Public procurement notice: Contract Award Notice
Published: 2019-09-10
Buyer: Derry City and Strabane District Council
Country: UK
Contract type: Services
Procedure: Open procedure
CPV classification: 60400000: Air transport services
Estimated value: 3147938 GBP
Award criteria: The most economic tender

Technical requirements: The appointment of an airline operator to provide a scheduled return air service between City of Derry Airport and a London Area Airport (LON).
Derry City and Strabane District Council (DCSDC) 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 Area Airport (LON). This can be any of the following 6 London Airports, listed in alphabetical order, Gatwick, Heathrow, London City, London Luton, London Southend, and Stansted). LON 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.
It should be noted that slots must be available to operate the schedule at the chosen London Area 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 EU Open Procurement procedure with a 2-month tender return period as prescribed in the Regulation (EC) No 1008/2008 of the European Parliament and of the Council on common rules for the operation of air services in the community.
This document contains information about the procurement process, the services, and sets out the conditions for submission of a tender.
CODA is owned by DCSDC and is operated by City of Derry Airport Operations Ltd, a Private Ltd Organisation wholly owned by DCSDC 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 450 000 ppa, before the economic downturn, and fell to 338 505 ppa in 2010. Over time, the economic recovery led to a steady rise in traffic to approximately 412 000 ppa 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. In 2016/17 the airport handled 280 000 passengers with approximately 106 000 on the route between Derry and London Stansted.
In August 2016 Ryanair, the historic operator of the London Stansted route, informed the airport management team that they would be withdrawing the route from end of the winter 2016 season in late March 2017. This was due to a strategic decision by Ryanair to reduce the number of aircraft based at London Stansted as a direct consequence of their focus on European markets other than the United Kingdom. Since the City of Derry to London route provides most passenger numbers at the airport, it is likely that there would have been a significant reduction in jobs at the airport and elsewhere in the North-West of Ireland if the London service ceased. From estimates, this reduction in employment alone would reduce the region’s GVA by 10 000 000 GBP, taking account of direct jobs and indirect GVA generated by airport employed staff alone.
On this basis, City of Derry Airport and DCSDC sought DfT (and, in turn, EU) approval to introduce a Public Service Obligation (PSO) on the route. The proposal was submitted to the Department for Transport (DfT) in August 2016 for the appointment of an air operator to provide a twice daily (morning and evening) return service to a London Airport from/to City of Derry Airport. DfT approved the proposal on 20.9.2016.
An initial 2-year PSO contract was awarded in February 2017 with operations running from 2.5.2017 until 1.5.2019. Unfortunately the PSO Operator went into administration on the 16.2.2019 and as a result the London route stopped immediately. In accordance with the EC Regulations 1008/2008, DCSDC carried out an emergency tender exercise and appointed an airline to operate the PSO route for a seven months period from the 27.2.2019 to 26.9.2019.
DCSDC now seeks tenders for the continued operation of the service beyond 26.9.2019, for an initial period of 16 months up until the 27th March 2021 with a view to extending for a further 24 months.


Winner: Loganair Ltd
Award value: 3147938
Number of bids: 2