Paul Gavan (Sinn Fein)
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It is always nice to see the Minister of State and he knows he is always welcome here. He is a fine man, in my books, apart from his politics.

Damien English (Meath West, Fine Gael)
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Likewise.

Paul Gavan (Sinn Fein)
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I am disappointed the Minister for Transport, Tourism and Sport, once again, has chosen not to be here.

Denis O'Donovan (Fianna Fail)
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By way of clarification, the Minister said today did not suit him and that the matter could be deferred to another day that would suit him. Obviously, the choice had to be made. To be fair, the Minister, Deputy Ross, has been here several times. I gave out to Ministers last week so I must defend those who try to come here.

Paul Gavan (Sinn Fein)
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I take your point, a Chathaoirligh.

I want to raise the issue of Shannon Airport, which has confirmed it is introducing a range of cost-cutting measures which will include reducing the status of the airport and restricting the number of larger airlines transiting through the airport. Management at the airport met with the three unions representing staff a few weeks back to inform them of the plans, which will include the re-categorisation of the airport from category 9 down to category 7, which will limit the number of larger airlines transiting through Shannon.

This news came as a complete shock - a bombshell, in fact - to the staff working in Shannon. I can tell the Minister of State first-hand that many staff are now worried about how the airport has been struggling financially since it separated from the Dublin Airport Authority. One of the staff said to me that staff feel Shannon cannot survive on its own. They feel this reduction in status reduces it to the same level as Knock or Kerry airports. They know it is losing money and they feel a category 7 airport is for smaller aircraft, effectively making Shannon a Ryanair airport for European destinations. Union officials are currently talking to staff at the airport to decide how to respond.

I want to put this in context. The original business plan for the airport painted a rosy picture of achieving 2.5 million passengers by 2021 and adding 3,000 new aviation jobs in the first five years as a stand-alone operation. Behind the spin and bluster, Shannon has completely failed to achieve anything like these figures. In reality, passenger numbers increased from 1.4 million to 1.7 million by 2015, but 2016 saw just a 2% increase in to 1.74 million, a figure way below growth in comparable airports. This compares to 3.6 million travellers who were going through Shannon in 2007. It is depressing to think that those passengers also include the hundreds of thousands of US troops who should not be there, but that is a whole other issue for another day.

Shannon management are now working on a new masterplan, as they describe it, or perhaps that should be a cunning plan, in the Blackadder Baldrick sense of the term. The reality is that instead of increasing jobs, the airport now wants to cut jobs via a downgrading of the status from category 9 to category 7. A key consequence is that Shannon would no longer be nominated as a diversion destination for aircraft travelling across the Atlantic. This is a very retrograde and short-sighted proposal. The name of Shannon Airport is synonymous throughout much of the Western world as a safe haven for flights that encounter difficulty. It is part of the unique brand that Shannon has had to offer for decades. Now, the management want to ditch this brand, with all the goodwill and name awareness it generates, in order to cut services and jobs.

It is increasingly apparent that management have no credible vision for the future of the airport and that the decision to hive off Shannon from the DAA has been a significant mistake. The Minister needs to take responsibility. I would remind him of the words of his predecessor, Deputy Leo Varadkar, with regard to Shannon, when he said:

I think it is defeatist to think that we can’t achieve modest growth by 2021. Quite frankly, if Shannon can’t achieve that kind of growth by 2021, there is no future for the airport...

Clearly, right now, we are miles behind the targets we need to hit.

In conclusion, Shannon Airport has a proud history of transatlantic travel and international status. The people of Clare and Limerick are seeing that tradition and history being rolled up into a ball and thrown in the bin by current management, who made empty promises and have clearly failed to hit targets they themselves promised to deliver. Rather than job growth, we have job cuts, and we now have the prospect of relegating the airport's status, a shameful prospect that no Government should stand for. I ask the Minister to recognise the need for an urgent review of policy with regard to our regional airports, Shannon international airport in particular.

Damien English (Meath West, Fine Gael)
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I thank Senator Gavan for raising this issue. It is always a pleasure to spend time in his company, which I appreciate. We are touching on a familiar subject when it comes to Shannon Airport. I am taking this matter on behalf of my colleague, the Minister for Transport, Tourism and Sport, Deputy Shane Ross. As the Cathaoirleach said, while he could not be here, he did offer to take this matter at another time. He is quite generous with his time, when he can be. As we know, Ministers must at times commit to other diary engagements and these debates often take place at short notice. I think it wrong to complain he is not here when he offered to deal with this at a more suitable time.

The Government's policy in regard to Shannon Airport is clearly set out in the national aviation policy published in 2015. The policy recognises that Shannon Airport holds a strategic importance for connectivity to the mid-west region and also serves as a gateway to the Wild Atlantic Way. I understand a major consideration for the Government in deciding to separate Shannon Airport from the DAA in 2012 was the serious decline of passenger traffic at the airport. Shannon Airport was loss-making since 2008 and passenger numbers plummeted by over 60% from 3.62 million in 2007 to 1.39 million in 2012. A consistent decline on that scale was always going to be challenging to address and would take time. However, since its independence, Shannon Airport has not only succeeded in reversing a five-year decline in passenger numbers, but has recorded four years of successive increases, with cumulative passenger growth of over 24% in that period. That is not to be sniffed at and is quite a good percentage. In 2016, passenger numbers at the airport increased for the fourth consecutive year, with almost 1.75 million flying through the airport, a 2% increase on 2015, with a number of new airlines and services.

Shannon Airport Authority is a subsidiary company of Shannon Group, the commercial semi-State group established in September 2014. The group's strategy is to improve air connectivity, develop its commercial property infrastructure and enhance its portfolio of tourism heritage attractions, all of which will attract more people to live and work in the region. Shannon Group is an enabler, providing the right environment for foreign direct investment and indigenous industry to prosper.

The latest data from the IDA shows the mid-west was the fastest growing region outside of Dublin in 2016, with 16 companies that announced new or expanded operations, citing the global connectivity provided by Shannon Airport as a key reason for basing themselves on the west coast. The year 2016 saw the largest increase on record in employment growth by IDA client companies in the mid-west, making this region the fastest growing nationally for FDI at more than 10%. I spend a lot of time in the Limerick and Shannon area, given my involvement in enterprise and job creation programmes and in trying to future proof companies and jobs. As the Minister has said, much of the feedback suggests that connectivity is a key part of business decision making. The Government and the various authorities involved recognise this, as is borne out in our policies.

The Shannon Group has advised that it is currently focused on providing quality infrastructure to entice more FDI and indigenous investment to the region. To this end, Shannon Commercial Properties, the group's property company, is investing over €26 million in property solutions at Shannon free zone to give the IDA and enterprise agencies the tools they need in attracting investment and jobs to the region.I understand that Shannon Commercial Properties will have developed over 200,000 sq. ft. of state-of-the-art advanced manufacturing, warehousing and office space by the end of this year. This new business accommodation will assist the job creation agencies in enticing more employment and investment to the area.

Like any business owner, the Shannon Airport Authority is conscious of the need to control its costs so that it can remain competitive and continue to attract new airline business in an increasingly competitive international marketplace. In this regard, the company has engaged with staff and union representatives on a range of proposals, one of which is to operate at category 9 on a flexible basis rather than to operate permanently at that level on a 24-7 basis all year round. This proposal has led to claims of the airport being downgraded, which have been repeated here. That is not the case. What is being proposed is an optimal use of resources in line with best business practice, thus ensuring that resources are deployed more efficiently and when required. I am informed that this flexibility will enable the airport to operate at optimal manning levels in order that it might be as efficient and cost-effective as possible and contribute to a more efficient operating model at the airport without any material impact on flight operations.

The categorisation of an airport is from a fire-and-rescue perspective. It is dictated by the International Civil Aviation Organisation, ICAO. The categorisation is based on the size of the aircraft that operate through an airport and outlines the minimum number of fire appliances and fire-fighting media required to operate at the appropriate categorisation.

Shannon Airport currently operates at category 9 level on a 24-7 basis all year round. As I stated at the outset, the operation of the airport is the statutory responsibility of Shannon Airport Authority. The Minister for Transport, Tourism and Sport believes that the airport authority is doing a satisfactory job in a very competitive environment. He believes that it should be encouraged in its efforts to run the airport as efficiently as possible, ensuring the future viability of the company for all of its staff and customers, and securing the airport's position as one of strategic importance for the connectivity of the mid-west region.

Paul Gavan (Sinn Fein)
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May I comment?

Denis O'Donovan (Fianna Fail)
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Very briefly. We are two minutes over the time that was allocated.

Paul Gavan (Sinn Fein)
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I thank the Cathaoirleach. I shall be very brief.

I thank the Minister of State for the reply. I am not encouraged by it because he did not address two of my key points. First, the promise of jobs in the Shannon area that have not materialised and, second, Shannon Airport no longer being able to accept aircraft on diversion flights, which is integral to the reputation of Shannon and its branding. To be frank, for him to say that there has been no downgrading is incorrect. The staff believe that the airport is being downgraded. There are no circumstances under which this Government should allow that to happen.

Denis O'Donovan (Fianna Fail)
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The Minister of State has no more to answer as he is not the line Minister. He has made his case.

Damien English (Meath West, Fine Gael)
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I cannot speak about all of the parts of the Department of Transport, Tourism and Sport. I can speak from a job creation point of view. In my previous post I spent a lot of time dealing with the educational institutions, at all levels, that are located in the Shannon area and in Limerick. Those institutions contribute to the job creation prospects of the area. They are flexible in terms of the courses they provide in conjunction with businesses in the area. I have no doubt that this is where we will see a growth in jobs in the future. A great deal of work is being done by the Shannon Airport Authority and across all of the different levels of education. Therefore, I am quite confident about future job creation in the area. My confidence also stems from the work being done by a number of Departments.