Hildegarde Naughton (Galway West, Fine Gael) | Oireachtas source

I am delighted to be here today as it is my first time to address the Seanad since I served as a Senator. I wish all Members who have this great honour of serving here well.

I am delighted to have the opportunity to update the House on aviation matters in general and on what the Government is doing to support Irish aviation during this unprecedented crisis.As an island nation, Ireland is particularly dependent on air connectivity, both socially and economically. Aviation plays a critical role in our economy. It is essential for tourism, export businesses and foreign direct investment. Successive Government policies have recognised this and have particularly pointed to Ireland's reliance on international connectivity to secure its competitive position internationally. Due to the coronavirus, however, global civil aviation is currently experiencing its most challenging crisis ever, more challenging than 9/11 or the global financial crash. At the peak of the crisis, traffic movements in Europe were below 2019 levels by more than 90%. Passenger numbers were estimated at just 1% of pre-Covid-19 numbers. I would like to take this opportunity to express my appreciation for the role the aviation sector, airlines and the leasing sector played in facilitating the supply of personal protective equipment, PPE, for the HSE from around the world at this time. While some traffic returned during the summer months to countries where travel and border restrictions were eased, this appears to have stalled while many European states implement new measures to deal with the now increasing numbers of Covid-19 cases. Several forecasts across the airline sector do not anticipate global capacity returning to 2019 levels before 2023 or 2024.

The question of when aviation business might be able to resume in a meaningful way is clearly linked to the evolution of the coronavirus, ongoing travel restrictions and advice, consumer confidence and the economic outlook more generally. Current estimates predict that airport passenger numbers this year will be just 25% of 2019 numbers. The scale of this decline is having a severe financial impact on airlines, airports and associated businesses in the aviation sector.

In order to assist businesses and protect employment, the Government acted early in the Covid-19 crisis, introducing wage supports in the form of the temporary Covid-19 wage subsidy scheme and then the employment wage subsidy scheme. These schemes provide direct assistance to employers to keep staff on the payroll. Some aviation workers may also be entitled to short-time work supports. In addition, the Government put a comprehensive suite of generalised supports in place for companies of all sizes, including those in the aviation sector. Companies can avail of grants, low-cost loans, commercial rates waivers and deferred tax liabilities. Larger companies, including those in the aviation sector, can apply for liquidity support through the Ireland Strategic Investment Fund's pandemic stabilisation and recovery fund. All of our airports are benefitting from the generalised supports which I have outlined here. In addition, Shannon Airport has been provided with an emergency grant of more than €6 million to complete its hold baggage screening project, a safety and security requirement under EU regulations.

The Government has taken strong and targeted action to support regional airports. Our regional airports are also benefitting from the range of Covid-19-related Government measures I have outlined. Donegal Airport, Ireland West Airport Knock, Kerry Airport and Waterford Airport are being supported under the Government's regional airports programme. This year these airports are receiving approximately €6 million in Exchequer grants for both capital and current expenditure. Regional connectivity also continues to be subsidised through public service obligation, PSO, air services between Dublin and the regional airports of Donegal and Kerry, with more than €7 million being provided to support these services in 2020. A new regional airports programme for the five-year period starting in 2021 is also being finalised. I expect this to be published before the end of this year.

These supports notwithstanding, our airlines and other aviation stakeholders have had to make several difficult decisions in order to best ensure their long-term commercial viability. These decisions have included consideration of redundancies, staff lay-offs and the potential closure of operational bases, and have all been taken in response to the significant reduction in their operations. Industry has also introduced shorter working schemes, which have reduced hours worked and pay received by their staff. Clearly, in the midst of a global pandemic and faced with restrictions on non-essential international air travel, the airline sector serving Ireland will be considering the viability of many of its existing routes. In the circumstances it is anticipated that the level of connectivity during the forthcoming winter season will be lower than last year. Route schedules for the winter season at Irish airports have not yet been finalised by the airlines serving the Irish market. However, it should be noted that any decisions by airlines regarding routes are commercial decisions of the companies concerned. I would like to make it clear that this Government is committed to maintaining Ireland's core strategic connectivity.As an island, such connectivity is essential to us for export businesses and for foreign direct investment. Further targeted financial supports to help reinstate connectivity and promote regional development and sustainability in the aviation sector are being considered by my Department. This will feed into the Government's further plans to aid broader economic recovery, at the appropriate time and remaining cognisant of prevailing public health advice.

The aviation recovery task force, which reported in July, set out recommendations for consideration by Ministers and Government as to what needs to be done to assist the Irish aviation sector to recover from the Covid-19 crisis. The task force report contains a number of recommendations on how to support Irish aviation in two phases. It recommended that measures to sustain the industry for as long as travel demand remains suppressed be introduced, followed by measures to help stimulate a return to growth when the time is right.

The Government has already implemented several of the task force's recommendations, including the publication of safe air travel protocols. In consultation with the European Commission, we have progressed a European slot rule waiver for airlines. The wage subsidy scheme was also extended to April 2021. The key to a meaningful recovery in the aviation sector, however, is to enable safe travel where the risk of contracting coronavirus from travel is low. That risk can be mitigated through additional measures such as testing and travellers should have some level of certainty on the public health measures in place during their travel journey.

The European Commission proposal for a co-ordinated approach to the restriction of movement offers a way forward in this regard. As part of its medium-term Covid recovery roadmap, the Government took the decision to broadly align with this EU approach to international travel, which is expected to be finalised at the meeting of the General Affairs Council on 13 October. With regard to countries other than those on the green list, the proposed EU approach would involve graduated requirements for testing for incoming and outgoing passengers.

My Department is consulting the Department of Health and the HSE, as well as maritime and aviation stakeholders, to consider the possibility of introducing testing for Covid-19 in the context of international travel as an alternative to the general advice against non-essential travel. Any testing regime would need to be consistent with public health requirements and cognisant of the resources and capacity for testing available in our health sector. It is our hope that once the European common approach, which includes support for a testing regime, is agreed, the path ahead for aviation and travel will be clearer and we will have better visibility of what might still be needed to support the aviation sector in the medium term.

Aircraft leasing is playing a growing role in the world aviation sector with approximately 40% of the world's commercial airliner fleet currently being leased. Ireland has become a global centre for the aircraft leasing industry, largely as a result of the skills developed during the era of Guinness Peat Aviation, the first truly global leader in this industry. Ireland is now one of the largest international hubs for aircraft leasing and aircraft management activities. The national aviation policy recognises the valuable contribution that the aircraft leasing and finance sector makes, both in its own right and in supporting other activities in the wider aviation sector such as maintenance, repair and overhaul. The Government is committed to maintaining and building on Ireland's attractiveness as a base for leasing and finance and to creating the conditions to grow employment in the sector.

I will say a few words on Brexit and sustainability, as these will be key issues for aviation in the period ahead, Covid-19 notwithstanding. On Brexit, the Government continues to support EU negotiators in working towards a future relationship agreement with the UK, including for aviation. We are seeking an agreement on aviation which protects Ireland's connectivity to and through the UK and which allows for flexibility in commercial operations. Aviation is just one part of the overall agreement, however and, as we know, significant gaps remain on key issues, in particular the level playing field, governance and fisheries. These fundamental issues must be addressed to secure an overall agreement.

Irrespective of the outcome of the ongoing negotiations, the end of the Brexit transition period will bring changes compared with today and certain actions must be taken now to prepare for that change. On 9 September, the Government published an updated Brexit readiness action plan. This plan supports and promotes the necessary preparations for the end of the transition period. The plan includes a section on aviation, which gives advice to stakeholders on what they should do to be ready for the changes to come. This readiness work is supported by a major national communications campaign under the "Getting Ireland Brexit Ready" brand.In addition, officials in my Department remain in close contact with aviation stakeholders to support their Brexit readiness.

On sustainability, the Government is committed to reducing the impact of air travel on the environment, and fully supports the push towards a resource-efficient and sustainable industry. This is reflected in the current national aviation policy and in Ireland's Action Plan for Aviation Emissions Reduction published in April 2019, which outlined a number of actions that will be taken over the coming years to reduce and offset the impact of air travel. The European Green Deal has brought renewed focus to this work. It outlines how climate change will be mitigated all over Europe and in all sectors in the coming years. The EU aims to be climate neutral by 2050 and reducing and offsetting aviation emissions will be a key part of this process.

I would like to take this opportunity to advise that I expect shortly to bring forward legislation to modernise and enhance the regulation of Irish aviation. The primary aim of this legislation is to establish a newly independent safety, security and economic regulator, putting in place new structures that meet the requirements of EU law and that better reflect international best practice. At present, Ireland has two aviation regulators: the Irish Aviation Authority and the Commission for Aviation Regulation. The plan is to merge these two entities, strengthen their capacity, improve their consumer and industry interface, and position Ireland for the future as a leading place to do business in global aviation. The text of the air navigation and transport Bill is expected to be ready soon, subject to Government approval, and I look forward to discussing it in more detail with Members of this Chamber when it comes before the House as part of the legislative process.

The Government has responded to the crisis affecting aviation and continues to do so. I will continue to maintain close contact with airports, airlines and all aviation stakeholders in the period ahead to ensure that we can safeguard Ireland's core connectivity, protect employment and position the sector to contribute to Ireland's post pandemic recovery.