Leo Varadkar (Dublin West, Fine Gael)

I announced in June 2011 that I had secured Government approval for additional funding to be made available to all six regional airports in 2011, including Galway Airport, reversing the cut in funding made by the last Government. However, at that time the Government also decided that it would not be able to provide operational or capital funding to Galway Airport or Sligo Airport from 2012 onwards, given the need to consolidate the number of airports on the west coast. In making that announcement, I encouraged Galway Airport and Sligo Airport, as privately owned entities, to use the opportunity provided by the additional funding in 2011 to engage with various parties, including business interests, investors and local authorities, to secure their ongoing viability in some form. Both airport companies have pursued this.

In December 2011, a total €5,392,334 was allocated to the six regional airports to cover a portion of their operating costs incurred in 2011. This included a subvention of €2,309,191 to Galway Airport. This funding was allocated under the regional airports operational expenditure subvention - OPEX - scheme to the airports at Donegal, Sligo, Ireland West Airport Knock, Galway, Kerry and Waterford. The operational funding scheme covers regional airports for a given range of costs arising from core airport services, but only when these costs cannot be fully recovered from their own income.

In addition, €222,943 was paid to Galway Airport in 2011 under the regional airports capital expenditure - CAPEX - grant scheme. This brings to €15.5 million the total amount of funding paid to Galway Airport in the past ten years under the OPEX and CAPEX schemes. The capital funding provided focuses mainly on safety and security projects, which aim to ensure that each airport can comply with the latest national and international aviation safety and security standards.

While Ireland West Airport Knock, Kerry Airport, Waterford South East Regional Airport and Donegal Airport will be eligible for funding up to the end of 2014, ongoing support during this period will depend on the availability of funds. These airports are expected to work towards achieving operational viability over this period. The decision to continue to provide funding to these four airports was based on the need to ensure the most effective use of scarce Exchequer resources to support the regional airports network serving the public both in terms of business and tourism. The aim is to ensure that Ireland has a sufficient network of regional airports while taking into account significant improvement in road networks, shorter and more reliable journeys by road and rail and the collapse in passengers flying domestically. I fully recognise the difficulties being experienced by Galway Airport at present. However, as a privately owned entity, it is a matter for the owners and management to work out how best they can secure their future.

In total, over €15 million in subsidies has been paid to this airport in the past ten years. Despite this, the airport has run up multimillion euro debts on top of that and even though subsidies continued throughout 2011, all scheduled flights ended several months before the subsidies were ended. Although it is no reflection on the hard work done by the board and staff at Galway Airport, the decisions made by the Government on the viability of the airport have been proven to be correct and there are no plans to extend support to airports not currently supported.

Bank of Ireland is a private company; the Government only has a 15% shareholding in the bank. I understand €1 million was taken from the bank account unilaterally by Bank of Ireland. I also understand, however, that Galway Airport had an agreement with Bank of Ireland that allowed it to do that. It is unfortunate that is the case given the loans are still being serviced.

The payments under the CAPEX and OPEX schemes are not for redundancy. CAPEX is for capital development and OPEX is to cover operating losses a company makes. Redundancy in private companies is not paid for by the State and the State does not provide redundancy payments in bodies it does not own. When it comes to redundancy, it must be paid by the company, or if the company becomes insolvent, by the Department of Social Protection under the scheme. Workers can be assured their statutory redundancy will be paid, although it may take some time for the payment to be processed either by the receivers or the Department of Social Protection, depending on how things spin out. Workers owed money or redundancy are first in line as preferential creditors, followed by the Revenue Commissioners and then other secured creditors.