Transcript Document 7199382

Sustaining air services
to peripheral regions
Dr. George Williams
Centre for Air Transport
in Remoter Regions
Contents
• PSO rules
• PSO application by country
• Examples of innovative
ideas:
Knock airport
North Cape airport
Day trip adventures
The PSO system
• EU Member States have the legal
authority to impose a PSO in respect to
scheduled air services on routes serving
peripheral or development regions
within their jurisdiction.
• PSOs can also be imposed on crossborder routes.
Reasons for imposing a PSO
• To link small or remote communities, and/or
islands to economic and administrative
centres
• To connect small or remote communities,
and/or islands to the TEN-T Networks and
hub airports
• To reduce peripherality and maintain social
and/or political cohesion and integration
Reasons for imposing a PSO
• To sustain and develop economic activity
and promote inward investment to
development regions
• To promote tourism and develop domestic
as well as international transport
Restrictions on imposing a PSO
• A PSO can not apply to routes ‘where
other forms of transport can ensure an
adequate and uninterrupted service
when the air service capacity exceeds
30,000 seats per year’.
• However, the capacity on many PSO
routes with good surface transport
greatly exceeds this figure.
Technical rules
• Member states in preparing PSOs are required to
issue a public invitation to tender which is published
in the Official Journal of the European Communities.
• The invitation to tender is open to all air carriers
registered in the EEA and can be made in relation to
a single route (or group of routes in the case of
Norway).
• The deadline for submitting tenders is one month
after the day of publication.
PSO tender usually covers:
 The minimum service levels in terms of capacity,
frequency and scheduling which an air carrier would
need to satisfy
 Any limits on the level of fares or specific fare types
and rules, which must be adhered to
 Rules concerning any amendments, in particular
termination of a contract as a result of unforeseeable
changes in costs and demand
Tendering Process
• Initial tendering on the basis of no subsidy
• If no carrier is willing to provide the level of
service and fares without subsidy, then the
tender is reissued
• This time offering subsidy and limiting access
to one carrier for a period of three years
Tendering Process
• Selection of the carrier takes into
consideration the adequacy of the services
being offered, the fares to be charged to
passengers and the level of subsidy required,
if any.
• Selection must be made two months after
submission of the proposal, so that other
Member States have sufficient time to submit
comments.
Growing Number of PSOs
200
150
100
50
20
03
20
01
0
19
97
Number of domestic PSOs imposed
250
Source: Use and Reform of the Public Service Obligation, Corin Minshall, MSc thesis, 2004, Cranfield University
Number of PSO Routes by Country in 2003
France
49
Germany
5
Iceland
1
Ireland
6
Italy
6
Norway
61
Portugal
10
Scotland
12
Spain
13
Sweden
11
PSO application in Norway – Southern routes
Tender groups 11-15
PSO application in Norway – Central routes
Tender groups 4-10
PSO application in Norway – Northern routes
Tender groups 1-4
Norwegian PSO Routes 2003-2006
Route area
Tendering carriers
Winning tender
1
Widerøe, Arctic Air
Widerøe
2
Widerøe, Arctic Air
Widerøe
3
Norwegian, Widerøe, Kato
Norwegian*
4
Norwegian, Widerøe, Kato
Norwegian*
5
Widerøe
Widerøe
6
Widerøe
Widerøe
7
Kato, Arctic Air, Widerøe
Source: Ministry of Transport and Communications, Norway
Kato
*Now operated by Widerøe
Norwegian PSO Routes 2003-2006
Route area
Tendering carriers
Winning tender
8
Kato, Arctic Air, Widerøe
Kato
9
Widerøe, Kato, Coast Air
Widerøe
10
Widerøe, Arctic Air
Widerøe
11
Danish AT, Widerøe, Coast Air
12
Widerøe, Coast Air
Widerøe
13
Widerøe, Coast Air
Widerøe
14
Coast Air, Danish AT, European
Executive Express, Arctic Air
Coast Air
15
Widerøe, Coast Air, Danish AT,
European Executive Express, Kato
Widerøe
Danish AT
Widerøe Dash 8-100
Kato Dornier 228
Annual Subvention levels on Norwegian PSOs
1997-2000
31.8 million euros
2000-2003
51.1 million euros
2003-2006
46.9 million euros
PSO application in Sweden
Swedish PSO Routes in 2003
Arlanda to:
Carrier
Aircraft
Subsidy per passenger (euros)
Hagfors
Swedline
Beech 1900
137
Torsby
Swedline
Beech 1900
137
Hemavan
Swedline
Saab 2000
224
Gallivare
Swedline
Saab 2000
81
Storuman
Skyways
Fokker 50
92
Nordic
Saab 340
120
European
Exec Exp
Jetstream
510
Umea to:
Ostersund
Lulea to:
Pajala
Swedline Saab 2000
PSO application in Scotland
Scottish PSO traffic, subsidy and operating data
Route(s)
Airline
Aircraft
Glasgow
Loganair
Twin Otter
80.4
Benbecula Stornoway
Highland
Jetstream
32.2
Orkney
Inter-island
Loganair
Islander
34.4
Shetland
Inter-island
Loganair
Islander
71.2
Data refers to year 2000
Subsidy per passenger (euros)
PSO application in Ireland
Irish PSO tendering round 2002-2005
Dublin to:
Previous
operator
Successful
tender
Current
operator
Derry
Loganair
Loganair
Loganair
Donegal
Aer Arann
Euroceltic*
Aer Arann
Galway
Aer Arann
Aer Arann
Aer Arann
Kerry
Aer Arann
Aer Arann
Aer Arann
Knock
Aer Arann
Aer Arann
Aer Arann
Sligo
Aer Arann
Euroceltic*
Aer Arann
* Euroceltic ceased trading during winter 2002
Aer Arann ATR 42
Loganair Saab 340
Subvention levels (000 euros) on Irish PSOs
Dublin to
Donegal
Galway
Kerry
Sligo
1997
454
444
698
603
1999
1011
1364
956
874
2001
1802
3999
3441
2725
2003
2100
5105
4479
2700
Source: Department of Transport, Ireland
PSO routes as a % of domestic seat capacity
40%
35%
30%
25%
20%
15%
10%
5%
Source: Use and Reform of the Public Service Obligation, Corin Minshall, MSc thesis, 2004, Cranfield University
*
U
K
n
ed
e
Sw
an
ce
Fr
w
ay
or
N
Ire
la
nd
0%
Imaginative ways to develop air traffic
• Knock Airport
• North Cape Airport
• Day trips
Knock knock what’s there?
• An international airport on a foggy, boggy hill
• Opened in 1986 serving a town with 400 people
• Catholic shrine at Knock where Mary appeared to a
group of children in 1879.
• Only Marian shrine in Europe without a local airport
• After Pope’s visit in 1979, local parish priest James
Horan began a campaign for an airport at Knock to
enable pilgrims to have easy access to the shrine
Deemed a ‘Miracle of the 1980s’
• In 1981 Charles Haughey, the then Taoiseach and a
Mayo man, promised a grant of 8 million punts for the
airport following an extended lunch
• Critics said it was the most expensive lunch Charlie
had ever had!
• He gave another 3 million punts when back in power
a few years later. (In between, the Fine Gael
Government had refused to provide funding for the
airport.)
• Monsignor Horan raised 4 million punts through
raffles and dances (and collections in the US)
Knock International Airport
• 2300 metres runway
• In 2001, 198,700 passengers
• In 2002, 197,600 passengers
• In 2003, 247,000 passengers
• In 2004, 373,000 passengers
Knock Scheduled Services
Destination
Airline
Frequency
Dublin
Aer Arann
Daily
Birmingham
MyTravelLite
Daily
bmibaby
Daily
Liverpool
Aer Arann
Daily
London Gatwick
Ryanair
Daily
easyJet
Daily
London Stansted
Ryanair
Daily
Manchester
bmibaby
Daily
Knock Summer Season Charter Destinations
(2004 Charter traffic 58,700)
Alicante
Faro
Lanzarote
Malaga
Palma
Rome
Knock Airport – key facts
• 1.5 million pilgrims annually visit the Knock shrine
• Knock village has a population of 1,400
• £50m Airport Business Park established in 2001
which was expected to create 2,000 jobs
• 140 staff of Dept of Community, Rural and Gaeltacht
Affairs relocated to Knock in 2004
• Minister Eamonn O’Cuiv views Knock Airport as a
centre of development for all of Connachct region
Knock Airport – Economic Impact
• 100 full-time and 29 part-time jobs at the airport
(373,000 pax in 2004)
• Additional 56 jobs created supplying goods and
services to the airport (32 indirect and 24 induced).
The multiplier is therefore 1.56
• Airport’s contribution to GDP estimated at €6.5mn
• 52% of passengers are inbound tourists staying an
average of 6 days (VFR 26%, Business 12%)
Knock Airport – Economic Impact
• Total spend of inbound tourists using Knock airport is
estimated at €37mn
• Tourism spend by Knock airport passengers is
estimated to support 584 jobs (482 direct, 102
induced) in the wider economy, of which at least 212
are in the catchment area of the airport
• Knock airport was expected to return a profit of
€437,500 in 2004
Source: Goodbody Economic Consultants, Dublin, 2004
North Cape Airport, Banak (Lakselv)
• In 2002, 68,938 passengers
• In 2003, 47,532 passengers
• In 2004, 58,598 passengers
• PSO services to Tromsø, Kirkenes, and Alta
• Charter flights
• Freight flights
North Cape Airport Attractions
• Northern most part of Europe’s mainland
• Midnight Sun – 24 hour golf
• Hurtigruta
• Sami Culture
• Fishing
Orca Safari Day Trips
Orca Safari Day Trips
• From 11 UK airports to Harstad/Evenes
• Departures at 05.00 throughout the autumn
• Day trip for £289 (420 euros)
• Also, weekend whale watching trips for £890
Why flying might be a more attractive option!
But then again on a good day ….