Wednesday, 8 July 2020
Saincheisteanna Tráthúla - Topical Issue Debate
Covid-19 Pandemic Supports
I welcome the Minister of State, Deputy Hildegarde Naughton, to the House and wish her well in her post. This debate is about Shannon Airport, specifically the detrimental impact Covid-19 has had on its operations. There has been a 96% reduction in passenger numbers in Shannon Airport since March. Passenger numbers are likely to be 70% lower than last year. Cork and Dublin airports will have a combined reduction in passenger numbers of 40%. Shannon, therefore, has been exponentially impacted by Covid. I seek a number of measures. An aviation task force is about to produce its final report. Will the Minister of State indicate when she expects to receive that report? The report will be made public and I ask that she act on it. Arising out of that report, I would like to see a specific task force report for the Shannon Group, specifically Shannon Airport. We have unique difficulties to overcome in Shannon. Coming from Galway, the Minister of State will understand that Shannon Airport is critical to the western seaboard. The area has the largest number of multinational companies outside Dublin. I want to see supports provided for the development of routes outside Dublin. Shannon Heritage has submitted an application for supports and it should receive funding. Some 230 staff in Shannon Airport who have been told that a voluntary redundancy package is available are extremely worried about their future. We want action and supports for Shannon Airport.
I wish the Minister of State the very best with her new portfolio. I plead with her to urgently intervene in the case of Shannon Airport. The airport is facing an unprecedented crisis and has been disproportionately hit by the Covid pandemic and the resulting grounding of planes. We are in a fight to ensure the solvency of the airport, retain jobs and protect the mid-west economy that is heavily reliant on Shannon Airport.
Passenger figures at the airport have dropped by 98% since March. The place is like a ghost town. On Monday evening Ms Mary Considine, the CEO of the Shannon Group, announced that a series of pay cuts and staff cuts were on the way. I consider this move by management to be rather premature. The aviation recovery task force is due to report to the Government in the next ten days. On 20 July we will see the green list of countries to and from which travel restrictions will be eased.
Last night I met with the Taoiseach in his office to discuss the matter urgently. I am now expressly asking the Minister of State to intervene. I ask her to engage directly with the airport's management and staff unions to offer some clarity and reassurance regarding the future of Shannon Airport, its workforce and the many industries and employees that depend on its existence.
I also wish the Minister of State well in her new portfolio. Shannon Airport is much more than just an airport. It is the driver of economic activity in the mid-west and west. The airport was struggling even before the Covid-19 crisis. Aviation is an industry that is highly exposed to the effects of Covid-19. Shannon Airport faces significant challenges. Traffic has decreased by 96% since March. Aer Lingus still has not returned to the Shannon-Heathrow route. United Airlines has announced that it will not return to the airport. Without warning, a letter from management has been circulated to 230 staff members. There was no consultation with the unions or the workforce. The letter outlines far-reaching cost reduction measures.
I welcomed the setting up of the aviation recovery task force. It is of critical importance that this task force acts to the benefit of Shannon Airport. Our country needs a balanced aviation policy that will benefit Shannon Airport. I plead with the Minister to roll up her sleeves in the interests of aviation in this country and back Shannon Airport.
I thank the Deputies for raising this very important matter with me. As an island nation, Ireland is particularly dependent, both socially and economically, on air connectivity. Aviation plays a critical role in our economy. More than 140,000 jobs are supported by the air transport sector in Ireland. The air transport industry, including airlines and industry supply chains, is estimated to support a share of Ireland's GDP worth €8.9 billion. Approximately 6.8% of GDP was supported by air transport and foreign tourists arriving by air in 2018. Spending by foreign tourists supports a further €8.7 billion of the country's GDP. Ireland is also a significant global player in the area of aircraft leasing, an industry which contributes a further €541 million to the economy and supports almost 5,000 jobs.
Successive Government policies and the national aviation policy have recognised and supported this contribution. They have pointed in particular to Ireland's reliance on international connectivity to secure its competitive international position. The current policy has been highly successful and aviation in Ireland has seen strong growth in recent years. However, as we all know, the Covid-19 crisis is having a significant impact on the sector. Irish airports and airlines are fully exposed to the dramatic downturn in activity. Operations shrank to a small fraction of the normal level of activity, resulting in significant cash flow problems. Airlines and airports have had to restructure their businesses significantly in response to the crisis, and many are availing of Government supports. The Shannon Group has been severely impacted by Covid-19. I acknowledge and thank the company's management and staff for their commitment to keeping the airport open and keeping passengers and staff safe during this very difficult time.
We can all agree on the importance of Shannon Airport to Ireland and to the mid-west in particular. This is acknowledged in the national aviation policy, which recognises the strategic importance of Shannon to the connectivity of the mid-west and its importance as a gateway to the Wild Atlantic Way. Unfortunately, in the challenging circumstances faced by the Shannon Group, management have had to take difficult decisions to ensure the future viability of the company. I understand the company has been engaging further with employees this week on further measures that must be taken to assist the company's recovery.
I do not underestimate the impact on employees of these changes, which are deemed necessary to enable the Shannon Group to secure the future of the airport so that it will be well placed when the sector recovers from this crisis. Deputies will be aware that in response to Covid-19, the Government has put a broad range of supports in place to help mitigate the effects of the crisis. These include the temporary Covid-19 wage subsidy scheme, of which many companies in the aviation sector, including the Shannon Group, are availing. The Shannon Group has asked for a range of supports from the Government to help mitigate the impact of Covid-19. These are being considered. My Department recently approved €6.1 million of emergency funding to complete the airport's hold baggage screening project. The Department continues to work closely with the Shannon Group to ensure that the company, including Shannon Airport, will be well positioned operationally to contribute to the post-pandemic economic and social recovery.
The impact of Covid-19 on the aviation sector has been severe. The sector will continue to be impacted as long as international air travel is restricted on public health grounds. The Government is acutely aware of the matter and suitable policy and financial responses are being developed. The final report of the aviation recovery task force will be important when finalising proposals, given the expertise and industry insights it will reflect.
I thank the Minister of State. I wish to follow up quickly on a few things. A large number of people in my constituency of Limerick City and in north Tipperary work at Shannon Airport. The Minister did not make reference to Shannon Heritage in her response. More than 300 people are employed there during the peak season and 145 are employed year-round. If a proposal comes from the Shannon Group, will the Minister consider providing funding to ensure the Shannon Heritage sites are kept open all year round?
Second, the programme for Government refers to providing funding for route support and looking for flexibility in state aid rules in discussions with other EU member states. Will the Minister of State commit to considering funding for Shannon Heritage? Will she commit to the provision of funding for route support? The Aer Lingus route from Shannon to Heathrow is still not up and running, which is not the case for Cork or Dublin. It is absolutely critical that the aviation recovery task force report is acted upon and that funding is put in place to enable Shannon Airport to operate. A more specific task force will be needed for Shannon Airport itself.
I thank the Minister of State. Many airplanes are gathering dust on the apron of the runway at Shannon Airport. I understand that public health guidance is preventing them from taking to the skies. However, we need to know why there are still many inbound and outbound flights at Dublin Airport and Cork Airport but virtually none from Shannon. Any open air links in and out of this country must be spread evenly. There is a lot more to this country than the Dublin economy.
I hope the Minister of State will intervene with respect to Ryanair's refund policy. I use the words "refund policy" quite loosely. These days there are Ryanair flights carrying single passengers. This is absolutely crazy. When people seeking to follow Government advice against international travel phone Ryanair to cancel their bookings, they are told by management that the planes are in the sky and whether to fly is the passenger's choice. This flies in the face of good consumer practice. Some passengers are being charged €600 or more in administrative fees to change their flights.
I must insist that any funding that the aviation recovery task force awards to the Shannon Group must be fully conditional on the company keeping the Shannon Heritage sites open throughout the autumn and winter months. The Shannon Group management plans to shut these sites at a time when we are desperately trying to attract tourists to the region for staycations. It makes no sense whatsoever to shut these iconic sites when we are trying to satisfy the needs of a very buoyant domestic tourism market. I hope the Minister of State will expressly intervene in this matter. We need all of the recommendations of the aviation recovery task force to be acted on immediately.
I join my colleagues in pleading with the Minister of State to ensure that the Shannon Heritage sites remain open all year round. If such a proposal comes from the Shannon Group, I ask her to support it with the necessary funding.
It is also important that the State should step forward and provide the necessary state aid to keep the airport operational and to facilitate capital expenditure works. We need a balanced regional policy for aviation if we are to stop the galloping, runaway horse that is Dublin Airport, which has a monopoly on air travel into our country. I plead with the Minister of State, who is from the west of Ireland, to buy into this effort and deal with the situation. A very congested Dublin Airport is not good for the country. We must try to spread those passengers out to Shannon and other airports in the post-Covid era. I look forward to the Minister of State's reply.
I have listened very carefully to what the Deputies said. I take all their comments on board, particularly those concerning the Shannon Heritage sites. As somebody who represents the west of Ireland and whose home is only 40 minutes down the road from Shannon Airport, I completely understand its strategic economic and social importance to the region. I propose to undertake a thorough examination of the airport's future viability and sustainability, including restructuring measures, financial supports and any other measures that may be necessary and appropriate as part of a wider review of Shannon Group. I will be in a position to do this once there is further visibility of the extent of the damage caused by Covid-19 to the group's strategic and business outlook and its funding position.
I plan to revert to the Government with recommendations on this issue in due course. I will take into account the strategic importance of Shannon Airport in the context of the national and regional development of aviation policies. I will be meeting with the task force for aviation recovery this week, whose membership includes the chief executive officer of Shannon Airport. Deputies can be assured that I am taking this issue very seriously and will work with all the stakeholders to ensure we have a viable aviation sector. I thank the Deputies for their comments, which will greatly assist me in my role.