Seanad debates

Thursday, 1 October 2020

Aviation Industry: Statements

 

10:30 am

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

I thank Senators for their contributions. I am acutely aware of the challenges and pressures for the airlines, the airports and those thousands of people working in the industry across the country, not to mention our reliance as an island nation on foreign direct investment and on ensuring we maintain connectivity. The Senators can be assured that the Government and my Department are working very hard at a cross-departmental level in regard to the financial supports. We could see that in the Government's reaction at the outset of Covid in putting in place those supports.

With regard to the aviation task force, I outlined some of the measures. I want to thank all of the contributors to the task force report, which is a very important piece of work that will contribute to the aviation sector. As part of that, we have implemented the extension of the wage subsidies to April 2021. We have published the national Covid health safety protocol for air travel and the extension of the airport slots waiver for the winter season, which is critical. It was recognised at a European level that we need to protect our slots and this was done by the European Commission. We are working nationally and at a European level to try to open up our airspace and to do so with public health at the heart of all our decisions to make sure we can do this at a European level. I wanted to outline those issues.

I reiterate that aviation provides a large number of high-value jobs and generates many more in the wider economy, especially in the tourism sector.As to the importance of Shannon Airport for the mid-west region, and the spin-offs that it provides, I agree with those who have spoken here today, such as Senators Conway and Dooley, that it is critical. It is something that we are very much focused on at Government level.

The current crisis is the most challenging the aviation industry has ever faced. As I previously stated, the forecasts do no anticipate a return to 2019 levels of activity until 2023 or 2024. The question of when aviation business might begin to return in a meaningful way is clearly linked to the evolution of the Covid-19 virus and the ongoing travel restrictions. The current estimate of airport passenger numbers for this year is at 25% of the 2019 levels, and there is continuing uncertainty ahead. It is the uncertainty that makes it difficult to make decisions. The European Council meeting being held on 9 October 2020 will provide some clarity to the Government regarding the supports that will be needed beyond that date.

Testing, and ensuring that we can do so in a robust way, where we are not compromising the capacity of the testing system in Ireland, is also very much at the forefront of our deliberations. Whatever plan we put into place has to be robust and stand up, and people must have confidence in it. Many Senators have alluded to the confidence required for people to be willing to fly.

To assist businesses and protect employment, the Government acted early in the Covid crisis to introduce unprecedented measures of wage supports and other measures to assist businesses, including those in the aviation sector, such as airlines and airports. These businesses were also able to avail of substantial Government support. I have visited many airports since my appointment as Minister of State. It was one of the first things I did throughout the summer, in order to get a real understanding of the issues at hand. I must commend the work and dedication of the staff working in our airports and for our airlines. It has been a very challenging time for them and they, like us, are grappling with uncertainty. We must put in place life-support measures to sustain this industry, so that when there is a vaccine for Covid-19, the industry can get back up and running.

Mention was made today of the State and regional airports. We all recognise the importance of connectivity for those coming from the west of Ireland, both socially and economically. We must ensure that that connectivity continues. I wish to reiterate that the Government is committed to maintaining Ireland's core strategic connectivity. We are all agreed that connectivity is essential for us as an island nation, for social reasons, for export business and for foreign and direct investment. I refer to the regional airports, and perhaps some Members did not hear me when I spoke at the outset. There has been significant funding in terms of capital and operational funding for our regional airports and I am working on a regional airports policy that will be announced at the end of this year. It is a difficult time and I cannot set out exactly what the plans are. We will have to see where we stand on 13 October, but the House can be assured that the Government is working proactively to try to ensure that the aviation sector remains viable.

I refer to the Shannon Airport Group and plans to reintegrate it into the Dublin Airport Authority, DAA. The request to place Shannon Airport on an independent footing came from the mid-west region. Airports all around the world, for example those in Dublin and Cork, now find themselves in a difficult situation. It is not just Shannon Airport alone. They are all experiencing dramatic falls in passenger numbers. Unlike Dublin and Cork airports, Shannon did experience a drop in passenger numbers in 2019. However, that was largely due to factors outside its control such as, for example, the global grounding of the Boeing 737 Max. Despite a very challenging aviation situation in 2019, Shannon Airport secured three new European routes which were officially launched in November 2019. Unfortunately, because of Covid-19, those services could not go ahead.

Our national aviation policy recognises the strategic importance of Shannon Airport for the connectivity of the mid-west region and the Wild Atlantic Way.Indeed, the programme for Government recognises the significant value of the aviation sector in supporting economic development. Despite Covid, Shannon Airport can stand on its own. We are in an unprecedented global crisis and it is important that the Government looks at supporting them through this crisis.

Another issue that arose was the suggestion to purchase a stake in Aer Lingus. If the Government did s, we would probably have to purchase a stake in the International Airlines Group, IAG, which includes British Airways and Iberia Airlines. Qatar Airways currently holds a 25% stake in IAG and this could be a complicating factor. As a shareholder, it is unclear what influence we would have on the day-to-day affairs of Aer Lingus. It would be difficult to get agreement with IAG to nationalise Aer Lingus as the group would have to reach an agreement on the sale of one of its subsidiaries. Nationalisation is not as clear-cut as has been outlined in the debate.

I assure Senators that targeted support will be given to State airports, thus ensuring we have connectivity regarding the Cork, Shannon and Dublin airports and we will continue investing in regional airports, which is critical. There is uncertainty and it is difficult for the Government to know the types of support and timing required. As has been outlined, testing will form a critical part of that.

Finally, I thank Senators for their contributions. I look forward to coming back and working with them all in the future.

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