Fears for future of City of Derry Airport

City of Derry Airport

City of Derry Airport could close within a year because of a multi-million pound shortfall in funding, a leaked report says.

It emerged in June that government funding of £2.5million promised in 2016 has yet to be paid because of Stormont's collapse.

The funding was pledged to help develop new routes at the airport

Now Derry City and Strabane District council is warning the airport may not be sustainable beyond next year.

A report compiled by the council's head of finance Alfie Dallas, which has been seen by the BBC, says the airport is "seeking immediate access to the £2.5million Route Development Fund."

Mr Dallas' report says the money is needed to ensure the continuation of the Stansted service currently operating at the airport.

It is a public service obligation (PSO) air route meaning it would not be viable commercially without government support.

The Stansted route is currently funded with help of the Department of Transport but this is due to run out next year and the airport needs £2.5m from Stormont to continue it.

The council report continues: "There is an urgency attached to this request, in that a tender or renegotiation process needs to be progressed in order to ensure that the London PSO route can continue in operation beyond May 2019.

"To enable this to be progressed, the required funding must be confirmed by late August/September 2018.

"Failure to do so will mean the London route will cease and the airport will no longer be sustainable beyond May 2019."

Ryanair axed a number of services to Derry in 2016

The BBC has also seen correspondence between the Council's Chief Executive John Kelpie and the Head of the Civil Service, David Sterling.

In a letter to Mr Kelpie dated 22 June, Northern Ireland's top civil servant said the previously announced £2.5million "was intended to support the establishment of new routes, rather than to extend existing routes from the airport."

Mr Sterling acknowledged ongoing discussions between council and Northern Ireland's Department of the Economy on new routes.

He said the lack of a minister and executive meant these discussions could not be advanced.

Mr Sterling warned that should the route development funds be used to bolster the existing London route it would "potentially render any further route development proposals unaffordable."

Meanwhile a Department of Economy spokesman said they allocated the "the funding for the air route development element of the support package for the 2016/17 financial year."

"However, following engagement with Derry City and Strabane District Council, this funding was surrendered as it could not be utilised in part or full in that financial year," he added.

Derry City and Strabane District Council said the issues would be discussed by councillors.

A spokeswoman said: "A detailed paper outlining the urgency of getting access to £2.5m route development fund money set aside by the NI Executive will come before members of the Governance and Strategic Planning Committee on Tuesday."

She said the report "will also discuss the future needs of the airport with regard to the management support of the facility and provide an update in relation to the annual funding operation subsidy of the Airport."

The airport is currently running at a £2.145m loss per year, paid for by Derry City and Strabane District Council ratepayers