Appendix 11(a)

OUTSIDE BODIES – SCRUTINY REVIEW PANEL REPORT

Background:

The Outside Bodies Scrutiny Panel was established at the Scrutiny Committee meeting held on 29 th March 2012, to scrutinise the Council’s outside bodies and affiliates.

Objective:

The objective of the Panel for this meeting was to consider a business overview of Blackpool Airport and scrutinise details of its recent performance and its strategies / policies for the future direction of the company.

Date: Tuesday 11 th February 2014, commencing 1.00 p.m.

Panel Members present: Councillors Mrs Callow JP, Elmes, Green, Hutton, Lee, Matthews, M.Mitchell, O’Hara and Stansfield.

Also present: Clive Coleman, Contracts Director, Regional and City Management Chris Kelly, Senior Democratic Services Adviser (Scrutiny), .

Meeting Report

It was reported to the Panel that since the last meeting there had been a number of substantial changes to how Blackpool Airport operated. Since the Panel’s last meeting with the airport, Balfour Beatty had sold and Regional and City Airports Management to The Rigby Group, whilst retaining its ownership of Blackpool Airport. However, Balfour Beatty had awarded Regional and City Airports Management a contract to manage Blackpool Airport on its behalf.

The Panel was provided with details regarding the contribution made by the airport to the local economy. It was reported that the airport directly employed up to 100 full time employees in peak season, that the airport site supported a number of small businesses that provided up to 200 jobs and that the airport contributed approximately £20 million to the sub-regional Gross Value Added.

The five principle pillars of the airport’s business were reported to the Panel. Those included commercial passengers, off shore helicopters, General and Corporate aviation, fuel sales and estate and commercial land development.

The key stages of development in the business of the airport in recent years were reported to the Panel. The Panel was advised that when Balfour Beatty had acquired the airport, it had inherited a contract with , which required the airport to pay Ryanair per passenger. It was explained to the Panel that the arrangement had proved unsustainable. A further development was the introduction of a policy of Free Passenger Parking (for up to 15 days), which had been introduced in order to try to encourage users from further afield. It was also reported that the airport had introduced an Airport Development fee in January 2009, which was a £10 fee payable by all departing passengers aged over 16 years that was used in order to supplement continued investment by the airport to improve infrastructure, facilities and route development.

Appendix 11(a)

OUTSIDE BODIES – BLACKPOOL AIRPORT SCRUTINY REVIEW PANEL REPORT

It was explained that at the peak of the aviation market in 2007, Blackpool airport handled in excess of 500,000 passengers. However, since then the industry had suffered a global decline and Ryanair had withdrawn from the airport, which had left Jet2.com as the principal carrier. It was reported to the Panel that the forecast for passengers using the airport in 2014 was 250,000 – 260,000.

The Panel was provided with information relating to the income and expenditure of the airport in recent years. The Panel noted that despite the much higher numbers of passengers in 2008 as compared to 2013, the level of income was not substantially different. However, the Panel noted the expenditure of the airport had significantly reduced within that time period.

The Panel discussed the future of the airport and methods to increase its profitability. The Panel noted the recent increase in the amount of work to off shore sites and considered the potential for future route development. The Panel was advised that airport growth could be achieved as a result of reaching capacity. It was explained that it had been expected that Manchester Airport would have reached its capacity by now, but global economic conditions had also reduced the number of flights from there. However, should Manchester reach capacity there should be a benefit to Blackpool as a smaller, regional airport in close proximity.

The Panel discussed the airport’s ‘A New Vision’, which had been drafted following recognition that aviation activity growth would take a number of years and therefore, in order to enable shareholder confidence, consideration should be given to land surplus to operational requirements, to secure the long term future of the airport. It was advised that the airport had been working on an emerging masterplan, which would set out its strategy for managing surplus land. He explained that a review into land use had identified that the airport had potential to develop surplus land and retain a commercial airport.

The Panel was presented with some of the potential options for the future development of the site to improve economic activity. It was noted that those options currently being considered could be categorised into either aviation related options (an Aviation Skills College, Maintenance Base operations and/or aviation research) or Non-Aviation related options (Renewable Energies, a Fire Training College and/or off shore training). Members noted that retail units were not currently being considered on the surplus land.

The next meeting of the Panel has been arranged for 13th March 2014 commencing at 2.00 p.m. and would be to review the business overview and performance of Blackpool Fylde and Wyre Economic Development Company.

The meeting ended at 2.00 p.m.