Cornwall Council's ruling cabinet is poised to make a decisive move that could sever a vital air link, with expectations high that it will vote to discontinue the daily subsidised flights operating between Newquay and London. The anticipated decision stems from a stark financial reality: maintaining the Public Service Obligation (PSO) service would likely demand a taxpayer subsidy ranging from £14 million to £16 million over the next four years, a burden deemed unsustainable for the local authority.
A Decade of Subsidised Connectivity Under Threat
For over ten years, air connectivity between Cornwall and the capital has been preserved through PSO arrangements. This scheme was originally established to safeguard the viability of the London route during periods when commercial airlines could not support year-round services. The council and the Department for Transport (DfT) previously granted a multi-year PSO, which was operated by Flybe until the carrier's collapse at the onset of the Covid-19 pandemic, leading to the service's initial termination.
Recent Turbulence and Procurement Failures
The route was later revived and awarded to Eastern Airways, which also entered administration last year. An interim contract, set to conclude in May, was then handed to Cornwall's own Skybus. However, this operator has faced significant challenges, including difficulties in securing appropriately sized aircraft and experiencing a remarkably low seat occupancy rate of just 20 per cent.
Council officers have now advised the Liberal Democrat and Independent coalition administration to vote in favour of ending the PSO entirely and to instead advocate for a purely commercial operation, albeit one unlikely to offer daily flights. This recommendation follows the council's inability to secure viable tenders during two separate PSO procurement processes conducted over the past nine months.
Financial and Operational Hurdles Prove Insurmountable
A detailed cabinet report has revealed that both procurement attempts failed to attract a tender that could be lawfully or affordably awarded, with all bids significantly exceeding the council's strict affordability cap. The report, authored by Cornwall Council's strategic director Phil Mason and interim service director for economy regeneration Gloria Ighodaro, notes that while several well-known commercial airlines have expressed interest in operating flights from Cornwall, none are willing to do so under the restrictive conditions of a PSO agreement.
Currently, Ryanair operates direct commercial services from Newquay to London Stansted up to four times weekly, with typical fares ranging between £30 and £75 for a single journey. In contrast, the PSO service provided by Skybus offers daily flights between Newquay and London Gatwick, but at a higher cost, with one-way tickets starting from £79.99.
Confidence in Commercial Viability Post-PSO
The cabinet report expresses confidence that Cornwall will not become isolated from the capital following the removal of the PSO. It highlights that the existing commercial operator already delivers around 40,000 passengers annually while offering competitive ticket pricing. "The commercial operator currently delivers around 40,000 passengers per year whilst offering competitive ticket pricing. This gives confidence that in the event of the removal of the PSO that Cornwall will not become isolated from the capital," the report states.
It further explains: "Since the 2021–2025 PSO was awarded, the operating environment has changed materially. National policy now requires a 50:50 funding split with the Department for Transport, aviation costs have risen sharply and operator appetite has reduced." Market feedback indicates that a compliant PSO would likely necessitate the substantial public subsidy or major reductions to airport charges, neither of which are financially viable for the council or the airport.
Managing Risks and Future Strategic Focus
While acknowledging that commercial provision may offer less winter resilience than a PSO, the report asserts that the associated risks are manageable and time-limited. The primary impact of not awarding a new PSO will be a short-term effect on Cornwall Airport Newquay's revenue income until commercial activity can grow. Conversely, awarding the PSO after the retender would have exposed the council to significant legal, financial, and governance risks.
Not proceeding with the PSO avoids an unsustainable subsidy commitment, maintains compliance with procurement law, and allows the market to respond to modern travel patterns. The council has committed to continuing its work with the Department for Transport to ensure Cornwall's strategic connectivity needs remain recognised and to explore future opportunities for national support.
Council Leadership and Upcoming Decision
The cabinet has been advised that the future approach to securing regular air connectivity between Cornwall Airport Newquay and London should be based on the needs of the business community, developed on a commercial basis, and led directly by Cornwall Airport Ltd. Council leader Councillor Leigh Frost emphasised the gravity of the decision, stating: "We have to make this decision very carefully in the best interests of the taxpayers of Cornwall within our tight budget."
The critical issue will be deliberated, alongside the approval of this year's council budget, at a cabinet meeting scheduled for Friday, February 13.
