AIR services out of Ronaldsway will be slashed if the government’s Open Skies policy continues, an air operator has warned.
Citywing, launched this month following a management buy-out of Manx2, has made a written submission to the Tynwald economic committee inquiry into the Open Skies policy.
The investigation is looking at whether the policy that allow airlines free access to fly routes to and from Ronaldsway still serves the best interests of the Isle of Man.
Supporters say that in the 12 years since Open Skies was introduced, the policy of unfettered competition had served the island well and resulted in a network of more than 20 routes being operated.
But critics say a system of ‘light touch’ regulation is needed to protect air services - with the regulator taking into account whether the route is currently ill served or would indeed benefit from competition.
In their written submission Citywing’s Noel Hayes and David Buck warn: ‘If the present status quo is allowed to continue, then the inevitable procession of free market economics will see the island’s air services reduced to two a day to Gatwick, Liverpool and Manchester and one a day to Birmingham, Dublin, Blackpool and Belfast with probably not much else.’
The pair advocate light touch route licensing – with the presumption that a licence will be granted unless it is against the national interest.
‘At present there is no mechanism in place to prevent even a new route development that is manifestly short term, and completely against the island’s interests,’ they say.
The Citywing directors also call for a pricing mechanism to encourage frequency, stability and long-term investment in route development.
They suggest a per passenger tax is introduced that would encourage frequency and maintain the operation of essential ‘thin’ routes.
‘It must be recognised that the operation of larger aircraft offers the operator economies of scale and therefore the operator is more fairly able to pay a proportionately higher charge per passenger.
‘At present, there is no incentive for the operator of the IOM-Manchester route to spend hundreds of thousands of pounds trying to grow passenger numbers if it knows another operator can start on the route at a day’s notice.
‘Thus, the passenger charging structure should reflect a significant discount to all existing operators of established routes. Any new operator wanting to take advantage of the investment made by an established operator would have to be prepared to pay for the privilege.’