Evaluation of the Scottish Air Route Development Fund: study report – final report

This evaluation of the Scottish Air Route Development Fund (RDF) was commissioned by Scottish Enterprise, the Scottish Government, VisitScotland, and Highlands and Islands Airports Limited (HIAL), and conducted by Scott Wilson, in partnership with Westminster University’s Transport Studies Group and Sky High Ltd. The Scottish Air RDF was established in November 2002 to improve business connectivity and inbound tourist access through the provision of incentives to initiate new direct overseas air links to Scotland. Regional economic development was the overall goal. The Scottish Air RDF was closed to new routes on 31st May 2007.

A general review of the RDF and a Transport Economic Efficiency appraisal were carried out. Passenger surveys were undertaken at different airports to assess levels of tourism expenditure, levels of business expenditure and whether business perceptions of air transport to Scotland had been influenced. Interviews with stakeholders including airports and airlines were used to assess net job increases, and whether the RDF had successfully mitigated risk aversion on the part of airlines and improved their knowledge of Scotland. Other issues investigated in the surveys and interviews were social inclusion and environmental impact.

Among the main findings were the following: over the period of the RDF, a steep rise in both domestic and international air passengers was observed, and also in air services operated with RDF investment; the SESTRAN and SPT areas are the ultimate origin and destination of most Scottish and non-Scottish tourists; a wide range of non-Scottish businesses were found to use RDF services, the most represented being academia, with a significant number also from technology sectors; migrant workers depend heavily upon RDF-supported flights to access jobs in Scotland; the TEE appraisal showed that nearly all RDF services return a positive net present value (NPV) and benefit-to-cost ratio (BCR) greater than 1.0, which suggests overall good rates of return, with some instances of very high rates of return; total NPV was calculated at £406m; total GVA (gross value added) was calculated at £47m-£52m; estimated net additional tourist expenditure in 2008 was calculated at just under £20m, and business expenditure at £7.8m; net job increase was identified as 37 full time equivalents (FTEs); the RDF appears to have had an overall positive impact on business perceptions of Scotland and airline industry risk aversion; by improving access to jobs, training and education, as well as enabling more social connections, the RDF was judged to have positively contributed to social inclusion; and the environmental impact of the RDF, appraised over a ten year period, was around four million tons of carbon dioxide.

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