Hildegarde Naughton (Galway West, Fine Gael) | Oireachtas source

I am delighted to have the opportunity to update the House this evening on what the Government is doing to support our regional airports and aviation in general. As an island nation, Ireland is particularly dependent on air connectivity, both socially and economically, and we all know that international travel and regional connectivity, which is facilitated by our regional airports, is vital for the economic well-being of the regions served. Government policy on regional airports seeks to optimise conditions for regional development and connectivity for both social and economic benefits. The Government recognises that, as employers, airports contribute to the local economy and employment is also supported through the various ancillary services that are provided to the airports. However, we are all too aware of the impact Covid-19, coupled with the emergence and spread of variants of concern, have had on international travel.

Globally, aviation is experiencing the most challenging crisis in its history, with European flights reducing from more than 11 million in 2019 to 5 million in 2020. Restrictions on international travel to date have further suppressed passenger numbers. Passenger air travel revenues have fallen to a fraction of 2019 levels. Scheduled carrier flights were down by approximately 60% and at year's end more than 4,000 aircraft, which represents half of the European aircraft fleet, were grounded. A similar number of flights across Europe is forecast for 2021 in a base case scenario. However, Eurocontrol, the European Organisation for the Safety of Air Navigation, has indicated that if more states relax their restrictions sooner and fully implement procedures, such as the EU's digital Covid certificate, as soon as possible, its forecast optimistic scenario could see the network handling 69% of 2019 traffic levels in August.

In Ireland, the general reduction in passenger numbers has severely impacted the aviation industry. This has led to companies, both in Ireland and in a wider European context, taking action to rationalise their cost base, including redundancies and staff reduction measures, as well as taking steps to safeguard liquidity through borrowing and new shareholder capital. I deeply regret the most recent announcement of the loss of 480 jobs as a result of the entry into voluntary liquidation of Stobart Air over the weekend. This came further to the announcement by Aer Lingus of the closure of its base at Shannon recently. I acknowledge the devastating impact of these announcements on all the staff involved and to all those in the aviation industry who continue to be impacted by the most sustained and deepest period of suppression this sector has ever faced.

Job cuts have unfortunately been a feature of other European airlines, including the loss of 24,000 jobs at Lufthansa, 10,000 jobs at lAG, 5,000 jobs at KLM, with further job losses signalled in industry-wide restructuring as a result of the Covid-19 crisis. These job losses have arisen even with the provision of substantial state supports and are indicative of the scale of the crisis in the sector.

As Deputies will be aware, Stobart Air's plans to secure a new buyer failed over the weekend and this action resulted in Stobart Air commencing a process of voluntary liquidation. This resulted in Stobart Air's franchise agreement with Aer Lingus being terminated with immediate effect.

I assure the House that the restoration of regional connectivity is a critical priority for the Government. The market has already moved to replace some of the lost routes, with Aer Lingus and BA CityFlyer now operating temporary replacement services which will cover most of the affected routes operating out of Dublin Airport and Belfast City Airport. Together with routing options, this will allow passengers impacted by the situation to return home.

The termination of the franchise agreement with Aer Lingus also had immediate implications for both of our Government PSO-supported air services operated by Stobart Air on two routes between Dublin Airport and Donegal and Kerry airports. I am, however, happy to advise that work is under way in my Department to launch an emergency procurement process with a view to restoring air services on these vital regional routes as quickly as possible in the coming weeks. I fully understand the importance of having these services in place by 19 July, when international travel is to return. My Department plans to issue a request for quotes directly to airlines in the coming days in accordance with applicable EU rules on air service PSOs. It is anticipated that this accelerated procurement process will be completed by early July with a view to services recommencing under the new operator or operators as soon as possible thereafter. The new contract will be subject to a maximum term of seven months and will operate in accordance with EU law. To mitigate against any further disruption to these services, my Department will also launch a procurement process for the continued provision of the services for a maximum of four years. This will apply after the temporary contract has expired. The Minister, Deputy Eamon Ryan, and I will continue to engage closely with aviation stakeholders, including representatives of the airports in Kerry and Donegal, to keep them informed of plans in this regard. I am happy to advise Deputies that a number of airlines have already been in contact to indicate their interest in operating these routes.

The Government is fully cognisant of the ongoing and deep impact of the pandemic on the aviation sector and has put in place a range of supports for businesses, including those in the aviation sector. These supports are unprecedented and include the wage subsidy scheme, the waiving of commercial rates, deferral of tax liabilities and the Covid restrictions support scheme, CRSS. Liquidity funding is also available through the Ireland Strategic Investment Fund, ISIF, pandemic stabilisation and recovery fund. This is also being availed of. Taking all of these supports into account, it is estimated that more than €450 million will have been made available to the sector by the end of June. I acknowledge the importance of providing clarity on the extent and duration of the employment supports beyond the end of June. Airlines have been reassured that there will be no cliff edge in the horizontal State supports that have been available from the start of the pandemic.

The Government has also allocated funding of €80 million for an aviation-specific support package in 2021. This represents a quadrupling of the funding provided to our regional airports and in support of our PSO services for Donegal and Kerry in a normal year. Some €21 million of this funding is being provided to our smaller regional airports at Donegal, Knock and Kerry under the new regional airports programme for the period 2021-2025.

Furthermore, in acknowledgement of the severe impacts on our two State regional airports and in recognition of the importance of these airports in the south-west and mid-west regions which they serve, an unprecedented €32 million is being made available to support the airports at Cork and Shannon this year. This level of funding to our State airports is unprecedented as Ireland's State airports at Dublin, Cork and Shannon operate under a commercial mandate and, ordinarily, do not benefit from Exchequer support.

In recognition of the impact of Covid-19 on all our airports, schemes that are compliant with state aid rules have also been developed following extensive engagement with the European Commission by my Department. Under these schemes, a further allocation of up to €6 million is available to the airports at Donegal, Kerry and Knock. These schemes also include €20 million in compensation for the State airports at Dublin, Cork and Shannon. This funding will provide State airports with flexibility to roll out route incentives and charge rebates in consultation with airlines with a view to supporting the recovery and growth of connectivity. My Department is currently assessing applications for this funding and hopes to be in a position to disburse this compensation in the coming weeks. Additional funding that might be necessary for our regional State airports at Cork and Shannon will be considered in the context of the Estimates process this year in respect of budget 2022. Government fully accepts and is willing to keep under review any additional supports in this sector, if required. Deputies will be aware that the economic recovery plan published by Government on 1 June explicitly references this and recognises that additional supports may be required to support the aviation sector's recovery as it opens up.

The regional airports programme published by Government in February provides certainty for the airports that deliver connectivity to the regions for the next four years. Donegal Airport, Kerry Airport and Ireland West Airport, Knock, are eligible for funding under this programme. In addition to targeting the funding of safety and security projects and activities, the scope of the new programme has been expanded to encourage airports to reduce emissions and build climate resilience. The programme honours commitments in the programme for Government, which recognises the value of aviation to economic development, international connectivity and tourism, to deliver funding that will support services and ensure safety at our regional airports. All eligible capital projects submitted for funding by our regional airports were approved this year. Some €2 million in grant funding has been made available to deliver runway upgrade works and a new fire training centre in Knock. More than €1.7 million in funding has been provided to Kerry Airport to deliver replacement vehicles and CCTV upgrade works. Almost €900,000 in funding has been provided to Donegal Airport to fund a new fire truck and other projects including runway lighting.

Projects supported under the €32 million regional State airports programme, to which I referred earlier, include a runway overlay project at Cork Airport. This is currently being assessed but, given the costs involved, this project is subject to appraisal under the public spending code. Pending a satisfactory evaluation, I hope to be in a position to formally approve funding of €10 million for this project in the coming weeks. The funding that Government will provide to Cork Airport has allowed this project to be brought forward to this year. This is a vital and strategic project for Cork Airport and the management of the airport aims to complete the project within ten weeks, taking the opportunity to complete it while passenger numbers are suppressed so the airport can be ready to operate in an unconstrained manner once it reopens on completion of the works at the end of November. Projects costing more than €6 million are also being supported at Shannon Airport this year. These include an airfield rehabilitation project and upgrades to security scanners and security screening. This funding is being provided in addition to €6 million in funding allocated to Shannon Airport for a hold baggage screening project last year. Both of these airports will also benefit from operational funding of €15.6 million this year.

I assure Deputies that the Government is committed to continuing to support this sector. The Minister and I have engaged extensively with all aviation stakeholders, including through the aviation recovery task force, the National Civil Aviation Development Forum and the aviation subgroup of the Labour Employer Economic Forum, which I chair. It is clear from this engagement that the single most important factor for Irish aviation is the earliest and widest reopening of international travel possible, subject to public health considerations.

The main requirement of all aviation stakeholders has been clarity on a plan to permit the resumption of non-essential international air travel. This has now been addressed with the Government announcement on 26 May of a roadmap for the gradual reopening of international travel on 19 July. The current advice to avoid non-essential travel and related penalties will remain in place until 18 July. However, from 19 July, citizens will be advised to travel safely and in accordance with public health guidance and restrictions and to avoid non-essential travel to countries in which an emergency brake has been applied. From 19 July, we will also operate the EU digital Covid certificate for travel originating within the EU or the EEA. This certificate will show if a passenger is vaccinated against Covid-19, has recovered from Covid-19 or has a negative test result. All passengers will be advised to observe public health restrictions and to present for post-arrival testing if they develop symptoms.

Furthermore, from 19 July Ireland will also broadly align itself to the EU approach to non-essential travel into the EU from third countries outside the EU or the EEA. To protect its citizens against the importation of variants, an emergency brake mechanism will be co-ordinated at EU level to react swiftly to the emergence of a variant of concern or variant of interest. It is important to point out that, with regard to third countries such as the US and UK, strict travel restrictions remain in place. The US, for example, continues to limit entry for non-essential travel. For travellers entering the UK from outside the common travel area from countries on the green list, a negative test is required, carried out up to 72 hours in advance of travel, with a further requirement for a test up to two days following arrival.

For travellers from countries on the UK's amber or red lists, there is a requirement to quarantine and take two Covid tests. Mandatory hotel quarantine applies for those arriving from red-listed countries. These requirements apply to all those entering the UK from outside the common travel area, even those who have been vaccinated.

I and the Minister, Deputy Ryan, along with my departmental officials, will continue to engage at every level across Government to ensure that all options relating to testing which strike the right balance between protecting public health and protecting our economy are considered. That same balance applies to aviation and maritime transport.

I highlight that during the normal regular engagements at interdepartmental level, including with the CMO, the Department of Health and the HSE, my Department has consistently highlighted the need to reopen international travel as soon as possible in a manner that continues to protect public health. The possible use of antigen testing for the purpose of reopening international travel has been suggested by my Department on several occasions. I most recently raised this issue in the context of correspondence to senior Ministers on 11 May to set out a number of issues that required urgent clarification in the context of the Government's consideration of the aviation restart plan. This included consideration of antigen testing to replace PCR tests for international travel, perhaps on a pilot basis initially. However, to date, the public health advice, which is based on World Health Organization advice, has been that the use of antigen testing is not suitable for the purposes of supporting international travel. The advice has been that while antigen testing may play a role as an added screening measure in some settings, such as the workplace, it is not considered appropriate for international travel. I note the comments made by the CMO yesterday and will continue to be guided by the Department of Health and NPHET with regard to testing.

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