Wednesday 11 January 2017

Rumblings around IOSSCO opposition continue.

The IOSSCo’s arguments against the re-introduction of a helicopter service continue to attract ‘flak’. Robert Francis (Star Castle Hotel) and John Spence (Karma Group/St Martins) recently added comments to the Heliport planning application (now standing at 2670 comments) on 5 Jan and FRIST filed its own response to the IOSSCO objections on 9 Jan (view here) .

Link to planning application here (click on 'comments' tab and scroll down)

The arguments being challenged by those in favour of the new service:

  • The impression that all well with transport between the mainland and the IoS.
  • That the BIH closure in 2012 was a ‘blip’ in transport services since overcome by ISSCO expanding and filling the void BIH created.
  • That the IOSSCO is not a monopoly provider – anybody can join the market.
  • That the market is of fixed size (meaning competition is a zero sum gain giving 2 weaker operators rather than one stronger one with profits to invest in the future). 
  • That the helicopter service is doomed to fail likes is predecessor and in the process damage the existing operator.

All is not well with travel to the IoS as far as many businesses and many islanders are concerned. Transport is seen as major constraint on the economy and the lives of islanders (especially those with health problems and significant mobility issues).   Autumn and winter air travel is regularly disrupted by weather to which Lands End is especially prone. Fixed wing aircraft are more constrained by visibility and cross wind criteria than helicopters. Penzance historically was less affected by weather.

The loss of BIH service in 2012 was more than a transient ‘blip’ in transport services. It was an injury to the economy and community which investment by the IOSSCo has only partly been able to make good.

The IOSSCo is currently a monopoly provider of transport and passenger services to/from the IOS – there is only one provider of service. There are significant barriers to entry for competitors.

The size of the visitor market was larger in the past (about 20% larger 10 years ago) and could be larger in the future. Skybus routes to Bristol and Southamption could be re-opened.  Cornwall is experiencing strong growth in the visitor economy whilst IOS growth appears anaemic. Total air passenger journeys in/out of IOS have never recovered from the loss of the helicopter service and are ~40+% below pre-2008 levels.

The winding down and closure of the helicopter service was as much a result of alternatives business opportunities as it was a failure in the market following the 2008 recession. The operator, in the 3 years 2001-2003, extracted over £7 million in dividends. With Tresco Estates to gain substantially from re-establishment of the helicopter service, the motivation to sustain the service through ‘thick and thin’ will be strong. The island community can only benefit from this commercial reality.

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