As Durham Tees Valley Airport waits to hear if its bid for vital Government funding has succeeded, Business Editor Andy Richardson takes a look at the latest plan to rescue the ailing site

BEFORE Deputy Prime Minister Nick Clegg goes on his summer holiday, he will make an announcement that could decide the fate of a struggling North-East airport.

Last October, he rejected a Durham Tees Valley Airport (DTVA) bid for £5.9m of Regional Growth Fund (RGF) cash to set up a freight operation on land south of the terminal building.

The failure to secure backing for the proposed Southside development was a massive setback, but airport bosses have submitted bold new plans they believe can create up to 1,400 jobs.

In the next two weeks they will discover if Mr Clegg is prepared to support the bid this time around.

Since BMI pulled its flights to London in 2009, DTVA has suffered a dramatic decline that nearly resulted in its closure.

The site loses about £2m a year. KLM’s flights to Aberdeen and the international hub of Amsterdam Schiphol are well used by business passengers, but the limited offerings for holiday makers and the absence of flights to London has seen passenger numbers fall from nearly one million to less than 200,000 in the past seven years.

Airport owner Peel Holdings has struggled to persuade airlines to use the site, with carriers preferring to invest in safer options, such as Gatwick, or regional airports, such as Newcastle International, Leeds/Bradford and Manchester.

Peel insists it has not given up on attempts to boost passenger numbers, but its immediate mission is to make DTVA a centre for aviationrelated businesses, such as freight, and to become a world leader in fire training and aircraft recycling. In short, the aim is for the site to become a flourishing business park with its own on-site airport and rail links.

Dave Laws, Newcastle International Airport chief executive, and the new president of the North East Chamber of Commerce, is supportive of moves to save the site. He said: “Durham Tees Valley has been going through a difficult time which reflects the wider challenges facing the aviation industry.

“We are no longer in a situation where airlines will take a risk on routes from regional airports – they want guaranteed returns. The airport’s plans to develop ancillary services on the site looks like a sensible move that will hopefully generate some extra revenue.

“We would be delighted to see DTVA doing well and if there are ways in which we can work closer together, for example, there is no sense in us both bidding for the same routes, then we should.”

The new funding bid on Mr Clegg’s desk asks for £4.65m of taxpayers’ cash to build a new road, and improve electrical supply lines and drainage, to connect the north side of the runway with the south side where there is consented planning permission for development.

Peel believes that the new road, which could be extended in the future to unlock other potential phases of development, will open up two million sq ft of brownfield land, draw in £40m of private investment and create 1,400 jobs.

The bid has been supported by Tees Valley Unlimited, Darlington Borough Council, Stockton Borough Council, Nepic and Business Durham.

The plan would see Serco International Fire Training Centre, which has operated at the airport since 1981, build a £7.4m 20-acre complex to include a virtual reality centre to test decision-making under pressure, as well as accommodation for trainees and the largest confined space rigs in the UK. The initial plans would see the firm recruit eight full-time and six part-time staff.

Serco say the new facilities would help it to increase export sales and secure more business from the offshore, marine, aviation and industrial sectors.

THE new road would give the firm access to the Southside development without any disruption to the airport’s aviation operations.

It would also, the bid document says, be a catalyst for further phases of development, such as attracting logistics firms to the site, which is where the ambitious figure of 1,400 new jobs over the next ten years comes from.

In addition, the Southside development would provide space for the expansion of Sycamore Aviation, which currently operates an aircraft recycling business from a hangar used by Lancaster bomber crews during the Second World War. Set up by former Jet2 captain Kevin O’Hare, Sycamore takes deliveries of decommissioned aircraft from around the world, rips them to pieces and sells the parts as spares or scrap. Mr O’Hare is confident that his business has tapped into a growing market.

A recent study by Boeing estimates that 65 per cent of global airline fleets – about 600 aircraft a year – will be replaced by 2028 as operators invest in quieter and more fuel-efficient aeroplanes.

The development would enable Sycamore to build a new facility to handle the biggest jumbo jets and become only the second firm of its type in Europe, Africa and the Middle East to offer a onestop- shop recycling service for all aircraft parts, including engines – the most lucrative part of any plane.

Sycamore employs six engineers and recruits contractors to help with big projects, but Mr O’Hare says he could employ up to 40 people before too long if things go according to plan.

Its growth plans could eventually see a logistics operation established on the site to distribute the parts, and a recycling plant for metals and plastics to create a fully integrated end-to-end process.

But without the new road none of this is likely to get off the ground. Peel says its commitment to the site does not hinge on the success of its RGF bid, but a second rejection by the Government would spark questions about the future for a vital part of Tees Valley infrastructure that supports 600 jobs and contributes £37m a year to the local economy. During a recent visit to Darlington, Transport Secretary Norman Baker said: “As a Government, we are very supportive of regional airports because they have an important role to play. What we are committed to doing is making sure that the benefits from such airports are used to create wider benefits.” Two years ago, David Cameron called Durham Tees Valley Airport a vital transport link and last week his ministers boasted of their commitment to invest in the future of infrastructure and the creation of private sector jobs.

Those words will have a hollow ring if the coalition turns its back on DTVA.