New Strategic Air Route Development Strategy.

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A decision made (25/01/2007) regarding New Strategic Air Route Development Strategy.

Subject:	New Strategic Air Route Development Strategy
Decision Reference:	MD-E-2007-0032		Exempt clause(s):
Type of Report: (oral or written)	Written		Person Giving Report (if oral):	n/a
Telephone or e-mail Meeting?	n/a		Report File ref:	n/a
Written report – Title	New Strategic Air Route Development Strategy
Written report – Author (name and job title)	Mike King Chief Executive, Economic Development Department
Decision(s): To approve the new EDD/Jersey Airport strategy for the designation and development of new key air routes.
Reason(s) for decision: The Economic Development Department and Jersey Airport aims to stimulate growth in the air network in both the business and leisure markets. Routes that have this combined potential will be designated as Key Routes and will, as a consequence, be considered for enhanced support. This support will be based on the nature and magnitude of potential economic contribution to the Island. Funding will be used to leverage the establishment and maintenance of regular year round scheduled services only.
Action required: The Chief Executive of Economic Development and the Director of Jersey Airport to propose the necessary action(s) to develop the key air routes identified in the policy.
Signature: Senator Philip Ozouf Minister for Economic Development		Date of Decision: 25 January 2007

New Strategic Air Route Development Strategy.

Economic Development Department

New Strategic Air Route Development Strategy

Criteria for the Designation of a Strategic Air Route

Jersey Airport and the Economic Development Department have developed a new strategic route incentive product that is applicable only to new key strategic routes defined by the following criteria:

 The route must represent a development of the air route network not serviced by current carriers.

 The route must have identified potential to deliver passenger and associated economic growth potential from sectors of the economy that include, but are not limited to financial services and tourism.

 There must be clear evidence of the inability of the market to deliver and maintain a service on the route without appropriate States intervention.

 Based on an assessment of net marginal profit contribution the States support must have a positive contribution to the Island’s economy. In particular the decision to designate the route a key strategic route must be made following a comparison of the likely net benefits that the Island will realise, both tangible and intangible, against the cost of States support.

The new strategic route incentive product will, subject to the criteria outlined above have the following components:

 The States of Jersey and the carrier will enter into a route-specific contractual agreement for a defined term. The agreement will comprise a risk and reward

sharing structure that includes a return to the States in the event of profitable operation of the route

 The nature of States support to facilitate the establishment and maintenance of the route will have two components

1. Reduction in aeronautical charges for the term of the agreement

2. Additional grant funding to offset commercial losses in the initial operating period