Manx Owned Airline is Most Expensive Option

A locally owned airline would require both financial and regulatory assistance to operate sustainably, a report commissioned by the gov has said.

Consultants Steer were commissioned to provide the gov with support to develop the island’s long term strategy for air services two years ago.

In a report released after Chris Thomas (Douglas Central) put a motion down for Tynwald to consider calling for its publication, Steer looked at current routes, passenger figures up to 2019 and what the future could look like.

Steer found that the establishment of a Manx owned airline would have high start up costs and would be the ‘most expensive option’.

It said: ‘The establishment of a Manx airline based on the IOM and funded by the Government, may appear to address the key issue of serving key critical destinations with an optimum schedule in terms of frequency and timings, but will be by far the most expensive option for consideration.

‘Additionally, it is likely that the new airline would face difficulty in gaining access to London airports at optimum times, given the fact that runway and terminal capacity constraints (slots) at the key London airports (and other key European hub airports) may not enable the delivery of an optimum “business” day return schedule.

‘Any new aircraft fleet would likely be assigned to a ‘non-optimised’ network schedule putting further cost pressures on the airline’s financial viability.’

It added that the cost base isn’t competitive against competition under the Open Skies policy and said that regulation would be needed to exclude/control competition.

Instead, the report said that getting existing airlines to operate a base from the island, such as how Loganair operates, would bring many of the benefits such as the use of local crews and maintenance facilities.

This also removes the costs related to obtaining an airline Air Operators Certificate, access to economies of scale provided by larger airlines, has the ability to utilise any relationships the airline may possess in terms of establishing codeshares and allows the leasing of slots at constrained airports.

Release

When Gef tried to have this report released undef FoI in May 2022, we were told that the ‘information you have requested has been classified as exempt from disclosure’.

The DfE added: ‘The information requested was commissioned by this Department and is being used to provide informed background and options for the future policy for air services to the Isle of Man. This policy is yet to be agreed by the Council of Ministers and remains in active development.

Disclosure of the information at this stage is considered to be potentially detrimental to the broader economic interests of the Isle of Man, ahead of finalising the agreed policy and engaging further with the aviation industry.

‘Section 34(1)(a) is a qualified exemption and therefore it is subject to the public interest test, to determine whether the public interest in maintaining the exemption outweighs the public interest in disclosing the information.’