Martin Conway (Fine Gael)
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I welcome the Minister of State, Deputy Noonan, to the House. I am sure he is aware of the serious blow inflicted by Aer Lingus on Shannon Airport last week with the announcement it was going to close its base there permanently. Like others, I fully understand Aer Lingus is in a perilous situation financially, having lost €360 million last year and €100 million to date this year. However, this undermining of its commitment to Shannon is a further deterioration in the status of Shannon Airport.

I would point to the decision on the Shannon stopover in the early 1990s, the sale of Aer Lingus and the controversy over the Heathrow slots. Shannon, which is and has the status of an international airport with a fantastic terminal building has been continuously completely undermined. As an island national, connectivity is extremely important. In light of Brexit and that we will be in a post-pandemic era, we will have to battle for our economic survival and development.We need proper, effective connectivity in order for the mid-west to flourish. There are many foreign direct investment companies based in the mid-west, particularly in the Shannon Free Zone and the surrounding area, that very much rely on an Aer Lingus presence, and particularly on connectivity between and Heathrow daily.

The announcement by Aer Lingus last week that it was going to close its base certainly does not augur well for the airline's commitment to Shannon. Without a base, one has to assume that we will not have early-morning flights to Heathrow whereby people who wish to do business in the City of London can fly there, do a day's business and come back that night. People who wish to fly to London and take connecting flights to other parts of Europe, to Asia and to the rest of the world will not have the option of early-morning flights.

Through the Ireland Strategic Investment Fund, Aer Lingus has already received a loan of €75 million. I understand it is in the process of drawing down a further €75 million. This will amount to a loan of €150 million from the fund. I also understand that Aer Lingus is in negotiations with the Government regarding a €150 million bailout in order for it to survive. The company must survive. It is critical from an Irish perspective and to secure connectivity. If, however, we are to write the cheque, it cannot be a blank cheque. We need commitments. First, we need a long-term commitment from Aer Lingus that it will keep the Heathrow slots to create and maintain connectivity between Shannon and Heathrow. Second, we need a commitment from the airline that it will continue the flights to Heathrow and continue its transatlantic services to connect the mid-west region to North America. This connectivity has been critical to the foreign direct investors based in the mid-west and doing business in Shannon. It is also important from a tourism perspective. The whole mid-west benefits enormously from American visitors, particularly those from North America but also those from the rest of America. They spend billions of euros in the mid-west every year. This is critical. Aer Lingus will have to guarantee it in the long term if it gets the bailout. Third, and equally important, the airline will have to be persuaded to reverse its decision to close its base in Shannon. These are three requests I am making of the Minister of State in return for the Government giving Aer Lingus the €150 million plus it needs to continue operating.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
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I am taking this question on behalf of the Minister of State at the Department of Transport, Deputy Hildegarde Naughton. I thank the Senator for the opportunity to address the ongoing crisis in the aviation sector, particularly the recent announcement made by Aer Lingus concerning certain cost-cutting measures in light of the cumulative impact of Covid-19 over the past 15 months. First, I acknowledge the unprecedented challenges faced by Aer Lingus and its staff during this difficult time. The entire aviation sector is experiencing its most challenging crisis in its history. Analysis undertaken last week by EUROCONTROL, the European organisation for the safety of air navigation, suggests air traffic across Europe is not expected to return to 2019 levels before 2025. Here in Ireland, the sector has been particularly impacted by Covid-19 and Irish airlines continue to face major financial challenges. As a consequence, all airlines have previously issued capital, raised further borrowings, drawn on Government supports and undertaken measures to reduce their cost base.

In that context and in light of the continuing pandemic, it is acknowledged that Aer Lingus has little option but to take unpalatable measures to reduce its cost base. It has also noted that many other European airlines are also implementing significant cost-saving measures in light of the circumstances currently facing the industry. Nevertheless, it is regrettable that Aer Lingus has decided to close its cabin crew base at Shannon Airport and to temporarily close its base at Cork Airport, as well as embark on a review of grounding-handling arrangements at those airports. The Minister for Transport, Deputy Eamon Ryan, and the Minister of State, Deputy Hildegarde Naughton, met the CEO of Aer Lingus to discuss details of the announcement made by the company last week. They reiterated the Government's commitment to supporting the industry and acknowledged the importance of providing clarity on the extent and duration of employment supports beyond the end of June.The Minister and the Minister of State also reassured the airline that there will be no cliff edge in supports for the airline or for the wider aviation sector. Their meeting with the CEO also focused on future operations of the company in Ireland and they outlined their hopes for a resumption of travel from Cork and Shannon when the situation allows. In that regard, the Minister welcomed confirmation by the CEO that there is no strategic attempt to reduce connectivity at either Cork or Shannon, while acknowledging that restoration of services depends on market circumstances.

The Minister and Minister of State also met with the CEO of Shannon Group and the Minister of State, Deputy Naughton, met with the CEO of Cork Airport last week to discuss the situation. The Minister and Minister of State reiterated their support for the airports and their important role in regional development. Similar engagements took place last week when the Minister of State, Deputy Naughton, met with unions and employer representative groups in her capacity as chair of the aviation subgroup of the Labour Employer Economic Forum. This subgroup has been investigating the option of a specially extended wage subsidy scheme for the aviation sector and this work will continue.

I assure the House that Government is committed to supporting the aviation sector. We recognise the importance of providing clarity on the extent and duration of supports beyond the end of June. Throughout this pandemic, Government has provided a significant level of general support to the economy, with at least €300 million provided to the aviation sector alone. The bulk of this support is in the form of wage subsidies which were designed to maintain the link between employers and their workers.

Approximately €32 million is also being provided in supports to 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 expects to be able to provide funding to Cork and Shannon Airports under this scheme soon. This support will allow the airports flexibility to provide route incentives and airport charge rebates to stimulate recovery of lost connectivity this year.

While acknowledging the primacy of the protection of public health, there is clearly an increasing need for a strategy for international travel that can serve as a basis to both protect existing jobs insofar as is possible and to plan for recommencement of operations as soon as is practically possible. I confirm the Government will set out a pathway for the reopening of international travel following its meeting next Friday.

Martin Conway (Fine Gael)
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I thank the Minister of State for his reply. I welcome the fact there will be a significant announcement on aviation in the coming days. The survival of Aer Lingus is critical to Ireland and to the mid-west, in particular, but any bailout it gets must be a return journey. If it gets €150 million, which I understand it is seeking, we need three commitments from it. First, it must maintain the Heathrow slots in and out of Shannon. Second, it must commit to long-term to strategic routes, transatlantic and in and out of Heathrow, because that is what is required from a foreign direct investment and tourism perspective, particularly with North America. Third, it must reverse the decision it made last week to permanently close its base in Shannon.

Aer Lingus should get the money it is looking for, but it cannot come without conditions. We cannot give a blank cheque. We must get those commitments in return. I call on the Minister and the Government to ensure that happens.

Malcolm Noonan (Carlow-Kilkenny, Green Party)
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Again, it is important to note that the Minister of State, Deputy Naughton, chairs the aviation subgroup of the Labour Employer Economic Forum and that subgroup is continuing its work in investigating a specially extended wage subsidy scheme for the aviation sector. That work is ongoing.

Specifically, in relation to the Heathrow slots, Aer Lingus still holds its portfolio slots at London Heathrow Airport, LHR. The slots are protected and are unaffected by the recent announcement by Aer Lingus of cuts at its Shannon and Cork bases. Certain connectivity commitments are agreed with International Airlines Group, IAG, when the State sold its residual shareholding in 2015. These are currently suspended under the force majeure provisions under the agreement. The connectivity commitments expire in September 2022 and Aer Lingus cannot dispose of those slots without prior consent from the Minister for Finance.

Getting international travel back up and running is vital for the continued economic well-being of this country and remains a Government priority. However, this can only be accomplished through consideration of the progression of our Covid-19 national vaccination programme, developments at EU and international levels, and public health advice. As stated earlier, the Government will set out its position very shortly.