James Browne (Wexford, Fianna Fail) | Oireachtas source

I thank Senators Dooley and Buttimer for raising this critical matter for the aviation sector regarding regional access within Ireland and connectivity throughout the world. I am taking this matter on behalf of the Minister of State at the Department of Transport, Deputy Naughton, who cannot be here but who sends her apologies.

I would like to provide an update on the challenges facing the aviation sector and the steps being taken by the Government to restore connectivity and ensure the industry will be well positioned to recover once the public health crisis has abated. The Government is very aware of the critical importance of regional and international air connectivity to Ireland's economic development and growth. It is a key enabler of international trade and business, including foreign direct investment and tourism. For this reason, the Government places a priority on international connectivity. Over the years, Ireland's aviation policy has supported a robust and dynamic sector and facilitated rapid growth in new routes and passenger numbers. The sector is experiencing its most challenging crisis, however, with many analysts predicting it will take several years for it to return to 2019 levels of activity.

All service providers in the sector, apart from those substantially or exclusively dedicated to air cargo, have had no option but to radically address their core base and seek to safeguard liquidity. Alongside rationalisation measures, the major service providers are shoring up their finances through increased borrowings or raising new capital. Regrettably, Stobart Air's plans to secure a new buyer failed over the weekend. This resulted in the airline ceasing trading and a liquidator is expected to be appointed imminently.

The announcement is deeply regrettable for the 480 Stobart Air workers who have been directly impacted by the decision, and my thoughts are with those families who have been seriously affected by this shock decision. Job cuts have, unfortunately, been a feature of other European airlines as a direct consequence of Covid. The temporary wage subsidy scheme, TWSS, followed by the employment wage subsidy scheme, EWSS, have been generally successful in maintaining the link between airlines and their employees during the Covid crisis. In this instance, however, the loss of its franchised contract for the operation of regional UK routes and other factors made Stobart Air's position untenable.

The restoration of regional connectivity is critical for the Government and work is under way to secure a new operator on these vital regional routes as soon as possible. The Government is acutely aware of the ongoing impact of the pandemic on the aviation sector and has put in place a range of supports for businesses including the aviation sector. These supports include the wage subsidy scheme, a waiving of commercial rates, a deferral of tax liabilities, the Covid restrictions support scheme, the credit guarantee scheme and the Strategic Banking Corporation of Ireland working capital scheme. Liquidity funding is also available through the Ireland Strategic Investment Fund pandemic stabilisation and recovery fund for medium and large enterprises.

The Government also allocated funding for an €80 million aviation-specific support package in 2021. In addition to €21 million in funding for regional airports under the regional airports programme for 2021, a further allocation of up to €6 million to the regional airports under a state aid-compliant scheme is available in 2021. This is in recognition of the impact of Coivd-19 on our smaller airports, and Donegal, Kerry and Knock Airports are eligible for funding under the scheme. Applications for funding under this measure are being assessed and the Minister of State, Deputy Naughton, hopes to be in a position to allocate funding within the coming weeks. Approximately €32 million is also being provided to support Cork and Shannon Airports this year.

Additionally, the Department of Transport is assessing applications for funding to State airports under the €20 million Covid-19 supplementary support scheme, and the Minister of State expects to soon be able to provide funding to Cork and Shannon Airports under the scheme. This support will allow the airports flexibility to provide route incentives and airport charge rebates to stimulate the recovery of lost connectivity this year. Government policy on regional airports seeks to optimise conditions for regional development and connectivity, both for social and economic benefits. The Government recognises that, as employers, they contribute to the local economy and employment is supported through the various ancillary services provided to the airport.