Mr. Ray Gray:

I thank the committee for the invitation to outline DAA's key concerns and difficulties in light of Covid-19 and to set out our views on steps to address them. An early resumption of more normalised international travel is of key importance. However, we are acutely aware that inappropriate easing of restrictions could undo the tremendous progress to date. Critically, Covid-19 and international travel will coexist for a considerable time to come.

International connectivity is critical for Ireland. It drives business growth and development and underpins 75% of the tourism economy. Our airport activities facilitate more than 140,000 jobs and support thousands of Irish businesses. Our airports fully pay for themselves and are not supported by the taxpayer. They have delivered a return of €125 million in dividends to the Exchequer over the past five years. They deliver record route connectivity for the economy, with both Dublin Airport and Cork Airport achieving record traffic volumes in 2019.

Financial sustainability is key to delivering critical and strategically important national airport infrastructure. We have managed our finances accordingly and entered the Covid-19 crisis in a strong financial position, with good liquidity and limited debt. However, this crisis has quickly eroded this strong starting position. In line with Government policy, our role has been to keep our airports open to ensure critical personal protective equipment, PPE, and medical supplies were able to reach Ireland at a time when they were most needed. We are immensely proud of the efforts of our airport staff, who became front-line workers in their own right, facilitating the repatriation of our people and enabling the delivery of much-needed cargo.

However, open airports with minimal traffic have led to losses of around €1 million per day. Passenger numbers in Dublin Airport may fall to 9 million from almost 33 million last year, while Cork Airport passenger numbers may fall below 1 million from almost 2.6 million last year. Industry predictions foresee a slow and protracted recovery for the aviation sector. We have had to take action. In conjunction with staff and unions we have constructively engaged in a large programme of work to rightsize and reshape our organisation. We have cut costs and are reviewing investment programmes pending greater clarity on the pace of recovery.

Dublin Airport faces strong international competition. Aircraft are mobile assets and can and will be reallocated to where they earn the best return. Cork Airport faces particular challenges, including maintaining a level playing-field. The process of identifying a path to reopening the country to international travel has commenced, starting with the publication of the 15-country green list, which we welcome. However, this list will only have a marginal impact on passenger numbers and is unlikely to add more than 100,000 passengers to the number currently flying in any month, which is less than would fly in a single normal day.

We have adopted the recommendations of the European Union Aviation Safety Agency, EASA, and the European Centre for Disease Prevention and Control, ECDC, and have implemented a series of health measures to protect both passengers and staff.

We are working closely with the Government to build a more robust process for tracking inbound visitors using passenger locator forms, with the intention of having a call centre in place in August. There may also be merit in pursuing an evidence-based system for all non-green list countries whereby arriving passengers are required to undertake a Covid-19 test 72 hours or less before travel and submit proof of a negative test prior to travel.

The significant losses we are currently experiencing are not sustainable and put the strategic airport infrastructure of our small and open island economy at risk. It is important that the State intervenes now to offset this risk. This should include continuing short-term supports by extending the temporary Covid-19 wage subsidy scheme, funding grants for pandemic safety measures, waiving rates and setting up an incentive fund for the development of air services.

Second, Cork Airport requires specific support as its revenue base has all but disappeared. A specific mechanism is required to offset essential operating costs and incentivise route development. Cork Airport should also be admitted to the existing regional airport programme and offered the associated capital funding.

Third, we need to look beyond the crisis and draw on the lessons of the past. Despite the need for significant investment, airport charges, our key revenue source, were continually lowered through the aviation regulatory process before Covid-19. The most recent reduction last year amounted to 22%. This left our charges well below those of most peer international airports. This came at a cost to the economy in the form of lower or slower investment and unnecessary financial risk or instability. The recovery phase should see renewed investment in long-term strategic airport infrastructure to support economic growth, especially post Brexit, and to meet our commitments to the European Green Deal policy framework. This will require a new and more supportive regulatory pricing framework.

DAA continues to operate in uncharted territory with little sign of recovery at this point. We are committed to working with all stakeholders to find ways for international travel to coexist with the virus, as it must, in a manner that reduces risk and builds confidence. Our airports can be engines for economic recovery, as they have been in the past. We welcome this opportunity to engage with the committee regarding the role our airports can play in assisting in the recovery effort and the support mechanisms we require to bring this about.