Noel Dempsey (Meath West, Fianna Fail)

I propose to take Questions Nos. 94 and 95 together.

The core airport management operational subvention scheme provides for an annual subvention to regional airports. The amount payable is based on projected losses by the airports in providing core services, after taking account of any surpluses from commercial activities or other income. This is in line with the view underlying the mandatory EU guidelines on state aid that, as a general rule, airports should be self-financing.

I have made arrangements for the table below setting out the amount of operational subvention paid to each of the regional airports in 2009 and 2010 to be provided to Deputies Costello and Coveney.

My Department does not collate details of the number of persons employed at the regional airports. I am very aware of the possible implications for Kerry of Ryanair reducing its level of services on the Kerry-Dublin route. This service is operated under the current public service obligation, PSO, contracts which run from July 2008 to July 2011.

In the case of the Kerry route, following an EU public tendering process, a bid submitted by Ryanair emerged as the winner. The bid met the specifications published in the EU Official Journal, which stipulated that three return flights per day would be provided. The bid from Ryanair also set out the compensation it required in order to operate the service. Based on that bid, Ryanair was awarded the contract and is receiving payments in accordance with that contract.

I refute recent claims by Ryanair in relation to the PSO contract. I have met my obligations under the terms of that contract. I have considered the company's notification to reduce frequencies on the route to one daily return service from 1 November on a commercial basis outside the PSO arrangement. A response has issued to Ryanair in the matter.

With regard to the PSO programme in general, the special group on public service numbers and expenditure programmes recommended that the public service obligations for air services should be discontinued when the current contracts expire. In addition, under updated EU legislation governing these services, more stringent conditions will apply to future PSO arrangements, having regard, for example, to the availability of other transport connections, and especially rail services, with a travelling time of three hours or less.

I have considered the recent value for money review of Exchequer expenditure on the regional airports programme. This was carried out to assist me in evaluating the appropriate scale of a regional airports programme in future years bearing in mind aviation policy objectives, the updated EU legislation, the improved surface links under the NDP and Transport 21 and the difficulties with our public finances. The review will be considered by the Government. It would be inappropriate for me to comment on any likely PSO scheme beyond 2011 in advance of the Government decision.

With regard to the funding of capital development at the regional airports, because of the difficulties with the public finances we decided in July 2008 that in so far as capital development projects are concerned, expenditure should be focused on project elements where the airports had already entered into contractual arrangements.

The provision in my Department's Vote to fund the capital expenditure grant scheme for all the regional airports in 2010 is €3 million. Grant aid for urgently required works at Knock and Donegal Airports was approved for this year together with the completion of projects which had been contractually committed. The amount available for 2011 will depend on the Government's consideration of the VFM review on the regional airports.

"Operational Subvention paid to Regional Airports"

Airport	2009€	2010€
Galway	962,000	582,576
Kerry	Nil	Nil
Sligo	313,000	152,256
Donegal	131,000	Nil
Ireland West Airport Knock	445,000	356,706
Waterford	1,494,000	604,965
Total	3,345,000	1,696,503

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