Shane Ross (Dublin Rathdown, Independent) | Oireachtas source

I thank the Ceann Comhairle for the opportunity to address the House on the aviation sector. While there are a number of structures through which my Department engages with industry stakeholders on a collective basis, I am acutely conscious that today's unprecedented challenges require that all options be considered and that we be open to novel approaches. For that reason, I am proposing to establish a task force for aviation recovery, which will be challenged with developing and advising on the framework for restarting aviation. I will appoint key stakeholders from the industry to this task force within the next week and will ask it to report back to me within four weeks with a plan ready to relaunch the aviation industry in Ireland. As an island nation, we must ensure that we staunchly fight for and protect our connectivity.

The Covid-19 crisis has brought new challenges in varying degrees to practically all sectors of our society and economy. We are all living and, in many cases, working in a manner that would have been unimaginable a mere three months ago. The crisis continues to have profound impacts on our society and devastating financial implications for the world economy, the Irish economy and the aviation and tourism industries at home and abroad.

The aviation industry is one of the most affected by the global pandemic. In Europe, air traffic movements fell to as low as 10% of the levels in the comparable period last year and were mainly buoyed up by cargo flights.

Passenger traffic has fallen to a trickle and stands at approximately 1% of what might be expected. Various businesses right through the aviation value chain, with the sole exception of dedicated cargo operators, have experienced a severe depletion of revenue and are facing various degrees of financial challenge. In an industry that has always been cyclical in nature and highly susceptible to external shock, the scale of setback now being experienced is unprecedented. Aircraft have never before been grounded in the way we are seeing. The future remains highly uncertain and because of the inevitable employment impact, the human cost will be high.

Ireland has historically had a huge dependence on aviation. As an island economy built largely on international trade and foreign direct investment, aviation is the lifeline that connects us to the global economy. We do not have the advantage of international road and rail connections that predominate for other countries to support the international movement of people for business, tourism or social purposes. The process of economic recovery as we emerge from this crisis will depend on the recovery of the aviation sector. Throughout the industry, the collapse in revenue streams has, with very limited exceptions, necessitated a swift and painful response. The main airlines serving Ireland and the airports have applied major pay cuts and laid off staff. While some companies were, at the outset of the crisis, in a very strong financial position in comparison with industry peers, none is immune from the need to reduce costs and restructure business. We have all heard the public announcements about reduced employment. There is a broad consensus that the recovery of the industry will take time. While there were hopes at earlier stages in the crisis that next year might see a return to business as usual, there is an increasing consensus that the recovery will be slow, with some predicting that 2019 levels of traffic will not be achieved again until 2023.

The Government has already announced a suite of measures to help mitigate the effects of the crisis on our citizens and businesses. These include the temporary wage subsidy scheme, the pandemic unemployment benefit, a three-month commercial rates waiver, the pandemic stabilisation and recovery fund for medium and large enterprises, a credit guarantee scheme to support lending to SMEs and the warehousing of tax liabilities for a defined period. Airports and airlines have been able to avail of those measures to help to constrain escalating losses. Some have taken difficult decisions to lay off staff on a temporary basis. These staff can and are availing of the Covid-19 unemployment payment. Most are also availing of support under the Government's Covid-19 temporary wage subsidy scheme.

State airports are continuing to facilitate airline services for cargo and limited numbers of passengers. Regional airports such as Donegal and Kerry are also remaining open to facilitate the Government-funded PSO service between those airports and Dublin. These services allow Donegal and Kerry to maintain a basic level of operations and safeguard connectivity. As well as supporting essential travel, they also provide support to air medical and rescue services. Unfortunately, Ireland West Airport Knock has had to close down its operations entirely on a temporary basis.

In line with recent announcements by other aviation businesses regarding cost-reduction measures, the Dublin Airport Authority, DAA, announced last week that in the context of expected significantly reduced passenger traffic for several years, the company has no choice but to right-size the business to match the number of passengers that are likely to use Cork and Dublin airports in the medium term. To achieve this, a number of options are being considered. These include a voluntary severance scheme. Shannon Group has kept the airport open to facilitate cargo operations, essential passenger travel, emergency flights, repatriations and diversions. The management has taken difficult decisions to reduce costs including temporary lay offs, reduced working hours, the closure of all Shannon heritage tourist attractions and reduced opening hours at the airport. The key airlines serving Ireland, Ryanair and Aer Lingus, have publicly announced some of the measures they are taking to tackle costs. I am acutely aware that these airlines are particularly critical to the Irish economy.

The Government's priority in response to the Covid crisis, and rightly so, has been to save lives. We all know well the measures taken and indeed, it is only through our collective efforts that we have avoided far worse outcomes.

The measures adopted for this purpose place a huge constraint on aviation movements. At present, the travel guidance issued by the Department of Foreign Affairs and Trade recommends that only essential international travel be undertaken. In addition, the self-isolation obligation is recommended for persons arriving by air with limited exceptions. In combination, these factors mean that both outbound and inbound travel for a business, social or tourism purpose is heavily restricted. This is, of course, reflected in the actual numbers travelling.

The Roadmap for Reopening Society and Business does not set out any timeframe for the resumption of aviation nor is there any clear definition of the conditions that need to be achieved to allow such a resumption on an unrestricted basis. As such, I am concerned that the industry has no certainty when business might regrow and this, in itself, is a significant destabilising influence. The recovery of aviation depends on a number of factors, including the lifting of constraints on border movements and the establishment of new arrangements to protect the health of passengers in the course of aviation journeys.

Fortunately, there is European guidance in respect of both of these issues. I will outline the position on each in turn. The European Commission issued a communication on 13 May setting out guidance and recommendations relating to the travel and tourism sectors that envisage a gradual, phased, co-ordinated and proportionate easing of border controls and travel restrictions across the EU. The guidance suggests the criteria that should be applied to the removal of restrictions on border movements. The criteria include epidemiological conditions in the country or countries concerned, the Covid containment measures and the economic and social considerations. We are beginning the process of considering how these criteria might be best applied in an Irish context. Of course, public health considerations must predominate and we cannot take actions that potentially undermine the good work we have done in bringing Covid-19 under control. On 20 May, guidelines were adopted by the European Aviation Safety Agency, in conjunction with the European Centre for Disease Control and Surveillance, for the management of air passengers and aviation personnel in the context of the Covid-19 pandemic. The guidelines seek to promote health and constrain the likelihood of virus transmission in the course of aviation journeys. The guidelines include measures such as increased sanitation with regard to both aircraft and airports, the implementation of physical distancing where possible and the wearing of medical-grade face coverings by passengers and staff. Air passengers will have a responsibility to adapt to new behaviours and new practices. In the measures to respond to the crisis so far, we have seen that people are very willing in this regard.

See this speech in context