Oireachtas Joint and Select Committees
Thursday, 12 November 2020
Joint Oireachtas Committee on Transport, Tourism and Sport
Issues Affecting the Aviation Sector: Discussion (Resumed)
This is our final hearing on issues affecting the aviation sector. I welcome the witnesses: Captain Evan Cullen, president of the Irish Air Line Pilots Association, IALPA; Captain Alan Brereton, vice president of IALPA; Mr. Neil McGowan, aviation sector organiser, SIPTU; Ms Karan O'Loughlin, SIPTU; Mr. Paddy Kavanagh, general secretary, Connect Trade Union; Mr. Matt Staunton, deputy secretary general, Fórsa trade union; Ms Ashley Connelly, assistant general secretary, Fórsa; Ms Dee Ryan, chief executive officer of Limerick Chamber; and Dr. Catríona Cahill, chief economist, Limerick Chamber.
Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. If the witnesses' statements are potentially defamatory, in respect of an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with all such directions.
For witnesses attending the meeting remotely, there are some limitations to parliamentary privilege and, as such, they may not benefit from the same level of immunity from legal proceedings as witnesses who are physically present. Witnesses participating in this meeting from jurisdictions outside this State are advised that they should be mindful of their domestic law and how that may apply to the evidence they give.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
Witnesses will be aware of the time limitations owing to the Covid restrictions. The meeting may not extend beyond two hours so I hope they can keep their presentations to five minutes each. I acknowledge that is limiting in itself but I hope they will be able to oblige us in that regard. I call on Mr. Cullen to make his opening statement on behalf of IALPA.
Mr. Evan Cullen:
IALPA welcomes this opportunity to appear before the committee on behalf of its 1,200 professional pilot members in Ireland. Mindful of the short time available to us today, this opening statement is short and focused on one or two key issues identified by IALPA members as significant for the continued survival of the aviation sector in Ireland.
The impact on the aviation sector of Covid-19 is well documented but it is important to give a summary of its effect on Irish pilots. Of our 1,200 members, approximately 50% are receiving no income from their employer due to redundancy or their having been laid off. The remaining 50% are on incomes between 25% and 30% of their normal full-time income. It will not be lost on committee members that such a massive decline in incomes is having a major impact on our members' ability to pay their mortgages and meet other outgoings. If the effective shutdown of our sector continues for any length of time, the impact on the pilots will be catastrophic; hence our desire to get Irish aviation safely operating again in line with our European partners.
On testing developments, the risk assessment of the European Centre for Disease Prevention and Control, ECDC, issued on 23 October last, advised:
While RT-PCR tests remain the operational standard for detection of ongoing infection, especially in cases where precision is key, antigen tests can also be used for this purpose. Rapid antigen tests (RATs) are becoming more readily available and are being increasingly used by Member States as a possible tool for rapid SARS-CoV-2 diagnosis. ... RATs with acceptable sensitivity and specificity ... are now available in the EU.
Many of our European partners have introduced, or are working to introduce, such antigen testing.
Italy introduced a testing requirement in September for arrivals from high risk or red areas that includes an antigen test within acceptable test standards. On 18 October, the French minister for transport announced plans to introduce rapid antigen testing at airports on departure to countries such as the US and on arrival from red zone countries. On 13 October, Germany’s Robert Koch Institute recommended antigen tests to complement existing molecular polymerase chain reaction, PCR, tests. Germany has secured 9 million so-called antigen tests per month that can deliver a result in minutes and cost about €5 each. Several major European airports, including Milan, Rome, Frankfurt, London and very recently Paris, are in the process of equipping themselves with antigenic tests to allow a rapid diagnosis. On 23 October, Austrian Airlines launched a trial programme of rapid Covid-19 antigen tests in co-operation with its hub, Vienna Airport, for flights to Berlin.
If the Irish aviation sector is to survive this pandemic, there is an urgent requirement for progress to be made in Ireland on the establishment of a rapid antigen testing regime to ensure adequate supplies can be sourced and secured in a timely manner. Such a regime can represent a significant addition to the existing multi-layered approach to the management of risk by its application to passengers coming from high-risk or red areas or countries. It would also allow us to safely open up our skies once again. I thank the members for facilitating our presentation this afternoon and I look forward to engaging in the question's session. In summary, IALPA is calling for mandatory, rapid antigen testing at the airports for all arrivals and departing passengers and crew. We believe this is the best way for us to secure the industry and to offer the protections necessary.
Mr. Neil McGowan:
I thank the Chairman and members for the opportunity to address the committee today. We look forward to answering any questions in due course. I am the SIPTU aviation sector organiser. I am joined by my colleague, Karan O’Loughlin, divisional organiser for SIPTU’s transport, energy, aviation and construction division.
The Covid-19 pandemic has had an unprecedented and devastating impact on the aviation industry. There are thousands of workers across the country who are earning a fraction of what they earned pre-Covid, hundreds more are on lay off, hundreds are out of employment and all are fearful for their futures. Flights and passenger numbers have collapsed, and the industry has been brought to its knees.
The outlook for aviation in the short to medium term is bleak and any green shoots that were hoped for in 2020 have not materialised. We are now in a winter season, traditionally a quiet time in the airports, that will be particularly challenging. Despite a dramatic drop in earnings, workers in aviation continued to work throughout the darkest days of the pandemic and SIPTU members in the airlines, ground handlers and airport workers played a critical role in keeping the airports open for essential deliveries of personal protective equipment, PPE, and medical supplies.
The adoption of the EU traffic light system is welcome but given the trajectory of the virus across Europe this is unlikely to give any short-term relief to the industry or the many thousands of our members who make a living from aviation. In order to ensure that Ireland has an aviation industry post-crisis, we believe a number of actions need to be taken immediately by the Government. SIPTU recommends the extension and amendment of the employment wage subsidy scheme, EWSS, for the aviation sector to ensure that employment is maintained in the industry. The scheme should be tailored for the aviation industry so that it becomes a genuine short-time working scheme based on the German model that pays workers 85% of their pre-Covid-19 earnings.
It must be made conditional on several binding commitments from the employers, which I will now outline. No worker is to be made redundant on a compulsory basis while the employer is benefiting from the EWSS and no worker should suffer a permanent reduction in any term and condition of employment unless by collective agreement while the employer is benefiting from the EWSS. SIPTU recommends that Shannon Airport be returned to the management of the DAA. The separation of Shannon Airport has not been a success and the Covid-19 crisis has brought into question its long-term viability. Given its absolute importance to the regional economy, we believe it must be brought back into the DAA. SIPTU also recommends the introduction of a rapid testing facility for all airport workers and passengers. SIPTU calls for a review of the non-State airport sector, which will require additional support in re-establishing routes and attracting new ones. If direct state aid is given to the non-State airport sector the State should take an ownership in these airports. SIPTU recommends that all recommendations of the aviation task force are implemented without delay.
In the absence of the Government taking meaningful action, we simply will not have a functioning aviation sector as structural damage is being done to the industry and in a post-Covid world, aviation will not be able to recover. Given that we are an open island economy, the wider Irish economy will not recover to the full extent without a functioning aviation sector. The thousands of people who depend on it directly and the hundreds of thousands in the wider economy who need a functioning aviation industry need the Government to act now through the tailored supports our union is seeking on behalf of its members.
There have, obviously, been some developments over the past days with regard to funding for the airports, which is welcome. We believe, however, that it does not go far enough to ensure the future of the industry. There have also been some positive developments around testing at the airports but, again, it does not go far enough. There will be very limited availability in the short term at least. It may only be some 300 per day between Dublin and Cork Airports, which is not going to be sufficient. We also have concerns that the cost of testing with private provider is prohibitive. The test will be around €150 or €200 for a rapid test, and for the ordinary travelling public that will prove prohibitive. While some of these measures are absolutely welcome, and it is the beginning of putting the building blocks on place to get the industry back on its feet, there really needs to be a razor sharp focus on supporting workers to get through the next period and months before the industry recovers to the full extent. We believe that the correct way to do that is to tailor the EWSS to make it a genuine short-time working scheme.
Mr. Paddy Kavanagh:
I thank the committee for the opportunity to raise our members' concerns today. Connect Trade Union is the largest engineering union in the Republic of Ireland for just under 40,000 workers and is affiliated to the Irish Congress of Trade Unions. In the transport sector, we represent approximately 3,000 workers across rail, shipping, air and road transport with 50% of those being electrical trades, mechanical trades and engineering workers in the aviation sector primarily in aircraft maintenance, aerospace component production and facilities maintenance and so on. Connect Trade Union also represents all electrical trades, civil trades and most mechanical trades working in maintenance provision in Dublin Airport Authority, DAA, in Shannon Airport Authority, SAA, and various regional airports. In addition, the union has a larger number of workers supporting these industries in contract support, construction, specialist services, lift maintenance and a number of other sectors.
While taking into account the impact Covid-19 has had generally on the various sectors of the Irish economy, the downturn in the aviation industry has meant, without doubt, that the sector is the most severely impacted. In the first lockdown, passenger throughput in Irish airports reduced by more than 98% and even in phases 2 and 3 of lockdown the throughput was running at a 66% reduction on the same period for 2019. This was even worse than the hospitality industry where phases 2 and 3 of lockdown showed a 50% reduction from the same period in 2019. The situation is even worse for regional airports especially now with the announcement by Ryanair to temporarily suspend services and with the decision by Aer Lingus to move aircraft from Shannon.
I will now turn to the impacts on our members, starting with earnings. The feedback and information we have gathered from our members is that there have been severe reductions in the working week, with the subsequent impact on pay, including half time or one week on, one week off, which equates to a 2.5-day week, or three and four day weeks in some employments. Full-time employment is now almost gone. With regard to job security, there have been redundancies and lay offs with the fear of further redundancies and lay offs. Fixed-term contracts have not been renewed despite previous commitments. This is important because a number of our members are younger members who have taken out mortgages on commitments given under contracts, which have not been renewed.
On health and safety, including mental well-being, our members concerns are around the fear of the virus, adequate and safe procedures, and about proper PPE.
Some employers are using the pandemic to enforce work practice changes which were initially sought prior to the virus and had no relation to the pandemic. They are using the pandemic as an opportunity. Unless assistance is given to the sector, the long-term impacts are likely to be greater than those experienced so far, impacting not only the industries directly affected, but those indirectly affected in the local supply chains and communities local to airports and production and-or maintenance facilities.
In terms of health and safety, and as mentioned earlier, our members have genuine fears for their health and safety as they go about their work in the airports, be that direct interfacing with customers or working on equipment and facilities used by customers. Employers must implement and maintain best practice in the following areas: provision of proper personal protective equipment or PPE; adherence to proper procedures and policies; clear signage and traffic or workflow maps; adequate sick leave to ensure their workers who are unwell do not hide their symptoms and continue to work in order to maintain their income. While not prevalent among State or semi-State employers, this is a concern among subcontractors and service providers; facilitate rapid testing for all passengers and all staff; ensure follow-on checks to ensure arriving passengers isolate, as required, and report, as required; and ensure full contact tracing for all passengers and staff.
Connect Trade Union welcomes the new EU traffic light system primarily as a more accurate and up-to-date measurement system on Covid infection rates in countries providing passenger throughput in our members places of work, and thus offering opportunities to react faster and put in place measures to safeguard our members in their place of work and, by extension, their families and the communities in which they live. Connect Trade Union calls for further supports for the aviation industry to facilitate the following: continued employment; enactment of a comprehensive maintenance programme to take advantage of the current availability of plant and machinery on downtime; prepare the sector for the expected upsurge in travel once the virus subsides and-or a viable vaccine becomes available; and provide all the health and safety measures that I outlined earlier.
The Connect Trade Union welcomes this opportunity to address the committee and I hope members will take our concerns into consideration during their deliberations. While our members in transport and aviation, in particular, continue to work through the pandemic, and will continue to work, all our recommendations must be put in place to ensure their work is safe work.
In terms of earnings and income security, Connect Trade Union is seeking that the employment wage subsidy scheme, EWSS, is extended and improved to ensure employment is maintained in the industry to best cope with the upturn once it comes.
In conclusion, I will make the following points. No worker should be made compulsorily redundant while his or her employer benefits from any Government subsidy during the pandemic. No permanent reduction should occur in any worker's terms and conditions of employment unless by collective agreement while his or her employer avails of any Government subsidy during the pandemic. The EWSS must be increased to 85% of a worker’s net pay pre-Covid similar to the German Kurzarbeitsystem, which is a short-term work system that is negotiated with worker representatives through their trade unions and the payment subside goes directly to the worker. It is generally accepted by economists that the Kurzarbeitsystem was the single greatest contribution to Germany recovering quicker than another country in the 2008 recession. That for any worker on lay off who cannot avail of voluntary redundancy, due to the Government’s temporary suspension of section 12 of the Redundancy Payments Act, that the period of lay off should count as service. Shannon Airport must be returned to be part of the Dublin Airport Authority as we believe that separation has been a failure. We seek the full implementation of the aviation task force report and the full implementation of all the health and safety measures that I have outlined.
On behalf of our members, I thank the committee.
Mr. Matt Staunton:
I am accompanied by Ms Ashley Connelly. As deputy secretary general, I speak on behalf of thousands of aviation workers who work in airlines, the Irish Aviation Authority, airports and other providers.
The aviation industry was the first to feel the impact of the arrival of Covid-19 in Ireland. When restrictions on movement were first introduced in March nobody quite foresaw the sustained effect the pandemic would have on the industry. A short, sharp shock was considered a best case scenario. However, eight months on commercial air traffic activity continues to operate well below 20% of capacity.
Irish aviation was one of the first industries to recover from the 2008 economic crisis. If we take, as a guide, the numbers travelling through Dublin Airport, it took seven years to recover from the impact of that crisis. Today, there is a very real possibility that aviation will be one of the last industries to emerge from the current crisis. Irish aviation is at risk of being left behind as the rest of the world moves on. This has very serious implications for the national economy and 140,000 quality jobs supported by aviation in airports, regulatory bodies, international air traffic support and airline operators as well as the industries, and local economies, that rely directly on the industry. That is not to mention the 330,000 jobs in the hospitality sector that the aviation industry feeds.
Ireland is a major force in worldwide aviation. We have a higher citizen aviation travel rate than any other EU member state while our connectivity to the rest of the world plays a crucial role in attracting inward investment. The Department of Enterprise, Trade and Employment has acknowledged that the Irish aviation sector has experienced a larger decline than anywhere else in Europe. It is, therefore, crucial that we act collectively to ensure that the industry not only survives the impact of this current crisis but is in a fit state to perform robustly as safe international travel resumes, and guard against the offshoring of work currently delivered by Irish workers.
Ireland's long overdue decision to integrate into the EU traffic light system for international travel this week marks a first step in terms of preparedness. The State's significant financial support, which has allowed aviation employers to retain staff on payroll, has also been crucial to safeguarding the industry's state of readiness for recovery. These are important measures. I would love to be able to say that they are enough but the importance of the aviation industry, to Ireland's economy, demands that a great deal more intervention is necessary.
While we wait, with a bit more optimism this week, on the arrival of an effective vaccine the commencement of pre-departure Covid testing for passengers flying out of Irish airports is a welcome development. However, with a cost per passenger starting at €149 per test, this may inhibit any real progress. In the meantime aviation workers face the prospect of prolonged reductions to working hours and pay, increased risk of temporary lay offs and an uncertain future while struggling to pay rent, mortgages and other bills.
Fórsa's mission since the pandemic struck has been to work closely with all aviation employers to maximise job protection, members' pay and members' conditions. Success in this mission is only possible through significant and continuing Government support and intervention.
The situation for aviation is getting worse not better during this latest phase of tackling the pandemic. We are all stakeholders in this industry and cannot afford not to act. We are here today to deliver the message that the Government must create all the supports necessary to ensure Ireland's aviation industry can withstand the current crisis and continue to play its crucial role in supporting the Irish economy. However, any State support to the industry must be conditional so no compulsory redundancies or offshoring of services, or permanent attacking of conditions. We fully agree with our colleagues from Connect Trade Union and SIPTU that Shannon Airport should be reintegrated with the DAA.
Dr. Catríona Cahill:
I thank the committee for the invitation to speak at today's meeting. We are all aware of the impact Covid-19 has had on the aviation sector. Over the past number of weeks, the committee has heard from several witnesses that have attested to a fall in airport passenger numbers of roughly 80% by the end of this year, and that the aviation sector is unlikely to fully recover from the fallout of the pandemic before 2023. As it stands, the reinstatement of routes lost to date will be based on commercial decisions taken by airlines. During the recovery there is a risk that airlines will focus on capital airports given the size of their catchment area. This will have serious implications for the timeline of the restoration of routes in regional airports and, as a consequence, the speed of the economic recovery.
This is concerning not only for the aviation sector but also the many businesses and organisations that depend on the operations of the airports within our regions. As a small island economy connectivity is crucial. Regional airports, in particular, play an important role in not just attracting foreign directive investment, FDI, to a region but also its retention. Furthermore, regional airports make significant contributions to the national economy. For example, Cork and Shannon airports contribute approximately €1 billion and €3.6 billion, respectively, to the Irish economy.
Limerick Chamber, with our colleagues in Ennis, Galway and Shannon chambers, which together represent 1,200 member organisations supporting 105,000 jobs, recently met the Minister, Deputy Eamon Ryan, and the Minister of State, Deputy Naughton, to discuss our concerns regarding the future of Shannon Airport. We welcomed indications from the Minister and Minister of State about their commitment to supporting regional growth and put forward several short- and long-term requests in support of the aviation sector's recovery, including the implementation of the aviation recovery task force recommendations. Further details on these requests are included in the briefing documents. We acknowledge that all airports are currently benefiting from the employment wage subsidy, EWS, scheme, commercial rate waivers and that Shannon and Cork Airports have received capital funding in budget 2021. The announcement on Tuesday of an additional support package worth €50 million to support the aviation sector in the short term is very welcome.
Since the onset of this pandemic, we have urged the Government to be strategic in its response to the crisis. Covid-19 has shone a light on some of the most fragile elements of our economy. As a society, we face a number of challenges, particularly with regard to ensuring that this crisis does not exacerbate existing inequalities or, more particularly, regional imbalances. This is not a region versus Dublin argument. For Ireland to thrive, Dublin needs to thrive, but so do the regions. These need not be competing interests. National policy recognises the key role that airports play in supporting growth in the regions, yet some worrying trends have begun to emerge in recent years, particularly as regards national passenger share. Between 2013 and 2019, passenger numbers at Shannon grew by 270,000 and in Cork by 342,000. Dublin Airport in the same period, however, exhibited growth in passenger numbers of 12.8 million and last year won 96% of all new passengers into Ireland.
In light of this worrying trend Limerick Chamber commissioned Copenhagen Economics to carry out a review of national aviation policy and its impact on Shannon and other regional airports. The findings were presented to the then Taoiseach, Deputy Varadkar, and then Minister for Transport, Tourism and Sport, Mr. Shane Ross. No one could have foreseen the devastating crisis that would unfold in the months following the report’s publication. A more detailed overview of the report’s findings is included in the committee's briefing material. I will mention the main elements now, but I am happy to take questions on any element of the research during today's session. Copenhagen Economics most significant findings were as follows.
It found the existence of significant regional disparity. Since 2002, GDP per capitahas grown by 8.3% in Dublin while other regions such as the west and mid-west have experienced economic growth rates of less than 3%.
Recent developments in passenger numbers show that the capacity at Dublin Airport is increasingly under pressure, whereas the capacity in regional airports is increasingly underutilised. The spare capacity of regional airports needs to be actively leveraged in support of a balanced approach to economic growth, with an attendant reduction in pressure on Dublin as a consequence. The dominance of Dublin Airport in an Irish context should not be viewed as a natural state of affairs, and such dominance is certainly not common in the EU. Other small open economies, where a similar concentration in market share has been observed, have implemented policy initiatives to counteract the dominance of the national airport and mitigate negative impacts on other airports. Schiphol is the only national airport with a larger share of the total number of passengers than Dublin, and Dutch aviation policy has recently capped the number of aircraft movements through the national airport to alleviate bottlenecks in and around Amsterdam. Similar intervention by governments have been seen in other countries, most notably, but not exclusively, Austria.
There is no level playing field between State and private airports. Both Cork and Shannon airports have historically been excluded from accessing capital supports under the regional airports programme, despite meeting EU criteria for such desperately-needed aid. To give an example, Shannon Airport, a State-controlled airport, utilised its own resources and borrowings when upgrading its runway at a cost of €15 million, whereas private airports can access 75% of the funding from the State for similar projects. The recent €16.5 million capital funding announcement for Shannon and Cork is helpful but it neither remedies the issues of the past nor provides comfort for future needs.
National aviation policy in its current form does not support Project Ireland 2040. While national and regional policy, that is, Project Ireland 2040 and the regional spatial and economic strategies, recognise the strategic importance of airport infrastructure for economic growth, no targets have been set for the development of airports outside of the capital. Furthermore, no formal links exist at present between route development and foreign direct investment, FDI, strategy despite a clustering principle currently being put forward as the key theoretical foundation for future economic growth in the regions.
If we are to address regional imbalance in a serious fashion, the patterns that have emerged in the airports sector must not be allowed to continue. In the midst of this crisis we should take the opportunity to address existing issues so that our new normal will not just replicate a damaging status quobut instead support targeted policy actions that develop regional economies. What might this look like in the case of the airports sector? We should, of course, start with the low hanging fruit such as allowing Cork and Shannon airports official access to the regional airports programme, implement a fund to support route development from regions outside of the capital and ensure that Project Ireland 2040 and enterprise policy align with aviation policy. More challenging reforms relating to the potential redistribution of traffic are medium- to long-term objectives, but it is crucial that the necessary discussions begin now so that this can soon become a reality.
I welcome the strong contributions from our guests. I am struck by the recognition of the union representatives that separation from the Dublin Airport Authority has not worked. It is well known that I was one of the few politicians at the time who spoke out against it. It should not have happened. Notwithstanding that, I do not believe that the response should be to put Shannon back under the DAA. What is their view on creating an overall airport authority with all three State airports under its remit, whereby they would work in a co-operative way so one is not set off against another as we try to rebuild our aviation sector?
It is clear that aviation, hospitality and tourism have suffered most as a result of the pandemic. If we are to start to rebuild those sectors, we will have to do it in a way that ensures, as Dr. Cahill said, we look to the medium term in terms of the distribution of passengers. There is an opportunity to do that now, when we are starting from such a low base. That is probably one of the first steps that must be taken. There should be a quick decision that the three State airports will come under one super authority, as was the case in the past under the old Aer Rianta, with an independent board. There should not be a situation where Shannon is dependent on the board and management of Dublin Airport Authority for its future direction. There should be devolved responsibility, with independent boards at each airport with the capacity for independent management decisions, but under the overall structure of an airport authority. I have in mind the model of CIÉ. CIÉ is the overall umbrella for public transport and acts not necessarily as a co-ordinator but as an umbrella, under which there are Dublin Bus, Bus Éireann and Iarnród Éireann. While there is some competition between them, it is managed in a controlled and regulated way.
The hawks that exist in the commercial sector are few and far between now in terms of the future of aviation. When one has people from the extreme end of commercial aviation, as I would describe Mr. Wilson, who appeared before the committee and I am sure he would be happy enough with that characterisation, talking about the necessity for State support, it is time to take a closer look. What are the witnesses' views in regard to an overall airport authority and how that might play out? What are Dr. Cahill's views of what would be acceptable for the chambers and their members? Perhaps Ms Ryan would respond on behalf of the members she represents who have a major role in foreign direct investment, FDI. Would they have a negative view of bringing the three airports together under a common umbrella, while recognising the size of the State and that naked competition has not worked? There was a view that Shannon would act in a competitive way and would be able to compete with Dublin, but that has not happened, sadly.
Mr. Neil McGowan:
I thank the Senator for the question. We would be broadly supportive of all the points he outlined. For Shannon Airport to be a success, it must be managed by the same entity as manages the other State airports in Dublin and Cork. We would be broadly supportive of a national aviation authority.
Our view on what needs to happen to Shannon is not that it becomes a bridesmaid to Dublin or Cork airports but that it is very much part of a national strategy for distributing the air traffic among those three airports. The other regional airports such as Knock and Kerry need to be taken into consideration in this regard. The separation and the idea that Shannon could compete on its own has been proven to be wrong. It is something that the unions and the Irish Congress of Trade Unions lobbied hard against at the time and we absolutely recognise the Senator's long-standing position on that. Our view is that it is certainly not about Dublin managing everything and the crumbs from the table going to the other airports. It is about having a combined, joined-up structure in place such that when the airports go to negotiate with the airlines, Shannon is not left out on its own as it unfortunately has been. When one contrasts the experience Shannon Airport has had with the one Cork Airport has had over the years since separation, it is quite stark. Cork Airport, while part of the DAA and with Cork representatives on the board - one of the SIPTU worker directors is an employee in the airport - was thriving and was the fastest-growing airport in the country prior to the pandemic, whereas Shannon was not getting anywhere near the passenger numbers it had until 2007. We would, therefore, certainly see a place for a national aviation authority and some independence around how those airports are run but with an overall joined-up strategy.
In relation to the boards, it is absolutely vital that there be worker representation on them as well.
Mr. Paddy Kavanagh:
I agree with everything Mr. McGowan has said on behalf of SIPTU and basically on behalf of all the unions. It is important to look at the way Dublin and Cork are structured and the input workers have into that. It makes more sense. Speaking from the perspective of a union like ours, which has members in Irish Rail, Bus Éireann etc., the overall, co-ordinated, national approach is best.
Mr. Matt Staunton:
I agree with everything my colleague, Mr. McGowan, has said but the big message today should be a joined-up approach to saving Irish aviation jobs. It is crazy that there are two companies both going off and doing their own thing on testing etc. It shows the frailty of the whole thing. We should get on with a joined-up approach to saving aviation.
Mr. Evan Cullen:
There is no question, Chairman. Rapid antigen testing should be made mandatory at the airport for all departing passengers, all arriving passengers and everyone working at the airport on an almost-daily basis. That is the best way to rebuild confidence in the industry and get people back flying. It is important however that we say it is not PCR testing, which we accept is the gold standard, but rapid antigen testing, which costs between €5 and €10 per test and gives results between 15 and 50 minutes. That is our position. The Irish Government should be moving towards that position. We accept that the gold standard is PCR testing, however we belief 100% mandatory testing of the silver standard is better than a voluntary position on the PCR standard. That is the easiest, best and safest way to get back flying and to give people the confidence to go back flying. I regard with real regret the position put by the Government in the last few days. It could have accommodated Christmas for an awful lot of Irish families, had it adopted and embraced the rapid antigen testing for everybody for this Christmas.
We had the Minister, Deputy Eamon Ryan, before us. For orange and red countries, PCR testing should be made mandatory to ensure people can come home for Christmas and we should expand the capacity at a national level to ensure tests can take place, obviously at a reasonable cost.
We will finish up on Senator Dooley's questions with a brief response from Ms Ryan.
Dr. Catríona Cahill:
I am aware of the time constraints so I will be very quick. We are supportive of an overall airport authority. However, there needs to be caution here as well that it should be the more historical format of Aer Rianta, rather than the Aer Rianta structure we had just prior to it being turned into the Dublin Airport Authority, because they are pretty much the same thing.
I highlight that in the case of Shannon's separation, it has not been depicted in an appropriate way because in terms of numbers, since separation from the DAA group, passenger numbers have grown by 22%. In Cork, during the same period they grew by 11% versus 63% for Dublin. We have to be very cautious here about asking for Shannon to be absorbed back into the DAA group because while Shannon was part of the DAA group, its market share fell from 13% to 5% and the exact same has happened with Cork Airport while it has been part of the DAA. We also have to bear in mind the significant underinvestment in Shannon that led to Shannon Group having to fund the €15 million runway; that runway came up for renewal while it was still part of the DAA group. In the same way we have heard in recent weeks about Cork's runway being due an upgrade for 30 years. As we have seen similar underinvestment in Cork, I would be careful about saying the solution here is for Shannon to go back to the DAA but I do take Senator Dooley's point that we should look to an overarching airport authority where the focus, as in the past, is not predominantly on growing Dublin Airport and that the overall approach is much more balanced.
I thank all the witnesses. I thank the memberships of the union groups for their essential work right throughout the Covid crisis in what must have been very difficult circumstances for them given the devastation to the sector. I just wanted to extend that thanks. I want to afford the representatives from SIPTU and Fórsa the time to address the issue of the temporary wage subsidy scheme, TWSS, and the EWSS as they have been employed in the sector. I have been contacted by scores of workers from the two unions who continue to struggle to get access or to get arrears paid. Will the representatives outline their experience of managing that situation, the impact on their members, what the current state of play is and what they are asking of the Government or relevant authorities? Perhaps Mr. McGowan can begin.
Mr. Neil McGowan:
Unfortunately, while there were members on the TWSS, particularly in Aer Lingus, those who were in receipt of that payment were working substantially fewer hours than they normally would.
The 30% working arrangement was in place and many hundreds of Aer Lingus workers made applications to the Department of Social Protection to claim short-time working payments as well. It has been an exceptionally frustrating and difficult time for people because there has been no real clear direction on it. We wrote to the Minister on a number of occasions and have met some of the Department's officials and while it has not been said outright, the general information that has come back to us is that while people were in receipt of the TWSS, they would not qualify for other payments. However, people have not received decisions from their local offices and it is completely unacceptable that they have been left in limbo for such a considerable amount of time. While they were on the TWSS, the €350 was essentially covering 30% of their wages but they were not receiving any other income from the company or, as yet, from the State. When people's income has been hit to that extent they should have the opportunity to avail of short-time working supports through the Department of Social Protection. They would be able to avail of those supports in any other circumstances if they were not in receipt of the TWSS.
Since we moved to the EWSS on 1 September, the situation has become a little more straightforward and people have been able to claim the short-time working supports. Working hours have increased to 60% now and people are able to claim the short-time working supports from the Department of Social Protection. In terms of our requests, given that it is likely that people will continue to work fewer hours than their contracts provide for over the short to medium term and their financial commitments, including mortgage and loan repayments, dictate that they need to be earning, a short-time working scheme needs to be introduced for aviation. The German model allows workers to receive 60% of their pay for the hours they are not working and full pay for the hours they work. That would create a scenario where somebody who suffered a 30% reduction in working hours would only suffer a 10% reduction in income. There have been some tentative positive steps regarding the introduction of testing and some welcome positive news on a potential vaccine but if there is to be some light at the end of the tunnel then people working in the aviation industry need every support to get them through. This period has been exceptionally difficult and we have hundreds of members who are really struggling to pay their mortgages, as is the case with all of the other unions at this meeting today.
Ms Ashley Connelly:
I thank Deputy O'Rourke for his question. I represent cabin crew with all airlines and I cannot overstate the stress and anxiety that our members have experienced since the onset of this crisis. I have discussed with members their sleepless nights and their extremely frightening experiences. The Deputy asked about the TWSS and accessing the short-time working scheme. There is no doubt that the Department must provide clarity. The individuals I represent are so concerned about what the future holds for them and the Department has a responsibility to provide them with the necessary information. If they are on shorter working hours and are not working their contracted hours, a short-time working scheme should be made available them. A decision must be made and our members deserve a clear response from the Department of Social Protection.
Our members are trying to seek alternative employment but because of the way their rosters are being drawn up, they do not know what their next month's work schedule will be. I have heard of people who have been offered jobs but when they say they work as cabin crew in the aviation sector, the job offers are withdrawn. Our members are trying to improve their own income security but they are meeting obstacles all of the time. There is an onus on us all, a collective responsibility, to put in place a real plan to shore up a short-time working scheme and to reconsider the appropriateness and longevity of the EWSS for this sector. Our members are suffering every day and are really struggling. The mortgage break gave some relief but that has now ceased. People are also worried about what the payment breaks mean in terms of what they will have to pay back on their mortgages. These are real fears and our members need clarity from the Department. Such clarity must be forthcoming as a matter of urgency. We must also have engagement on an extension to and further development of the EWSS for those working in aviation. I urge the Government to face up to its responsibility and to start engaging on a realistic plan that will bring certainty to those working in aviation. There is no line of sight on recovery and our members need certainty, which is not asking a lot.
I welcome all of the witnesses to this meeting. We are compiling a very important report and I took the opportunity to extend an invitation to Limerick Chamber to come before the committee today to discuss Ireland's aviation policy. The world has changed because of the pandemic and aviation has also changed but we now have an opportunity to have a root and branch look at the sector and at aviation policy. I am particularly interested in the Copenhagen Economics report commissioned by Limerick Chamber which looked at this question. I am interested in the situation in other countries. In Holland, for example, the Dutch Government has an aviation policy that is focused on redressing the imbalance at Schiphol to the betterment of other airports. I ask Dr. Cahill to expand on that. The report also identified a number of strategic routes that would be beneficial to the mid-west and western regions including to Frankfurt, Charles de Gaulle and other airports. I ask the witnesses to elaborate on the benefits of direct daily flights to Frankfurt from Shannon, for example. The report makes a very strong case for the need to underpin strategic routes with money from bodies like the IDA rather than just from Tourism Ireland. I ask them to expand on that point too.
Dr. Catríona Cahill:
I thank the Deputy for his questions and agree with him that now is quite a good time to look at Irish aviation policy given that its last iteration dates from 2015. Aviation policy is generally due for review every five years but as far as we are aware, at the end of last year the plan was to review whether Cork Airport should remain as part of the Dublin Airport Authority, DAA. That was on the cards because a commitment was made previously that Cork Airport would be looked at after Shannon Airport had separated from the DAA. There is merit in extending the review of aviation policy in 2020 to look at wider issues.
Schiphol Airport is an interesting case study. In my opening statement I spoke about the fact that an aircraft movement cap was introduced. In 2018 an advisory board also recommended that non-hub related traffic should be redistributed to other airports in the Netherlands. This recommendation was made for a number of reasons, one of which was environmental impact and the question of how big is too big in the context of airports. That is where the recommendation came from and in 2019, the Netherlands took the first step towards addressing that and redistributing some of the traffic. They got agreement from the European Commission for traffic distribution rules between Schiphol Airport and Lelystad Airport. The overall change that has occurred is quite significant. In its analysis, Copenhagen Economics looked at airport concentration in other European countries and the Netherlands was the only country which had a higher significant market share held by the capital airport than Ireland.
The message that Copenhagen Economics was trying to get across is that action is being taken elsewhere to reverse these damaging patterns that have come about in recent years.
With regard to the second question, on strategic routes and in particular Frankfurt, within the Copenhagen Economics study the Frankfurt analysis showed that if a regular route were developed, with services twice daily and once a day at weekends, the value to the regional economy - not the full economy - would be €412 million and could help support 2,500 jobs, which is quite significant. This links in with the final question and what the Deputy highlighted with regard to Tourism Ireland and the fund that is there at the moment. In 2019, the only support for routes from regional airports was a marketing support led by Tourism Ireland. In budget 2020, an additional support package of €2.5 million was given to help develop routes from regional airports but we have not seen much of that, given circumstances that have come about in the meantime.
In its report, Copenhagen Economics highlighted the disconnect at present between aviation policy in Ireland, and our foreign direct investment strategy and enterprise policy. That the responsibility to date has been Tourism Ireland's shows we have an over-emphasis on the development of tourism routes rather than business routes. This will become an issue in the long term because our regional economic policy greatly depends on the idea of clustering, which I mentioned earlier, and how we agglomerate economic activity within a particular region. As of now, there is no connectivity to identify clustering opportunities in the regions against what types of routes are being developed by the airports in the regions, and this disconnect needs to be addressed. When we speak to the creation of a route to support strategic development, we are drawing from what Copenhagen Economics has stated with regard to the oversight for route development extending beyond Tourism Ireland, with other organisations such as IDA and Enterprise Ireland perhaps having more of a say on how that develops.
I thank all our guests for appearing before the committee but, in particular, I welcome those from Limerick Chamber. At a committee meeting a number of weeks ago, I proposed we would invite them to present the Copenhagen Economics report, which was launched 13 months ago but whose relevance has been heightened, given the current crisis in the aviation sector. It provides the only credible alternative policy for aviation that I have yet seen. There is perhaps too much on this meeting's agenda and in some ways it is an injustice that the Copenhagen Economics report and the depth of information therein have been confined to such a short speaking slot. I propose, therefore, that we invite those guests back on another occasion to dig deep on this. There is some very concrete material and it has been researched on a pan-European and Middle Eastern basis. There are even some data relating to potential new routes, from Shannon Airport to Dallas and other such locations. I would really like those guests to appear before us again.
Separation has not worked for Shannon Airport. A certain number of passengers coming into Shannon Airport was recommended in the Booz report in order for it to be a sustainable, stand-alone airport but, even in its best years, Shannon Airport did not attain that. On that metric alone, the separation has not worked for Shannon Airport. I do not believe that going back to that old relationship with the DAA would serve Shannon Airport well. Dublin Airport had a predatory view of Shannon Airport and that has continued even more in recent years since the airports have separated. I do not think Shannon Airport would fare well under the wing of the DAA. The model we should consider is something akin to that in Britain since the 1960s, which has been accentuated in recent years, whereby the British Airports Authority was set up to lead and manage centrally the state-owned airports.
In 2018, which was probably one of the last really good years for aviation, the DAA made significant profits and paid a €40 million dividend to the State. If nothing else, and if the State does not overhaul aviation policy, would our guests agree that the €40 million dividend should be ploughed directly back into Shannon Airport, which is separate from the DAA, to keep it going? I refer also to Knock and the other small airports. Should the dividend to the State be ring-fenced and ploughed back into aviation?
Brexit poses a number of challenges and opportunities. On challenges, I would like to hear in particular the views of Dr. Cahill and IALPA. Do they believe that public service obligation routes from Shannon Airport to the UK and continental Europe are now required beyond 1 January, when we will be even more geographically peripheral and our need for connectivity will be all the greater? As for opportunities, do our guests believe that Brexit may present an opportunity for enhanced cargo into and out of Shannon Airport?
We have been told the north runway at Dublin Airport will be complete and probably operational in the second or third quarter of next year. In spite of everything we have said during the meeting and of everything the Copenhagen Economics report laid out in respect of a future for Shannon Airport, will that further increase Dublin Airport's share of the market? Have there been any projections of how the runway will damage and impact the other airports?
A report in today's edition of the Irish Independentquestions antigen testing and how accurate it is. I very much welcomed what happened this week in respect of funding and setting up a testing regime that is now operating at Shannon Airport. Nevertheless, it needs to be a gold standard test to give passengers the confidence to book tickets and fly. Our guests from IALPA might comment on that.
Dr. Catríona Cahill:
The Deputy commented on the Booz report and the number of passengers it projected as the level that Shannon Airport needed to reach to be sustainable. While it is correct that the number has not been reached, two other aspects were put forward for the sustainability of Shannon Airport within that report, one of which concerned growing cargo operations, which links with one of the Deputy's latter questions. The second aspect involved allowing for cross-subsidisation across the group but that has not been allowed. We have to bear in mind that certain conditions did not come into play and that has to be considered in the context of the wider aspect of Shannon Airport's growth projections and patterns that have emerged.
On cargo, the previous time there was significant discussion of cargo expansion at Shannon Airport was in 2012, when the airport was still part of the DAA group and the DAA had entered into discussions with the Lynx group. The official separation of Shannon Airport took place in December 2012, at which point the management structures of Shannon Airport decided they would not progress with that plan but instead focus their attention and resources on developing more routes from the airport.
Copenhagen Economics did not examine the issue of cargo in detail for two reasons, one of which was it was originally outside the scope we had requested. Moreover, in order for it to carry out a legitimate analysis, it would have needed access to particular information that is currently deemed to be commercially insensitive. It nonetheless stressed in the document that the area warranted further attention, particularly because of opportunities that could present themselves after Brexit. From our dealings in other areas and sectors, we know there are opportunities, especially for pharmaceutical companies currently based in the UK that now need access to European markets. They are looking to Ireland and this could help with opportunities for an international cargo hub being developed-----
Dr. Catríona Cahill:
On the question about ring-fencing the €40 million dividend, that is the route being taken in Finland, where Helsinki has the only profitable airport within the country and supports all the other airports. Finland, however, does not have a balanced regional development national policy, and we do. If we were to go down that route, it would be contradictory to what we are trying to achieve in Project Ireland 2040.
Mr. Evan Cullen:
It would have been helpful if we had known we were going to have a discussion about Shannon Airport and the Copenhagen Economics report. There was certainly no mention of that in the invitation letter I received.
IALPA absolutely supports public service obligations, particularly during the current pandemic, to provide direct access cargo through both Shannon Airport and Dublin Airport for all foreign direct investment companies. At the moment, Aer Lingus is subsidising connectivity between Ireland and the US for big pharma and the high-tech sector. It is losing money by making sure Ireland remains connected to the United States and Europe, particularly on cargo operations. There should be a rethink on how we do cargo, particularly freighter cargo, as opposed to belly cargo which is fundamentally different. Shannon Airport provides opportunities in that regard for growth and the development of a major global hub for freighter cargo as opposed to belly cargo.
On the issue of testing, as I stated, our position is that antigen testing is needed because it is quick and cheap, but also because if it is imposed on 100% of departures and arrivals, it would have a greater benefit and enable more screening than the voluntarist nature of the PCR testing the Government is currently promoting. In our view, it is ridiculous to expect people who fly into the country to get a PCR test voluntarily and at their own expense at some remote private operator and to then decide whether they will self-isolate for five days or 14 days. Mandatory testing for everybody at airports is needed.
To come back to the Copenhagen Economics report and the comparisons made with Amsterdam, all present know that the Netherlands has three times the population of Ireland but only approximately half its area. A much more integrated and holistic policy is needed, rather than people being invited to a meeting on Covid and its impact on the sector and then being effectively hijacked, as has been the case here today.
Mr. Alan Brereton:
I will answer briefly on that issue. We welcome the announcement of the support package for all the airports in Ireland, namely, Shannon Airport, Cork Airport and Dublin Airport. However, the future of these airports is not dependent on Government support; it is dependent on having airlines to serve them. We represent pilots of all the four major Irish airlines, all of which are in discussions on redundancies or are in the process of moving aircraft out of the country or have already moved them. We need a strategy to get us out of this. From where we stand, that strategy is not worrying about who will manage the airport five years from now; it is having airlines to serve those airports. We need the Government to develop a strategy that rebuilds confidence in aviation and we believe that is wholly dependent on rapid testing. We urge all members viewing these proceedings to really focus on how we get out of here rather than worrying about mistakes that have been made in the past.
With respect, there was no intention in any way to hijack the witnesses. We were looking at aviation in the round. I acknowledge the last point made by Mr. Brereton in respect of testing and about the airlines. We need to move on. I call Deputy Ó Murchú. We are very limited on time.
We accept the necessity in terms of the connectivity that an island requires in particular. It is absolutely vital that we have an aviation sector. Reference was made to the significant number of workers in the sector who are under severe pressure financially. My next question is for the union representatives in particular and relates to their dealings with the employers and the Government. They stated that some of the difficulties related to the TWSS and referred to the changes they want to the EWSS, as well as discussing protecting workers' rights. I assume they fear this period could be used as a means of undercutting workers' rights. I ask them to deal with the plans and interactions they have had with employers and the Government. If possible, I will get back in for another question at the end.
Mr. Paddy Kavanagh:
The Deputy raised a very important point regarding workers' rights. I mentioned earlier that in Germany the Kurzarbeitsystem is run in consultation with workers and their representatives, that is, their trade unions. The systems they put in place are much more closely aligned to the needs of workers, the industry and employers. That is quite important and we have not had it here. Under that system, the subsidy goes directly to the workers, which is also important.
On the importance of testing, our members welcome the traffic light system. There should not be a big argument about rapid testing versus PCR testing. Reference was made to countries that are on the red list, but under the traffic light system there are also grey countries, where nothing is known about the Covid situation in the country or it is not providing information.
Mr. Paddy Kavanagh:
On workers' rights, I will mention two impacts. The first is the associated health risks. The second is the redundancy issue I touched on. As a result of the Government suspending section 12 of the Redundancy Payments Act, we have a situation whereby workers have been laid off for more than four weeks and should be able to apply for redundancy under that Act but cannot do so. That is also the case for workers who wish to seek redundancy after six weeks of a combination of being laid off and being on short time. Even if they wish to apply for redundancy, they cannot do so but, in spite of that, the time they are out of work is not counted as service. That should be taken into account. It is very important to our members. If they are going to be denied the right to seek redundancy, at least let that period of time count as service for when the calculation-----
Mr. Paddy Kavanagh:
On the issue of worker's rights and the importance of testing, some people working in these areas for subcontractors or small employers are reluctant to report symptoms because they would suffer financially for so doing. That arises due to the difficulties they have at this stage and the difficulty with the system. That has to be taken into account as well.
Mr. Neil McGowan:
I will be brief. The experience with employers to date has been mixed. The responsible employers have entered into negotiations and collective agreements with us, aimed at trying to maintain people's incomes throughout the period. The one thing that is clear is that as the wage supports have changed, whether through the initial decrease when moving from the TWSS to the EWSS or the most recent increase in the employment wage subsidy scheme benefit that was available to employers when the country moved to level 5, that has enabled us to increase people's incomes with employers. That recently happened at Aer Lingus. If we are to adopt a genuine short-time working scheme in consultation with employers, the Government and trade unions, that would leave us in a position whereby we will be able to protect people's incomes.
Mr. Evan Cullen:
From an IALPA point of view, we have had a mixed response from employers. One of the points I should highlight to the committee and which is important for the political system to understand is that pilots have been made redundant by an Irish company which uses the Irish courts for examinership and uses Irish employment law to make people redundant. After making those people, who had served the company for more than 20 years, redundant on a Friday, it advertised their jobs in Denmark the following Tuesday. It is far easier to make people redundant under Irish employment laws than it is in other EU jurisdictions. It was a serious kick in the teeth to people who had served that company well for more than 20 years to be told their jobs were gone and to then have those jobs re-advertised the following Tuesday in another jurisdiction. That was our experience. I will leave it there for the sake of time.
Mr. Matt Staunton:
We too have had a mixed experience with employers. With reasonable and responsible employers, we have come to forms of concession bargaining with temporary pay reductions and temporary hour reductions. We have managed to retain the main terms and conditions in the hope that there will be jobs for people to come back to.
However, due to inaction on this crisis in this country, these employers are coming back to us for more and that is scary.
The reason we are here is to appeal to committee members to get the message through that this piecemeal policy of dealing with this crisis in aviation is not working. We are falling into the trap again today. There was an aviation task force report, which the Government has sat on since July. There has been at best a cherry-picked approach to it and we need a joined-up approach. For example, we all knew there would have to be testing and a traffic light system. If we had that a few weeks ago, around the time of the budget, I wonder whether a certain airline would have closed its bases in Cork and Shannon. We need a single, joined-up approach to deal with this crisis and get our members back working.
I thank the witnesses for their contributions. I recognise the role played by the workers and union members in our airports who have made gargantuan sacrifices, adopted new work practices and endured lower pay and job losses. I thank them sincerely, particularly the members in Cork. All of us on the committee are acutely aware that the presentations today are about getting planes back in the air, having testing in our airports and ensuring we restore confidence.
I ask Mr. Cullen about the experience of his members in airports in other jurisdictions in respect of testing, quarantining and flying. I ask our union representatives, in terms of staffing and new work practices, what is the primary message to us today about the future of the aviation sector?
Mr. Evan Cullen:
I thank the Senator for the question. Ireland has to date been an outlier not just in Europe but in the western world in its approach to aviation. There is a lack of joined-up thinking. I could list the number of airlines that have received direct state support. For example, Lufthansa has received in the region of €10 billion; KLM, €3.5 billion; Air France, €7 billion. TAP in Portugal has been nationalised. Alitalia has been nationalised. British Airways received credit support from the British Government of more than £300 million. Ryanair and EasyJet have received more than £600 million in credit assistance facility from the British Government. In the US, all the carriers Aer Lingus competes with directly have received in the region of $25 billion in supports. The only airline of note in the western world that has not received any direct support is Aer Lingus. It is the only airline that is subsidising cargo activity to the US to keep our FDI investment intact. It has not received any supports, other than through the EWSS and the TWSS, from the Government.
In other jurisdictions, testing has been introduced at airports. The Canary Islands are the latest to bring in rapid antigen testing. If one goes to the Canaries, one will have to take a test and it will cost far less than the PCR test. Ireland is again the outlier. Ireland and the Government's failure to put in place a properly integrated policy to deal with this problem is the reason the two main airlines have left Cork and Shannon. It is the reason Aer Lingus are going to move aircraft out of this jurisdiction and into the UK. It is the reason Ryanair continues to threaten further movement of aircraft out of the jurisdiction. It is because of Government policy that these things are happening. I hope that answers the question.
Mr. Neil McGowan:
I thank the Senator for the question. Regarding the message that we want to deliver for what the industry needs to get through this crisis, the first thing that is needed is liquidity supports to the employers, including the airports, airlines and another category of employers who employ thousands of people in the aviation industry in this country and unfortunately sometimes gets forgotten, namely, the third-party handlers, catering companies, cleaning companies and so on. One of the aviation task force report recommendations is that liquidity supports be given to employers who had a strong balance sheet coming into the crisis and that needs to happen. Second and most important from our point of view is that the EWSS is altered and improved to provide additional income to people in the aviation industry.
They are the two key messages. The question of testing has been well dealt with but from our point of view the issue is liquidity for employers so that they are still there and we still have airlines, airports and third-party handlers, and wage support schemes that mean that aviation workers who have suffered through this crisis through no fault of their own have an income to meet their financial obligations in the short to medium term.
Mr. Paddy Kavanagh:
I will make a couple of points on that. Larger employers such as the DAA, the main airports and so on have engaged in in-depth discussions. We have not always agreed but we have tried to work together. However, there is an element of trying to go back over all the things they could not succeed with years ago and get it all in now under the guise of the coronavirus pandemic. One anomaly concerns medium to small service providers and contractors who have probably employed many in airports and production and maintenance facilities. All these employers are availing of State supports and, in many instances, refusing access for employees to their union representation to go in and address their concerns. That is wrong. We said in our presentation earlier that companies who are taking State supports should be in a position to let their workers have the rights and representation they should have and deserve. That is an issue.
On testing, with the traffic light system, there is probably the facility to look at the combination of rapid testing and PCR testing based on the traffic light designation of the countries from which those people are coming into the airport.
I stress the issue of worker representation, which is important. A large number of workers are suffering because they have not got access to the people giving them representation. We should be allowed to go in and talk to workers and address their concerns.
Ms Ashley Connelly:
I thank the Senator for his question. I concur with Mr. Kavanagh and Mr. McGowan but I reiterate what my colleague, Mr. Staunton, said earlier. In the absence of a sustainable plan to deal with the longevity of this crisis, we find ourselves engaging with employers regularly and constantly the asks are coming back to the workers. That will not be sustainable into the future and we need to deal with our collective responsibility to address the issues in terms of wage subsidy schemes and into the future. Similar to the issue my colleague, Mr. Cullen, spoke about earlier, cabin crew in one airline were also made compulsorily redundant earlier this year after working decades in a company and giving loyal service. That company went ahead and advertised jobs within a couple of weeks. We need a sustainable plan that also provides protections for workers into the future.
We are operating under constraints as a committee at level 5. This committee requested an additional sitting this week to have our witnesses in. It has led to a long witness list, which is not ideal for us or the witnesses. However, we deemed it essential and I commend the chair and the secretariat on bringing this meeting together.
I thank the Chairman for pulling the three strands together.
Much has been said about the need for a short-time work scheme. I back up that view, which should be reflected in the committee's report. I will bundle my questions together. The first question is directed towards Mr. Kavanagh and then the SIPTU, Fórsa and IALPA representatives might comment also. In his submission Mr. Kavanagh referred to fixed-term work contracts not being renewed and the threat of further redundancies. Many of his members would be the unseen workers of the aviation industry. They are in the hangars and doing work behind the scenes to ensure the planes are ready and keep in the air. Mr. Kavanagh also referred in the submission to health and safety around the airport such as access to PPE, clear signage, workflow practices and safe work practices. With the airport operating at reduced capacity, we may not be seeing the impact that the lack of these practices is having. Even with low capacity, will Mr. Kavanagh expand on the deficiencies in the airport in terms of worker safety? At some stage the airports will recover. If there is anything he wants to add on the temporary Covid-19 wage subsidy scheme and short-time work, I would appreciate that.
Following Mr. Kavanagh's response, the SIPTU and Fórsa representatives might answer my second question on health and safety and the infrastructure that is in place for the workers they represent. With regard to IALPA's call for antigen rapid testing, which we would all like to see, and the physical infrastructure that needs to be put in place, we seem to be miles away from that. What needs to be done to get us to that point? If Mr. Kavanagh would lead off, I would appreciate it.
Mr. Paddy Kavanagh:
I will start by making a brief comment on the TWSS. We all know that this virus was visited upon us at the start of the year, some would say very quickly and others would say we were not sufficiently prepared when it happened because we did not know it was coming. The subsidy scheme brought in at the start of the pandemic was an initial reaction to what the country was faced with. Ten months later, there is no excuse for not having a system that is properly tailored towards workers. To harp on again about the German system or even the Danish system, where one must sit down with the workers’ representatives to agree the scheme, the beauty of the German scheme is that the company pays the workers for the work they do and the state subsidises the hours they lose. While workers could get more, it will not cost the State any more. That is the first point.
We have a few health and safety concerns. We will admit there has been an increase in both the quantity and quality of PPE in recent times. It was not available at the start and that was a concern. However, there are concerns about workflows, workloads and where people in the airports and production facilities go in regard to interaction with luggage, customers, etc. Some places still do not have Covid-19 officers or the required number of safety representatives. That should be examined because if we cannot increase the required number of safety representatives or Covid-19 officers in the current pandemic, when will we get health and safety right?
We would like to see more regular meetings of health and safety committees at which workers could raise those concerns. Our concerns are many. We have full-time staff working beside subcontractors or outside companies which are coming in to assist and there is not the same number of procedures in place. Our guys are working beside those workers and they can see that. We are managing to a better extent the direct workers but there are concerns about contractors and those who are walking in. Some smaller airports do not have any direct staff and maintenance staff are all being brought in from outside. That has to be looked at also.
Mr. Neil McGowan:
I will be brief. On the wage support side, I agree with everything my colleague in Connect Trade Union said. It is the ninth month of this crisis and nine months since the vast majority of aviation workers received a full week’s pay. The impact that has had on people’s personal finances and their mental health cannot be overstated. Essentially, nine months into the crisis aviation has been operating at level 5 throughout. The rest of the country has moved through levels and things have improved, opened up and so on. Since March, aviation has been operating under conditions akin to level 5 and that must be recognised in a tailored wage support scheme.
Regarding the health and safety concerns, we made reference to our concerns in the submission. Our concern is very much around what is likely to happen when the airport gets busy again in terms of social distancing. One of the aviation recovery task force report recommendations was that funding be made available for infrastructure to ensure social distancing takes place and work can be carried out in a safe way. We all know what a crowded security area in the airport looks like. We all know what it is like to queue in a crowded immigration hall. Staff are expected to work in that environment all the time. This issue has not arisen much at this stage because the airport is very quiet, although there have been some very limited examples of it. From our point of view, the issue is very much looking ahead to what is likely to happen when the industry recovers and making sure protections are in place for .people
Mr. Evan Cullen:
I understand the question refers to the infrastructure at the airport. In the three main airports there is space for enhanced social distancing and testing. This simply involves taking out some of the retail areas and using the retail floor space to increase spacing between passengers at the security and immigration areas and also providing rapid, mandatory antigen testing. All of that can be facilitated by reconfiguring the airports and having less retail.
I am out of time but I thank the representatives for their responses. To respond to Mr. Cullen’s point on creating space inside the terminal building, if we get rid of retail space it will impact on retail workers. We want to create systems that will work but I do not want to see other workers lose their jobs. This highlights again the difficulty-----
I thank the witnesses for their concise and informative presentation. It highlights what we have heard already from other witnesses about the serious crisis in aviation and the depressing state of aviation. There are two issues. The first is the interim and the short-term problem and the second is the long-term issues that arise.
On the long-term issues, I absolutely agree with previous speakers that Shannon Airport is in serious trouble. The mid-west economy, which relies on connectivity from Shannon Airport, has collapsed as a result of the effective closure of the airport. As it is currently structured and funded, Shannon Airport is not a viable model and it will have to be looked at. Members representing the mid-west have made the point several times that whereas Dublin Airport continues to expand, Shannon and Cork airports are wilting as a result. A strategic policy decision needs to be taken to divert traffic to Shannon and Cork airports. Unless that happens, these airports will be left stranded.
Regarding the workforce, I understand 600 pilots are receiving no income from their employer, with another 600 on income reduced by 25%. What is happening with cabin crew? Do the witnesses have any estimates for numbers in employment and possible redundancies? I am not surprised at these figures. I regularly meet people in the industry, particularly pilots and cabin crew. Because of the nature of the business, relationships and partnerships are formed. Those people took out mortgages and made financial commitments based on a double income and in many cases, they have a double loss. It is a fight for survival. They are under enormous stress and strain and there is desperation among that cohort of people. They require support and assistance.
It is one thing to get over the short-term problems, but is there a danger that we will lose much of this talent pool to other jurisdictions if they reopen more quickly than we do? Our national response to the aviation crisis is too sluggish. We were slow to sign up to the EU directive and have been slow with testing. There seems to be a line of thinking that an antigen test is not acceptable. I have always said at this committee that we will never get our airports running again, we will not get aircraft in the air and we will not get consumer confidence back without rapid testing. People will not wait around for 14 days. Who will go on a holiday and quarantine for 14 days in the long term? Who will come to do business in Ireland if they must lose 14 days? No one in the business sector will visit Ireland to do business and make investments with that kind of regime in place. We need rapid testing.
Mr. Evan Cullen:
The Deputy is correct. The livelihoods of many households are devastated because many people in the aviation field socialise and have married people in the sector. They are facing catastrophic losses affecting mortgages and other financial commitments.
On the broader question of Shannon, it was a mistake to separate them out. The provision in the legislation that unhooked any obligation to the pensions was also built into the State Airports (Shannon Group) Act and should be reversed. I would like Limerick Chamber of Commerce to support that.
No potential foreign investors will visit Ireland if we are going to be the outlier regarding testing. We must adopt mandatory rapid testing, which would be far better than the voluntarist nature of the PCR testing the Government currently supports.
Ms Ashley Connelly:
I thank the Deputy for the question. Cabin crew are highly qualified staff, whose training is provided to the highest standard. There is a fear of losing experienced staff in the aviation sector. This is a career they have chosen, and they now face a very unknown future. The fear and anxiety our members express to us every day cannot be underestimated.
On the specific question, some of our members in Shannon have been laid off since June and only a small percentage are back in work. One airline has pulled out of Cork and Shannon and will not return until spring of next year. One airline forced our members into compulsory redundancies. As I stated earlier, we now find ourselves engaging nearly on a weekly basis as the situation continues to evolve. It is getting worse instead of better in aviation. We see no green shoots of any possible return to normality.
I agree that testing needs to be cost-effective. We cannot have this as another hurdle preventing people from returning to travelling. We need to consider free testing. Many initiatives have been taken across Europe. We can learn from our colleagues across Europe to develop a sense of confidence in the return to flying. There needs to be collective engagement to develop a plan that looks after the futures of people who have developed their careers in aviation and want to remain working in the sector. They are the most highly trained staff across Europe.
Mr. Neil McGowan:
The Deputy asked about the number of redundancies. There will be thousands of redundancies in the industry. For example, the DAA will make between 750 and 1,000 people redundant in Dublin and Cork between now and the early part of next year. That is a colossal number of jobs by just one employer. That will be replicated across the board and will have an impact on the industry's ability to recover.
We mentioned the structural damage being done to the industry in our submission. That is financial for employers. As regards the skill sets in aviation, people are leaving through redundancy, whether that be voluntary or compulsory. Many people are just choosing to exit the industry because they have spent nine months without a proper income and cannot afford to meet their financial obligations. They have had no choice but to leave a job that they are highly skilled at, qualified for and certified for, and go to work at something else. We will not get those people back to the industry, which will affect the ability of aviation in this country to recover. That will ultimately affect the country's ability to recover economically from this pandemic.
Mr. Paddy Kavanagh:
Our members have suffered from redundancies and lay-offs. It is worse in some airports and employments than in others. We also have many members in component production in the aerospace industry in a few plants in Ireland. We have lost skilled people who will not be easy to replace.
We need an holistic approach in which rapid testing has a part to play. For example, in June, one of my sons returned home after five years in Australia. Another son came home two or three weeks ago for a wedding and only went back at the weekend. Neither of them was contacted at any stage about isolation or anything like that. Surely the success rate in rapid testing at approximately 60% is better than the low percentage of follow-up for what we have now.
My biggest concern is the knock-on effect not only on the industry and employers, but also on the communities. As I said earlier, many ancillary services depend on people who work in these areas, which provide good employment. That is having a severe knock-on effect in Dublin, Limerick, Clare, Cork etc. We need to work on a remedy to cure all these ills we have.
Dr. Catríona Cahill:
That is a significant point regarding the jobs that the airports support. Sometimes we can get caught up in just using direct numbers. We need to remember that considerable indirect employment is created as a result of the operations of the airport.
Shannon Airport supports more than 45,000 jobs and Cork Airport supports in excess of 12,000 jobs when indirect jobs are factored in. It is a very important aspect that needs to be kept to the forefront of our minds
I have a few questions. Apart from the future of the sector, I want to deal specifically with the issue of testing. We have had various experts appear before the committee, including with respect to Rome airport, where rapid antigen testing is taking place. The Minister has appeared before the committee, as has the Chief Medical Officer, Dr. Tony Holohan, covering this whole area. They have told us that the HIQA report indicates antigen testing is not foolproof and that the PCR test is the gold standard. Mr. Cullen made reference to that. I will frame my question in that light. I believe all testing for orange and red listed countries must be mandatory. We must find every mechanism possible to get people home, which will benefit the airline industry. The Government needs to examine, at a national level, how we can increase our capacity, if we can increase our capacity on PCR testing above the 300 tests a day overall across the airports that was referenced and if it can be made cost-effective to ensure people can afford to come home. Does Mr. Cullen envisage a way in which we can have a system of mandatory PCR testing where we can increase the capacity, be it on-site or off-site at airports, and that it can be cost-effective or does it have to be antigen testing for rapid testing to work? I want to put that question to the other witnesses and I have a brief follow-up question. Mr. Cullen, can we have rapid PCR testing?
Mr. Evan Cullen:
I put a similar question to all the pilot associations around the world. We are not aware of any jurisdiction that has 100% PCR testing at any airport. We know that airports are moving rapidly towards having up to 100% of antigen testing. Antigen testing is improving all the time. A new Novara test is coming in at 90% efficacy. I listed in my presentation that Italy, France, Germany and Austria are introducing and have made significant investments in antigen testing.
We have limited time. The HIQA report on Covid that was commissioned by NPHET, the membership of which is basically located in the Department of Health, stated it could not stand over the antigen test. It said the PCR test was a more effective test. On health grounds, how does Mr. Cullen respond to that finding?
Ms Karan O'Loughlin:
I am from SIPTU and would like to add a comment. Given that none of us are health professionals, I do not think a debate on which type of testing is better than the other is the best use of our time but I believe all of the stakeholders in this conversation, who are witnesses to this committee, would agree there should be some type of free testing available so that we can get back to changing the conversation about safe travelling rather than having to look forward to another 12 months of people travelling for absolute necessity. The aviation industry will not survive that.
I will conclude on that point. The Government now needs to examine having mandatory testing for orange and red listed countries and to increase capacity if we are proceeding with PCR testing and, working together, to do that in a way that is cost effective.
I ask all the representatives what is their top priority item to get the airline industry and people back to work. When the representative of Limerick Chamber answers, I would also ask what is the single most important aspect with respect to Shannon Airport. I will start with Mr. McGowan.
Mr. Neil McGowan:
The number one request from SIPTU at today’s committee is to see the wage subsidy scheme amended to provide a proper income to people while we weather this crisis. The other debate we have had on restoring confidence to the industry in terms of having a testing regime that is free, quick, efficient and accessible and would restore confidence in the industry, that would get back people back flying again, but our real concern is that in the time that it will take us to get there, people will end up defaulting on mortgages and moving into homeless situations. It is a desperate time for aviation workers and has been a desperate nine months. That is why our number one ask today is that the wage subsidy scheme would be amended to provide a proper income to people so that they can meet their financial obligations.
Mr. Paddy Kavanagh:
Similar to Mr. McGowan, the subsidy scheme is crucial to our people who have suffered financially. He made a brilliant point earlier, namely, that this sector has been operating at level 5 for almost a year now and it is crucifying people. Also, we need some measures on testing that would restore people's confidence in travelling.
Mr. Evan Cullen:
Nothing that we will do will replace the millions of passengers we normally fly into and out of Ireland. Nothing we will do, whether with respect to the EWSS, the TWSS or the corporate structure of Shannon, will fix the €10 billion foreign visitors leave in our economy every year. We have got to find a way to get that back as quickly as possible. We believe testing is the way to rebuild confidence in the industry and to get people flying again and investing in Ireland. That is what we need to do. We need to find the shortest path back to that.
Ms Dee Ryan:
In terms of Shannon Airport, we would be supportive of further measures, similar to what was announced this week, being announced for the airport and for the workers. Also, into the future, should it be necessary to put direct support into the airlines, we would advocate that conditions be attached to that around regional route development and carbon emission reduction targets, as has been done in other jurisdictions.
Briefly, I have a question for Dr. Cahill. Denmark and Holland have rejigged their aviation policy to see a more balanced approach to the regional airports. How has that worked?
I also ask the Fórsa representative if the Aer Lingus employees in Shannon been short-changed. It seems they have run out of their cabin training hours. They have expired. Their contracts are not specific to Shannon but rather are specific to the airline as it operates in Ireland and yet they are the ones who seem at all stages of the temporary lay-offs to have had the sword wielded on them first.
I would like an answer to those questions.
Dr. Catríona Cahill:
Regarding the Netherlands, we should bear in mind that the policy is quite new. It was implemented very recently but early indications suggest that, prior to Covid, it led to reduced congestion in and around Amsterdam. That said, the impact of Covid-19 is such that we have seen massive reductions overall in traffic going to airports. Therefore, it is difficult to tell right now.
Denmark has carried out studies considering the diversion of routes from Copenhagen Airport to alternative airports, such as Aalborg. It was found that there was a net passenger welfare gain of approximately 3 million to 4 million, in terms of benefits.
Ms Ashley Connelly:
I fully agree with the Deputy in that members in Shannon have found they have to fly within a six-month period, meaning they are now out of what is known as "recency". They will have to conduct a full retraining programme due to the lack of activity out of Shannon. It is unjust and unfair that our members in Shannon are being treated less favourably that their colleagues in Dublin and Cork. Fórsa takes that quite seriously and it is an issue on which we continue to engage with the company.
I thank the representatives of IALPA, SIPTU, Connect Trade Union and Limerick Chamber for attending to engage with the committee. They will appreciate that there were time constraints but we wanted to ensure they could participate in our hearings on aviation. I thank the clerks for the fantastic work they have done.