T22-090CRO CIty of Derry Airport to London Public Services Obligation

Description

Derry City and Strabane District Council is seeking to procure the services of an airline Operator to provide a scheduled air service between City of Derry Airport (CODA) and a London airport. This can be any of the following 6 London Airports, listed in alphabetical order: Gatwick, Heathrow, London City, London Luton, London Southend, and Stansted. A London airport has been defined by the Department for Transport (DfT) as any airport that can access transport zone 1 of London within 60 minutes by rail. Tenderers are strongly encouraged to give more than one option of London airport with separate cost estimates for each airport. This will enable consideration of the value-added elements provided through hub access. It should be noted that slots must be available to operate the schedule at the chosen London airport and must be acquired by the airline through the regular slot allocation process. Slots will not be made available by Government through ring-fencing. This exercise will be conducted using an Open Procurement procedure (Public Contracts Regulations 2015) with a 2-month tender return period as prescribed in Regulation (EC) No 1008/2008 as retained. This document contains information about the procurement process, the Services, and sets out the conditions for submission of a tender. It is intended that a single contract shall be awarded to one Tenderer to provide the Services. City of Derry Airport is owned by Derry City and Strabane District Council and is operated by City of Derry Airport Operations Limited, a Private Limited Organisation wholly owned by Derry City and Strabane District Council since the airport company was incorporated in 2010. The annual passenger traffic using the Airport grew historically at a rapid rate and peaked at nearly 450,000ppa, before the economic downturn, and fell to 338,505ppa in 2010. Over time, the economic recovery led to a steady rise in traffic to approximately 412,000ppa with a number of new services following incorporation in 2010 but, due to the reduction in services and Ryanair’s changing priorities, passenger numbers have has fallen since 2011. City of Derry Airport and Derry City and Strabane District Council sought Department for Transport (DfT) approval to introduce a Public Service Obligation (PSO) on the route. The proposal was submitted to the DfT in August 2016 for the appointment of an air operator to provide a twice daily (morning and evening) return service between CODA and a London airport. DfT approved the proposal on 20 September 2016. An initial two-year PSO contract was awarded in February 2017 with operations running from 2nd May 2017 until 1st May 2019. Unfortunately the PSO Operator went into administration on the 16th February 2019 and as a result the London route stopped immediately. In accordance with the Regulation (EC) No 1008/2008 as retained, Derry City and Strabane District Council carried out an emergency tender exercise and appointed an airline to operate the PSO route for a seven month period from the 27th February to 26th September 2019. Following this a further tender exercise was carried out and Loganair was appointed to operate the route up until 31st March 2023. Subject to any termination rights contained within the Contract, the Council proposes to enter into the Contract for an initial period of 24 months up until the 31st March 2025 with a view to extending for a further 24 months with the successful Tenderers (Operator). The anticipated Commencement Date is 1st April 2023. Please refer to CfT documents for further detail

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