The managing director of Scotland’s regional airline group HIAL is optimistic over Dundee Airport’s future, despite the facility racking up a £2.6 million annual loss.
Inglis Lyon said the Riverside airstrip remained a key part of HIAL’s portfolio of 11 regional airports across Scotland despite suffering the loss of two key scheduled services late last year and a recent timetable reduction on its remaining Cityjet route to London.
He was speaking as the HIAL Group which is wholly owned by Scottish ministers and which received £17.9 million in revenue support last year revealed a narrowing of group-wide operating losses for the year to March 31 from £969,000 in 2011/12 to £896,000.
The improvement came as HIAL achieved a 3.1% uplift in overall passenger numbers to 1.29 million the highest level seen since 2008/09 on the back of a milder winter which encouraged travel, and efforts to identify efficiencies and cut costs.
HIAL said highlights included a significant increase in traffic through Sumburgh, a crucial hub for the North Sea oil and gas industry, and a continuation of its success at its base at Inverness, where a new link to Geneva has been added.
However, Mr Lyon acknowledged the problems which had beset Dundee Airport and said efforts were ongoing to bring new services to the city.
“Dundee has one of the most interesting 10 years ahead of it of any city in the UK that is why the airport is so crucial,” said Mr Lyon.
“Getting more business in Dundee is what we are constantly trying to do, but one of the things that makes it very difficult is the big neighbour (Edinburgh Airport) on our doorstep.
“Any airline has to consider whether there is a sufficient passenger base to make it work for them.”
Mr Lyon said regulations meant HIAL could currently only support the development of a new route for a maximum of three years, with that timeframe due to drop to two years.
He said traditional commercially operated airports could offer a more attractive package of much longer-term support to airlines than HIAL could.
However, Mr Lyon said there were parties interested in operating from Dundee and other regional airports, and it was a case of ensuring the route was financially viable for the operator.
“We are looking for airlines that are prepared to take a commercial risk,” he said. “We have got one lead that we are working on just now that feels quite good.
“These things are pretty fickle and always involve more than just Dundee, though.
“It is a question of speaking to other airports in the UK and elsewhere and saying to them ‘this is what we are trying to do’.”
The HIAL group invested more than £8.4m on capital projects during the past year, including completion of the first stage of a £7m investment in firefighting equipment across its airports network.
Chairman Grenville Johnston said it was clear that progress was being made following one of the most challenging downturns in the history of the aviation industry.
“At HIAL, we have been working hard, with our airline partners, to provide a diverse network of routes, some of them lifeline, others more geared towards the business and tourism sector,” Mr Johnston said.
“Collectively, these routes play an important role in driving Scotland’s regional economy. Our airports are amongst the most peripheral in the UK, serving parts of Scotland where air is the only practical form of long-distance travel. So, it is vital that we redouble our efforts to ensure these communities remain connected.”