Dáil debates

Thursday, 29 November 2012

Topical Issue Debate

Airport Development Projects

2:50 pm

Photo of Michelle MulherinMichelle Mulherin (Mayo, Fine Gael)
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I understand the Minister for Transport, Tourism and Sport, Deputy Varadkar, is otherwise disposed. However, I regret he is not here to take this matter. I am from Mayo, where Ireland West Airport Knock is located. I am gravely concerned for the future of this airport in light of the announcement earlier this year with regard to the separation of Shannon Airport from the Dublin Airport Authority and its amalgamation with Shannon Development, the purpose of which is to make Shannon Airport self-financing. We know that Shannon Airport operates at a significant operational loss year-on-year, to the tune of €8 million. Shannon Airport is key to the future development of the mid-west region. Knock airport, which serves the west and north-west regions, is equally significant, if not more so. Knock airport is a success story. The Minister should not be making decisions which have an anti-competitive effect on Knock airport and ultimately undermine its future viability. The airport operates on a shoestring budget. The three State airports should be benchmarked against Knock airport for efficiencies.

Knock airport was established in 1985 by Monsignor James Horan, whose mantle has been taken up by the trusteeship under which Knock operates and by the people of the area. Some 680,000 passengers will pass through Knock airport this year. Five major airlines serve 25 international routes from the airport. All of this is being done without the financial and regulatory focus the Government has on the State airports. Knock airport does not need to be undermined. The Minister is on the record as saying that it is a role model in terms of efficiencies, how to do business in aviation and how to be competitive and succeed. There is a great emotional attachment to Knock airport in the region, which, more than any other region in the country, has suffered mass emigration. For many years our diaspora were in the international sphere but we were not internationally accessible. However, that was before the construction of Knock airport.

The Minister has stated on many occasions that any development of Knock airport is a matter for the management of the airport because it is a privately owned entity. This is his reason for not having a plan for Knock airport. I do not accept that. Knock airport is run as a trusteeship. Its stated objective is the social and economic development of the region. Unlike any other airport in this country, Knock airport has been funded to the tune of €26 million by the people of the region and its diaspora. It is owned by the people and should be supported into the future. It is a red herring to suggest that this is the reason something cannot be done for Knock airport.

The concerns of the management of Knock airport need to be taken seriously and a plan for the future growth of the airport needs to be worked out. It must be given the same focus shown to Shannon. As a peripheral area competing in a global village for business and tourism, Mayo cannot afford to have its airport undermined going forward. I do not wish to play any part in putting the final nail in the coffin of Knock airport. This problem will not go away.

Photo of Brian HayesBrian Hayes (Dublin South West, Fine Gael)
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I am taking this topical issue on behalf of my colleague, the Minister for Transport, Tourism and Sport, Deputy Varadkar. Since his appointment, the Minister has set out to rationalise the system of State support for the privately owned regional airports. The Government now has a settled policy with regard to these airports. The Minister has also endeavoured to restructure the State-owned airports and, in particular, to map out the best future for Shannon Airport. All Irish airports should operate to a commercial mandate and the Minister has stressed in the past that regional airports, including Knock airport, must work towards achieving operational viability over the near term. This also applies to the three State Airports. This aim is particularly acute in the current difficult financial and economic situation in which the country finds itself.

Next week, the Minister for Finance will announce budget measures to achieve a further €3.5 billion in savings through expenditure cuts and revenue-raising initiatives. The State has recognised that the six privately owned airports needed financial assistance with their capital and operational costs and substantial amounts of taxpayers' money has been disbursed to them over the years to support their operations, but this could not go on indefinitely. To ensure best use of scarce Exchequer resources, it has already been necessary to cease all funding for the two airports in Galway and Sligo. Subject to funding availability, the other four airports, including Knock, will continue to be eligible for funding up to the end of 2014. In this regard, approval was secured from the European Commission in 2011 to extend the Department of Transport, Tourism and Sport's capital expenditure grant scheme for three years to 2014. It is in this context that all airports must work towards sustainability over the coming years, without an ongoing need for Government subvention. Capital funding for these four airports is focused on safety and security projects aimed at ensuring they can comply with the latest national and international aviation safety and security standards. Current funding is split between subvention for PSO air services between Dublin and the two most remote regional airports, Donegal and Kerry, and operational subvention towards the cost of providing core airport services at these airports.

As the Deputy will be aware, following the Government decision last May to separate Shannon Airport from the Dublin Airport Authority group and merge it with a restructured Shannon Development to create a new entity, a steering group of senior officials from five key Departments was established to introduce proposals for the implementation of that decision. The steering group was assisted by two task forces, which submitted their reports for consideration by the steering group earlier this month.

On the basis of the work undertaken by the task force and the steering group, detailed proposals on the restructuring of the State airports and Shannon Development have been submitted to the Government by the Minister for Transport, Tourism and Sport and the Minister for Jobs, Enterprise and Innovation. An announcement will be made about this shortly. The task force made a submission to the Department of Finance in the context of the forthcoming budget and it is understood that it suggested a range of potential nationally available incentives that could be considered in support of aviation development in this country. However, as the Deputy is aware, budgetary matters are an issue for the Minister for Finance. Aviation is a key component of all major forms of economic activity in Ireland, in our tourism as well as our business sectors. The measures being taken are based on increasing the overall number of passengers to and from Ireland through increased efficiencies and attracting new aviation business that can have a beneficial national impact. The Minister believes that these measures will form the basis for sound, sustainable airport businesses into the future that will support the growth of these sectors and help drive Ireland's economic recovery.

3:00 pm

Photo of Michelle MulherinMichelle Mulherin (Mayo, Fine Gael)
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I thank the Minister of State for his reply. I find the rationale operating here amazing. We have an airport in Shannon that has been haemorrhaging money. I have no issue with helping out Shannon Airport but I do have an issue with the Government putting at risk an airport that is doing its best on a shoestring budget by intervening in another State airport. I have consistently asked questions about the anti-competitive effect of decisions made in respect of Shannon Airport but have received no answer. If I am asking these questions, the Minister of State can only imagine what the trustees and staff of Knock airport are wondering. I have asked whether there has been any liaison with the European authorities regarding competition law and whether the Government's intervention falls foul of this, but the silence has been deafening. No concrete information is forthcoming, despite the fact that a decision about one airport is having massive ramifications for another.

This situation requires a lot more joined-up thinking, because I cannot see any clear Government airport policy. Before proceeding with the preferred approach for the separation of the Dublin Airport Authority, would it not benefit the Government to clarify its airport objectives? The Government must clarify its desired level of airport competition for the country as a whole, as well as among the current DAA airports. Is it just going to ignore the West as a region? Is it acceptable that we all go to Shannon Airport and undermine Knock airport? I do not think that is acceptable. It is not fair to hide behind the fact that the DAA airports are State airports. Knock airport is a public airport, owned by the people of the area in trust; that is the way it was set up. A lack of consideration of Knock airport by the Government will not wash, because it has the potential to be a strategic aviation hub for us. Without it, the west will be at a significant disadvantage in terms of business and tourism. This matter must be addressed. The issues surrounding competition and the possible illegality of some of the moves the Government appears to be planning must be addressed. Some consolation must be given to Knock airport in this regard and some plan must be drawn up for the airport and for the people of the region.

Photo of Brian HayesBrian Hayes (Dublin South West, Fine Gael)
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I agree with Deputy Mulherin that we need a plan for Knock airport and the region, given the importance of the airport to the entire region in terms of tourism and business development. However, any such plan must be sustainable, viable and based on a thorough examination of what pertains in other parts of the country. As I said in my response, a task force has been established which will advise the Minister on the regional airports, whether privately or publicly owned. My understanding is that the task force will report directly to the Minister, who will in due course submit his proposals, if any, to the Government. The points raised by Deputy Mulherin on the importance of Knock airport, not just to County Mayo but to the wider region, are very real and I will make sure the Minister for Transport, Tourism and Sport is fully appraised of the comments she has made.