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

I am glad to have this opportunity to update the House on the recovery of aviation, which is a key supporting element in the recovery of tourism that the Minister has just outlined.

The Government is very much alive to the challenges faced by both sectors and has proven its commitment to their recovery through the various strategic and financial supports provided to date. I am pleased to report that we are seeing some positive trends towards recovery in Irish aviation but there is still some distance to go. Much still depends on the international Covid context, global vaccination rates and the return of consumer confidence in respect of safe air travel.

I take this opportunity to touch upon two other key developments which will impact aviation during the recovery ahead: the domestic regulatory reform process to establish a single aviation regulator in Ireland; and the sustainability challenge faced by the sector in responding to the EU's recent commitment to reduce carbon emissions by 55% by 2030.

Throughout the Covid-19 pandemic, my officials and I have remained in close contact with key stakeholders in the aviation sector.

It was clear from this engagement that the single most important factor for Irish aviation was the reopening of international travel, subject to public health considerations. This reopening began on 19 July, following a period of extensive preparation and collaboration between Departments, industry and international partners. Central to this was the substantial work undertaken to introduce the enhanced passenger locator form and the EU digital Covid certificate. Under these arrangements, we have seen a very welcome recovery in passenger numbers, with throughput at the State airports in mid-September up nearly 300% on the levels of 19 July. However, passenger numbers at Irish airports are running at around 50% of pre-pandemic levels, compared with an average of 70% at other European airports. I am hopeful this will improve shortly and there are positive signs in this respect.

The news that Ryanair will reopen its Cork Airport base from December, which secures 60 jobs, is very welcome. We have seen the limited return of Aer Lingus to Shannon on the London to Heathrow route and its recent announcement of the phased reintroduction of numerous European routes from Dublin this winter is another welcome development.

The news of the intended relaxation of US travel rules for vaccinated European travellers from November means we can look forward to an increase in transatlantic traffic over the coming months. The announced return of both American Airlines and United Airlines to Shannon is a further positive development, particularly as transatlantic connectivity is key to many commercial activities in the mid-west region, as well as serving as a boon to our tourism and hospitality sector.

Much of the recovery in passenger numbers has been driven by our successful vaccination programme and those of our European neighbours. At this stage, approximately 90% of incoming passengers completing the electronic passenger locator form are fully vaccinated. Ireland's reputation as a safe destination is also enhanced by our impressive vaccination figures and our position at the top of the Bloomberg Covid resilience ranking. This is a vindication of Ireland's careful approach to Covid-19 and international travel and I am confident this approach will reap benefits from here on in.

We cannot underplay, however, the seriousness of the impact that Covid has had on the aviation sector. The industry is emerging from its greatest ever crisis and it needed substantial support throughout this time to remain resilient. Here again, the Government was not found wanting. From the beginning of the pandemic, the Government has taken strong and targeted action with a broad range of unprecedented Exchequer supports to help mitigate the effects of the crisis, including a wage subsidy scheme, grants, low-cost loans, a commercial rates waiver and deferred tax liabilities. It is estimated that Irish airlines and airports will have availed of over €440 million through several of the available supports by the end of 2021. In addition, through the Ireland Strategic Investment Fund, ISIF, pandemic stabilisation and recovery fund, DAA secured €40 million and Aer Lingus secured €150 million.

In November 2020, a dedicated funding package for Irish aviation totalling €80 million was announced. This package included the regional airports programme, which provides over €21 million for 2021 to Ireland West, Donegal and Kerry airports and supports the operation of our public service obligation air service between Donegal and Dublin. The Covid-19 regional State airports programme for 2021 provides €32 million to Cork and Shannon airports. A €26 million Covid supplementary supports scheme will compensate airport operators towards the losses caused by Covid-19 and the travel restrictions imposed to limit its spread. This saw €20 million in compensation disbursed to Dublin, Cork, and Shannon, providing the State airports with flexibility to roll out route incentives and charge rebates in consultation with airlines, with a view to supporting recovery and growth of connectivity. Of the total, €6 million was provided for Donegal, Kerry and Ireland West airports.

I assure Deputies that the Government is keeping under review the need for any additional targeted supports to this vital sector. Deputies will be aware that the economic recovery plan published by the Government on 1 June explicitly references this and recognises that additional supports may be required to support the aviation sector's recovery as it reopens.

International travel is vital for the continued economic well-being of this country and maintaining its recovery, and it will continue to remain a priority for the Government. Supports needed to help all regional airports, including Shannon and Cork, are being considered in the context of budget 2022. I recently wrote to the Minister for Public Expenditure and Reform in respect of the provision of support for the licensed travel trade in light of continuing uncertainty for that sector. The travel trade is expected to be one of the last to recover from the impact of the pandemic. Consumer confidence remains unstable and the industry has forecast that most bookings in 2021 will relate to 2022 and that trade will not recover to any meaningful extent until that year at the earliest.

The availability of general wage supports undoubtedly sustained many small businesses over the course of the pandemic but the risk of insolvencies has re-emerged now that travel agents and tour operators are falling outside eligibility for the Covid restrictions support scheme since the more general reopening of non-essential retail from 17 May. That is despite low levels of holiday booking. Support for this sector is support for small business and I will continue to advocate for it in discussions with my colleagues, the Ministers for Finance and Public Expenditure and Reform.

As the aviation sector continues to recover from the Covid-19 crisis, we must ensure we have a robust regulatory regime to sustain the recovery. The Air Navigation and Transport Bill 2020, which is moving through the legislative process, will provide this. Whereas the current regulatory regime was put in place in the early 1990s, and has served the sector well over time, the institutional structures no longer reflect international best practice. This Bill therefore proposes to put in place a modern regulatory system that will underpin Irish aviation for the next decade and more.

This Bill has three main objectives. First, it merges the regulatory functions of the Irish Aviation Authority with those of the Commission for Aviation Regulation. In doing so, it establishes a single, independent and strengthened aviation regulator. Second, it establishes a new commercial semi-State company to manage the air traffic control requirements of Irish controlled airspace, AirNav Ireland. Third, it makes changes to how airport charges are set at Dublin Airport by putting a greater emphasis on the needs and expectations of the consumer.

As Deputies will be aware, recovery from Covid cannot come at the expense of the climate and the aviation sector in particular is conscious of the need for a sustainable recovery in line with the goals of the Paris Agreement and the EU's commitment to reduce overall carbon emissions by 55% by 2030. I am happy to advise that Dublin Airport was formally designated as level 3+ carbon-neutral in December 2020 by the global Airport Carbon Accreditation programme and is the first airport in Ireland to achieve carbon-neutral status. All Irish airports are encouraged to sign up to Airports Council International, ACI, Europe's carbon accreditation programme and, where feasible, the regional airports programme will seek to support eligible airports to achieve goals in this respect.

In addition, officials in my Department are also engaged in the negotiation of several key files at EU level as part of the EU's Fit for 55 package. These measures aim to address the sustainability challenge for aviation but will require efforts and investments by both airlines and airports. I fully recognise that the need to meet this sustainability challenge is coming at a time when the sector is trying to regain its footing but the aviation sector is nothing if not innovative. I am confident that the supports and commitments to the sector provided by the Government will position it to rise to the dual challenge of recovering in a sustainable manner.

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