Wednesday, 29 April 2015
Ceisteanna - Questions - Priority Questions
3. To ask the Minister for Transport, Tourism and Sport if the upcoming policy document on Ireland’s aviation policy will take into account the European Commission's guidelines on state aid to airports and airlines with regard to reducing State funding, specifically for Waterford Regional Airport; if he supports these guidelines; if he anticipates the Government and local authorities reducing funding to Waterford Regional Airport under the new aviation policy; his views that reducing state aid to Waterford Regional Airport could have a detrimental effect and ultimately hinder economic growth and deter multinational investment in County Waterford; if he will provide an update on the proposed runway extension at the airport; and if he will make a statement on the matter. [16852/15]
I wish to ask the Minister whether the upcoming policy document on Ireland's aviation policy will take into account the European Commission's guidelines with regard to reduced funding for state aid to airports and airlines, in particular to Waterford Regional Airport. Does the Minister support the European Commission guidelines? Does he anticipate the Government and local authorities reducing funding to Waterford Regional Airport and other airports, under the new aviation policy?
The Government policy on aviation is reflected in Ireland's Regional Airports Programme 2015–2019, which provides for the continuance of three Exchequer support schemes, namely, the OPEX and CAPEX schemes which deal with the operational and capital expenditure needs of airports and the PSO air services scheme. These apply, where appropriate, to the four regional airports, including Waterford Regional Airport. The programme limits future Exchequer support to safety and security-related infrastructural capital projects, similar to previous policy.
Such supports must comply with the 2014 EU guidelines on state aid to airports and airlines. The criteria for providing such financial support has changed since 2005 and has resulted in a reduction in the level of state aid that may be given to the airports under the 2015–2019 programme. However, I stress that there is provision under the guidelines, in exceptional circumstances, for airports to make submissions to the Commission for consideration on a case-by-case basis to seek approval to exceed the 75% maximum set out in those guidelines.
It will be up to Waterford Airport to provide a comprehensive business case in support of such a request.
Central to such supports will also be the need for regional and local business investment over the course of the programme. Ireland, in accordance with the requirement to do so under the 2014 guidelines, conveyed its unconditional acceptance to the guidelines in May of last year. Following a lengthy clarification process, the programme has recently been formally notified to the European Commission for approval. My Department will engage with the four airports to identify the specific level of Exchequer supports to be made available to each airport under the programme once approved.
Waterford Airport suffered a dramatic decline in passenger numbers since the recession began, from 144,000 in 2008 to 28,000 in 2013, but the numbers have increased dramatically since 2014, by 15% to 16%. Waterford, like Knock, Donegal and Kerry, is still in receipt of the support under the regional airports programme. However, since 2011, successive transport Ministers have made clear the importance of what they call working to achieve financial viable in the medium term, and this is where I have the concern about the impact of the proposal by the European Commission. The Government pledged to bolster air traffic at airports with incentives, such as the ending of the €3 travel tax, but would the Minister agree that reducing state aid by any amount would ultimately hinder economic growth and deter multinational investments in Waterford Airport and other regional airports, and that regional airports play a crucial role in facilitating balanced regional development?
I agree with Deputy Halligan that regional airports play an exceptionally important role in delivering balanced development across the country. The Deputy has in the past raised with me the issue of the lengthening of the runway at Waterford Airport and I followed up on that matter in anticipation of this question here today. My Department has been advised that the airport board is committed to raising the necessary funds from local sources to fund the laying of an additional 150 metres of runway.
I appreciate that the Deputy has acknowledged the considerable success that the board and management of Waterford Airport have had recently but I acknowledge, too, the recent success that they have had in securing a replacement for the Waterford-London Luton route which became operational on 27 April. This route will operate seven days a week between Waterford and London Luton. They will also operate a mid-morning Waterford to Birmingham service four days per week. I can assure the Deputy that, through the regional airport programme on which we are working with the European Commission, I aim to provide a platform within which the needs of airports such as Waterford can be responded to.
I welcome the Minister's engagement, as I welcomed the engagement of the previous Minister, with regional airports but I must reiterate that there are concerns which must be addressed. Ireland's official response to the European Commission guidelines stated, "provision of compensation for uncovered operating costs of services of general economic interest (SGEI) would remain possible for small airports to allow for connectivity of all regions". The problem is it does not clarify what the provisions will be. As the Minister stated, the Commission is calling for a maximum intervention rate of 75% for small airports, such as Waterford. Would the Minister agree, even at that, it could have catastrophic consequences for small regional airports?
I do not agree with Deputy Halligan's analysis regarding the risk of catastrophic consequences for either Waterford Airport or the other regional airports. The Deputy asked about the Government's response to the guidelines from the European Commission. As I stated earlier, we agreed with the guidelines that were being put out. I suppose we did that for larger reasons. It places new constraints on the ability of state bodies to invest in the kind of airports to which the Deputy refers. I believe that will create a level playing field within which airports such as Waterford will be able to prosper in the future because there will always be other governments and bodies which will have deeper pockets than a country such as Ireland which, in turn, could confer greater competitive advantage on the kind of airports with which Waterford is competing.
I assure Deputy Halligan that in the framework within which we operate in the European Union, we will do all we can to support the development of Waterford Airport. In fairness, this is something that is acknowledged by the management and board of Waterford Airport. I met the airport's manager recently and I look forward to having an opportunity to meet the board and management of Waterford Airport in Waterford Airport soon.