The future of Newquay airport lies in expanding its terminal to ensure passengers spend more on food, drink and retail.

This is just one area a Cornwall Council inquiry has found wanting at the Duchy’s airport.

A meeting of the council’s economic growth and development scrutiny committee heard today (Tuesday, March 4) that the airport’s organisational structure needs to be simplified and that there is unlikely to ever be a time when Cornwall’s taxpayers’ don’t contribute to a subsidy to keep it running.

Currently, the council pays around £4million a year towards its running costs.

The meeting heard the results of a strategic airport inquiry, which was initiated by councillors following a stalled joint venture deal to find a private investment company to help take on the airport and its 650-acre estate, which is currently owned by the council.

The purpose of the review was to come up with a strategic vision to secure the long-term future of Cornwall Airport Limited and maximize the potential of its surrounding land.

Cllr Leigh Frost, who oversaw the inquiry, said: “The big thing is the terminal is too small. It offers limited opportunities. One of the things an airport makes money from is the customer while they’re there.

“We just do not have a terminal where we can maximise the opportunities for customer spend and experience.

“That’s why we’re proposing there should be more capital investment into the terminal building to give us a better departure lounge.”

He added: “We realised we could be missing a trick with the car parking arrangements.

“We’ve seen here at County Hall we’ve got a solar canopy over the car park. Is that an opportunity for income and also the potential revenue of expanding the car park?

“What efficiencies can be made through the airport organisation itself by simplifying the financial and operational structures? There are clunky mechanisms preventing us reaching the decisions we want to get to.”

Cllr Frost believed the airport estate focuses too much on aerospace industries.

“We need to widen that out because there are businesses that would like to be on the estate that don’t necessarily align with that vision, but if we’ve got someone making use of the land we can lever out an income to help reduce the subsidy.

“We know there are potential private investors already.”

Committee chairman Tim Dwelly said: “My takeaway mainly is if you want an airport in Cornwall you have to pay for it.

“However, that doesn’t mean that you have to accept that the cost should be too high.

“We’ve had these grand aspirations around aerospace and the space sector, but a lot of users of the airport who do business in the UK have not necessarily been targeted to have work spaces or even homes potentially near the airport.

“We heard from one business with a lot of employees who need to fly from Newquay that they would be interested in relocating near the airport.”

Among the stakeholders the inquiry members spoke to were land agents CBRE, developer Treveth, property consultants Vickery Holman, business accountants Ward Williams, the council’s services offshoot Corserv and Cornwall Airport Newquay itself.

Senior council officer Phil Mason said the benefit to Cornwall of having the airport was around £90million per year.

Cllr Peter La Broy said: “Historically, perhaps, what has brought us to this point is that perhaps we haven’t appreciated truly the value to the Cornish economy that the airport brings us.

“If our investment of between £3million and £5million a year provides a further added value of many tens of millions then it’s an investment that’s worth making.”

However, he brought up the amount of money the council spent on consultants while trying to thrash out the failed financial partnership; a matter which has raised concern among many councillors.

“I do find it troubling that we spent around £1million from our revenue budget on consultants preparing a proposal for a transfer that didn’t get past our own due diligence on fiscal management. We need to have a look at why we got there.”

He asked for an investigation into the matter. The committee agreed and voted in favour.

The council’s cabinet member for the economy Louis Gardner said there were big changes at the terminal already, with an expansion of the food and beverage offer, and an opportunity for more retail expansion.

He added that he thought it was odd that not a single user of the airport had taken part in the inquiry – no airline operator, no customers, no tenants or potential tenants. However, he said he agreed with 90 per cent of the recommendations.

The economic growth committee agreed to all the recommendations, which are likely to pass to the council’s new administration following the May 1 election.

They include significant capital investment in the terminal building, a review of airport parking and the airport’s organisational structure, and the introduction of new services or business ventures in order to reduce its reliance on subsidy, “contributing even more to Cornwall’s economy while providing better services to its residents”.

The report concluded: “While some subsidy may always be required due to the nature of the airport’s operations, the focus should shift to generating additional income from short-term rents, long-term rents, land exchanges, capital receipts, and business rates to reduce reliance on subsidy.”