Mr. Niall MacCarthy:

I am Niall MacCarthy, managing director of Cork Airport. I am a member of the DAA executive team. I am here today in my capacity of DAA executive Brexit lead and I am speaking on Brexit planning for both Dublin and Cork airports. I thank committee members for the invitation to attend and for facilitating the important discussion on the implications of Brexit for Irish aviation and for the wider transport sector.

DAA is a global airport and travel retail group which operates in 13 countries. In Ireland, DAA manages and operates the country's key gateways at Dublin and Cork airports, which welcomed a combined 34 million passengers in 2018. DAA's airports at Dublin and Cork are uniquely exposed to Brexit in a European airport context, given the significant traffic flows that exist between Ireland and the UK. To put it in context, research by our industry body, Airports Council International, ACI, Europe, published in October 2018, shows that UK passenger traffic accounted for, on average, 12% of total traffic flows across EU 27 airports in 2017. In contrast, UK traffic amounted to 38% of total Irish traffic, which emphasises why we are uniquely exposed.

Given these unique challenges. Brexit has, over the past three years, been a critical and ongoing area of focus for our business. DAA has established an internal Brexit planning team, which has been focussed on identifying and understanding all of the potential impacts which Brexit could bring for our airports, passengers, and customers, as well as for our wider business. We have put in place robust contingency measures to effectively minimise these impacts. In our planning, we worked closely with Departments such as Transport, Tourism and Sport and Agriculture, Food and the Marine, key State bodies such as Revenue and the Irish Naturalisation and Immigration Service, INIS, as well as customer airlines and a range of other key operational and commercial partners at our airports. We have also participated in key industry fora such as the National Civil Aviation Development Forum, NCADF, Fáilte Ireland and Tourism Ireland's Brexit readiness group and the Irish Institute of European Affairs Brexit readiness grouping.

I would like to provide the committee with a brief overview of the implications of a no-deal Brexit for Irish aviation and DAA's airports, as well as the steps that have been taken to manage these impacts. First, this is categorically important in terms of our own business, I reassure the committee that we expect flights to continue to operate as normal at Dublin and Cork airports in the event of a no-deal Brexit. If the UK leaves the EU without a deal, emergency regulations will come into force at EU level to protect air connectivity for passengers and freight between the EU and the UK. Regulation EU 2019/502 on common rules ensuring basic air connectivity with regard to the withdrawal of the UK from the Union will take effect immediately in the event that the UK exits the EU without a deal on 31 October and will apply until October 2020.

It will bring into force a range of provisions to ensure that UK air carriers can continue to provide basic air transport services between the UK and the 27 remaining EU member states, including Ireland. The UK has confirmed that it will mirror the provisions set out in the EU regulation in respect of the rights of EU air carriers within the UK. For example, the regulation will, in a no-deal Brexit scenario, give UK air carriers the right to continue to perform scheduled and non-scheduled international air transport services between any point within the UK and the EU. It will also allow UK carriers to continue to engage in co-operative marketing arrangements such as code-shares under certain conditions and will allow further traffic freedoms for all cargo services for a limited period.

In addition, the regulation also states that if airlines can, within two weeks of the no-deal legislation taking effect, provide proof to the European Commission that they have robust plans to ensure compliance with EU ownership and control rules within the subsequent six-month period, these airlines would in effect be entitled to a six-month grace period, during which their EU operating licences and associated rights would remain unaffected. For information, I have supplied a copy of the regulation, as well as recent amendments to it, to all members. Given these important provisions, and given the current traffic profiles at our airports, it is critically important to emphasise that flights into and out of the UK and feeder flights through the UK will continue to operate in a no-deal Brexit scenario. It is important that we all get this message out to the travelling public.

The next key area I will address relates to the passenger journey, and the key implications Brexit will have within our airports from a passenger viewpoint. First, I will address the implications of a no-deal Brexit for passengers departing at our airports. Regarding security processes, there will be no changes or additional requirements for UK-bound passengers departing from Irish airports, as a result of a no-deal Brexit. UK-bound passengers will simply continue to comply with all current security processes and requirements, with no change anticipated from existing processes. Furthermore, the Government has now confirmed that duty-free shopping will return on alcohol and tobacco products if the UK leaves the EU without a deal. This means that passengers departing from Irish airports to UK airports will be able to purchase these products at duty-free prices, but only in the event of no deal. Other than that, we do not anticipate any other significant implications for passengers departing through Irish airports.

Second, I will address the implications of a no-deal Brexit for passengers arriving at our airports from the UK. At airport immigration, UK passport holders arriving at Irish airports are currently processed through the European Union, European Economic Area and Switzerland, EU-EEA-CH channel. If the UK leaves the EU without a deal, INIS has confirmed that UK passport holders will continue to be processed through the same channel. However, the channel will be redesignated as an EU-EEA-CH and UK channel. There will be no additional or onerous immigration checks applied to UK passport holders at Irish airports. It is important we all get this message out as there is likely to be confusion and uncertainty, in particular with UK tourists considering coming to Ireland.

DAA has identified all relevant signage that will need to be changed within our airports in this scenario. The new signage has been printed and is currently being held in storage, on standby, to be switched over, if and when required. In the event of no deal, additional customer services staff will also be deployed in immigration areas at the airports, for a period, to advise passengers, and to deal with any queries or confusion which could arise.

At customs points in the arrivals hall, Revenue has confirmed that all passengers arriving at Irish airports from UK destinations, including all Irish and EU passport holders, will be required to use the green channel in a changed scenario. We will simply use a different channel from that we use now; rather than using the blue channel, we will use the green channel.

Again, we will have customer services staff on hand to help passengers and to deal with any queries or confusion that may arise during the transition period.

Furthermore, UK arriving passengers will need to ensure that they are aware of allowances applicable to duty-free and tax-free goods and that they are in compliance with these allowances. If they are carrying goods in excess of these allowances, they will need to make a declaration at the red customs channel. Generally, UK passengers arriving in Irish airports who have not made purchases exceeding their allowances will have the normal smooth experience, except that they will use the green rather than the blue channel. Random checks will continue to arise.

Another area which will be impacted at Irish airports in a no-deal Brexit scenario is bulk cargo, as a result of the additional paperwork and inspections which would be required for UK cargo on both sides of the Irish Sea. Airports will be far less impacted in this area than ports, given the relative scale of freight handled by airports compared with ports. Dublin Airport handled 143,000 tonnes of freight in 2018, while Dublin Port handled more than 26 million tonnes of freight in the same period. Notwithstanding this, we in the DAA have been engaging closely with Revenue and customs for a no-deal scenario. Revenue and customs have confirmed that their preparations are now well progressed, with an additional 40 customs officers in place at Dublin Airport to meet increased requirements. Similar preparations have been made by customs with respect to Cork Airport. On this basis, no material impacts are currently anticipated for DAA airports by Revenue and customs in this area of bulk cargo, though there will be significant additional paperwork.

Finally, like all businesses in a no-deal scenario, DAA could potentially face disruptions, delays, and interruptions to its own supply chains. To this end, detailed and comprehensive risk assessment and contingency planning has been completed with respect to DAA’s supply base, and mitigating actions have been undertaken where necessary to protect ongoing supplies, such as chemicals and equipment from the UK. Beyond the operational impacts that I have outlined, it is also very important to add that, ultimately, the greatest risk for Irish aviation from a no-deal Brexit is the wider macroeconomic impact that such a scenario would bring to Irish tourism and business. Inevitably, with sterling predicted to fall further in the event of a no-deal Brexit, Fáilte Ireland has indicated that at least 10,000 jobs would be at risk in the tourism sector in Ireland. Estimates vary but Fáilte Ireland believes there could be a loss of more than one million British tourists each year, resulting in the loss of €380 million per annum. To put this in context, 3.5 million visits from Britain were recorded in 2018, contributing around €1 billion to the Irish economy. For this reason, we in the aviation industry strongly believe that everything possible should be done to avoid a no-deal Brexit to safeguard tourism and all the jobs throughout the country that are dependent on it.

Our expectation is that the operational impacts for Irish aviation and Irish airports will be relatively minimal in a no-deal Brexit scenario and, where impacts will be experienced, I believe that the DAA and its key stakeholders are taking all reasonable measures to minimise any negative effects that could be experienced. However, I cannot emphasise enough the macroeconomic damage that will arise to tourism and travel in the Irish economy from the currency and other effects of a no-deal Brexit. I look forward to any questions the committee may have.