Joe Costello (Dublin Central, Labour)
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The decision to eliminate the public service obligation subsidies for all regional airports in the west is both wrong and illogical. The Minister has announced that he will close the regional airports on the north-western, western and southern coasts apart from Kerry and Donegal. His argument for retaining Donegal is the county's isolation and lack of interurban roads. Sligo and Knock are in the same position in that there is no direct road link to Dublin. It is amazing the Minister should retain Donegal when he knows there is another airport in the north-west, in Derry, because he used it to travel to the Glenties to attend the Magill summer school. The entire province of Connacht, however, will now be deprived of any Government subsidy for regional airports.

It is outrageous the Minister should be making an announcement of this nature. There were indications in the budget that the PSO would be reduced but the total elimination is not acceptable.

The Minister did not consult other relevant Departments, such as the Department of Finance or the Department of Enterprise, Trade and Innovation, to see what could be done in terms of connectivity for the isolated periphery of the country. We know these regions are economically dependent on airport accessibility and that foreign direct investment depends upon them. Multinational businesspeople need global transport structures to go about their business. Industries were attracted to peripheral areas because the IDA could promise accessibility that is now being done away with. The only part of the economy doing well at present, the export-led multinational sector, is having the rug pulled from under it. Personnel will not have the necessary connectivity. It is outrageous.

There is not much good land in the west of Ireland but the landscape is very attractive. The tourism industry is highly dependent on airport access, with regional airports in Sligo and in Knock, a place where we never thought an airport would survive. Effectively, Knock is now in a serious position and will find it difficult to operate on a commercial basis. The Minister stated in the document that it is not commercially viable. It could easily close.

The Minister for Transport is not operating unilaterally. This is not merely a transport matter, but a matter of the economy, tourism, foreign direct investment and accessibility. He should link up with the other relevant Departments and put together a task force to deal with the threat to the regional airports, ensuring the service that is so urgently needed continues to be provided in those areas.

Martin Mansergh (Tipperary South, Fianna Fail)
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I am replying to this matter on behalf of the Minister for Transport, Deputy Noel Dempsey. I thank the Deputy for raising it.

Having fully considered the conclusions and recommendations of the value for money review of Exchequer expenditure on regional airports, the Government has agreed to support the continuation of a public service obligation, PSO, route between Donegal and Dublin and between Kerry and Dublin. The necessary approval to continue these PSO air services will be sought from the European Commission. Once approved, specifications for the services will be settled and arrangements will be put in place for a tender competition in respect of these two routes.

In line with the review, the Government has also agreed to cease requiring PSO routes between Dublin and Sligo, Knock, Galway and Derry, from July 2011, recognising, inter alia, the improvements in alternative transport modes by rail and road which have taken place particularly with Government investment under Transport 21 in recent years.

The VFM review is part of the Government's value for money and policy review initiative introduced to secure improved value for money from public expenditure. The review initiative evaluates past Exchequer expenditure against the regional airport programme objectives and examines the scope for achieving those objectives more efficiently and effectively in the future. The review was published yesterday and is available for download on the Department's website.

Under updated EU legislation governing the PSO air services, more stringent conditions will apply in the future, having regard for example, to the availability of other transport connections and especially rail services with a travelling time of three hours or less. The change in EU legislation, the substantial investment in surface transport, the completion of the review and the requirement to make best use of scarce Exchequer resources, were all taken into consideration by Government in making this decision and it is not the Minister for Transport's intention to reverse that decision.

It must be borne in mind that there are many demands on the Department of Transport's Vote and trying to maintain a level of expenditure on the regional airports programme which is no longer justified or sustainable would impact negatively on other areas such as public transport provision and-or road maintenance. Overall, the Minister for Transport believes the combination of an improved surface transport network together with a more consolidated air service network to regional airports, along with the State airports at Cork, Shannon and Dublin, provides the necessary transport access to underpin Ireland's sustainable development.

Where a PSO route is being terminated from mid-July 2011, the route will be open to commercial air services from that date. In addition to the PSO scheme, there are two other schemes which provide Exchequer support to the regional airports, an OPEX scheme which provides money to airports to cover all or part of their operational losses in any given year and a CAPEX scheme which provides finance towards the cost of necessary infrastructure at our regional airports. The Minister for Transport is giving further consideration to these schemes and will revert to Government shortly with proposals.

If I might just add a couple of comments of my own, at some time in the past 20 years I have used every single regional airport, some of them several times. They are an asset to the country but they were constructed at a time when the road services in particular and the frequency of rail services were very different from what they are now. At least one regional airport, the south-east Waterford airport, was never in receipt of a PSO. I gather it has had discussions with the Department of Transport and it is satisfied with the outcome. I hope all the regional airports mentioned will continue to provide services but under other conditions.