Olivia Mitchell (Dublin South, Fine Gael)
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Question 427: To ask the Minister for Transport the moneys paid by the Exchequer to City of Derry Airport in regard to the provision of air services operated by the airport or airline firms; the areas to which such moneys are allocated; and if he will make a statement on the matter. [35197/05]

Martin Cullen (Waterford, Fianna Fail)
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My Department has a long-standing policy of supporting City of Derry Airport, in the interests of North-South co-operation and in recognition that the catchment area served by the airport includes east Donegal. In 1999, my Department provided Derry City Council, the owners of the airport, with capital funding of approximately €1.9 million towards runway improvements, under a co-funding arrangement with the Department of the Environment for Northern Ireland.

In March 2005, the Government approved a decision, in principle, to co-fund safety works and essential infrastructure at the airport with the British Government, with a total contribution from the Irish Government of €7.55 million. The agreement is subject to a number of conditions and the proposals are being examined by the EU Commission in the light of state aid rules. Exchequer subvention is paid directly by my Department to the Scottish regional carrier, Loganair, for the operation of scheduled daily air services on the Derry-Dublin route, under the public service obligation, PSO, essential air services programme.

PSO services on the Derry-Dublin route commenced in 2001 and a new three-year contract with Loganair was announced earlier this year, following an EU procurement process. Subvention payable for services on the route amounts to approximately €2.5 million per annum.