Seanad debates

Wednesday, 15 December 2021

Nithe i dtosach suíonna - Commencement Matters

Airport Policy

10:30 am

Photo of Timmy DooleyTimmy Dooley (Fianna Fail)
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I welcome the Minister of State to the House. As she knows, aviation and tourism throughout the State have been devastated due to the Covid pandemic. Shannon Airport is no different to any other airport in the world, in that it has suffered very considerable losses in passenger numbers and a reduction in activity. I recognise the support the Government has provided to date, which is well respected and well regarded at the airport and in the wider region. I am very pleased to see that the supports the Government put in place have today received the support of the European Union, which is most welcome.

As the Minister of State knows, however, 2022 is seen as the year from which the recovery of the aviation and tourism sectors will begin. I will put on public record that, prior to Covid, Shannon was not keeping pace with growth at other airports. We saw very significant growth in tourism numbers in the five years prior to 2020 and, quite frankly, Shannon was not holding pace with that growth. Only 1.7 million passengers went through Shannon Airport in 2019. In 2007, there were close to 3 million passengers, or more, going through the airport. Cork Airport is at 2.5 million and Dublin Airport, the behemoth, has 35 million passengers going through it and is growing all the time.

The effort now in rebuilding activity at all airports gives an opportunity to rebalance, to some extent, the lopsided growth that has taken place between east and west. There is now an opportunity to see more balanced growth. Dublin was bursting at the seams, putting pressure on the infrastructure at the airport, in addition to the infrastructure of the roads and public transport network around it. Shannon Airport will need ongoing support to ensure that it is in a position to rebuild and be ultimately self-sustaining into the future.

In the long term, we have to look at putting in place a national aviation policy and establishing a national aviation authority, which will have responsibility for the three State airports in order that they work together rather than in competition with one another and do so in a way in which Government policy dictates a regional development approach.It is not to take from Dublin, but it is to take the unnecessary traffic from Dublin, and supporting Shannon, Cork and the wider region in the way we do it. I do not think the structure as it is currently constituted, or the current policy, are appropriate to do that. However, I am also mindful that it will take some time to change the policy and put those kinds of processes in place. In the meantime, we must do everything we possibly can to rebuild the foundation in Shannon in order that it is able to compete and start to rebuild from this year on.

I have a couple of asks. The first thing we need to do from the perspective of the Department of Transport is ensure that there is an hourly direct bus service between Galway and Shannon and Limerick and Shannon. There are good Bus Éireann services at the moment but they are not direct. We need the buses to make the journey in the quickest possible time. It is possible to drive by car from Shannon to Galway in less than an hour and it is important that we have a direct bus service to replicate that.

The chambers of commerce in Clare and Limerick have done a very good piece of work on the need to establish a link between Shannon Airport and one of the big hubs in Europe, either Schiphol or Frankfurt. Schiphol is probably the best, with Frankfurt at number two and Paris and number three. To get an airline to do that in the short term will require significant Government support. Under the public service obligation, PSO, rules it should be possible to put in place that kind of funding. I accept it will need intervention from the European Commission, but I hope the officials in the Department will be open-minded to such a proposal and will be prepared to put together an application for PSO status for a route from Shannon into Schiphol or Frankfurt at the earliest opportunity and to give Shannon and the wider mid-west region – the Minister of State's city, my county and neighbouring counties - a real opportunity to start the rebuilding process as early as possible.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I welcome the opportunity to discuss this topic with Senators this morning. Aviation plays a critical role in our economy as a driving force for tourism and business, including foreign direct investment. Nowhere is this more evident than in Shannon. Government policies have consistently recognised and supported this contribution. Indeed, this has remained the case following the arrival of Covid-19 to our shores. During the Covid-19 pandemic, the aviation sector has benefited considerably from a suite of measures to support businesses across the economy, including but not limited to, a wage subsidy scheme, grants, low-cost loans, a commercial rates waiver, deferred tax liabilities and the Covid restrictions support scheme. It is estimated that Irish airports and airlines will have received approximately €440 million under these measures by the end of 2021. Early in the Covid crisis the Government implemented a range of horizontal economy-wide supports. Shannon has rightly and appropriately benefited from these supports, including the recently extended employment wage subsidy scheme.

Specifically, in relation to Shannon Airport, it is benefiting from a suite of aviation-specific Exchequer-funded programmes and schemes. By virtue of its size - pre-Covid the airport had more than 1 million annual passengers - Shannon Airport has not been eligible for funding under the regional airports programme. However, in light of Covid-19, a decision was taken by the Government to provide funding to Shannon and Cork airports under a newly designed €32 million Covid-19 regional State airports programme this year in recognition of the impact of the pandemic on these airports. Under this programme, the Exchequer is funding 100% of all eligible non-economic safety and security-related current expenditure at Shannon Airport in 2021, as well as a number of safety and security-related capital projects. Shannon Airport was also separately allocated emergency capital supports of more than €6 million towards its hold baggage screening project, a safety and security project at the airport.

The Government has been responsive to the needs of airports as part of the wider aviation ecosystem. This ability to respond decisively is clearly seen in the funding announcement I made this morning. I am pleased to inform Seanad Éireann that today, I have announced €108 million in direct Exchequer supports to the airports of Shannon, Dublin, Cork, Ireland West Airport Knock, Kerry and Donegal. This means that this year, an unprecedented €160 million in Exchequer funding has been allocated by the Government to support airports under the Covid-19 supplementary support schemes, the regional airports programme, and the regional State airports programme. Funding under these programmes supports airports in delivering safety, security and sustainability-related projects and activities.

The supplementary support schemes will help compensate smaller regional airports for the damage caused to them by Covid-19, as well as providing State airports, including Shannon Airport, with the flexibility to roll out more route incentives and to charge rebates with a view to supporting recovery and growth of connectivity. In total, in 2021 the Government will have allocated almost €24 million to Shannon Airport in direct grant support. This is in addition to the aviation-specific supports provided in 2020 and the horizontal supports provided to Shannon during the Covid-19 crisis.

Turning to the wider group, I understand that Shannon Group's engagement with the relevant local authorities on the transfer of Shannon Heritage sites to them is progressing well. As Members may be aware, due to the complexities involved in the transfer, due diligence exercises must be concluded before any necessary formal consents of the Minister for Transport and the Minister for Public Expenditure and Reform can be given to execute any transfer of the sites with the agreement of the Minister for Housing, Local Government and Heritage. The restructuring of the group is seen as necessary to assist the Shannon Group to focus on the recovery of the airport and to build back international passengers, while continuing to develop its aviation cluster and associated property activities.

Photo of Timmy DooleyTimmy Dooley (Fianna Fail)
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The Minister of State correctly identified the considerable support the State has provided to Shannon and to other airports, which is welcome. What we now need to look at is to move beyond the care and maintenance of the airport sector. It is hoped that, all going well, 2022 will be the beginning of the end of the Covid pandemic and in parallel with that we will have a reawakening of the tourism and aviation sectors. I want to work with the Minister of State and others, as I have done in the past, to try to ensure that when we rebuild, we rebuild better and that we build a fairer base. The policies that existed heretofore, unfortunately, skewed the activity towards the east coast to an extent that was too great. Shannon Airport had 1.7 million passengers compared to up to 35 million in Dublin. Some 500,000 or 1 million extra passengers through Shannon Airport would make an amazing difference to the lives of many people who work in the airport and the tourism and hospitality sector in the region. The lack of growth in Dublin would only help the city and Dublin Airport. It there is to be further growth of 1 million passengers in the coming years, it would be lost on Dublin and would merely put further pressure on the infrastructure there. There is a real opportunity to get a policy shift right now by putting in place the key supports that will enable the recovery of Shannon and to skew in an incremental way increased growth in Shannon and the mid-west region.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I do not doubt the importance of Shannon Airport for the mid-west region. I do not need to tell Senator Dooley that this will continue to be a focus of the Government to ensure it is supported. The Minister for Transport, Deputy Eamon Ryan, and I had a very good meeting with the new chair of the Shannon Group, Mr. Pádraig Ó Céidigh last Friday. We discussed the current status of the airport, the key challenges, risks and opportunities for the future, including his ambition for building back passenger numbers at the airport, as the Shannon Group continues to successfully position itself for recovery.

I welcome the commitment to the resumption of transatlantic flights with Aer Lingus and United Airlines both offering services from March next year. The availability of transatlantic flights is critical to the mid-west region to ensure balanced regional development. We are all cognisant of the fact that these services provide support and access for the US multinationals based within Shannon Airport's catchment area. They are also critical to supporting tourism and industry in the region.

I have also been informed that next year's Aer Lingus Heathrow service will increase to twice daily from 18 February and then three times daily from 27 March and that Ryanair is planning to operate 20 routes, including the first service from Shannon to Malta. These are positive developments and recovery is being seen. The Government will continue to support Shannon Airport into 2022.

Sitting suspended at 11.10 a.m. and resumed at 11.32 a.m.