Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I thank the Deputies for their comments. This measure is an important element of job creation. We believe the aviation sector has significant potential for job creation and by providing this targeted incentive, we hope to encourage the establishment of the infrastructure that will allow us to attract significant maintenance, repair, overhaul and dismantling activities of aircraft to Ireland. This would foster the development of centres of excellence within this specialist engineering sector which we could build on in the context of future job creation. There is serious potential in that regard.

To put Deputy Boyd Barrett's suspicions to rest, the measure is not about tax relief for wealthy airplane owners. It is expected that it is mostly companies that will avail of this measure. The cost of an aircraft hangar will differ, depending on the size of the hangar. The smaller the hangar, the lower the cost. Depending on the construction type, estimates range from €1 million for a steel, single-bay hangar to over €10 million for a three-bay hangar suitable for larger aircraft.

Any costs that do not qualify for the accelerated capital allowances available under the scheme will qualify for the standard capital allowances regime. This would allow that the costs incurred on a hangar less than the value of €10 million could be written off in the following manner: €5 million to be written off over seven years, six years at 15% and one year at 10%; and €5 million to be written off over 25 years at 4%. I hope that clarifies the matter for Deputy Fleming. Owners of aircraft do not benefit from the relief. If the facilities do not qualify, the repair and the maintenance of such aircraft will be carried on outside the State.

Deputy Naughten mentioned Ireland West Airport Knock and I am happy to provide clarification on that. He also spoke about direct flights from China.

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He is aware of the single visa for entry to Ireland and Britain, which is operating in a number of Eastern countries. Having spoken to President Xi Jinping and Premier Li earlier this year, I am aware that there is quite a deal of negotiation going on about direct flights from China to Ireland. I expect it to become a reality, although I do not want to put a time on it.

I have dealt with the reductions that Deputy Fleming mentioned.

Deputy Boyd Barrett mentioned aviation leasing. The measure is not targeted at aviation leasing, but a company could avail of a facility under the new arrangements, not retrospectively, but from the time from which it applies - namely, today. The measure is aimed strictly at maintenance, repair, overhaul and dismantling. While some aircraft leasing companies may involve themselves in these operations, there are companies which specialise in these very specialist activities. It means that young people get involved in this area of engineering, which is a legitimate career aspiration to have.

The resolution is giving effect to a statutory scheme which will be part of the Finance Bill. It is aimed at the particular areas of maintenance, repairs, overhaul and dismantling. It allows for targeted incentives which hopefully will become reality at different locations around the country, depending on where companies decide it might be most attractive for them to invest.

I commend the resolution to the House.

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