Scotland’s domestic connectivity

The third part of the consultation discussion document set out aims for domestic connectivity, based on existing strategies and commitments, namely:

“Between Scotland and other parts of the UK, and within Scotland, to have low/zero emission air services that meet the needs of communities and help deliver sustainable economic growth.

This includes decarbonising scheduled passenger flights within Scotland by 2040 and having air services in the Highlands and Islands which provide good value for passengers and the tax payer.”

Q8. What do you think about the idea of the Scottish Government purchasing new zero emission aircraft and leasing them to any airline operating routes in the Highlands and Islands?

Among those who answered this question, most were in favour of the proposal for purchasing and leasing new zero emission aircraft to airlines operating routes in the Highlands and Islands. There was a sense that these routes could be transformed into zero emission routes relatively quickly and easily, and that such an option would help support/speed decarbonisation of the sector. A few were also keen to see such provision rolled out more widely and not be limited to a few specific routes. A similar number wanted such aircraft to be exempt from Air Passenger Duty (APD):

These airline routes are the most likely to be genuinely carbon neutral the soonest, given the low load factor and short distance of many of the routes. It is a good idea to concentrate efforts to decarbonise aircraft here.”
(Environmental NGOs/representative bodies)

Provided that the economics work out, this proposal seems to be a worthwhile investment that will help decarbonise aviation and accelerate the shift to net zero.”
(Transport Partnership)

However, some respondents were either against the proposal, and others who were generally supportive, voiced some reservations.

Several respondents felt that other modes of transport needed to be considered and decarbonised as a priority (e.g. trains, buses, ferries, etc.) rather than encouraging flights. Others suggested that Scottish Government resources may be better directed at alternative incentives (such as the adoption of SAF) and improving the infrastructure needed to support zero emission aircraft in airports, etc. It was suggested by several respondents that operators or private leasing companies were in a better position to purchase the required aircrafts, with a few suggesting they should be supported to do so rather than the Scottish Government buying the aircrafts directly. Airlines and a number of other stakeholders represented at the dedicated workshop also questioned whether the Scottish Government buying and leasing zero emission aircraft would be needed as they expected that private sector aircraft leasing companies would do this more effectively. These companies operate at a larger scale than the Scottish Government could, giving airlines greater flexibility to continually up-grade aircraft as technology develops, it was suggested.

Several online respondents questioned the Scottish Government’s credentials and/or practical ability to manage such an undertaking - e.g. its knowledge and ability to purchase appropriate aircraft to suit different airlines/routes, and the costs and ability to ensure any maintenance and repairs could be carried out quickly and efficiently.

Similarly, a few online respondents suggested that the speed with which the technology would develop could present a risk for the Scottish Government and this proposal, with the first generation zero emission aircrafts possibly becoming quickly outdated. The impacts of this were seen to range from routes being tied into using outdated aircraft and thus holding back further development, and for the Scottish Government to have to try and sell these on to other areas/sectors (which it was felt operators were in a better position to do):

It is expected that private sector aircraft leasing companies would do this more effectively. These companies operate at a larger scale than the Scottish Government, giving airlines greater flexibility to continually up-grade aircraft as technology develops.”
(Transport Partnership)

Workshop participants echoed this sentiment suggesting that there may be a danger that the Scottish Government invests in a technology that turns out not to be appropriate and wastes public money.

While other workshop delegates supported the use of these aircraft on intra-Scotland routes, they had concerns about the practicalities of the Scottish Government buying and leasing aircraft, including how to ensure that the aircraft were suitable for the routes, how to provide equal access i.e. if there were insufficient aircraft to meet demand how would decisions be made around allocation?, and the risks of inadvertently constraining airlines’ ability to move their assets across their network. One airline said that, should such aircraft be used, the routes would need a public service obligation (PSO).

One public body supported the proposal on the proviso that fares were maintained at an affordable and equitable level, and extra costs of decarbonisation were not met by Highlands and Islands regional stakeholders only.

Q9. What else can the Scottish Government do to achieve its aim of decarbonising scheduled flights within Scotland by 2040?

The key suggestion by many respondents in response to this question was to incentivise both the development and use of decarbonised/zero emissions technology.

A few individuals suggested the Scottish Government should implement a ‘carrot and stick’ approach, by offering tax relief or other financial incentives for the development and use of zero carbon technologies, as well as penalties/taxes/levies for those who continue to use fossil fuel options. Similarly, one organisation in the aviation industry suggested the Scottish Government should legislate to encourage operators to embrace new technology as it becomes available, and perhaps consider penalties for those who do not, while another felt financial assistance should be provided to operators to adopt the early technology:

…have significant financial ‘carrots’ to encourage airlines to adopt lower emission fuels and technologies and at the same time introduce significant financial ‘sticks’ on the continuing use of older technologies.”
(Individual)

At the dedicated workshop, in response to a question about how the Scottish Government could do to help increase the use of SAF, using a ‘contracts for difference’ model was also suggested. This would mean the Scottish Government paying the difference in cost between conventional operation and the new operation using SAF. This would provide support in the early years, with the hope that it would be commercially viable in the medium or longer term.

A few online respondents, from across a range of respondent groups, again suggested the Scottish Government should fund or support research and development to decarbonise the sector, develop zero carbon technologies, the electrification of aircrafts, and the necessary supporting infrastructure (at both ends of the route). Similarly, workshop delegates suggested there may be a role for the Scottish Government in helping to put in place the supporting infrastructure needed for these new types of aircraft to operate, including airport infrastructure but also the wider energy system (grid connection, lowering the cost of hydrogen production, hydrogen transportation and storage, etc.). When considering the infrastructure needed and the best location for this, it was suggested there was a need to consider demand from other transport modes and other uses (e.g. hydrogen for heating) and to link into the work that was already underway in these areas (with specific comments that lessons could be learned from electric vehicle (EV) charging).

While stakeholders recognised that the regulatory side of aviation is currently reserved to the UK Government, they stressed the importance of the regulatory process keeping up with technological development in order for these new types of aircraft to be able to operate. The importance of passenger acceptance of these new types of aircraft was also highlighted again, and so it would be important for the Aviation Strategy to get the messaging right from the start.

A few online respondents specifically recommended the use of dedicated hubs to test and roll-out new technologies, such as unmanned aerial vehicles (UAV), or hydrogen based airports. A few also suggested it would be important to support the highly skilled workforce needed to both develop and operate/maintain the new technology (something also echoed elsewhere in response to other questions).

Some individuals and Transport Partnerships suggested managing or reducing demand for flights (with a few suggesting this could be done through improving and promoting digital connectivity, or by increasing passenger duty); improving, promoting and incentivising alternative (greener) transport options and addressing the cost of local travel across the Highlands and Islands; and a few individuals and organisation in the aviation industry advocated supporting/incentivising SAF:

Reduce flights. It's the main tool we have in reaching zero carbon emissions.”
(Individual)

Replace them with better rail connectivity and faster trains, and more efficient ferries with train connections for links to island areas. There should be no need for domestic flights within the UK.”
(Individual)

Again, workshop delegates suggested that improving public transport to and from airports could be a quick win in terms of reducing emissions.

Campaign groups wanted airport expansion plans to be reviewed and only approved where it would be compatible with zero-emissions. This included further reconsideration of the expansion of Heathrow airport. Other suggestions from this group included removing air routes where a direct rail route is available, banning mainland domestic flights, and developing an integrated transport approach:

Airports should be required to put any expansion plans on hold until they can demonstrate that their infrastructure plans are compatible with zero emissions aircraft. The Scottish Government could propose a ban after 2030 on any mainland domestic flights powered by jet fuel.”
(Environmental NGOs/representative bodies)

A few respondents also wanted the Scottish Government to support and expand the Sustainable Aviation Test Environment (SATE) project in order to allow the private sector to develop the necessary technology.

Q10. What air services do you think are needed to meet the needs of people living in and visiting the Highland and Islands in the scenarios set out above (i.e. less demand for air services; same level of demand for air services; more demand for air services?)

The discussion document set out three possible scenarios for air services which might help to meet the needs of people living in and visiting the Highlands and Islands (see Appendix F).

While roughly half of respondents answered the question, not all provided a response to all of the question elements. There was also evidence that several respondents misinterpreted this question as a multiple choice question, flagging one option as their preferred/expected scenario for the future. Of these, five wanted/expected more demand (and more affordable prices), while one wanted/expected less demand and two the same level of demand (although one again flagged the need for more affordable services, particularly for businesses).

Less demand

Under the less demand scenario a few online respondents preferred to see fewer flights and smaller planes, however, they did not want to remove existing routes. Only one respondent preferred an expansion of routes to more destinations:

Following the pandemic it is possible there may be less demand, but operating smaller, more efficient aircraft connecting more local airports on short flights could be sustainable financially for an airline.”
(Individual)

One respondent suggested that flights should be maintained for healthcare and emergency purposes, while another felt that island to mainland and inter-island connectivity should be prioritised. One respondent also suggested tourism should be promoted more. A few, again, noted ways they thought demand for air travel could be reduced, including greater support and promotion of alternative options.

Feedback from workshop delegates in relation to ‘less demand’ included:

• that some air travel would still be needed in this scenario, but perhaps the routes between central Scotland and London/the Midlands would no longer be needed;
• the fact that the NHS is currently a heavy user of the existing air services, both in terms of patients travelling for treatment and NHS staff travelling for work, with suggestions that there needed to be a greater consideration of transportation when making decisions about the provision of health care (i.e. better integration between health and transport policy);
• smaller aircraft could be used, however, fire service provision, etc. would still be needed, meaning that the on-going need for air travel would be challenging (as certain fixed costs could not be reduced):
• that more PSOs would be needed as the reduction in passenger numbers, especially the reduction in business travel, would mean routes would not be commercially viable; and
• air taxis could provide a different way of meeting the remaining need for air travel.

Same demand

Although some online respondents provided feedback in relation to this scenario, several simply suggested methods for curbing demand (e.g. improving alternative transport options).

A few suggested this scenario reflected the current situation and therefore, generally, the service provision was appropriate and should be maintained. One respondent suggested more services were needed at Wick, while another suggested the services should be maintained at the current level for three years while new transport solutions were developed.

Feedback from workshop delegates in relation to a ‘same level of demand’ scenario included:

• that this premise could be challenged as it was likely that demand would continue to be low for the foreseeable future as a result of COVID-19 uncertainty, which was also making planning and data interpretation more difficult. It was suggested that making significant changes to PSOs could provide some support with these challenges; and
• that there was a difference between community expectations about the cost and frequency of flights in the Highlands and Islands, and what was feasible to deliver given volumes of passengers. Also, actual usage does not always reflect what people say they want from an air service.

More demand

Again, a few online respondents outlined their resistance to ‘more demand’ while others outlined methods for increasing demand. This included:

• exploring new routes (including regional, national and international) - one respondent noted this might require upgrades to infrastructure and policy to support charter flights;
• improving inter-island connectivity;
• improving the frequency and cost of travel to mainland Scotland;
• providing new aircraft (preferably low/zero emission options);
• reducing fares/costs to passengers; and
• considering seasonally adjusted services.

Several also noted the need for increased services, this was particularly for healthcare reasons (and one respondent felt there was a need for travel options to be better aligned with NHS facilities and appointments), but also to provide for currently unmet demand in particular areas or for particular routes. A few respondents also noted the benefits of supporting economic development of the region (Highlands and Islands). One respondent felt it was important to understand local need and then develop services to support this - it was felt this would increase demand.

Feedback from workshop delegates in relation to ‘more demand’ included:

• that suggested new technologies present new opportunities. While airframe costs may be higher the marginal cost of operating additional services may be lower, incentivising the operator to maximise the use of the aircraft. This means more frequency and possibly more routes. Services such as Glasgow / Edinburgh to Inverness may be viable and environmentally better than the current alternatives; and
• frequency and availability are key. Using the car is very flexible and resilient and this would need to be mirrored if air services were to be considered viable alternatives.

General comments

Some online respondents provided more general comments rather than responding to different scenarios. Several suggested that local communities and businesses were best placed to identify aviation requirements and demand and felt that they should be consulted with directly. Similarly, workshop delegates considered that demand would be dependent on individual community needs. The core needs of some communities were not currently being provided, it was suggested. In particular, it was essential to ensure adequate full day return travel is achievable. This was seen as important for business, healthcare and leisure.

Some Transport Partnerships and local authority/public body respondents stressed that flights to many island and remote areas were lifeline services and therefore needed to be retained and protected as such.

Two respondents noted that the use of video conferencing may reduce demand for flights in the short term but suggested this may fuel increased demand over the longer term as businesses expand their markets/customer base.

One noted that regional air services could respond and adapt reasonably quickly to changes in demand.

A suggestion was also made that the model should be developed with the National Transport Strategy (NTS2) priorities in mind:

In order to better understand and quantify future scenarios, it would be necessary to undertake a sufficiently detailed and sophisticated model of what is required to deliver the all the priorities of the National Transport Strategy.”
(Local authority/public body)

At the workshop, a suggestion was also made that the Strategy should adopt an outputs based approach that considers minimum service provision and the support mechanisms needed to achieve that outcome. Similarly, delegates felt that the focus could not be on access to the central belt alone, but should also look at inter-regional links.

Q11. Most air services in the Highlands and Islands are delivered on a commercial basis. How can the Scottish Government best work with the private sector to deliver the air services you think are needed?

This question did not attract a large online response and there was also quite mixed feedback given. General incentives or subsidies were supported or seen as necessary by several to maintain the viability of some routes, to boost the local economy, and/or to enhance or grow provision. A few suggested that subsidies should be provided to promote green technology or services using zero/emission aircrafts, while a few (generally individuals) were opposed entirely and felt such support should focus on alternatives to aviation such as bus, rail and ferries:

In the same way as some bus routes are deemed to be socially necessary but not commercially viable and therefore are run with a subsidy, so any air route in the Highlands and Islands that is also considered to be socially necessary should be similarly supported.”
(Individual)

Public Service Obligations (PSO) are required in some circumstances to support regional services and, although appreciated, a system that better incentivises air operators to improve and grow passenger demand is needed.”
(Transport Partnership)

Again, a few individuals suggested that other modes of transport should be prioritised, at least until zero emission air travel was possible, while several suggested that the service should be nationalised (with two extending this to all transport systems). One suggested that a national airline could be run by an ‘arm’s length’ Scottish Government body:

…an "arm’s length" Scottish Government owned airline should be formed to take over these routes, the aim being to run the routes efficiently for passengers/users and not make as much profit as possible.”
(Individual)

A few respondents reiterated earlier support for the Scottish Government buying low/zero emission aircraft and leasing them to the private operators. A few others suggested that undertaking or supporting research and development into zero emissions technology and investing in the required infrastructure would be helpful.

While several respondents recognised the PSO scheme as a method for supporting lifeline services, a few organisations (largely local authorities/public bodies) noted the need for greater co-ordination in this respect. It was suggested the PSO services operated largely in isolation to one another, and that a more joined up approach was required:

Air services across rural Scotland are all continually being operated in small pockets in isolation from each other. Argyll and Bute Council, Orkney Council, Shetland Council, Comhairle nan Eilean Siar and Transport Scotland all have responsibility for financially subsidising Public Service Obligation (PSO) air service routes and also airports and each organisation carries out its own individual procurement for the air services it has responsibility for. There is not a joined up approach - that could offer many savings in procurement, advertising, etc. The air service contracts should be procured at the same time, to allow operators the best opportunity as to how they could deliver services in tandem.”
(Local Authority/Public Body)

One public body noted that the risks of ‘single operators’ must always be considered and risk management plans put in place to protect lifeline services if the single operator fails.

At the dedicated workshop, airlines outlined what they needed to consider when deciding to operate a route (at a minimum covering their operating costs). This, they explained, is slightly different to airports, which need passenger volumes. It was also noted that some communities may, for example, want a ‘9 to 5 schedule’, which conflicts with what airlines can provide and so the strategy should consider these conflicts of interest.

A few online respondents also noted the need for public consultation or engagement in this respect, with others suggesting the Scottish Government needed to liaise with and take a partnership approach with the private sector to determine the support needed. The importance of open and honest dialogue between communities, Scottish Government, airlines and airports was also stressed during workshops, to find the right balance between what communities would ideally want, what is feasible, and the commercial imperatives involved in providing services.

Q12. How effective do you think the Air Discount Scheme has been at addressing high airfares?

The Scottish Government funds the Air Discount Scheme (ADS) which makes air services more affordable for remote communities in the Highlands and Islands by providing residents with a discount of 50% on the core air fare on eligible routes. When asked how effective how effective the ADS has been to date at addressing high airfares, there was a reasonably even divide between those who offered supportive, unsupportive and neutral feedback.

Those who were positive about the ADS expressed that it had been effective in making communities more accessible and sustainable, and had helped to maintain vital lifeline services:

The ADS is essential to sustain equity of access for our island residents helping ensure their sustainability in the 21st century.”
(Local Authority/Public Body)

The fact that flights on these routes have been maintained surely proves that the approach taken has been successful.”
(Individual)

Those who provided mixed comments were generally supportive of the ADS but felt it did not go far enough. A few suggested that air fares remained high, thus prohibiting it as a travel choice for some, especially those on lower incomes who still found the cost a barrier to air travel:

Air fares remain at an extremely unfair high level for Western Isles residents due to lower than average GDP (75% of UK GDP) and earnings locally, compounded by the fact that these are lifeline routes which should be more accessible to residents especially as an alternative to ferry travel which has become increasingly unreliable.”
(Local Authority/Public Body)

Of those who provided generally negative comments, several respondents were against the scheme in principle as it was seen to incentivise air travel, which they felt was incompatible with averting the climate crisis.

Very specific regional issues were noted, including lack of flights available from Wick airport.

Costs were also discussed, with one respondent noting that they had seen no difference in airfares, one who felt it had only limited impact on residents and highlighted that the inability to cap costs meant that the excess was passed on to the public purse, and another who suggested it was still cheaper to drive to a larger airport and travel from there compared to their nearest/local airport.

Businesses and tourism were also constrained by the very high costs of air travel and were not eligible for ADS, it was highlighted.

Two respondents simply perceived that the ADS was ineffective, one of whom also suggested it was unnecessary as alternative travel modes were available.

Three organisations that provided more general comments suggested that:

• a discount scheme was important to make air fares affordable for residents;
• that any scheme which makes remote communities more accessible should be viewed as having wider benefits than purely a monetary saving for the passenger; and
• that a level playing field was needed between mainland airports in relation to Air Departure Tax.

One respondent felt that there was still misunderstanding between when ADS or other subsidies applied and felt this needed to be clearer.

Among workshop delegates, there were also mixed views on how effective the Air Discount Scheme had been. Some said it was very important to help reduce the cost of living for people in the Highlands and Islands, while others thought it had not achieved its aim and that the Scottish Government should consider whether there was a better way of achieving this. A number of stakeholders suggested that the Scottish Government should consider how it supports air services in the round (e.g. subsidy for airports, PSOs, air discount scheme, Air Passenger Duty exemption) and how it could use this money in the most effective way to achieve the stated aim of the air discount scheme.

Others suggested changes to the current scheme, such as expanding it to cover business travel and having an ‘air discount scheme fare’ which eligible people could book. Airlines said this idea would limit their flexibility to adjust prices and thus potentially undermine the viability of the route which, in turn, would have a negative impact on the community by reducing connectivity.

Q13. How can the Scottish Government improve the Air Discount Scheme?

Around a third of respondents provided feedback on how the Scottish Government could improve the Air Discount Scheme.

Some suggested that greater discounts could be provided to residents of the Highlands and Islands, while others advised that it could be expanded to allow a greater/uncapped number of flights for those with medical conditions receiving treatment and to include business travel for those based in remote/island locations (although one respondent suggested it should not be extended to business travel). A few also felt that awareness raising in relation to the scheme was needed, and that it needed to be easier to use.

Conversely, a few suggested that access to the ADS should be restricted, for example, to only those living on islands, or for it to be means-tested. One respondent suggested such a scheme could be applied to operators of small, very short-haul, sustainably-powered aircraft to encourage their use - they suggested the discount could apply to tourists as well as residents and business travel.

One respondent suggested that no further expansion of the ADS was necessary as the sector was already heavily subsidised:

Flights departing airports in the Highlands and Islands are already exempt from APD. There is currently no tax on aviation fuel and no plans to introduce it. Aviation already enjoys being very lightly taxed, especially when compared to alternative transportation. We do not support the further reduction or discounting of air fares.”
(Environmental NGOs/representative bodies)

Others went further, with one respondent suggesting that the ADS should only be applied for those who make their onward travel by sustainable modes rather than onward flights. Several others argued that the ADS should be scrapped entirely, generally suggesting that funds should be diverted to alternative modes, and with one suggesting all flights should be subject to tax rather than discounts.

Other suggestions made by one respondent respectively included:

• introducing a ‘tourist pass’ which could integrate with ferries to support them to travel around different islands;
• to undertake a comprehensive review of funding for and governance of air services in the Highlands and Islands;
• more input needed from the NHS as a significant service user; and
• the consideration of penalties if the ADS is abused.

Two suggested that local users would be the best placed to provide advice in this respect and one organisation simply urged its continuation:

Air connectivity is critical for the Highlands and Islands and the existing ADT exemption must remain in place to protect remote and rural communities, and to ensure that the devolved powers are not compromised.”
(Local Authority/Public Body)

Q14. What do you think about complementing the current operating model with an on demand service, such as air taxi?

When asked for opinions on complementing the current operating model with an on demand service, respondents gave quite mixed views.

Those who were generally supportive considered that this might improve connectivity for certain areas (especially the islands), and increase travel options for certain groups:

[We] see this as a positive option particularly to connect to remote areas. A great deal would depend on the affordability but it could certainly help create better connectivity. [We] are broadly in favour of any innovation such as this and potentially Scottish Government could pilot this idea with a view to being a leader in this area.”
(Organisation, Other)

Despite this support, it was stressed that any on demand service needed to be safe, economically viable, that there should be no penalty/premium for low capacity, it should not increase carbon emissions, and that an equitable funding model would be needed:

If the fares are cheaper/more affordable and equitable and retain ADS, this may attract a sector of customers to the air taxis. It would be expected that public sector workers/NHS patients would continue to provide baseload for current flights.”
(Local Authority/Public Body)

Those who offered mixed views cited both advantages and disadvantages, or were unsure of the commercial viability of on demand services. Two respondents (from the aviation industry) were concerned that an air taxi service would be more expensive than scheduled flight options, with one suggesting that scheduled flights and air taxi services could not be offered together as one would compete with and reduce demand for the other - they felt that only one model could be offered at any time. Another respondent (a local authority/public body) saw benefits in providing services where scheduled flights would typically be cancelled due to lack of passengers but were concerned about how many air taxis could be funded. One respondent called for an impact assessment to be undertaken and for all options to be explored in order to develop the best service provision.

Those who were against the proposal generally cited either: environmental reasons; concerns about detrimental impacts on scheduled flight services; concerns that an on demand system would be expensive or would not provide value for money; and/or concerns that an air taxi service would only be affordable for a small minority:

On-demand services could undermine the viability of scheduled services and/or make these more expensive. There would be equality issues regarding affordability of an on-demand service.”
(Transport Partnership)

Q15. What do you think about an open charter service?

There was relatively little feedback on the open charter service compared to other questions in the consultation, with mixed views being put forward.

Those who were positive about an open charter service viewed it as a way to provide financially viable and efficient services. Provisos again included the need for any services to operate fuel efficient/zero emission aircraft:

Could be a good way to fill up flights and help them to be economically viable.”
(Individual)

Two respondents, who were generally supportive of an open charter service option, stressed this should not compete with vital lifeline schedule flights, but could provide options in other circumstances:

…we do not advocate for this as a replacement for scheduled flights, which should remain a critical lifeline for many communities, but should be considered as a serious option in those areas where demand would merit it or indeed where scheduled operators are unable to meet demand.”
(Business Representative Body)

A few also highlighted that charter services already existed.

Those who were unsure or offered mixed views thought the option sounded complex or felt that such a service might work in some areas but not others or offer a seasonally mixed pattern of service provision.

Those who were generally against an open charter service largely preferred scheduled flights but felt that these needed to work harder to deliver flight times and routes that passengers wanted in order to maximise capacity. One respondent felt that an open charter was not the right option for their area, and another thought the proposal was unworkable:

It seems to us that an open charter service has the potential to offer the worst of both worlds to customers. On the one hand, it presumably commands a high price, although one which is offset to some degree by opening up to other fee-paying customers. On the other, it loses to some degree the benefits currently enjoyed by charter passengers - privacy, exclusivity, convenience, and flexibility.”
(Business Representative Body)

Q16. Apart from on demand and open charter services are there any operational models you think could be used? If so, what?

Again, there was relatively little feedback in response to this question and most respondents provided unique responses with no obvious themes emerging.

Among online respondents, a few simply indicated their preference for one model over another (e.g. for scheduled flights, or for a supporting air taxi model), or noted preferences for specific routes to be provided. One was interested to explore what a totally free service would look like, and one advocated that any model/provision should be market driven.

A few stressed the need for a joined up, integrated public transport system with integrated or combined ticketing. This was important between air services and onward travel modes, but also across public transport more generally, they felt.

One respondent suggested that wider service elements should be considered, such as information provision and booking systems, and that a more consistent and joined up approach was required between ferry and airline systems as passengers often tried to divert to the alternative mode when one was cancelled:

It may be that it is not merely the physical operational model that should be considered but the way in which these services are advertised, booked etc… There should be a Scottish network approach as to how these two modes of transport [flight and ferry] are advertised so the general public know of their availability as alternatives.”
(Local Authority/Public Body)

This same respondent also suggested there was potential to make better use of existing aircraft by combining routes, which were often considered to operate in isolation.

Another suggested exploring the potential for developing mixed models to accommodate seasonality:

Potentially expand on the idea of a seasonally adjusted service where winter months are a mix of schedules and customer driven call off which is potentially a multi drop route.”
(Aviation and associated industries (including representative bodies))

One respondent suggested that synergies and efficiencies could be explored with the Scottish Air Ambulance Service, while another indicated that partnerships could be explored between the Scottish Government, local authorities, private airlines and employers in the sector:

There are examples in the provision of other major services such as utilities or housing where partnerships between authorities, private airlines and major private sector employers have been developed to bridge the funding gap and we believe there is merit in exploring where these models could add to the range of options for delivery of sustainable aviation services in Scotland.”
(Business Representative Body)

Among workshop participants, feedback on air taxis/on demand services included that:

• such services may meet the needs of certain people but the cost would be prohibitive for others;
• there may not be sufficient volume of passengers to make these services viable;
• such services may have a negative impact on scheduled passenger services by reducing their demand (although this risk could be mitigated by using air taxis on routes where there is no passenger service); and
• adopting pilots, trials or learning from the roll out of air taxi services in other countries first may be a prudent approach (to gain a better understanding of the opportunities/challenges ahead of roll out).

On open charter services, workshop attendees indicated that, while this was a good idea in principle, the practicalities may mean it was not feasible.

As with online consultation respondents, workshop stakeholders found it very difficult to suggest alternatives as they perceived that the traditional model worked well in many circumstances. More general comments from delegates included that:

• it was good to encourage competitiveness in the network where possible but there needs to be a driver of equity to support lifeline services;
• from a business travel perspective, reliability is very important and perhaps more so than frequency, as commuters need to be able to plan their journeys with certainty;
• price models may need to be looked at if there are going to be fewer future passengers (i.e. business travellers) willing to pay for the more expensive tickets which currently supports the provision of the less expensive tickets;
• airlines would always need a certain overall yield to make a route commercially viable and so any change in weightings between high price ticket payers and lower payers could impact overall service provision; and
• should the number of craft on the route network increase substantially, there would be a fundamental issue about a lack of available pilots.

Workshop delegates also said they would welcome a complete review of existing support mechanisms and questioned if existing spend was being used optimally to provide services that communities needed.

Q17. What are the strengths and weaknesses of the operational model set out in the table above?

Airport services for scheduled passenger air services in the Highlands and Islands are currently provided by HIAL, Shetland Islands Council, Orkney Islands Council and Argyll & Bute Council. A table illustrating the operational model was included in the discussion document (see Appendix G).

When asked about the strengths and weaknesses of the operational model, very few provided an answer to the question. Those who did commented on alternative operating structures rather than the current model, or compared a central model against the current arrangements.

While several strengths of the current model were outlined, these were typically mentioned by just one or two respondents each. These included comments that:

• it facilitates commercial competition;
• each organisation understands the needs of its area and can ensure services are suitably tailored, including the provision of integrated travel options;
• it provides direct control over day-to-day operations;
• it allows quick response to local issues;
• it could provide better flight times; and
• many remote communities are served by an air service.

Similarly, while weaknesses were identified, these were largely only mentioned by a single respondent each. The weaknesses were considered to include:

• a complex and confusing landscape regarding who is responsible for each airport;
• different bodies have different requirements for passengers;
• current operators do not have the ability/authority to ‘invest speculatively’;
• unable to maximise resources, such as staff;
• four separate operations doing the same business with no economy of scale for purchasing;
• each operator needs to develop and employ its own internal aviation and airport expertise;
• no allowance for bundling of routes or for available aircrafts to be utilised in the most efficient way;
• funding inequality;
• current lack of integration with other modes of travel - e.g. ferries; and
• airports operated by public bodies were felt to be less efficient and operate at a loss.

In relation to economies of scale, however, a few respondents suggested that linked or joint procurement could be undertaken to improve this situation. One respondent suggested that PSOs could potentially be grouped together with Transport Scotland taking ownership to achieve price efficiency.

Other respondents suggested simplifying or centralising the operational model so that all airports were operated by one organisation. Again, pros and cons were discussed with this model, with some suggesting this would simplify the landscape, offer operational benefits (e.g. with staff being able to work between locations, greater route options, etc.) and offer greater purchasing powers. Others, however, were concerned that centralisation would lead to a few larger airports being prioritised and risk local lifeline services:

Having multiple airport managers means these bodies have more direct control over day-to-day operations. Consolidating airport operations through one organisation, however, might prove to be more efficient, leading to more streamlined operations, potential cost savings in terms of economies of scale, as well as standing ground in negotiations for new routes and attracting airlines to operate in Scotland. One operation model also provides greater potential for integrated flights and more flexibility for organising flight schedules on a more on-demand basis (such as air taxi) in the future.”
(Transport Partnership)

If all airports were centrally run then there is theoretically the potential to reduce costs by removal of duplicated service and a centralised control system for standards. However, centralisation would undoubtedly favour the larger airports. The smaller communities where the airport supports a lifeline service rather than a convenient hub would be in danger of being under the control of management who may have little understanding of supporting fragile communities with particular community needs.”
(Aviation and associated industries (including representative bodies))

Lack of familiarity with local communities and the need for democratic control in an alternative model were also cited as potential barriers.

Five respondents who provided comments, did not answer the question set. One outlined issues with their local airport, one identified desired route alterations, two suggested airports should be closed, and one felt the consultation was too detailed and that different questions should have been asked of different respondent types.

Q18. What changes, if any, do you think should be made to these governance arrangements to improve services?

When asked what changes should be made to the current governance arrangements to improve services, few respondents provided a substantive response.

A small number either suggested that having one single operator/body responsible for all airports and routes, or at least having more central oversight, might be beneficial, both in simplifying the landscape and providing more efficient and effective services (although risk management and mitigation was again encouraged in cases where a single operator may fail):

Having one airport operator in the Highlands and Islands might help making the running of these services more streamlined and integrated, which would help improve services.”
(Transport Partnership)

Rules should be standardised and regulated centrally to ensure all customers get the best service and that safety standards are monitored.”
(Individual)

It was suggested that consolidating responsibility for and the management of all airports and airstrips under one organisation may lead to certain efficiencies, particularly in the areas of regulation, staffing, training, equipment, etc.

Another respondent suggested a more co-ordinated approach (such as the model provided by Network Rail) could be explored.

One respondent suggested that the HIAL airports should be reduced to the ‘big five’ of Inverness, Sumburgh, Kirkwall, Dundee and Stornoway, and that the others should be operated by a more local body in the same way as other areas in order to prioritise local needs. Three respondents suggested that local authorities should not be in charge of airports; two preferred private operators while the other simply wanted the operator to be independent of local authorities but supported via central government funding. One respondent also wondered whether certain airports/areas could be transferred into community ownership/control.

Four respondents were content with the current arrangements and did not think changes were required:

Given our experience of working with local Councils serving fragile communities we would say it is essential that local councils retain the ability to control the needs of the air services. They are undoubtedly best placed to assess the needs of the local population. We therefore do not believe changing local governance would be of benefit to the communities they serve.”
(Aviation and associated industries (including representative bodies))

One respondent stressed that there needed to be a review of the current air services before any decisions could be taken regarding changes:

…there needs to be a fundamental review of current airport infrastructure and all public funding that currently supports the operation of airports and air services across Scotland. It’s back to basics - what type of aircraft can use the runway, where are refuelling points on the network, which services could be linked, are there seasonal variations, various airport opening times on the network, etc. Only then can we then start to consider what services are required to support our fragile island communities and remote mainland communities and how these can be better procured to offer best value for money through the infrastructure that exists.”
(Local Authority/Public Body)

Again, two respondents felt that local communities, businesses and service users should be consulted rather than seeking input more broadly.

Q19. What changes, if any, do you think should be made to these governance arrangements to reduce running costs?

When asked to suggest changes which could be made to the current governance arrangements to reduce running costs, there was little consensus among online respondents.

A few, again, suggested that a single body/organisation should operate all airports, while others suggested that the Scottish Government could be more involved, in order to provide greater support/purchasing powers and nullify risks:

…having one airport operator in the region can help achieve better economies of scale, and therefore reduce running costs. Lower running costs may contribute to making air travel for local communities more affordable.”
(Transport Partnership)

Transport Scotland could operate a model where they themselves act as the back-up service operator if the current single operator fails, and in future operate the low emission aircraft rather than leasing to commercial airlines to nullify the risk…”
(Local Authority/Pubic Body)

One respondent suggested that better procurement procedures were needed, although they did not outline how they thought this could be achieved:

Better procurement is key, not just for the air services themselves but for all type of works - runway maintenance (e.g. white lining), procurement of new fire appliances, maintenance machinery, training for staff, advertising, etc.”
(Local Authority/Public Body)

Another respondent highlighted that many operating costs were fixed and therefore it was important to attract a wide range of airlines and routes, and that it was important to recognise the significance of regional airports as drivers of economic growth, jobs provision, social wellbeing and fairness:

Many of the costs of running a regional airport… are fixed - it is therefore essential that resources are made available to attract commercial operators and more destinations, particularly hub airports.”
(Transport Partnership)

One respondent, while recommending that local services should remain in local control, outlined several suggestions. This included the provision of support from the Scottish Government to purchase low carbon aircraft and infrastructure, and that some charges (which are ultimately recharged to local authorities under the service level agreements) should be waived. They also noted that any changes to a centralised model of ownership would incur significant costs, and suggested that significant economies of scale were already provided:

Given the level of expertise required to run an airline or airport authority there would be costs associated with any move to centralise the management of either services and considerable costs would be incurred to duplicate these outside this environment. Markup by the airlines is currently limited through the current processes and local councils undoubtedly benefit from economies of scale with significantly reduced costs of operations.”
(Aviation and associated industries (including representative bodies))

Again, one respondent noted there was no need to change the status quo, two felt that local communities, business and service users should be consulted, one argued against regional airports, and another felt that costs should not be reduced as this could increase travel which would be contrary to the environmental crisis.

A specific workshop was also run to consider the Highlands and Islands governance arrangements and feedback included:

Benefits

• local authority operation of airports provides a high level of democratic accountability and an ability to respond quickly to local issues and concerns;
• airport infrastructure is also a critical part of island sustainability, which can be built into wider community planning;
• HIAL has a close working relationship with Transport Scotland which allows HIAL to react quickly to challenges within its network and to deliver Transport Scotland’s objectives. In contrast, councils do not have a close relationship with Transport Scotland and are not therefore able to exert the same strategic influence.

Challenges

• aviation is a specialist and disproportionately resource intensive area as seen, for example, in the regulation by and relationships with the Civil Aviation Authority (CAA). Local authority officers may be spending disproportionate amounts of time on aviation whilst also having to deal with ferries, bus, roads, etc.;
• population trends on some islands can make it difficult to recruit and maintain appropriate airport staff. Decoupling pay scales from standard ‘civil service’ scales may help to create a wider pool of people by more accurately reflecting the market for these types of jobs; and
• specific infrastructure challenges, for example, that the length of some runways restricts the type of aircraft that they can accommodate.

There were also more fundamental questions about the nature of the current networks and whether they represent simply the accumulation of practice over decades, rather than being the most effective service model for Scotland. It would be useful to examine (and be more transparent about) how much public money from councils and Transport Scotland is subsidising airports, it was suggested.

Participants saw merit in establishing a coherent, pan-Scotland approach to dealing with the complexities of ensuring connectivity and effective resource management. They perceived that there were opportunities to achieve standardisation in the provision of certain services across airports in the Highlands and Islands, for example, training and recruitment, infrastructure, fire services, operating hours, insurance, uniforms, etc. This could help to achieve economies of scale.

It was also suggested that having one accountable manager for relationships with the CAA could lead to a more straightforward relationship between the airports and their Regulator as well as driving a more consistent approach to operations and compliance with regulatory requirements. It could also enable a more effective response to proposed changes in the Regulatory Regime such as the CAA’s modernisation plans.

The opportunity to simplify the complex administration of Public Service Obligations (PSOs), which are let by various local authorities, was also raised. However, the risk of adopting a ‘one size fits all’, overly centralised approach was highlighted.

The need for some kind of central innovation driver was suggested, as all air services, no matter how remote or specialist, will have to take action to deal with environmental demands. However, local airports are not large enough to drive the technological changes required.

While there was support for some kind of standardisation, particularly within the context of budget constraints, it was stressed that local authorities would be strongly against any change perceived as being about centralisation and would want to ensure that local influence was retained under any new model. There was also a recognition that changing the current model alone would not be sufficient to address some of the challenges local authorities face with the delivery of airport services.

Delegates also suggested that there was a danger of believing that the new model should involve either everything being done centrally, or everything being done in local communities. Rather, there may be an opportunity to create a new model that incorporates the local influence and realises the benefits of being part of a larger organisation. Local communities could retain responsibility for matters such as air services, including local flight timetables, while the day-to-day operation of airports could be managed separately. One suggestion was that a peer network would allow the bodies involved to benefit from each other’s knowledge and expertise, and work together when needed.

Participants considered that there was merit in Transport Scotland making initial, more detailed proposals for how any new model could work. This could involve analysing existing infrastructure; public funding; and whether current arrangements are optimal for a strategic Scottish air network.

Finally, stakeholders warned that there was a disconnect between Transport Scotland’s second Strategic Transport Projects Review and aviation. There has to be integration between the Aviation Strategy and the proposed islands connectivity plan, rather than transport modes being considered in isolation.

Q20. Do you think the Scottish Government should encourage airlines to offer plane plus train tickets?

Respondents were asked whether they thought the Scottish Government should encourage airlines to offer plane plus train tickets. The aim of these tickets is to make it easier for people to combine different modes of transport in order to reduce the total emissions from the journey).

The valid percentage, in the table below, shows the proportion of respondents who said ‘yes’, ‘no’ or ‘don’t know’ once the non-responses were removed. This provides a more accurate account of the strength of feeling among those who answered the set question. Among those who answered the question, two thirds (67%) supported this proposal.

Table 3: Number and percentage of respondents who agreed that the Scottish Government should encourage airlines to offer plane plus train tickets

Response	Number of respondents	Percentage of respondents	Valid %
Yes	44	48%	68%
No	4	4%	6%
Don't know	17	18%	26%
No response	28	30%	-
Total	93	100%	100%

Q21. If yes, how do you think the Scottish Government could best do this?

Respondents were also asked how the Scottish Government could best encourage airlines to offer plane plus train tickets. While only those who had supported the proposal were asked for comments, a number of these respondents did not answer while a number of those who indicated they did not know or did not answer the closed question above, provided qualitative comments here.

Suggested ways of encouraging use

Several respondents suggested that the Scottish Government could work directly with transport operators to provide joined-up ticketing.

Several respondents felt that, in order to provide integrated ticketing options relevant to Scotland’s infrastructure, such an offer would need to be extended to incorporate bus/coach, tram, car clubs, e-bike/bike hire and ferry, as well as rail, (especially in remote communities):

…this should be extended to other modes - especially bus (e.g., airport shuttle bus), inter island ferries, car clubs or bike/e-bike hire that are more relevant to island economies, and could be booked through an integrated platform offering low carbon surface transport options.”

A few suggested that the Scottish Government could draw on the existing train plus bus model to support onward travel.

A few respondents suggested that the Scottish Government should consider successful applications in other countries and learn from these models, however, again, a few also cautioned that Scotland’s infrastructure does not match some of those of countries where this is successfully implemented:

Only through careful planning with the companies involved and as part of a well put together tourism campaign could such a venture succeed on a large scale. Scotland does not match the characteristics of some other countries where this is a more widespread practice used by the local populace.” (Individual)

Effective advertising of such ticket options was suggested by a few. This included offering the plane plus train option when booking flights, and by working with and incentivising the travel industry/travel agents to develop and support this option:

…the Scottish Government could be working with travel agencies across the country to facilitate this and provide incentives for doing so. Travel agencies can tailor-make itineraries and could include rail as part of a collaborative strategy.”
(Aviation and associated industries (including representative bodies))

A few also suggested that such a ticket option would need to be based on a simplified rail service and ticketing options to make this easier to navigate, and that the currently high rail fares would need to be addressed for this to be attractive to travellers:

Make sure its affordable. A train journey should be a one price transparency, not the myriad of fares we have at present.”
(Individual)

Two respondents noted that plane plus train tickets should remain a commercial arrangement between transport operators, although one suggested this could be incentivised by the Scottish Government, i.e. to encourage airlines to adopt such an arrangement, the Scottish Government would offer a financial incentive for each plane/train ticket sold. Meanwhile, a few questioned how liability would work in the event of issues that led to delays/cancelations.

One respondent noted that such an offer could be incorporated as part of the Mobility as a Service, Smart Ticketing projects and Islands Connectivity Plan, as well as connections being needed to the Scottish Government Concessionary Travel Scheme.

One respondent suggested that demand modelling would be needed as well a pilot scheme to assess and better understand demand.

Other comments

Despite general support for the Scottish Government encouraging airlines to offer plane plus train tickets, several respondents stressed that the current services provided in some areas (including across the Highlands and Islands, as well as some of Scotland’s major airports) may not currently provide the linked-up provision that was intended. As such, it was felt that these ticket options may have limited applicability:

Realistically in a rural setting, with the exception of Inverness and even Oban airport… this is unlikely to achieve any significant benefits. Even offering plane plus bus tickets is unlikely to be a success in a rural setting given the infrequency of services.”
(Local Authority/Public Body)

Finally, a few respondents again suggested greater promotion of/incentives for alternative (non-flight) travel options wherever possible while others stressed that such a scheme should not divert rail passengers to internal flights.

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