THE ten-year blueprint unveiled by Tees Valley Mayor Ben Houchen aims to bring in as many as 1.5m passengers and return the airport to profit. The report’s rationale is that the airport is at “imminent risk of closure” meaning the Tees Valley would be the “only urban conurbation without an airport” and 400 jobs would be directly at risk with 712 “direct and indirect jobs” facing the axe.

Whether or not it comes back into public hands depends on how the five Tees Valley council leaders vote on January 24.

The mayor’s office says EasyJet and Flybe are among the low cost airline targets for the best case scenario – with EasyJet a target as it already makes use of the airstrip at DTVA to train its pilots.

Part of the business plan is to “capture market share” and passengers from Leeds-Bradford and Newcastle Airport and boost summer flights with a 75/25 split in favour of “recreational passengers”.

The airport turnaround plan has touted passenger numbers reaching as high as 1,579,000 in 2027 if a Low Cost Carrier (LCC) is brought in – making the most of the 2.5m people living within “one hour drive” of the airstrip.

Labour leaders have shared doubts over whether the plan adds up. The airport turnaround plan states carriers “face the risk of cannibalising their existing market share” if they expanded their operations to DTVA – with Ryanair, Jet2 and British Airways touted as “unlikely” to come to the airport.

However, it adds any operator moving in would “dominate” local demand which it says spills over to other airports.

TVCA blueprints indicate a “holding company” would own and run the airport in a 75/25 split with the TVCA under the plan with repayments to the combined authority forecast to start in 2026.

It is understood the Stobart Group is the operator lined up for the airport alongside its Carlisle and Southend operations, but this has not yet been confirmed by the firm or the TVCA.

PREFERRED OPTION

The ten-year “turnaround plan” by the TVCA was put together with marketing services firm ICF using information from the Civil Aviation Authority and “our own extensive experience within the sector”. If everything gets voted through, the “preferred option” being lined up is to have the airport run by a “third party investor” in a joint partnership – with the third party running the airport. A timeline has been drawn up in the report aiming to have the partner signed up by March 2019. Securing ten additional routes by 2022 is the aim and attracting the golden goose – a “low cost carrier” – has also been pencilled in for 2022 – alongside the “tenfold increase” in passenger numbers.

LAND PLANS AND SCENARIOS

Alongside the airport plan, getting in a “specialist operator” to run the airport’s hotel is also part of the TVCA turnaround vision to move it away from its past losses. Protecting the operation of tech firm Cobham at the airport – which has a multi-million pound contract with the Ministry of Defence (MoD) – is also one of the plan’s aims.

Boosting the number of tourists from “negligible” levels has been drawn up by “starting discussions” with charter airlines.

And sorting out “lamentably poor” broadband speeds has also been put into the plan to try and improve services and the “tired infrastructure” for tenants on airport land.

Among the three scenarios forecast for the airport are an “organic” modest forecast – where passenger numbers remain at similar levels to now, and a second “seasonal scenario” where passenger numbers rise to about 370,000 by 2027.

The third “low cost carrier” scenario is the ambitious vision with the highest numbers touted.

The TVCA turnaround plan indicates the third scenario would need “significant investment in extra capacity” which would come to between £5m to £10m to sort out the taxiway for bigger aircraft  and a “modest extension” of the airport terminal to cope with demand.

ECHOES OF PEEL

There also also echoes of the Peel masterplan with mention of “building out” a “south-side” business park at the airport in a bid to create an extra 1,861 jobs.

Meanwhile, the clock is also ticking on the land earmarked for 350 homes which Mr Houchen has agreed to halt should the airport plan get the green light.

The report warns contracts are being finalised to build the homes on a “key part of the site” which would “significantly increase the potential purchase price of the airport” and reduce the likelihood of Peel selling up.

LOSSES FORECAST

There is no lack of ambition in the blueprints. However, details within the financial case of the airport fire a warning shot across the bows of the vision when it comes to revenue. The business plan forecast within the documents is that “losses will continue to 2025 at a total cost of £19.4m”.

A surplus is forecast to start from this point onwards increasing to £17.8m in 2037 – however, this is under the third best case scenario with a low cost airline on board. In a “worst case scenario” the report says losses would amount to £20.6m in the first ten years of operation and a £1.4m loss in 2037.

Based on these risks, the proposal in the plans is for the combined authority to put up to £20.6m of “contingent funding” aside as a loan to the holding company.

WHAT HAPPENS NOW?

If the airport plan is to go ahead, all council leaders will have to back the TVCA’s ten-year investment plan on January 24, which includes the airport, as well as plans at the South Tees Development Corporation (STDC) and all the other major investments the combined authority has lined up. A month-long legal wrangle over whether the vote was a majority decision or a unanimous decision has finally been cleared up.

All leaders will have to unanimously back the ten-year investment plan if it to go ahead.