   license and expanding the airport. Phase 1 works at the airport are due to
   be completed shortly, with Phase 2 starting in October 2007. (1.4)
5. Expenditure aimed at improving facilities at Newquay Airport
   already runs into millions of pounds. Present anticipated costs for
   bringing capacity up to 700,000 passengers a year is £44.12m. (1.5)
6. A consultation on the airport expansion plans
   was due to begin on 1st September 2007. (1.6)

 

 

1.1 The operating deficit

 

Newquay Airport has been facing financial
difficulties for several years.

 

Cornwall County Council
became sole owners of the airport in 2004, the same year in which the BBC
reported on the airport’s running deficit of £750,000, with the airport facing
an overall shortfall of £1.7million.1 This had occurred despite an increase in passenger numbers; the
increase had been mainly due to the growing popularity of low budget airlines,
which pay lower charges.

 

In 2005-6, despite an assumed
£500,000 of additional income through the introduction of an Airport
Development Fee (ADF), Newquay Airport’s deficit rose from a budgeted £484k to
£1.0m and finally £1.2m, partly due to increasing operating costs.2 The budgeted deficit for
2006-7, set at £1.031m,3 came in at £923,000.4

 

While the 2007-8 Budget Book
omits a reference to any deficit or surplus, it does record that an
‘additional’ £800k would be required for 2007-8.5

 

The deficits are funded by
the Council.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.2
The CAA licence

 

Newquay Airport operates as a civil enclave
within RAF St Mawgan. Whereas the landside facilities are owned by the airport
the airside facilities have been operated by the RAF base. The council pays a
fee for the use of fire cover and air traffic control.6

 

In March 2005 the then
Defence Secretary Geoff Hoon announced that the RAF base would be put into care
and maintenance in April 2007, leaving the airport’s future in doubt.7 The RAF’s pull out date has
since been delayed. Newquay
Airport states that from
August 2008 airfield services will be provided by the airport company subject
to a civil license being secured from the Civil Aviation Authority (CAA).8

 

In order to gain the CAA license required to enable the airport to
continue functioning following the effective closure of RAF St Mawgan the
civilian airport has had to seek finance for the provision of air traffic
control, radar and fire fighters to the tune of £21m (‘day one’ funding) and a
total of £44.12m to complete all works.9 At the time of writing this report the CAA
license was yet to be issued.10

 

 

 

1.3 Passenger numbers

 

Passenger numbers from Newquay Airport
have greatly increased recently, echoing a UK wide trend. The Newquay Airport website reports that numbers
were up 3% in 2006 from the previous year, with 370,000 passengers using the
airport. The forecast for 2007 was 430,000 passengers (since revised down to
400,000), a 16% increase

on 2006 numbers.11

 

Newquay Airport has pushed for expansion of
the airport amid claims that once past the 500,000 passenger number mark the
airport’s viability is likely to increase. However Mark Pilling, editor of
Airline Business Magazine, has said that low-cost carriers make it ‘almost
impossible’ to make profitable deals on services and that Newquay Airport,
being out on the periphery, is at a heavy disadvantage (see section 5.3 on the
Aviasolutions report findings; the airport’s deficit will continue even with an
increase in passenger numbers to 1.1 million passengers per annum by 2030).12

 

 

1.4
Building works at the airport.

 

The airport has received much
financial input in the last six or seven years. In May 2001 for example a new
terminal was opened at the airport at the cost of £2.3million.13 Further works were completed
in 2006 at a cost of £2.8 million including a single-storey extension to the
existing building to ‘improve facilities’.14 Funding was secured from Objective One European Regional
Development Funding (ERDF) and the Department for Transport.

 

According to Newquay Airport, airport passenger capacity for
2007 will be around 430,000. The expansion of the existing facilities to comply
with CAA requirements would raise
capacity to 700,000 by 2011 and is planned to begin during 2007.15

 

The planning application
states that it ‘seeks the continued operation of the airfield’ rather than
looks to facilitate any future airport expansion proposals.16 However, the Council’s
Community Policy Development and Scrutiny Committee sets out their three main
aims as being to obtain a CAA
licence, retain it, and to continue to grow the business.17

 

Given the Council’s aims to
treble air passenger capacity to attempt to make the enterprise financially
viable, issues of the scale of airport activity and associated material
planning issues cannot be separated from this application.

 

A full description of the
works is available from the Cornwall
County Council website.

 

They are as follows;

 

1. The widening of the Civil Aviation Authority (CAA) designated taxiway ‘Bravo’ from 18 metres
   to 23 metres, including some localised widening
2. The widening of part of the CAA
   designated northern taxiway ‘Alpha’ from 18 metres to 23 metres
3. The re-profiling of part of the CAA
   designated northern taxiway ‘Alpha’ and the re-grading of the taxiway
   strip
4. The widening of part of the CAA
   designated northern taxiway ‘Alpha’ and the re-grading of the taxiway
   strip
5. The re-profiling of part of the CAA
   designated taxiway ‘Echo’ and the regarding of the taxiway strip
6. Minor re-profiling of the runway near both runway ends, following
   removal of Runway Hydraulic Arrester Gear
7. Works relating to removing any small structures, debris and the
   provision of sub-surface ramps to taxiways to ensure safe operation of
   aircraft
8. New navigational equipment and ILS with associated approach
   lighting to replace existing military navigational equipment
9. The modification of access and creation of a temporary
   construction compound.18

 

 

These works are due to take
place in two phases in accordance with the Interim Development Strategy, as
agreed by the Executive on the 11th October 2006.

 

Phase one works are underway
and due to be completed shortly. These works include a new entrance to the
terminal, better catering facilities, additional car parking, and a new fuel
farm.19

 

Phase two works have been
suspended while boundary issues with the MOD are resolved. They involve civil
engineering (e.g. apron/taxiway widening, runway and taxiway re-profiling),
electrical engineering, an extension to the terminal building, expansion of the
departure lounge and the creation of a new departure gate, new retail
facilities and roadside elevations.20 The eastern car park will be extended eastwards by 225 spaces to
provide spaces for future passenger growth.21

 

 

1.5
Expenditure and funding

 

Cornwall County Council
suggests that Newquay Airport will have the potential to handle ‘at least 1.2
million passengers per annum’ in 20 years time.22 It is not specified what additional level of investment in
services and infrastructure, and what additional risk, will be involved in
reaching this level of activity.

 

The cost of the proposed
works, designed to bring the airport into line with CAA
standards and to bring air passenger capacity up to 700,000 per year, is
estimated at £44.12m.23

 

 

 

 

 

At the time of writing £8.0m
has been secured from SWRDA and an

Objective One (Convergence)
bid for £12.0m is under negotiation.

 

The County Council states
that temporary borrowing from the Capital Reserve/Prudential Borrowing will be
repaid by future Local Transport Plan EU funding allocations.24

 

The Aviasolutions 2003 report
suggests that ‘securing routes through financial incentives to the airline is
now necessary to attract a new service’.

 

 

 

1.6
Consultation on expansion plans

 

A Consultation
Forum was due to commence from 1st September 2007 ‘to consider issues as they
affect local communities or the amenities of the Airport; protect and enhance
the interests of users, and consider its contribution to the local, regional
and national economy.25

 

The consultation
did not begin on the planned date. There has as yet been no indication of a
revised date.

 

 

© Groundswell Cornwall, October 2007

 

Chapter 1

Newquay Airport: Background

Sources:

 

• 1 BBC
  News, Cash threat to Newquay Airport,
  20th January 2004, website visited 08/07: http://news.bbc.co.uk/1/hi/england/cornwall/3413183.stm
  henceforth BBC News,20/01/04
• 2 Cornwall
  County Council, Community Policy and Development and Scrutiny Committee, Budget Report, 20th
  October 2005, weblink visited 08.07: http://www.cornwall.gov.uk/media/pdf/o/5/Item_4.pdf
  p.1 henceforth Cornwall County
  Council BR.
• 3 Cornwall
  County Council, County Budget 2006-7,
  weblink visited 09/07: http://www.cornwall.gov.uk/media/pdf/4/9/Budget_Book_2006-2007sm.pdf  henceforth
  Cornwall County Council CB.
• 4 Cornwall
  County Council, Economy Portfolio,
  weblink visited 08/07:

http://212.104.147.54/media/pdf/0/h/economy_1.pdf 

• 5 Cornwall
  County Council, CB, p10.
• 6 BBC
  News, RAF cuts may hit airport’s future,
  22nd July 2004, website visited 08/07: http://news.bbc.co.uk/1/hi/england/cornwall/3915767.stm

• 7 Cornwall
  County Council, Astonishing Plans to Put RAF St
  Mawgan into ‘Care and Maintenance’, 10th
  March 2005, website visited 08/07:

            http://www.cornwall.gov.uk/index.cfm?articleid=881

• 8 Newquay Cornwall Airport website, visited 07/07: http://www.newquaycornwallairport.com
• 9 Cornwall
  County Council, Community Policy Development and Scrutiny Committee, Newquay Cornwall Airport – Update,
  19th July 2007, weblink visited 07/07, available
  for download: http://db.cornwall.gov.uk/documents/download.aspx?doc=186007  henceforth
  Cornwall County Council, 19/07/07
• 10 Email
  received from the CAA, 22nd
  August 2007.
• 11 Although
  this is reported as a 15% increase on the Newquay Cornwall
  Airport website. See
  http://www.newquaycornwallairport.com

• 12 UK Airport News Info, Race to fund £21m Newquay Airport
  upgrade, 11th April
  2006, website visited 08/07:

http://www.uk-airport-news.info/newquay-airport-news-110406.htm
henceforth UK Airport News Info, 11/04/06.

• 13 Cornwall County Council, £2.3 Million Terminal Building Becomes Operational at Newquay Airport,
  11th May 2001, website visited 08/07:

       http://www.cornwall.gov.uk/index.cfm?articleid=9745

• 14 UK Airport News Info, Newquay Airport £2.8m expansion opened, 2nd
  March 2006, website visited 08/07:

http://www.uk-airport-news.info/newquay-airport-news-020306.htm

• 15 Newquay
  Cornwall Airport
  website.
• 16 Airport
  Planning and Development Ltd, Newquay
  Cornwall Airport Transition Works: Final Planning Statement,
  February 2007, weblink visited 08/07: https://db.cornwall.gov.uk/PlanningApplications/AssociatedDocs.aspx?doc=121551  p.1 henceforth Airport
  Planning and Development Ltd,NCA Transition.
• 17 Cornwall
  County Council, 19/07/07, p.1.
• 18 Cornwall
  County Council, CCDEV Application,
  16th February 2007, weblink visited 09/07,
  available for download:

https://db.cornwall.gov.uk/PlanningApplications/AssociatedDocs.aspx?doc=121523  p.4

• 19 Cornwall
  County Council, 19/07/07, p.4.
• 20 Airport
  Planning and Development Ltd, NCA Transition, p.2 and Cornwall County
  Council,19/07/07, p.4.
• 21 Newquay
  Cornwall Airport
  website.

• 22 Cornwall County Council, Cornwall County Council’s Economic Development and Regeneration
  Strategic Plan, website visited 08/07:

             http://www.cornwall.gov.uk/index.cfm?articleid=31273

• 23 Cornwall
  County Council, Community Policy Development and Scrutiny Committee,Newquay Cornwall Airport – Update,
  Report by Director of Planning, Transportation and Estates, 31st
  May 2007, web link visited 07/07: http://db.cornwall.gov.uk/documents/download.aspx?doc=166903
  p.1 henceforth Cornwall County Council, 31/05/07
• 24 Cornwall
  County Council, Executive – 19th February 2007,
  3rd April 2007, weblink visited 07/07: http://db.cornwall.gov.uk/documents/download.aspx?doc=124664
  p.4

 

• 25 Cornwall County Council, Cornwall County Council
  to set up new consultation forum for Newquay Airport,
  7th July 2004, website visited 07/07:http://www.cornwall.gov.uk/index.cfm?articleid=1260

 

© Groundswell Cornwall, October 2007