Figures generated before the corona virus pandemic suggested that only 8,200 extra visitors would be needed per year to pay back the costs of extending Guernsey's runway - however the idea has been shelved until the future of the aviation industry becomes clearer.
Based on the 858,000 air passengers to Guernsey in 2019, a 1% increase in visitors would be enough to pay back a runway extension over a 40-year period and inject £21m into the local economy.
However, the state of the aviation industry has changed dramatically since due to the global corona virus crisis and the shutdown on non-essential travel until phase six of Guernsey's lockdown exit strategy.
Economic Development President Charles Parkinson has updated the States on the business case and cost benefit analysis for extending the runway to at least 1,700m that his committee was tasked with doing by the late Deputy Jan Kuttelwascher last year.
The Committee commissioned Frontier Economics to undertake an Economic Impact Analysis of the runway extension, as well as a Social and Environmental Impact Analysis. Consultancy firm RPS was commissioned to undertake a high level cost and engineering analysis.
Pictured: Deputy Parkinson said the three pieces of work cost £181,650, around half of the budget the committee had been allocated from the Capital Reserve to fund it.
"The research was completed prior to the Covid-19 pandemic, so clearly the findings and recommendations of the report will need to be reviewed in light of the current situation," said Deputy Parkinson.
"However, in summary, the report found that over a 40-year payback period, the extension of the Guernsey runway could help stimulate additional visitor growth and new business to deliver a significant net economic benefit to the economy.
"The report's findings are that an additional 8,200 visitors would be needed each year in order to break-even. In other words, for the economic benefits to outweigh the investment costs and any social and environmental costs, the runway extension would need to lead to an additional 8,200 visitors per year and this could generate additional net economic benefit of £21 million over the 40-year period.
Pictured: Only essential journeys are currently permitted at the airport, which is closed completely to passenger services on some days.
"To put this figure in perspective Guernsey Airport had over 858,000 air passengers in 2019. An additional 8,200 visitors is less than the number of passengers who flew to or from London Southend when that route was trialled during 2019."
Deputy Parkinson said there was clear potential for a runway extension to generate higher visitor numbers than that, but that the assumptions underpinning the reports would need to be re-evaluated given what has transpired since.
"If the number of additional visitors were to increase to an additional 20,000 visitors per year, then the report suggests that the net economic benefit would rise to approximately £200 million over the 40-year period.
Deputy Parkinson announces that the cost benefit analysis on the case for a longer runway has been competed but the underlying assumptions now need to be reviewed in view of Corornavirus. 1/2— Christopher Green (@deputycgreen) May 20, 2020
"Nevertheless, it is the Committee for Economic Development's view that, in the light of the recent events in relation to the Covid-19 pandemic and the travel restrictions and other measures that it has been necessary to implement, now is not the right time for the Assembly to debate a potential extension to Guernsey airport's runway.
"Clearly the implications of the Covid-19 pandemic on the findings and recommendations of the cost benefit analysis report already completed will need to be considered. Nevertheless, investment in critical infrastructure to improve and future proof sea and air connectivity will be essential to the fast recovery and sustained growth of the economy, when the short-term crisis caused by Covid-19 is over."
Pictured top: Guernsey Airport's runway.
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