Ministers say they there is no merit in giving detailed consideration to a proposal for government to set up its own airline.
But any funds available to protect air routes would be better spent supporting existing operators and routes.
The suggestion that a franchise-based airline should be established to enable to government to buy airport landing slots was one of the recommendations of a Tynwald scrutiny committee inquiry into the open skies policy.
Leonard Singer, chairman of the economic policy review committee, will present the report for debate at this week’s Tynwald sitting.
The Council of Ministers’ response is to be laid before the same sitting. It concludes that setting up a franchise-based airline would not be advisable.
It states: ‘The operation of an airline is a commercial activity with significant financial risk. Aircraft lease costs, legal costs and liabilities, set up and running costs are hugely expensive.
‘In addition, specialist management expertise would be required even if this were limited to managing a contracted provider. Very few airlines make a profit and that significant financial support will almost certainly be required. Although some marketing support [can be provided] to airlines in some circumstances, there is currently no need to subsidise airline operations.
‘The Department of Infrastructure suggests any funds available to protect air services would be more advantageously used to support current operators and routes. Council would support the DoI’s suggestion and during these very difficult fiscal times it would not be advisable to give detailed consideration to establishing an airline.’