REGIONAL & CITY AIRPORTS

Preparing for take-off

Realising the potential of the UK's Regional Airports

5 STEPS

Regional airports play a hugely important role in the United Kingdom, they provide national and international connectivity and are enablers of economic growth. They are significant direct and indirect employers of skilled people.

As the UK attempts to move the post-Brexit, post-Covid economy up a gear, with its mandate to level up the Government has clear opportunities to build on the existing attributes of regional airports and further increase the economic benefits that they can offer both to their regions and the UK at this critical stage.

Regional and City Airports (RCA) is a leading UK regional airport operator. RCA currently owns and operates Bournemouth Airport, Exeter Airport, Norwich Airport and Coventry Airport and holds a management contract for Solent Airport. With its expertise RCA also carries out consultancy commissions at other airports and airfields. Additionally, RCA operates the growing XLR Executive Jet Centres FBO business that currently has operations at Birmingham, Bournemouth, Liverpool, and Exeter Airports. Through its operations before the pandemic RCA served 2.3m passengers and managed over 215,000 aircraft movements a year, serving as a gateway to and from the UK for the 7m people that live in the airports’ passenger catchment areas.

RCA positioning and challenge

As we build back better, RCA Airports have tremendous potential to provide more connectivity to more people, and a home for more aviation and non-aviation related businesses and their employees. The Government has the opportunity now to take bold decisions to unlock this potential. RCA urges the Government to act today and implement five specific policies.

1 - Accelerate the reduction in domestic Air Passenger Duty (APD) and support new connectivity

After years of campaigning, the UK Government’s 2021 recognition that Air Passenger Duty (APD) undermines the viability, sustainability, and potential of regional airports - and the subsequent decision to halve domestic APD rates from April 2023 - was weclomed.

The pressing need for this reduction in costs is not in the future, however, but right now.

The impact of APD on the economics and demand for domestic connectivity, which often requires connectivity between regional airports, is acute, with domestic journeys currently being subject to double taxation whereby the short haul rate of APD is charged twice on a return journey.

RCA therefore urges HM Treasury to introduce the reduced domestic APD rate with immediate effect, along with a commitment to no further increases to APD, and to utilise the revenues raised as an investment fund to support credible efforts aimed at solving the industry’s sustainability challenges.

Restoring and developing regional connectivity is also vital. To support this objective RCA urges Government to amend the UK’s PSO rules such that routes eligible for support can operate between regions rather than requiring a connection to London. Furthermore, for routes where the PSO mechanism is not appropriate, RCA urges Government to consider how domestic APD can be used to support the start-up of new or improved connections.

2 - Designate regional airports as freeports

Following last year’s designation of 10 airports as free ports – a defined area where goods can be imported, manufactured or reexported inside the allocated boundaries without incurring domestic customs duties or taxes - the UK government should expand the scheme to cover all regional airports.

This would enable frictionless trade to and from the UK.  Research conducted on a free port initiative for Northern Sea ports by the Centre for Policy Studies claims that free ports could create over 86,000 jobs for Northern communities, proving this policy could serve the Government objective of addressing geographical imbalance in economic growth.

With regional airports located across the country, a free ports initiative for all regional airports would spur investment and growth for the whole of the UK and provide new opportunities for regional airports, supporting their long-term survival and encouraging the possibility for new passenger routes, as well as freight routes in the future.

RCA urges the Government to expand the free ports concept to cover all regional airports, establishing a critical national infrastructure network to support the promotion of the UK as a global trading hub.

3 - Net Zero

In summer of 2021, RCA’s Exeter Airport hosted England’s first successful commercially-focused trial of a hybrid electric aircraft on a route between Exeter and Newquay airports.

Although only the first step on a long journey, the event underlined that regional airports’ space, resources and motivation can be put to work in the industry’s effort to ensure a sustainable future and to play its part in achieving Net Zero by 2050.

To succeed as an industry, we need to tackle the challenge not just from the perspective of a small set of specific incomes, but in a holistic sense that examines every aspect of the industry and drills down on hundreds of specific sets of challenges and solutions.

That effort requires an infrastructure to support it, but we do not have to build one from scratch. The UK’s Regional airports already offer the real estate, connectivity and skill clusters that will be required to support the initiative and are well positioned to provide the UK with a technical backbone capable of delivering a vital but ambitious set of targets.

RCA urges the government to engage with the regional aviation sector, understand its already extensive capabilities, and work with stakeholders to transform the existing infrastructure into a coordinated team effort towards a sustainable future.

4 - Expand the Enterprise Zone network to cover regional airports

Expanding the network of Enterprise Zones to cover regional airports will help to address regional imbalance for economic growth and make regional airports attractive places to invest – helping to secure their long-term future and develop key new skills.

Airports are generally accessible and outside conurbations, they have land available, are existing employment centres, and are generally in the wider regions plans as an area for growth and development. Designating these airports as Enterprise Zones will therefore help to achieve this potential.

Investment into airport sites from new technology businesses, spurred on by the designation of Enterprise Zone status and the demand created by Net Zero initiatives, will help to ensure the long-term economic success of regional airports.

RCA urges the Government to designate regional airports as Enterprise Zones with a presumption in favour of development.

5 - Invest in transport infrastructure to maximise the connectivity of regional airports

Access to a regional airport is critical – for passengers, staff and employees of businesses located there. To maximise the connectivity potential and subsequent economic benefits that regional airports provide to local communities, it is essential that they enjoy good local transport links.

Regional airports should be recognised as nationally significant infrastructure which should be a focus of appropriate road and rail investment to support development and growth.

RCA urges the Government to ensure policy prioritises investment in local connections to regional airports.