Scotland ponders public funding of air links to London

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Scottish transport officials have sounded out the UK government about the practicalities of subsidising air routes between London and Scotland.

In email exchanges with the Department for Transport (DfT) during June and July, officials from Transport Scotland asked whether they would have access to £20 million ($31 million) set aside under the new "regional air connectivity fund" to set up a "public service obligation" (PSO) services between Scotland and London.

PSOs are typically used by governments to subsidise a carrier to operate flights to remote destinations that would not otherwise by profitable. A number of PSOs already operate in Scotland, to destinations in the Highlands and islands.

Transport Scotland officials also queried whether the fund would be available from 2014 and whether Scotland could negotiate a PSO directly with the European Commission rather than through the UK government.

In its response, the DfT says authority to establish a PSO rests with the UK secretary of state for transport, but adds: "This is an untested area since, as you'll know, there are no PSOs in operation on air services to London airports."

PSO applications would be open to "a regional body or other stakeholder partnership in Scotland" should they feel that a "business, financial and legal case can be made" to satisfy European regulations, it adds.

Concern over air links between London and Scotland were sparked in May when Flybe said it was pulling out of its London Gatwick-Inverness service next year, leaving EasyJet as the route's only operator.

A month later, Treasury chief secretary and Inverness MP Danny Alexander announced the formation of the regional air connectivity fund. "The recent concern over the potential loss of the former Flybe routes should have convinced us all of the need for this fund," he said at the time.

The subsequent email correspondence between the DfT and Transport Scotland was shared in response to a request under the Freedom of Information Act.