Agenda item

To receive an update on the current financial position of Gloucestershire Airport.

120.1  The Leader of the Council introduced the Managing Director and Chair of Gloucestershire Airport. The Managing Director delivered a presentation detailing some of the services offered at the Airport, including Air Ambulance and Police aviation, flight training, charter and pleasure flights. She outlined the ongoing projects taking place at the Airport which included runway improvements, CGX Connect business park and access road developments, as well as future projects such as Marketing improvements, Radar Communications upgrades and further aviation business development. The Managing Director explained that the Airport was also currently working on numerous green initiatives including LED lighting, implementing the CLS Energy Report action plan and exploring the use of drones and solar farms.

120.2  The Chair thanked the Managing Director for her presentation. Referring to the Airport’s green credentials, he noted that the aviation industry did not naturally lend itself towards carbon neutrality and asked for her views as to whether she felt carbon neutrality was an achievable goal. The Managing Director expressed the view that nothing was impossible but acknowledged that carbon neutrality in aviation would be a challenge. She noted that as airplanes consume significant amounts of energy, it was important in her view to offset this through other green initiatives, for example, through the use of solar panels. The Chair of the Airport explained that work to develop hybrid airplanes, using electricity or batteries alongside fuel, was underway however the size and weight of aircraft was a challenge. He confirmed that the industry was also looking at hydrogen fuel as a possible alternative option.

120.3  Councillor Wilson asked for clarification as to what the Airport’s main income streams were. The Managing Director confirmed that the main income streams were landing fees, fuel sales and rental income through the Airport’s business parks. She confirmed that Air Traffic Control was not a major income source.

120.4  In response to a follow-up question from Councillor Wilson, the Managing Director confirmed that fuel sales could amount to up to 50% of the Airport’s income, however this was dependent on the time of year.

120.5  Councillor Wilson referred to the presentation and the comments concerning the use of drones. He referred to a previous incident involving drones at Gatwick Airport and asked whether there were any safety concerns with using drones in an airport environment. He also asked for clarification as to the relationship between drones and green initiatives. The Managing Director confirmed that the drones in development were powered by electricity and batteries. In terms of the use of drones at Gloucestershire Airport, she explained that an idea under consideration was for passengers to use drones as a mode of transport, for example, from Gloucestershire Airport to Cheltenham. The Chair of the Airport further noted that the Civil Aviation Authority (CAA) had commissioned a working group to consider how drones could be used safely in airports. The Managing Director confirmed that safety was paramount, and highlighted that the CAA was pioneering the work and looking for test sites to establish feasibility.

120.6  In response to a further request from Councillor Wilson to clarify the term ‘people drones’, the Chair of the Airport explained that the concept was similar to people carriers, however the drones would be operated remotely. He noted that trials were already taking place in Hong Kong.

120.7  Councillor Hilton referred to his previous experience on the Gloucestershire Airport board and noted that runway safety projects were previously a priority of his. Referring to the latest runway improvements, he asked what benefits they were likely to have and whether any consideration was being given to lengthening the runway. The Managing Director confirmed that improving the standard of the runway was a priority and recognised that the length of the runway was a challenge. She confirmed that the Airport was seeking advice from the CAA as to whether it might be possible to remove some green space at either end of the runway to increase the length. The Chair of the Airport noted that urgent runway improvements following an incident in 2019 had identified further subsurface deterioration issues, and assured Members that Gloucestershire Airport was a safer airport because of these improvements.

120.8  Councillor Hilton referred to short haul flights which were previously offered from Gloucestershire Airport to Jersey and the Isle of Man. He asked whether there was any likelihood of similar flights being reinstated. The Managing Director responded that the Airport were looking at options for short shuffle flights and confirmed that they hoped to run a trial flight to Newquay in the summertime. She also confirmed that the Airport was looking into the possibility of flights to Ireland, however these discussions were at very early stages.

120.9  In response to a further question from Councillor Hilton as to the Airport’s capacity to build additional hangars and how many they would like to build, the Managing Director explained that it would depend on the type of hangar as they ranged in size. She commented that in her view, larger hangars were better. The Managing Director further noted that several providers, including rotary clients, were interested in moving their aircraft to Gloucestershire Airport but there were some challenges with the utilities along the link road in terms of supplying the appropriate levels of electricity. She noted that the Airport would like to build their own hangars, however a mix of prebought hangars alongside some built by the Airport would better mediate risk.

120.10          Councillor Dee asked whether the Airport had experienced resistance from the community as a result of the increased activity at the Airport and if so, how it was dealing with the resistance. The Managing Director confirmed that engagement with the community was important and that she was keen to invite neighbouring residents to tour the Airport to showcase the good work underway. She highlighted that she was particularly keen to engage with young people through offering work experience opportunities and STEM learning support. The Managing Director acknowledged that Air Ambulance night training had initially caused some complaints. She confirmed that the Airport had taken feedback on board and now informed residents of the days and times when training would take place in advance.

120.11          Councillor Pullen referred to previous comments concerning short haul flights and asked which airports were the main competition. The Managing Director explained that the Airport was not manoeuvring to be in direct competition with Bristol or Birmingham Airports and was on a scale similar to Blackpool and Doncaster. The Chair of the Airport further noted that smaller charter flights in the South West were looking for a simple airport to use and that larger airports were less interested in attracting smaller aircraft.

120.12          Referring to the Airport’s green aspirations, Councillor Pullen requested clarification as to which of the priorities outlined in the presentation were underway, and whether any were aspirational. He also asked whether Members could be provided with a copy of the CLS Energy Report action plan. The Managing Director confirmed that a meeting was taking place that week with the Countywide Climate Change Coordinator to discuss green priorities and potential funding avenues, and offered to share an update with the Committee following that meeting. She noted that the Hydrogen Plant, Electroflight and drones were progressing and commented that hangars were thought to be a convenient place to hold solar panels. She further confirmed that the CLS Energy Report was underway and that she would be happy to circulate the action plan to Members

120.13          Following an additional request from Councillor Pullen, it was agreed that the Committee would be provided with an update on green initiative progress in 3 months’ time.

120.14          Councillor Organ expressed the view that the Airport’s plans were ambitious and asked for an estimated timeline as to when the full regeneration would be complete. The Managing Director confirmed that most repairs and regeneration projects would be completed over the next 3-4 years and that it was her expectation that full regeneration would be completed over the next 10 years.

120.15          In response to a further question from Councillor Organ as to the largest risks facing the Airport and whether any contingency plans were in place to mitigate those risks, the Managing Director confirmed that the Airport’s business plan was sensitivity tested on a monthly basis. She confirmed that the biggest risk previously faced by the Airport was the runway safety issue, which had been addressed through the civil engineering works. She expressed the view that the second largest risk facing the airport was not embracing change early enough and not adapting to environmental changes.

120.16          Councillor Organ noted his support for increased short haul flights for tourism purposes and asked for an estimated timeframe as to when the Airport might offer such flights. The Managing Director confirmed that discussions were still in the early stages, however, there had been some expressions of interest from operators.

120.17          Councillor Mason expressed the view that the presentation slides had little substantive detail and commented that it was not the first time that the information he had received from the Airport lacked detail. He referred to the demand for hangar space and asked why no business case had been made for further hangar development. The Chair of the Airport responded that the Airport had delivered on several projects, including the CGX Connect Business Park, access road and runway improvements and disputed that the Airport were being aspirational. The Managing Director further explained that in terms of the business case, the Airport needed to prioritise runway improvements and CGX initially and had made business cases for both projects accordingly. She noted that a business case would be made for the hangars in due course and confirmed that it would need to be justified by S151 officers.

120.18          In response to follow-up comments from Councillor Mason pointing out that the role of an Overview and Scrutiny Committee was to ask challenging questions, the Chair of the Airport confirmed that the leadership team did take feedback on board and wanted to bring the shareholders along with their ideas.

120.19          Councillor Gravells requested clarification on a statement in the presentation that Gloucestershire Airport handles 80,000 aircraft movements per annum, noting his understanding that ‘movements’ did not necessarily include take offs. The Managing Director confirmed that the term ‘movements’ included landings and turn arounds, and not necessarily take offs. She also clarified that this figure was reflective of the situation prior to the Covid-19 pandemic. In response to a follow-up question from Councillor Gravells, the Managing Director confirmed that during the summertime, the Airport could see 700-800 movements a day.

120.20          Councillor Gravells requested clarification as to the landing figures for commercial flights at the airport, excluding training flights. By way of example, the Managing Director of the Airport confirmed that prior to the Covid-19 pandemic, around 5% of movements had the potential to generate 20% of the Airport’s profit. The Chair of the Airport further noted that a significant profit generator for the Airport was rotaries. It was agreed that further information on the landing figures would be circulated to Members following the meeting.

120.21          In response to an additional question from Councillor Gravells regarding the main income streams, including landing fees, fuel sales and rental income, it was agreed that a more detailed breakdown of the main sources of income would be provided to Members following the meeting. It was noted that profits had fluctuated as the County recovered from Covid-19 pandemic. The Managing Director further explained about the impact of fuel prices, noting that whereas the larger airlines would fly regardless of fuel prices, this was more of a challenge for pleasure flights. She also noted that aircraft movement was weather dependent, and that profit was dependent on lots of external factors.

120.22          In response to comments from Councillor Gravells regarding public awareness of hangars and short haul flights, the Managing Director confirmed that the Airport had changed its marketing strategy, acknowledging that the Airport had been poorly marketed in the past. She noted that the Airport recognised the importance of consulting with the local community, and that it was having to balance attracting the aviation community with the wishes of local residents. She also confirmed that the Airport had already received an expression of interest in occupying one of the hangars.

120.23          Councillor Hilton expressed the view that it was important to provide hangar storage for aircraft being actively used. He noted that he was aware that the previous Air Traffic Control (ATC) system was old fashioned and asked whether any improvements had been made to the Radar system. He also queried whether the Airport was experiencing any difficulties recruiting Air Traffic Controllers.

120.24          The Managing Director responded that that the Air Traffic Control workforce was in short supply across the industry and that historically, there had been challenges with staff training at Gloucestershire Airport and subsequently moving on to work in larger airports. She confirmed that to counter this, the Airport had introduced a ‘bonding’ system, and that trainees now needed to repay their training fees if they found work elsewhere. The Managing Director confirmed that discussions were underway regarding further development of the apprenticeship scheme and noted that the Airport had made representations to Central Government to request that Air Traffic Control be listed on the skilled worker Visa list. In response to Councillor Hilton’s comments around hangar occupation, the Managing Director confirmed that there was less movement among owner-managed hangar space and that a challenge for the Airport was to make sure that they were able to facilitate hangar space where there was demand.

120.25          In response to a query from Councillor Hilton as to whether the Airport expected to fill the new business park units, the Managing Director confirmed that there had been some Planning Permission restrictions along the North side of the site, however, a mix of aviation and non-aviation businesses were likely. She provided assurances that the Airport would not exclude non-aviation businesses, noting that they had the potential to be a helpful source of additional income in times where the aviation industry faced challenges, such as Covid-19 restrictions.

120.26          Councillor Hilton expressed the view that filling business park units had the potential to create skilled jobs in the aviation and technology industries. The Airport Chair noted his agreement.

120.27          In response to additional comments from Councillor Hilton regarding the hangars, the Managing Director of the Airport noted that an estate management review was underway.

120.28          Councillor Wilson asked whether the Airport leadership team were concerned about rising fuel costs. The Managing Director of the Airport explained that historically, fuel prices changed monthly. However, as a result of recent rapid cost increases, the latest costs had been issued mid-monthly. She confirmed that fuel was purchased in bulk and sold on replacement price. The Managing Director stated that the Airport had recently been more flexible and would keep tenants updated.

120.29          Councillor Pullen referred to the future projects outlined in the Managing Director’s presentation and queried whether the hangar development or Radar Communications were the main priority. He also asked for comments as to the reliability of the Radar Communications system. The Managing Director explained that a scoping exercise was underway and that the idea was to develop the hangars alongside the Radar improvements, noting that a business case would be developed in due course. She noted that the Airport was working closely with the CAA and that an upgraded Communication intervention was needed. The Chair of the Airport noted that the Airport would require agreement from shareholders and that a separate business case would be developed for each project.

120.30          Councillor Pullen asked for clarification as to the estimated timescales for the Radar improvements. The Managing Director confirmed that the system would be kept in place for as long as possible and that an options appraisal was ongoing. She further noted that if an issue with the system emerged as an immediate risk, it would be treated as a separate priority to the business case.

120.31          In response to comments from the Chair of the Airport regarding the Voice Switch Communications, Councillor Pullen requested an estimated timeframe as to when Voice Switch improvements would be completed. It was agreed that this information would be circulated to the Committee in due course.

120.32          The Chair thanked the Managing Director and Chair of the Airport for attending the meeting and for the presentation. It was noted that Members would be welcome to visit the airport in the future.

RESOLVED – That the Overview and Scrutiny Committee NOTE the update.