Flights on Newquay-Gatwick route to be subsidsed by central government for four years
Ever since Cornwall Council took over responsibility for Newquay Airport from the MoD at the end of 2008, passenger numbers have failed to live up to the optimistic forecasts. In 2008, passenger numbers were 430,000 per annum. This year, 2014, they will be just over 200,000. At the same time, the operation has needed subsidies from the Council of the order of £3-4 million each year.
In 2013, Flybe anounced that it would be ceasing the Newquay to Gatwick service from April 2014. Negotiations were held between the airline and the ariport to try to retain the service. At the same time, approaches were made to central government to to try to get the route designated as one eligible for funding under a Public Service Obligation procedure (PSO).
The government agreed to support this move. The route was put out to tender and Flybe were the only airline to tender for it. Eventually, a deal was struck with the airline whereby they would receive a public subsidy of up to £600,000 per annum to run the service for 4 years. Most of this subsidy is being funded by central government with Cornwall Council making a small contribution towards it.
The Cornwall Council website provides more details at Newquay Gatwick PSO deal.