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Derry airport remains at ‘significant risk’ due to ongoing doubts over London route
28 Sept 2018
The running costs of the City of Derry Airport will only be covered at a ‘reduced level’ for six months after May 2019 unless £2.5m in government funding is allocated to the facility, it has emerged. In July of this year, the Derry News revealed that the future of Derry’s airport is in doubt after a council report revealed it will be ‘unsustainable’ after May 2019 unless the £2.5m funding is secured. The news came after it emerged that Derry City and Strabane District Council, who own the City of Derry Airport (CODA), have been unable to access the funding which it was awarded from the Northern Ireland Executive in November 2016 for ‘route development’. The £2.5 ‘Route Development Fund’ was set aside by the NI Executive to enable the London Stansted route from Derry – known as a Public Service Obligation (PSO) route – to continue until after May 2019. However, there is no functioning Stormont Executive to sign off on the money. Earlier this week, a meeting of the council’s Assurance, Audit and Risk Committee was presented with an audit report which stated that the airport continued to present a ‘material uncertainty’ and that this could present ‘significant impairment’ on the value of airport assets, which stood at £45m as of March 31, 2018. The report went on to say that auditors were ‘content that the notes to the accounts provide a comprehensive and fully transparent overview of the current position with regard to CODA’ and recommended that Derry City and Strabane District Council ‘continues in its efforts to work through alternatives so as to reach a timely resolution of the issues’. A council officer told meeting, held in the Guildhall on Monday, that it was working to secure funding for the London route and said that ‘discussions are currently underway with the Department for Transport in London and relevant senior Civil Servants with a view to the London PSO being tendered by November 2018’.
Decisions The officer added ‘on the basis of submissions to date’, the airport’s director were ‘hopeful’ that the funding will be released. If the funding is allocated, the current subsidy provided by the council will be enough to fund the airport at its current level of operation until March 31, 2021. However, the council officer warned that in the event the funds are not secured, the council’s current level of funding support would be ‘sufficient to meet the cost of operations at a reduced level for a minimum period of six months after May 2019’. The officer added that during this six-month period ‘the viability of the airport over the short and medium term will be considered and appropriate actions taken’. “If the London route is not secured, there will have to be decisions made on the ongoing sustainability of the airport,” the officer added. The local council currently provides annual funding to the City of Derry Airport to the value of £2.145m through ratepayers with a further £1.3m being set aside to fund capital loan charges.
Pictured above: City of Derry Airport (by Tom Heaney nwpresspics.com)
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