Wick Public Service Obligation
Public Service Obligation
We are supporting air services between Wick John O'Groats Airport and Aberdeen International Airport. This is being done through a Public Service Obligation (PSO) contract with Eastern Airways. The PSO is set to be in place for three years, starting in April 2022, and is funded by Transport Scotland (£1 million per year) and Highland Council (£300,000 per year).
A Public Service Obligation is a type of contract often used to support public transport between two or more regions, where it is not possible for the service to be delivered commercially. These are generally used in Scotland on what are called "lifeline" services.
The way it works is that a public body (in this case the Highland Council with support from Scottish Government) signs an agreement with an airline to provide services to a set schedule and specification. The two parties work out how much it will cost to deliver the service, and how much they think will be made by the airline from passenger fares. The Council has then agreed to provide a certain amount of funding to the airline each month to cover the expected difference.
This arrangement allows the Council to specify a timetable and level of service from the airline that would not always be possible if the airline was operating the route on a purely commercial basis. For example, it allows fares to be capped at an affordable level, and a timetable to be developed which suits the needs of the community.
A PSO being in place does not mean that the Council is covering the total running costs of the service. The airline is still expected to operate on a commercial basis and to generate enough revenue from ticket sales to cover some of the cost of the flight.
As a "lifeline" service, the main aim of the Wick-Aberdeen PSO is to support the community of the North Highlands. By supporting air access to Aberdeen and beyond, the Council is ensuring that residents of the region have better access to business, leisure, healthcare and social opportunities.
The PSO is also designed to support the business community of the region. Many businesses in Caithness and Sutherland require access to Aberdeen, and connections to destinations such as Manchester, London and the Midlands. By supporting air access to Aberdeen, the Council is ensuring that businesses can quickly and affordably get to and from the region in order to do business with the rest of the UK.
Services between Aberdeen and Wick will also benefit tourism businesses in the region. Making it faster and easier for tourists to access the region will help to attract new groups of tourists and encourage them to spend money in the communities supported by the PSO.
Finally, the PSO will help to encourage inward migration and investment. By making the North Highlands more accessible, it will be easier to attract skilled people to the region, and to encourage investors to set up and expand businesses here.
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