The recession, high fuel prices and falling demand have led to the demise of dozens of UK and European airlines. Globespan and its airline flyglobespan join a growing list of airlines and travel companies broken by the worst downturn in aviation for a generation.
This is a significant blow for the Scottish travel industry. Globespan was Scotland’s national airline, providing low-cost flights from Aberdeen, Edinburgh and Glasgow to destinations across Canada, the US, Europe and North Africa. It was also a significant economic contributor for Scotland, supporting inbound tourism and providing jobs for about 800 people.
But Globespan was a small player in global terms. Even at Glasgow, where it handled some 500,000 passengers a year, it accounted for only 7% of the total number of passengers, and 11 of the 12 destinations served by flyglobespan are also served by major airlines.
Though we are saddened by the demise of flyglobespan and count many of the staff as our friends, the loss of flyglobespan is not a killer blow for Glasgow Airport.
Unlike some Scottish airports, Glasgow has a broad mix of UK and international carriers, many of them major players. That gives us strength to withstand setbacks. Within 24 hours of its demise, we had secured almost one-third of the lost capacity, with several other carriers providing extra seats on flyglobespan’s key routes. Discussions to secure more new capacity are continuing and we are confident we can plug the gap.
However, even before Globespan’s demise, we were working with other airlines to secure about 12 new routes for 2010. That work continues. And we will shortly announce plans for a multi-million-pound investment for Glasgow Airport for 2010 and 2011, funded entirely without taxpayer contribution.
The next year will be equally challenging for the airline industry but we believe our investment in route development and capital infrastructure will see us return to growth in the latter part of 2010.
However, challenges remain. The steep rise in Air Passenger Duty, recently imposed by the UK Government, is a blow to the industry and is particularly ill-timed. It stands in sharp contrast to other European countries which have cut, or in some cases scrapped, aviation tax to protect connectivity and tourism.
At a time of economic recession, the importance of our airports to Scotland has never been greater. They are important for business and investment and critical to tourism. As a country on the periphery of Europe, air links are not luxuries: they are vital necessities to our communities. However, we cannot and must not take our airports and our international links for granted.
Today it is possible to fly from Scotland to around 130 destinations worldwide. That has not happened by accident. It is
a direct result of our investment in air route development, worth some £130m since 2002. Until 2007, the industry was also supported by the Scottish Executive route development fund. That support no longer exists.
Now, of all times, in the midst of the worst recession for 50 years, we need a new route development fund. Other European countries – Cyprus, for instance – are taking the lead. Scotland must act quickly if it is to stand any chance of competing in Europe.
Scottish ministers tell us there is no money. I have a suggestion.
Why not start by scrapping the public subsidy, through ScotRail, of the Prestwick Airport rail link? This unfair and anti-competitive subsidy provides free or discounted fares for anyone travelling with ScotRail to Prestwick. It is, in effect, a subsidy for one of Europe’s most commercially successful airlines at the expense of Scottish airlines such as flyglobespan. It should be removed immediately and the money reinvested into a marketing fund for all of Scotland’s airports.
Amanda McMillan is managing director of Glasgow Airport.
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