Route Development Funds were an initiative, originated in Scotland, but quickly spreading to other parts of the UK aimed at using public funding to “kick-start“ new air services, by facilitating the sharing of risk between airports and airlines.
In line with the declared EU policy objectives of improving transport connections between all areas of the European Union, by developing new links and removing bottlenecks, in order to allow access to the European Single Market and enable it to operate more competitively and therefore efficiently.
Aimed to be transparent, nondiscriminatory, degressive and time-limited: all features designed to further ensure the avoidance of distortive State aid and to ensure that any aid was only given for the specific time period required to demonstrate long-term commercial viability.
In December 2005 the European Commission issued guidelines (following its 2004 decision in the Charleroi case) on how state aid and competition rules apply to start-up aid of this kind.
The guidelines have had a considerable impact on the scheme – which were required to be made compliant by June 2007 – in declaring that in order to meet state-aid rules
1 Only routes operated by EU carriers were eligible for funding
2 Funding for routes from airports with more than 5m annual passengers (such as Belfast International, Edinburgh, Glasgow and Newcastle) could be considered only in exceptional cases.
The UK RDF initiative was suspended after unsatisfactory consultations, and it is now subject to the current review of State Aid rules.
Chris Cain has ideal expertise in this area. In his time in the UK Department for Transport (DfT) he was very much involved with developing the UK policy for RDFs and he secured EU support for several regional airport development programmes, including PSO’s, Route Development Funds and Aid of a Social Character Programmes. He also negotiated state aid approvals for public investments in Plymouth and Derry Airports and the sale and conversion of RAF Doncaster-Finningley Airfield.
Chris was involved in a Baltic review of how the RDF approach can be adapted to peripheral areas in that region and he is also closely following the EU’s deliberation of their State Aid guidelines which will have significant impact on the toolbox available to airports and regions.