Mr. Joe Gilmore:

A friendly rivalry, but for the most part we have a very positive relationship and I do not think the committee has anything to be concerned about in terms of any economies of scale or any efficiencies being lost out.

It terms of the 1 million passenger cap, our proposal was for that to be reviewed in the context of regional airports of our scale, which we forecast is to be just over 800,000 passengers for the current year. The 3 million is permitted within the EU state aid guidelines. That is the next stage up. The current cap of 1 million is set, I understand, by the national Exchequer, by Government. In our case we had serious concerns that if the 1 million cap were not reviewed, we would reach a hard stop, and for airports of our scale, if we were to reach the 1 million passenger level, which we hope will be shortly, all funding would cease and that would have a very serious impact.

As for the intensity of the current funding, the current regional airports programme was put in place following a 2011 review of regional airports, which is quite a while ago now. Prior to that, funding was available to regional airports for both landside and airside developments, so airports like Knock under the previous programme were able to develop passenger handling, terminal facilities, traffic and car parking infrastructure and so forth on the landside as well as airside support.

The current programme was limited and focused primarily on safety, security and funding air traffic control costs in our case, which has been very much appreciated over the years. However, it has been somewhat restrictive and now, after the Covid pandemic in particular, the caps on level of intensity at 75% or 90% for large-scale capital projects are particularly challenging given the significant escalation in construction costs for large capital programmes. There is continued uncertainty over that, especially on a multi-annual programme. Trying to bring a major €10 million construction programme to tender and get some level of fixed pricing is very challenging for smaller airports. Given we are all small businesses with stressed balance sheets, we ask for that to be included in a review.

The development with Heathrow is very welcome. I acknowledge the confidence Aer Lingus has in putting a major lunchtime slot into the airport daily from 26 March. We are particularly excited with the onward connectivity it gives through British Airways, American Airlines, United Airlines, Iberia and the IAG network. We are also trying to get our heads around the inward impact. It opens up the west of Ireland through the whole global network going through Heathrow.

There have been some discussions with the Department over the years about having a new route development scheme. As I outlined earlier, regional airports are challenged when developing new routes, especially to major European centres. There is already a proven market to our existing ten UK destinations. They are based on diaspora, leisure and, to a lesser degree, business. However, developing European hubs for regional airports is a major challenge, as has been highlighted by others present at this meeting. All airlines want to fly to the capital city, which is very understandable. That is where the market is and that is where the least risk is.

Airlines considering Ireland West Airport and other regional airports identify high risk in the first one to three years. Airlines are commercial entities with very expensive mobile assets in their aircraft. If it does not work in the first year, they will generally terminate the service. We need a scheme that can support the first three years while the initial market development at both ends is being done. We have had initial discussions looking at other schemes across Europe. That could be included in the new national aviation policy. We need to take a serious look at what is permitted in state aid guidelines for funding new routes and supporting new access. In particular, Ms Considine and Mr. MacCarthy have highlighted the potential new hub services and European destinations can offer for the regions. It would be a game changer.

The Deputy mentioned security screening. Last year we made an application to Government for the updated security screening which avoids passengers having to take out their liquids and so forth. Unfortunately, we did not receive funding last year. We are hopeful we will receive funding this year. We will need two of the new systems at a cost of approximately €1.5 million.