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Flying News And Information
Earlier News - 2006
Flying News And Information Main Index
Earlier News - 2006
18 August 06
Highland Airways will launch direct flights between the Highland capital and the Uists on Monday 4 September.
The Inverness-based airline has now placed its new fares on its website booking engine in advance of its enhanced range of services between Inverness and the Western Isles starting next month.
Prices on the new route start at £19.99 plus airport taxes, resulting in an opening price of £39.93 for a single fare between Inverness and Benbecula. This is substantially less than the current single cost of travelling between Inverness and Benbecula which involves a connecting flight at Stornoway. Even the highest fare is a few pounds less than the current Inverness to Benbecula fare.
The new price regime also operates on the extra seats offered by Highland Airways on its weekday and Sunday lunchtime flights between Inverness and Stornoway.
The airline's new timetable also permits passengers to travel seamlessly between any two destinations, via a third intermediary. From Inverness passengers will be able to fly to Benbecula direct or go via Stornoway. They can also fly to Stornoway direct or go there via Benbecula. Passengers will obtain the same fares for travelling such routings as for travelling direct, so the number of travel and timetable options has now greatly increased.
Highland Airways' commercial director Basil O'Fee commented: "With this new fare structure and timetable we are confident that the total market between the Western Isles and Inverness will grow. The Uists and Inverness will find it much more convenient to do business with each other while family and friends will be able to get together more often.
"The timetable with Stornoway is also enriched with great weekend deals for shoppers and short break seekers and better business options throughout the week. Until now our limited seat offering to the Western Isles has often been over-subscribed. We now can offer more passengers the chance to fly west with Highland Airways.
"The Scottish Executive Air Discount Scheme is applicable to direct flights between Inverness and Benbecula and this will reduce fares even further for island residents. Our route advertising has only started at the end of last week, and already the level of enquiries and bookings are encouraging," said Mr O'Fee.
10 August 06
26 July 06
The enhancement includes the addition of a
new lunchtime rotation between Inverness and Stornoway each weekday and
a flight on Sundays to provide more comprehensive weekend travel options
between the two centres. The times of existing services will be varied
slightly as a result of the additional rotations.
Inverness, the capital of the Highlands, is also very much the centre for air transport. Regular scheduled flights operate to London Gatwick, London Heathrow, London Luton, Belfast, Birmingham, Bristol, Dublin, Leeds Bradford, Liverpool (from 3 October 2006), Manchester, Newcastle, Edinburgh, Glasgow, and Kirkwall in Orkney and Sumburgh in Shetland.
"We are instigating a programme of modest expansion for this coming winter" said Bob Macleod, chairman of Highland Airways. "We see potential for further developments of our scheduled services, and trust the travelling public of Scotland will profit. A benefit for travellers to and from Barra is that morning connections with Inverness are eased. The timetable has been fine-tuned to make it possible for early Eriskay ferry passengers to catch the Benbecula flight to Inverness."
The flight will leave Benbecula at 0900 and leave Inverness at 1010 for Benbecula. Additionally Highland are offering an extra lunchtime service between Stornoway and Inverness departing Stornoway at 1240 and departing Inverness at 1345.
The enhancement includes the addition of a new lunchtime rotation between Inverness and Stornoway on Sundays to provide more comprehensive weekend travel options between the two centres. The times of existing services will be varied slightly as a result of the additional flights.
Highland Airways will be offering a range of fares with very attractive entry points for those able to book well in advance. The price structure is still being finalised but fares will commence at £19.99 (excluding taxes) for a single journey. The low fare finder available through the airline's online booking system can help locate the very best fares on www.highlandairways.co.uk. Those registered with the Scottish Executive Air Discount Scheme aimed at residents of Scottish islands and remote regions can benefit from a further 40% discount on any qualifying fare (excluding taxes and charges) they might secure.
Welcoming the service Councillor Charlie King chairman of Hitrans observed that: "Extra connectivity between the islands and Inverness is exactly what the Hitrans air transport strategy aspires to, and such innovations are to be greatly welcomed. Inverness is increasingly attractive to islanders as an alternative to travelling to the central belt for business, shopping and leisure. Highland Airways' move reflects the growing role that the city is playing in the wider region. The Air Discount Scheme will also make the cost of travel that much more attractive to island residents."
Inglis Lyon, managing director of Highlands and Islands Airports Limited (HIAL), also welcomed the development. "These new flights help underpin the increasingly important role that Inverness is playing as the regional transport hub. The island communities will welcome their increased ability to access Inverness. In addition, Highlanders are increasingly enjoying the leisure and business opportunities presented by easier access to the Western Isles.
"HIAL is working with Highland Airways to ensure the new link with Benbecula thrives and becomes an established fixture in the timetable."
25 July 06
By providing a seven day a week radar service Highlands and Islands Airports Limited will increase the capacity of the airport and achieve environmental benefits by reducing fuel use and noise emissions from aircraft.
A six figure contract has been awarded to industry specialist Barco and is being funded by HIAL in partnership with Hitrans. The regional transport partnership has awarded a grant of £50,000 towards the cost of the installation.
HIAL intends to have seven-day radar cover in place by summer 2007 using radar controllers based at the airport.
The airport's radar cover is currently provided Monday to Friday via an arrangement between National Air Traffic Services and the Ministry of Defence, using the radar heads at RAF Kinloss and RAF Lossiemouth.
The first phase of the Inverness radar project will see data from these radar heads fed into the new radar control room at Inverness air traffic control tower staffed by HIAL's own radar controllers.
Earlier this year HIAL signed a contract with Marshall Aviation Services to develop the radar project and is working closely with the UK Civil Aviation Authority's Safety Regulation Group on the scheme.
HIAL has already internally recruited four air traffic controllers who are undergoing radar training, the first of whom has now gained his qualification. External qualified radar controllers are also being recruited.
The second phase of the project will see HIAL procure its own radar head and install this at the airport to provide local radar cover for the region's busiest airport which is forecast to be handling more than one million passengers per annum by 2010. This capital investment is planned to be made in 2007/08.
The provision of local radar seven days a week will enhance the service provided to airlines at the airport and allow new approach procedures to be designed which reduce noise and cut down on fuel burn by aircraft as they land at Inverness. It will also reduce delays to inbound aircraft and increase the number of aircraft movements the airport can handle in an hour. The project will also facilitate the development of controlled airspace at the airport.
Passenger numbers at Inverness have increased by 85% since 2000 as a result of the introduction of new air routes and aircraft movements have risen by 51% over the same period. Inverness handled 41% of the total 93,000 aircraft movements at HIAL's 10 airports last year. The airport is on target to cater for circa 800,000 passengers by the end of March 2007 and has already seen new services to Dublin, Leeds Bradford and Newcastle introduced this year. Ryanair will launch a daily service to Liverpool in October.
Inverness Airport manager James Walton said: "The arrangement we have had with the MoD since 1999 has served the airport well but as the airport continues to develop the time has come to move to providing our own radar.
"This is a major project that will offer significant benefits to the airlines, minimise delays to passengers and mitigate the environmental impact of aircraft movements at Inverness in terms of reducing noise and emissions.
"We are working closely with the industry regulators, the MoD and our specialist consultants to ensure that this project is properly phased and ultimately delivers the radar service a rapidly expanding regional airport like Inverness requires. Barco has extensive experience of providing radar control rooms in Europe and we are delighted that their first UK project will be at Inverness," said Mr Walton.
Chris Stock, Inverness radar project manager with Marshall said: "This project will deliver an enhanced service to airlines and passengers, provide environmental benefits through new approach procedures and increase the capacity of the airport as it continues to develop new routes to UK and European destinations.
"The next two years will therefore be an exciting phase of development for the airport in line with the expectations of the industry regulators and our customers. Part of this will involve a major consultation exercise on the development of controlled airspace which we aim to commence later this year."
Frank Köhne, market director ATM at Barco said: "We are delighted that HIAL has selected Barco's advanced approach control system for Inverness Airport. The challenging requirements and demanding schedule make this an exciting project to be part of."
24 July 06
The event, the largest of its kind held at the airport, was expected to attract more than 8,000 visitors but saw this number of people attending on the Sunday alone.
More than 80 aircraft visited the airport over the weekend when attractions included fly ins by vintage and classic aircraft, a fly past by a US Air Force Rockwell B1-B Lancer strategic bomber and a host of displays, stalls, motorbike stunt riding, vintage cars and flight simulator rides.
The weekend was organised by Kintyre and Argyll Events Limited, a partnership of Highlands and Islands Airports Limited, the council and local enterprise company which was formed to organise the previous air show in 2003.
The impressive array of attractions also included the Red Bull Matadors, Utterly Butterly aircraft, helicopter pleasure flights by Lothian Helicopters, RAF Hawk aircraft from 208 Squadron, a Dakota DC3 from the Battle of Britain Memorial Flight and the RAF Falcons parachute display team.
Derrick Lang, Highlands and Islands Airports' acting regional manager south said: "The air show was a huge success and exceeded all our expectations in terms of visitor numbers. It was a great opportunity for the area to promote itself to visitors and will have had a considerable impact on tourism revenues locally.
"We would like to thank everyone who has helped to make the weekend such a huge success and look forward to calling on their support for future events."
17 July 06
The Mull of Kintyre Air Show weekend on 22 and 23 July will be the largest event of its kind staged at the airport operated by Highlands and Islands Airports Limited.
Attractions over the weekend include fly ins by vintage and classic aircraft, a fly past by a US Air Force Rockwell B1-B Lancer strategic bomber and a host of displays, stalls, motorbike stunt riding, vintage cars and flight simulator rides.
The weekend has been organised by Kintyre and Argyll Events Limited, a partnership of HIAL, the council and local enterprise company which was formed to organise the previous air show in 2003.
The impressive array of attractions also include the Red Bull Matadors, Utterly Butterly aircraft, helicopter pleasure flights by Lothian Helicopters, RAF Hawk aircraft from 208 Squadron, a Dakota DC3 from the Battle of Britain Memorial Flight and the RAF Falcons parachute display team.
Derrick Lang, Highlands and Islands Airports' acting regional manager south said: "The previous air show at Campbeltown in 2003 attracted 5,000 people and 80 aircraft and we hope that this year's two day event will prove an even bigger draw for visitors. This is a unique opportunity to see a selection of classic and military aircraft in one place and should be a fantastic family day out with the range of ground attractions also on offer at the airport.
"We have again joined the local authority and local enterprise company in staging this event as part of the airport's wider role in promoting economic development in the area. A key growth market for the airport is the general aviation sector and we are expecting many private pilots to fly in to the airport for the weekend.
"We would also like to express our thanks to our sponsors and Defence Estates at RAF Machrihanish for their support in facilitating the Mull of Kintyre Air Show," said Mr Lang.
Campbeltown Airport is located at RAF Machrihanish on the Kintyre peninsula, three miles from Campbeltown. Full parking facilities will be signposted from the B843 road and visitor entry will start at 10.30am on Saturday and 10.00 am on Sunday.
Prices for entry to the event are:
5 June 06
Passengers using Eastern Airways' Aberdeen service can now access onward flights with the airline from Aberdeen to Norwich, Teesside, Nottingham East Midlands, Humberside, Leeds Bradford, Bristol, Southampton and Stornoway. The introduction of the Scottish Executive's Air Discount Scheme at the end of May is also providing more affordable access to Scottish domestic flights for local residents.
The combination of more air travel options and more affordable fares is expected to see Wick increase its total passengers this year from the 31,000 handled in 2005/06.
Angela Donaldson, Wick Airport manager said: "We are looking forward to a busy summer at the airport with air connections to Kirkwall restored and a new opportunity to fly to Glasgow with Loganair.
"The expansion of Eastern Airways' operations at Aberdeen means that interlining opportunities have increased to more UK destinations. "We also expect the ADS to provide a further boost to passenger numbers in the months ahead as it will make the cost of flying more affordable for local residents - something that has long been called for in Caithness and north-west Sutherland," said Miss Donaldson.
22 May 06
The major civil engineering project involves the extension of the 09/27 runway's eastern and western ends into the sea through land reclamation and will open up opportunities to increase capacity on existing air services and develop new scheduled flights with larger types of aircraft. The resurfacing of the extended runway is now nearing completion and the next stage of works will involve modifications to the existing airfield ground lighting and Instrument Landing System at the airport.
Work started on site in April 2005 and a total of almost 400,000 m³ of material has been required to build the runway extensions. Other than the 72,000 tonnes of heavy rock armour imported from Norway and placed last year to secure the land reclamations before winter set in, the majority of the material used has been extracted from the Wilsness Hill area of the airport.
The total cost of the project will be circa £10 million and the principal contractor is Balfour Beatty Civil Engineering Ltd (BBCEL). Design and project management services are being provided by Shetland Islands Council's Capital Programme Service (SIC-CPS). The target completion date for the extended runway becoming fully operational was set at 31 October 2006.
The runway extension is the key aim for the members of the Sumburgh Airport Strategic Partnership. The partnership comprises HIAL, Shetland Islands Council, Shetland Enterprise, and the Sumburgh Airport Consultative Committee. The project is being funded by the SASP partners, the Scottish Executive and the European Regional Development Fund through the Highlands and Islands Special Transitional Programme 2000-2006.
Shetland experiences one of the most aggressive marine environments in the UK which presented three main challenges to the project team. Firstly, the structure had to be robust enough to survive the prolonged and sustained battering of the winter seas year on year. Secondly the structure had to be able to be built in a fairly short construction season with gales starting late September and going on to late March or early April every year. Thirdly, the solution had to remain affordable and represent value for money for the funding partners.
manager Nigel Flaws said: "This major project continues to run to
programme. The extended runway will support our route development work,
which aims to deliver new air services for Shetland, and will enable
existing scheduled services to operate without weight restrictions."
Sumburgh Airport's current scheduled services are operated by BA franchise partner Loganair to Aberdeen, Edinburgh, Glasgow and Inverness. Faroese airline Atlantic Airways will start operating a Faroes-Sumburgh-London Stansted service - the islands' first direct link with London - in June this year.
Grant Dudgeon, HIAL's infrastructure services manager said: "The whole project in terms of design, build and procurement is delivering excellent results to date and we are pleased to be developing a scheme that should serve as a model for best practice in the industry.
"An Early Contractor Involvement (ECI) procurement strategy was seen as the most effective way to meet the challenges of this project. The work on buildability, affordability and structural integrity which was carried out in the very early stages of this project is now paying dividends."
15 May 06
All seats booked via the airline's www.aerarann.com website during May will qualify for the all inclusive one-way price of £19.99, subject to availability - making a return trip less than £40. The sale lasts until the end of May and covers travel until 17 September 2006.
More than 1,000 passengers have used the first direct air link between the Highland capital and Dublin since it launched on 10 April.
Aer Arann operates four return flights a week between the Highlands and the Irish capital on Mondays, Wednesdays, Fridays and Sundays departing Dublin at 10.30am and Inverness at 12.15pm with a flight time of one hour and 15 minutes.
The new route qualified for support from the Air Route Development Fund which is supported by the Scottish Executive and Highlands and Islands Enterprise.
Alex Johnson, commercial and marketing manager at Highlands and Islands Airports said: "Dublin was one of the routes most regularly cited as a 'must have' by people in the region and Aer Arann has been delighted with the response from travellers in its first month of operation. This summer seat sale is a great opportunity to book up and visit Dublin for less than £40 return."
Inverness is the largest of 10 airports in the region operated by Highlands and Islands Airports and handles more than 330 scheduled flights each week. It is the fastest growing airport in the region and has seen passenger growth of 85% since 2000 as a result of route development and air service enhancements. The airport should handle around 800,000 passengers in the current operating year ending 31 March 2007.
Inverness Airport manager James Walton said: "Research has shown that the airport provides an annual economic output of £120 million and supports 2,300 full time equivalent jobs in the Highlands.
"Eastern Airways launched a new Leeds Bradford service from Inverness at the end of April and will start a Newcastle service at the beginning of June. Ryanair will launch a Liverpool service at the airport in October.
"This continuing growth in connectivity and increasing passenger numbers will make the airport an even more important economic generator for the region over the coming years."
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6 April 06
31 March 06
31 March 06
Inverness Airport Way will significantly improve surface access to the airport and open up the development potential of the 250 hectare airport business park site. Mr Scott opened the road at 11.45am with help from pupils from nearby Ardersier Primary School.
Inverness Airport Way will improve the integration of transport within the Highlands by better linking Inverness Airport to the trunk road network and enhancing the connections between air services and public transport. Construction of the road started in May 2005. The scheme was designed by Halcrow and the contractor for the project was Mowlem. The road will open to traffic late on Friday afternoon.
The road and associated access infrastructure has been funded by the European Regional Development Fund through the Highlands and Islands Special Transitional Programme 2000-2006 (£1.042 million), Highlands and Islands Airports Limited (£1.4 million), Inverness, Nairn, Badenoch & Strathspey Enterprise (£0.550 million) and The Highland Council (£1.175 million).
Inverness is the region's largest airport and is on target to handle a record 660,000 passengers in the year ending 31 March 2006 which will represent passenger growth of 90% since 1999. The airport handles more than 330 scheduled flights per week to London, Belfast, Bristol, Manchester, Birmingham, Edinburgh, Glasgow, the Western Isles, Orkney and Shetland. New routes to Dublin and Leeds Bradford are due to start in April.
A report published in summer 2005 showed that the airport and the connectivity it provides produces an annual economic output of £120 million and supports almost 3,000 full-time equivalent jobs across the region.
Inverness Airport Business Park Limited, a joint venture company comprising HIAL, INBSE and Moray Estates Development Company and supported by The Highland Council, is developing Inverness Airport Business Park on a 250 hectare site at the airport. The project has a key role to play in attracting inward investment to the area and enabling business expansion on the main A96 road corridor between the City of Inverness and Nairn. It is estimated that the first phase of development will include the creation of around 16,500m2 of business accommodation, including an airport hotel. Around 260,000m2 of business, industrial and freight distribution accommodation could be developed on the site over 30 years, supporting as many as 5,000 full-time jobs.
John Doune, chairman of IABP Ltd said: "The development of Inverness Airport Way has been a successful partnership project which will bring significant benefits to the area and airport users. It also opens up access to the business park site which will play a major role in attracting investment to this region and providing thousands of new jobs over the next 30 years."
Inglis Lyon, managing director of HIAL said: "Inverness
Airport is a major economic driver for the Highlands and its development
will play a crucial role in the future prosperity of this area.
Improving access to the airport is very important. The opening of the
new road is one step in this process while we also aim to work with
partners to improve public transport and integration as the airport
continues to expand in terms of routes and passenger numbers."
Councillor Charlie King, chair of The Highland Council's Transport, Environmental and Community Services Committee and chairman of the Highlands and Islands Regional Transport Partnership said: "I am delighted that the airport now has an access road befitting its status as the principal airport in the Highlands. Accessibility and transport integration are key priorities for us and this project is an example where a major improvement has been achieved through a partnership approach to development."
Stuart Innes, project director from civil engineering consultants Halcrow said: "Halcrow has been immersed in this project from very early on and we are delighted to finally see the access road open. The design of this stretch or road threw up some considerable challenges and the result, after three years of work, is a tremendous boost for Inverness and the Highland economy.
"The road opens up a huge new area for development and I'm pleased that the development partners have been visionary enough to recognise the potential growth opportunities in this airport zone."
23 March 06
The level of advance bookings is high for Eastern Airways' Inverness - Leeds Bradford Airport service which starts operating on Monday 24 April.
The service is Eastern's third route from Inverness, joining their well established Birmingham and Manchester operations, and will operate six days a week, Monday to Friday and Sundays.
The service will be operated with 29-seat Jetstream 41 aircraft with the one hour 20 minute flight departing Leeds Bradford at 10.15 and returning from Inverness at 12.05.
Online fares on the new service start at £99 return ( www.easternairways.com ), including taxes and charges.
The route has qualified for support from the Scottish Executive's Air Route Development Fund and will be the second new service to launch at Inverness in April, following Aer Arran's Dublin route which will start on 10 April and is also being supported by the RDF.
Leeds is one of the United Kingdom's largest cities, a major financial centre with a range of management consultancies and law firms and from the leisure perspective, the airport is the gateway to the Yorkshire Dales and James Herriot country, the spa town of Harrogate and, of course Leeds, a fabulous shopping destination.
Inglis Lyon, managing director of Highlands and Islands Airports Ltd said: "This new route into an important English region will be good for both business and leisure travel. Bookings are going well and we look forward to Eastern firmly establishing their third route at Inverness over the coming months."
Stuart Black, chief executive of Inverness, Nairn, Badenoch & Strathspey Enterprise said: "This new route from Eastern is very good news for Inverness and the wider Highland economy. Leeds/Bradford serves a major tourism market for the Highlands and is also an important business and financial centre offering opportunities for business growth and inward investment."
Councillor Charlie King, chair of The Highland Council's Transport, Environmental and Community Services Committee and chairman of the Highlands and Islands Regional Transport Partnership said: "HITRANS supports the development of a wider range of destinations served by air from Inverness and therefore we welcome the new services to Leeds and to Dublin. Improved air links are fundamental to the main objective of our emerging Regional Transport Strategy which is to enhance the economic competitiveness of the region."
14 March 06
The performance of fire-fighters from Highlands and Islands Airports Limited at the Serco International Fire Training Centre at Teesside will be recognised at the college's annual awards ceremony in early April.
Wick Airport in Caithness has landed the top aerodrome award for 2005 while Sub Officer Steve Fordyce from Sumburgh Airport has landed the title of top watch commander.
Fire-fighters from across the UK and over 70 countries internationally attend practical and classroom-based training and revalidation courses at IFTC.
Wick landed the award after members of the local AFS attending IFTC during the year achieved the highest average marks across all their exams. A minimum number of staff must attend the centre in the year for an airport to qualify and the last time Wick met the qualification criteria, in 2000, it also won the top aerodrome award.
Steve Fordyce received the highest marks of all UK fire-fighters on the watch commander course at IFTC during the year.
HIAL employs more than 150 members of staff in the AFS across its 10 airports in the region. Airport fire-fighters provide rescue and fire-fighting cover for aircraft at the airports as well as fulfilling a wide range of other duties, such as snow clearing during the winter months and attending callouts for air ambulance flights.
Inglis Lyon, HIAL's managing director said: "The members of our Airport Fire Service are the backbone of the company without whom the airports could not operate. The professionalism and dedication they demonstrate is commendable and I am delighted that both Wick and Sumburgh airports will be recognised at the IFTC awards.
"We place great emphasis on professionalism and excellence within the AFS at HIAL and this is reflected in the performance of the fire-fighters across our 10 airports in the region where they play a vital role in enabling both scheduled and emergency air services to operate."
3 March 06
At Inverness members of the AFS worked through the night on snow clearing on Tuesday, Wednesday and Thursday and are expected to have to do so this evening, and on Saturday, as further snow is forecast.
Meanwhile Highlands and Islands Airports Limited continues to liaise closely with the airlines to ensure disruption is minimised as far as possible.
Inglis Lyon, HIAL's managing director, said: "The weather this week has been extreme and has caused disruption, delays and cancellations of air services. The frequency and severity of the snow in both the North and North-east of Scotland has disrupted airline schedules with knock-on impacts to timetables and caused the intermittent closure of runways at many of our airports.
"The work of both our own staff and those of the airlines has been excellent and every effort continues to be made by all parties to minimise the disruption to travel. I would like to make special mention of our Airport Fire Service staff who have worked above and beyond thecall of duty this week to keep runways open."
Travellers are advised to contact the airports or the airlines direct for up to date information on flights to, from and within the region until the weather improves. Live flight information for Inverness, Kirkwall and Stornoway airports is also available on the Airlines/Flights section of the www.hial.co.uk website.
14 February 06
Bill Fernie who coincidentally was in Edinburgh met Tavish Scott and spoke to him about his announcement earlier in the day and he said " I am confident this will make big impact on the areas where the new fares structure applies". Tavish Scott is a Scottish Liberal Democrat and in addition to being the transport minister is the MSP for Shetland. Bill congratulated the minister on his announcement that will be welcomed by the business community and people in the areas concerned who would like to use air travel to shorten the long trips to the centres in the south.
A total of 87,795 passengers used the company’s 10 airports in the month compared to 73,038 in December 2004.
The airports which showed the greatest gains in the month were: Inverness (+28%); Islay (+22.4%); Sumburgh (+24.3%) and Wick (+40.3%).
Angela Donaldson the Wick airport manager confirmed that December had been an excellent month with the increase in passenger traffic being due to increased flights available from Eastern Airways, a rise in the number of passengers in transit and increased refuelling and helicopter crew training for the oil industry. the recently added early morning flight leaving at 7.00am had proved very popular with business passengers. This means the first flight out is at 7.00am and the last flight in is at 8.30pm giving better timetable than previously
The nine month running total for HIAL’s airports now stands at 896,400, an 11.8% increase on the same period in 2004/05. All 10 airports handled more passengers compared to 2004/05 over the nine months.
23 January 06
The buy out of the PFI has been achieved through the purchase by HIAL of Inverness Air Terminal Limited (IATL), the PFI concession company.
HIAL purchased IATL from Elbon PFI Fund Limited, part of the Infrastructure Investors (I2) group. The purchase has been funded by the Scottish Executive via a grant to HIAL which covered both the purchase price and potential tax exposure for I2.
The cost of HIAL purchasing IATL was £27.5 million with an additional sum of up to £8.4 million being paid to indemnify I2 against potential tax exposure, including tax losses and payment of corporation tax due.
The buy out represents value for money compared to the projected £73 million cost of the PFI running its full term to 2024. The deal consolidates HIAL's control of the business at Inverness and the immediate impact will be that passenger growth will no longer be penalised by escalating PFI charges and HIAL will have access to the non-aviation revenue streams from car parking, concessions and franchises that IATL received under the terms of the PFI contract.
Inverness is the largest of 10 airports in the region operated by HIAL, a limited company wholly owned by Scottish Ministers. It is the fastest growing airport in the region and has seen passenger growth of 63% since 1999 as a result of route development and air service enhancements. The airport is on target to handle a record 625,000 passengers in the year ending 31 March 2006. Research published last year showed that Inverness Airport, an important gateway for business and leisure travel, currently provides an annual economic output of £120 million and supports 2,300 full time equivalent jobs in the Highlands.
The Inverness Airport passenger terminal facility has operated under a PFI contract since 23 May 1999. At the time the PFI deal was signed in 1998 it was regarded as providing the best value for money option to replace the obsolete terminal building which dated from 1972. It was envisaged that the costs of the PFI would be largely offset by growth in landing charges at Inverness. However, since 1998 fundamental changes have occurred in the aviation market. As a result of the passenger growth achieved at Inverness the costs of the contract significantly increased while at the same time HIAL's ability to generate income from landing charges diminished.
With the PFI issue now resolved Inverness Airport has the potential to become a successful business that operates without the need for revenue subsidy. HIAL therefore aims to achieve market value returns from the asset over the coming years while ensuring that it continues to develop as the region's air transport gateway.
With the purchase of IATL HIAL is therefore better able to:
The airport's performance and outputs going forward will thus provide best value for the region, the Scottish Executive and the public purse.
Inglis Lyon, managing director of HIAL said: "The buy out figure represents value for money over the projected cost of the PFI contract running its full term. It allows us greater flexibility in managing our business as we will no longer be financially penalised for increasing passenger numbers. It also unlocks the potential for us to bring Inverness Airport into profitability thus eliminating the need for revenue subsidy from the Scottish Executive in the future.
"By funding this buy out the Scottish Executive has shown great commitment to the long term development of a major driver in the regional economy. I am sure that all those with an interest in the future economic and social prosperity of the region will join us in welcoming the resolution of this issue which could not have been achieved without the support of the Minister for Transport, his colleagues and the team at HIAL - all of whom have worked tirelessly on the buy out for over two years," said Mr Lyon.