5. Market Assessment
5. Market Assessment
5.1. In our response to the study brief, Northpoint Aviation set out its intention to undertake a high-level quantitative assessment of the potential market for air services from Dundee, to sit alongside the qualitative evaluation provided by the stakeholder interview process (see Chapter 7). This has encompassed:
- An analysis of route-based demand to support commercial passenger services, with a particular eye on understanding catchment leakage.
- A consideration of whether there might be a cargo market from Dundee, although given previous attempts to attract it to the airport, not with any real expectation that this would be material.
- An overview of the scope for further development of the existing Business Aviation and GA (e.g. pilot training, aero club, private flying) activity.
- An assessment of the potential for attracting offshore servicing (particularly wind farm arrays in the North Sea).
- A strategic look at Dundee's competitive position for attracting commercial flight training/testing, fixed wing and rotary emergency service operations and use of the airfield by the military.
- MRO and aerospace related activities including aircraft recycling, customization, servicing and training.
- Other airport 'related' or 'associated' (e.g. hotels, business centres, renewable energy) activities, or non-aviation commercial property development.
Passenger Demand Assessment
5.2. The first of these market assessments required access to CAA survey data, the latest of which for Scottish airports dates back to 2009, although route based data for services from Dundee has been acquired from various sources and is summarised in Chapter 2. The survey data is the key to understanding catchment demand and the competition for traffic within that catchment from other, larger, Scottish airports. It also helps to identify destinations - direct and indirect - of Dundee focused air travellers and journey purpose (i.e. business and leisure split). In addition we also looked at some MIDT[3] data provided via Transport Scotland, to confirm the feedback we were getting from various stakeholders about pricing on existing (or recently terminated) Dundee services and inform the crucial issue of likely yields and the price sensitivity of demand.
1.1. 5.3. As discussed further in Chapter 7, we have not spoken at length to potential airlines about operating services from Dundee. Those discussions are likely to be commercially sensitive, and having consulted both HIAL and Transport Scotland it was agreed that it would not be prudent to do so before the findings of this report have been carefully considered and a strategy for route development has been determined. Based on our analysis of the Airport's operational capabilities and examination of the underlying travel market within Dundee's core catchment, what we are able to do at this stage, however, is identify those airlines we believe that there is merit in speaking to and those which it is not.
5.4. The over-arching aim is to identify potentially sustainable markets from Dundee and what kind of commercial offer and marketing support might be required to attract suitable airlines.
The Catchment Area of Dundee Airport
5.5. Table 5.1 records the distance and travel times by car to the other principal airports in Scotland where there is evidence of material flows of passengers from the Dundee catchment area. The closest, and by far the most important because of its size and traffic mix is Edinburgh, some 1hr 15 minutes away, although a number of stakeholders have mentioned that congestion on approach roads from the north can add to journey times at peak times, during which 1hr 30 minutes is probably a more realistic time to allow. It is also worth noting that to catch an early morning (i.e. up to 7.30am) flight at Edinburgh, with the aim of getting to a meeting starting at 9.30am or 10.00am in central London, probably requires a 5am departure from Dundee, whereas using a direct flight from Dundee, taking into account the shorter distances between terminal and car park than at Edinburgh and the greater scope for fast-track processing through the Airport, could push a wake up call to a more respectable 6.30-6.45am.
5.6. Based on these drive times, which exclude the time require to access the remote car parks (at Edinburgh this is typically 10-15 minutes), we believe the core catchment area for services from Dundee Airport would be between 30-40 minutes as in Figure 5.1, whilst one hour provides an appropriate proxy for the extended catchment boundary, However, due to the terrain and the location of key population centres, not all the population within those Counties can be considered to be within the 'core' catchment area.
1.1. 5.7. So for example, in the case of Angus and Dundee City, the vast majority of their population lies within the Airport's core catchment area:
- Angus has a population 110,000 and virtually all of the populous parts of Angus are closer to Dundee than to Aberdeen Airport.
- Dundee City has a population of 152,000, and all of them lie within close proximity to the City's airport.
Figure 5.1: Dundee Airport Core Catchment Area
5.8. However, in the case of Perth and Kinross and Fife the situation is somewhat different:
- Perth & Kinross has a population of 148,000; much of it is concentrated towards the South and East of the County due to the terrain elsewhere including upland areas such as Ben Cleuch and the the range of hills further South. The result is the vast majority of the County of Perth and Kinross is located closer to Dundee airport, in drive time, than to either Edinburgh or Glasgow. As such we have assumed that 75% of the County's population is within the Dundee True catchment area.
- Fife has a population of 360,000; approximately 20% of this is located within the core catchment as demonstrated by Table 5.2.
5.9. In Fife, St Andrews is the only significant town that is closer to Dundee than Edinburgh Airport, and therefore, even though the County borders Dundee City, only 20% has been allocated within the core catchment of Dundee in line with the boundaries of the old district of North East Fife (see Table 5.3), because the majority of the catchment is located significantly closer to Edinburgh Airport.
5.10. Taken together, this analysis suggests the Airport's potential core catchment area has a population of 450,000. Given Dundee's relative geographic peripherality within the UK and EU, the long journey times associated with the use of alternative surface modes and comparison against other small regional airports serving similarly populated and located catchment, a propensity to fly of 2 to 1 would be a reasonable benchmarked expectation. This would also be consistent with that of the air market in Scotland as a whole, suggesting the potential for a passenger throughput of over 1 million passengers for Dundee Airport, However, if the relative strength of the competition offered by Edinburgh Airport and its well-developed low cost carrier presence is taken into account, it would certainly be prudent to reduce this figure by 50%, possibly more.
5.11. The high-level catchment analysis, suggests that in principle there could be a potential medium to long-term passenger market for Dundee Airport in a range between 250-500,000. However, achieving these kind of figures is very much dependent on the right fare levels, frequency and route structure being developed. It is worth noting that these kind of projections are consistent with the forecasts in the Scottish Consultation Document in the lead up to the 2003 Air Transport White Paper and route network comprising:
- A link to London and small network of regional domestic services;
- one or two international links (e.g. to a hub like Amsterdam or Paris - which we are aware has been looked at in the past); and
- some bespoke charter flights to Jersey and a number of sun destinations;
This hypothesis is examined more closely in Tables 5.4 and 5.5 below.
Traffic Leakage to Other Airports
5.12. At the moment, however, Dundee Airport's passenger throughput is less than 50,000 and falling (see Figure 5.2). This points to the fact it is currently not providing local passengers with the right commercial offer and that as a consequence, large numbers of them (more than 95%) are using other airports. This is commonly referred to as 'leaking traffic'.
Figure 5.2: Passenger Throughput by Route at Dundee Airport
Source: CAA Data
5.13. Figure 5.3, which is based on data from the last detailed CAA survey in Scotland in 2009, illustrates exactly this point, with Edinburgh Airport shown as capturing two-thirds of Dundee's core catchment traffic, which totals over 1 million passengers and Glasgow nearly a quarter; and of this leakage, around 25% is business orientated, 75% leisure.
Figure 5.3: Leakage of Passengers from Dundee Core Catchment to Alternative Airports
Source: CAA Survey Data 2009
5.14. Figure 5.4 identifies the kind of carriers that traffic is using.
Figure 5.4: Airline Mix of Passengers Leaking from Dundee's Core Catchment
Source: CAA Survey Data 2009
Note: Scheduled includes UK and overseas network and regional carriers
London Market Overview
5.15. In view of the fact that it is the only commercial service which Dundee Airport currently has left, the decline in passenger numbers on the London City route since 2006 (50,015) to 2012 (27,961) is particularly noteworthy. Presently, Cityjet have wet leased a D328 Turboprop from Suckling Airways and operate a twice daily service, and this smaller aircraft is still operating at a load factor of 64% despite the small numbers of passengers overall, but at prices that as we report in Chapter 7, most stakeholders are finding difficult to sustain. They have probably taken the view that if you top slice the higher end of the Dundee catchment, the yield in the remainder quickly falls away and that given the very high charges for this kind of aircraft at London City and operationally for the Avro RJ85, which is Cityjet's mainstay aircraft, it might not be able to operate a twice-daily service from Dundee and remain viable.
5.16. As Figures 5.5 and 5.6 illustrate, even though there is ten times as much traffic flying to London using other departure airports as is currently using Dundee, the great majority of it is low cost or attracted to use the national carrier en route to Heathrow. Given its physical constraints, this is a difficult, though by no means impossible market for Dundee to compete in.
Figure 5.5: Leakage to London by Type of Airline Type
Source: CAA Survey Data 2009
Figure 5.6: Leakage in London Market by Airline
Source: CAA Survey Data 2009
Regional Services
5.17. As detailed in Chapter 2, having had scheduled links to Birmingham and Belfast for a number of years, in December Loganair withdrew those services in December 2012 citing low yields and declining passenger numbers as the principal cause. Our analysis suggests there is sufficient demand for travel to both cities within Dundee's core catchment to operate twice-daily services using a 30 to 50 seat aircraft. However, our 'leakage' analysis reveals that the majority of the passengers (c70%) are travelling for leisure purposes. For this journey type price is a major determinant behind airline choice and hence in the case of Belfast they tend to gravitate towards Easyjet for Belfast International and Flybe to Belfast City.
5.18. In contrast, traffic to Birmingham from the Dundee Catchment area has, at 62%, a surprisingly high business content (see Figure 5.8), and as cost is normally less price sensitive for these passengers the dropping of the BHX route by Loganair is less readily understood. We suspect that its franchise partner Flybe may have been offering the same destination at a substantially discounted price from Edinburgh, or possibly they may have just identified a more profitable use for the aircraft.
Figure 5.7: Airlines Used by Passengers From Dundee Catchment to Belfast
Source: CAA Survey Data 2009
5.19. Again, Dundee Airport faces the challenge of finding a way of offering services, for which there clearly is a market within its catchment area, at a price the market is willing to pay given the competition offered from Edinburgh some 90 minutes away. Given that this core issue was confirmed by many of the stakeholders we spoke to when preparing Chapter 7, finding a solution is the key to finding a sustainable long-term commercial future for the airport.
Potential Route Opportunities
5.20. Based on our earlier assessment of the Dundee core catchment area, we have used CAA 2009 survey data to examine empirically (rather than through the use of benchmark estimates as earlier), the principal markets for air travel. These are set out in Table 5.4 by country.
Source: CAA Survey Data 2009
5.21. The same data is then broken down by city pair in Table 5.5 and the potentially realisable market traffic estimated based on an assumed 60% penetration rate. This figure is typical of airports with small, geographically discrete, under-served and relatively high-density catchments similar to Dundee, but requires strong marketing support and a pragmatic approach to airport tariffs until routes have become fully established if it is to be achieved.
Source: CAA Survey Data 2009
Notes: O&D stands for Origin and/or Destination
5.22. The country-based analysis indicates the UK (most notably London) and the Netherlands as the biggest business travel markets from within the core catchment area, with smaller requirements associated with Germany, Ireland, France, Norway and Denmark. All of which points to the potential significance of a northern European hub connection (in addition to London), as being important for transfers to a range of destinations, if what otherwise are individually relatively small markets are to be made accessible by air from Dundee Airport. The leisure market is dominated by VFR (Visiting Friends & Relatives) traffic within the UK and traditional sun destinations in Spain. However, there is material demand to France, Italy and Turkey, but at levels that suggest they would be best served by limited summer charter frequencies. There are markets of over 30,000 to Ireland, Germany (which may include a significant component of inbound traffic) and the USA that would also require access to a hub if served from a local departure point.
5.23. Table 5.5's focus on route specific markets highlights that the two largest individually are both to London, but to airports (i.e. Heathrow and Gatwick), where there are slot constraints and small aircraft are increasingly being denied access because of flat rate landing charging structures that substantially favour larger aircraft in terms of overall costs per passenger. It is unlikely, therefore, that these routes will be developable in the near future. But were approval to be given to build a new runway at Heathrow (or a new hub elsewhere in the South East), then re-establishing Dundee's former link to a UK hub served double daily, year round, by an E170 or E190 aircraft operating at load factors close to 70%, has the potential to attract 70-100,000 passengers and provide a much better under-pinning for a more commercially self-sustaining airport, than the current London City service. In the interim, however, a number of alternative options that need to be explored, especially with the speculation surrounding Cityjet's future as outlined in Chapter 2. These could include:
- Looking for a carrier that would be willing to use a 50-70 seat aircraft on the London City route and so bring down fares from Dundee to a more competitive level. A Fokker 50, ATR/600 or E170, all of which are compatible with operating into London City, could do the job.
- Examining Stansted, Luton and Southend as lower cost alternatives to the more expensive London City Airport; all face the key restriction of aircraft capability from Dundee, but an E145, a Q-400 or even an E175 might be ideal if they are capable of being operated at close to maximum payload, as seems likely on such a short sector.
5.24. The most promising new route destination is Amsterdam, which subject to a code share agreement being reached with KLM, theoretically based on the size of the market within Dundee's catchment, could sustain a double daily, year round service with a 50-seat aircraft offering both point-to-point and connecting onward travel. Variations to this might include 'testing' the route by deploying D328 or Saab 340 based at Dundee, to fly to Amsterdam 3x daily on peak days, but with one of the rotations including a stop at Inverness en route in each direction. As in the case of the London market, the crucial issue will be yields that could potentially be achievable from Dundeecompared with fares and accessibility costs at from Edinburgh. A third, and potentially the most pragmatic start-up configuration, would be to extend the existing Inverness-Amsterdam service to Dundee, preserving the core INV-AMS sector, but adding an additional discrete market, which could then maybe justify at double-daily service to the benefit of both cities, for the cost of a 20 minute sector between DND-INV. Given surface travel times (road and rail) of up to 2.5-3.0 hrs between the two cities, and the relative proximity of both airports to their core urban areas, it is not beyond the realms of possibility given good shuttle bus links, that what might at first appear a 'dead leg', could itself attract a small market.
5.25. Birmingham still looks a strong route because of its ability to attract business traffic, but it would either need to be marketed more strongly or perhaps could make use of either a 19-seat turboprop (e.g. a Jetstream 31/D228), or more realistically the larger, quicker and better specified 31 seat Dornier 328, flown as a middle of the day rotation between London City (or other) flights, with the higher yielding business market being the principal target. A larger aircraft (e.g. an ATR 42) would probably be more suitable if fares capable of attracting leisure passengers are to form part of the route strategy.
5.26. Manchester may also merit more detailed attention, even though at first glance the level of un-served traffic may seem too small. The rational is:
- The source CAA survey data in this case may be a bit misleading as the surface travel time from Edinburgh and Glasgow to Manchester at just between 3.25-4.0 hrs (the classic cusp for rail vs air travel), means that it offers competition to the aviation market between those cities and which as a consequence is not as strong as it might otherwise be But with a further 1.5-2.0 hrs travel time by road or rail, Dundee is well beyond the normal 3.0-4.0 hr rail vs air cut-off giving air a potentially stronger market share.
- Manchester is arguably now the UK's second city with strong business and professional services and the largest concentration of tertiary education capacity in Europe. As such it must offer potential to 'stimulate' currently under-developed business links and an alternative to reliance purely on London and Edinburgh.
- Finally, Manchester Airport (MAN) has been developed as a mini-hub by Flybe to aggregate thin route domestic traffic and hence support a wider network of regional connections at enhanced frequency. A route to MAN, in addition to stimulating both a business and leisure/VFR market, could provide an option for Dundee passengers seeking onward connections to places such as Exeter, Norwich, Southampton, Newquay, the Isle of Man, the Channel Islands and even Belfast if not flown directly as well as greater range of short and long haul destinations than available from Edinburgh or Glasgow.
5.27. So in addition to the potential baseline point-to-point traffic on the route shown in Table 5.5, it may also be possible to serve indirectly existing traffic toother thin domestic markets from Dundee that are currently using Edinburgh or Glasgow, alongside those international business and leisure destinations where Manchester offers services at competitive frequencies. It is this combination of potential direct and indirect transfer traffic that leads us to conclude that there could be an overall passenger market for flights between Dundee and Manchester two or three times greater (see Table 5.7), than that which recent CAA data suggests.
5.28. From Table 5.5, other domestic route options that also may merit exploration include:
- Bristol, especially as a new hourly bus service from Bristol Airport to Cardiff may help to combine these markets more effectively.
- Southampton direct in a D328 with an onward leg to Paris or Jersey, or with a drop-in en route to East Midlands/Leeds Bradford or possibly Durham Tees Valley/Humberside (in all of which Eastern have a presence).
- Norwich direct, given the right fares to underpin core business demand from Aviva and offshore renewables traffic, and perhaps as part of a schedule in which the aircraft flies onward from Norwich to Paris or Germany (Frankfurt or Dusseldorf), or initially indirectly via the Flybe Manchester mini-hub.
- Belfast limited to 3x week around weekends and flown with a Q-400 to help reduce costs and make fares more competitive out of Dundee.
5.29. Internationally, Dublin is the strongest scheduled candidate after Amsterdam, and might be made stronger by a drop-in to Carlisle and/or the marketing of pre-clearance for the USA as part of the interline process at Dublin. Otherwise, the demand for Malaga and Palma is certainly large enough to justify a once or twice a week charter during the summer. The aircraft typically used to operate this length of sector (c3-3.5 hrs), are incompatible with the performance restrictions imposed by Dundee's runway. But with an intermediate stop at Exeter or Newquay, both of which are directly en route, within range from Dundee's short runway whilst having long enough runways of their own to facilitate the onward leg. A Flybe E175 or E195 could readily make this routing and thereby combine Dundee holiday traffic to Devon and Cornwall with those heading further south to Spain and Majorca from Scotland and Cornwall.
5.30. Finally, it may also be worth looking further into:
- Small 'outbound' charter seasons to Devon & Cornwall, Brittany, Guernsey (as well as Jersey) and the south or west of Ireland.
- A short 'inbound' charter season from Germany, Switzerland and/or Scandinavia to offer access to the nearby championship golf courses, the city's of St Andrews and Perth as well Dundee, the Fife Coast and the Highlands. Tourism infrastructure within Scotland would need to be galvanised to support this.
Possible x 2-3 weekly service to Norway (Stavanger, Bergen or Oslo) and a similar frequency to Denmark (Billund or Copenhagen), perhaps as part of an onward service to Belfast or Dublin, to combine renewables and oil traffic, with students, those on business and ourism visitors travelling both ways.
- Combining a service to Luton or Stansted, with onward travel of the aircraft beyond Dundee x3-4 weekly to also serve Shetland (i.e. Sumburgh), the Western Isles or even the Faroes.
5.31. Whilst the Stakeholder interviews summarised in Chapter 6 appear to support certainly the core services outlined above, we have not undertaken the detailed analytics or route economic assessments that would be required before approaching airlines for reasons set out in Chapter 11. But based on the aircraft performance characteristics set out in Chapter 3, we believe there are a significant number of airlines that would merit approaches for one or more routes. Ultimately this is the only way of understanding whether there is an airline partner willing to share the risks (and rewards) of developing services with Dundee Airport, at what cost and how the traffic might be built up over time. Included in the airlines we suggest approaching are those in Table 5.6 below:
Source; Consultants evaluation
Estimated Market Potential
5.32. In the absence of those discussions with airlines, we have not attempted a detailed or formal 'bottom-up' forecast for Dundee. Instead, as a way of bringing together the many potential opportunities discussed above in a structured form, Table 5.7 attempts to provide a consolidated overview of the airport's 'market potential' under a range of scenarios (i.e. Low, Mid Point and High). This methodology uses the preceding analysis of the 2009 CAA survey data to determine which markets are already large enough, or could be stimulated to a size capable of attracting airlines with the right equipment, to operate from Dundee. It then dovetails this with assumptions about how much of the 95% or so of existing traffic that is currently leaking from its core catchment area might be capable of being 'clawed-back' to services operating from Dundee and the size of aircraft and load factors needed to support those markets at realistic operational frequencies.
5.33. Table 5.7, in which the figures have been subject to rounding to emphasise the strategic nature of the market assessment, summarizes the foregoing results in the context of three different demand scenarios associated with different assumptions about levels of leakage capture and background growth. These range from a low growth figure of 75,000 passengers using Dundee Airport, to a high growth outturn of 400,000, against a figure of 54,600 in 2012, which is likely to fall to 35,000 or less in 2013. In our view these bear realistic comparison with the overall potential market that we initially benchmarked at over 1 mppa based on catchment population - a figure that was supported by our subsequent analysis of CAA data in Figure 5.3. The difference between the estimated total market and the predicted outturns are a function of two major factors:
- First limiting the routes included in Table 5.7 to those that are of a scale to potentially be viable from Dundee, on the basis that the smaller markets will either be served indirectly via one of these routes or by passengers continuing to drive to other airports.
- Second, the reality that thus far airlines have only been able or willing to operate three routes from Dundee, and that their current commitment is limited solely to London City.
5.34. Table 5.7 also illustrates what may happen over time in each demand scenarios if background growth is applied at an average of 2% pa initially then 1% pa out to 2030 based on a range of 'existing' market outturns anchored in 2015, depending on how effectively the short term measures outlined later in the report are resourced and implemented.
Source: Consultant's estimates
Notes: * Not London City ** If access is secured to a well connected London Hub
Maintenance Repair and Overhaul
5.35. As reported in Chapter 2, Loganair maintains the D328 aircraft acquired from its purchase of Suckling Airways in a purpose built hangar at Dundee - this encompasses line maintenance of the aircraft used on the London City route, but also C and D checks on the other aircraft as required. This facility is also large enough to accommodate Saab 340's that are the mainstay of its fleet. Having this based 'type' capability will be an important factor in maintaining Loganair's commitment to the airport and will provide an important part of any package which might encourage them to consider flying additional routes. It also potentially offers line maintenance facilities to other airlines that may wish to operate into or base an aircraft at Dundee as well as providing a source of rental income and skilled jobs.
5.36. Tayside Aviation also has a maintenance operation on site, principally looking after their aircraft, but also undertaking some third party work. They believe there is a market that they can tap into for the latter and have expressed an ambition to expand this side of their operation, but require larger premises and additional engineers with certification to maintain light aircraft to do so.
5.37. There is certainly the physical scope within the existing site boundaries to double the size both of Loganair and Tayside Aviation's maintenance facilities, although this may require some rationalisation of the existing site layout as described in Chapter 9. If this were to be achieved, this would not only help revenue diversification by increasing rental income, but also help to enhance the value of the airport to the local economy through the creation of additional employment as well as giving airlines confidence about their ability to maintain the integrity of any new services they might consider developing from Dundee.
5.38. It is worth noting, that in conjunction with Perth College (now part of UHI) Air Service Training and ACS are involved in the maintenance space for small commercial turbo-props and light aircraft, much of it at Perth Airport some 40 minutes drive away from Dundee. As such there now exists a specialist cluster in this part of Scotland that is already a market leader in the UK. Scottish Enterprise recognise this potential, and given the possibility that some RAF personnel at Leuchars may not wish to move with their squadrons when they relocate to Lossiemouth, as well as an prospective demand for additional trained aviation engineers and mechanics locally, the scope for developing an 'outreach' Academy at the airport, in partnership with UHI and AST, and with Loganair and Tayside Aviation as future employers looks like an opportunity that should be explored further if it is decided that the airport has a long term future.
Business Aviation Market
5.39. The latest CAA annual statistical data indicates that during 2012 Dundee received some 527 Business Aviation and 166 air taxi movements, out of a total of over 40,000 by all types of aircraft. There were also 764 movements categorised as 'private' and these may also likely to have included some movements where an aircraft owner was primarily flying their airplane for business purposes. This compares with 528 and 190 respectively in 2011 and a high point of 608 for Business Aviation movements in 2008/09. Longer-term trends are illustrated in Figure 2.7 in Chapter 2.
5.40. The Business Aviation sector in the UK is known to have been in something of a slump since the beginning of the economic downturn in 2008. Wider UK analysis suggests that as the economy improves so will the demand for this kind of aviation and so in time Dundee can be expected to benefit from this recovery as well. HIAL believe, however, the level of Business Aviation traffic at Dundee could be increased if the RAF were no longer to accommodate non-scheduled civilian commercial movements at RAF Leuchars as they have done in the past. There are no published movement records for this traffic, but HIAL believe it to be material, especially during major golf championships at Carnoustie, St Andrews or Gleneagles, and are keen to capture it for the benefit of the Airport.
5.41. Optimism that this would happen from October this year as a by-product of military flying at RAF Leuchars being moved to Lossiemouth as an outcome of the Defence Base Review has been dampened:
- Firstly by the retention of Leuchars as an operational airfield for the RAF, principally as a diversion airport for front-line aircraft to be based at Lossiemouth, but also to allow continued operation of the East of Scotland University Air Squadron which has 5 Grob aircraft located there (although the latter could just as easily be based at Dundee), making it possible for it to continue to take this type of traffic; and
- secondly, by the little heralded 'Civil Engagement Financial Directive', published in December 2012, which not only encourages operational bases to do this but also to compete for other civilian traffic that might otherwise use Dundee.
1.1. 5.42. The above notwithstanding, it needs to be born in mind that based on the airport's current runway length and categorisation it is only suited to certain types of small and medium sized business aircraft, and this is the market which has suffered most in the UK. Of course some larger business jets have, and are capable of using the airport as noted in paragraph's 3.13-3.32, but these tend to be used for shorter sectors and therefore are less exposed to the growth markets in Business Aviation (e.g. Russia, Turkey and Asia) but under any circumstances, it would be necessary to build additional dedicated stands if this type of activity is to be accommodated, especially during peak seasons and major events.
GA/Flight Training
5.43. GA movements associated principally with Tayside Aviation's flight school operation and Tayside Flying Club dominate aircraft movements at Dundee, with between 85-90% of the total of 40,000. The CAA's 2012 statistics report a 13.5% jump in aero club activity from 30,900 in 2011 to 35,100 in 2012 indicated this is the primary source of last year's growth in movements. This new 'high', compares to figures oscillating in a range between 28,000-32,000 since 2005, which marked a notable rise in activity over preceding years, with 24,000 being the recorded figure for 2003.
5.44. Tayside Aviation have continued to be the supplier of choice for a range of RAF training contracts and have also been successful in attracting commercial contracts, most recently from Cathay Pacific. With over 20 qualified instructors, Tayside Aviation is one of only five major flying schools in the UK and thus an asset to the region.
5.45. Discussions with the company indicates they have ambitions to expand their operations further and Dundee remains their location of choice for this new activity, but they have expressed concerns about relationships at a local level with the airport and the need to increase the size of the facilities available to them, including for parking aircraft. Some suggestions as to how this might be achieved are outlined in Chapter 9. Equally, analysis of the Airport's accounts indicates that it receives only around £150-200,000 from GA activity, less than quarter of its commercial income, suggesting that any investment in its expansion needs to be associated with revised terms in which the airport benefits from this increased activity.
Offshore Activity
5.46. As Chapter 2 reported although the airport accepts a mix of rescue helicopters, some light training flights from PDG in Perth and offshore helicopters that are occasionally diverted in bad weather, there are currently no helicopters based at Dundee. However, with offshore activity again booming, Aberdeen is known to be approaching capacity for rotary operations and as a result operators looking for bases to service offshore renewables activities in the North Sea are known to be looking for alternative bases. Wick has already secured some offshore traffic, but Dundee's position close to two prospective large offshore wind turbine arrays suggests that it could provide a very attractive base for this kind of helicopter activity provided appropriate facilities at affordable cost are made available to the operator. There is understood to have been discussions between HIAL and potential operators but thus far without any commitments.
5.47. They key to unlocking this opportunity is likely to be to identify potential operators and work closely with them as they decide how they intend to service the arrays both during construction and thereafter for ongoing maintenance and the role that helicopters will have in this. Then to provide suitable facilities for based rotary operations (e.g. apron, taxiing and hangar facilities) cost effectively, ensuring they are integrated with other activity on the airfield. And finally, to manage those operations in such a way as not to cause excessive nuisance to neighbours.
5.48. What is clear, however, is that with each turbine estimated to require 3-4 movements per annum, servicing an array of 300 turbines could require 900 to 1,200 movements per annum. This offers the prospect of considerable additional income for the airport and the creation of additional capability and jobs in one of Dundee's target economic sectors.
Property Development
5.49. If the Airport is to be retained and developed as a going concern, most of the land within its existing boundaries will need to be reserved for aviation related activity (that is requiring airside access or immediate proximity to the airfield). The prime commercial sites (i.e. the Riverside Business Park, the site occupied by the Riverside Inn and the business complex immediately to the west of the Loganair hangar, were sold off before HIAL took over the running of the airport. The former Water Board building on the eastern end of the Airport site fronting the A85 offers the only real opportunity of any significance unless additional land is acquired from the University playing fields complex, or from the reclaimed area at the western end of the runway - and that is also not in the Airport's ownership.
5.50. Another possibility is buy-back of some of the poorly used industrial land north of the western half of the airport. Some of the current development on that site may be empty at the moment, but overall the site would be ideal for an airport business park of the kind considered but not taken forward by the City Council in the mid-1980's.
5.51. So while there is some scope for rationalisation of existing Airport property to allow some intensification of the way in which it is used, restrictions on building heights and the extent of encroachment into existing operational areas relating to safety surfaces means that this is modest. There also seems little appetite amongst key stakeholders for significant commercial development on or close to the Airport, not least because of the resource that is being put into major developments elsewhere in the City's waterfront Area.
5.52. It appears, therefore, there is no property related 'silver bullet' to dramatically improve the Airport's finances at Dundee in the way that has been possible at small regional airports such as Blackpool, Robin Hood Doncaster Sheffield and Gloucester Staverton, or is being planned at other peer airports like (Durham tees Valley, Newquay and Exeter). Rather the focus is likely to be on improving the site density, enhancing the commercial offer within the Airport building as passenger numbers grow, ensuring all available space is let and that rental levels are optimised within the confines of what is practicably possible.