Jimmy Deenihan (Kerry North, Fine Gael)
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Question 493: To ask the Minister for Transport if he has sought an alternative airline company to operate the public service obligation between Kerry and Dublin airports; if this company will restart the PSO contract in the near future; and if he will make a statement on the matter. [1676/11]

Jimmy Deenihan (Kerry North, Fine Gael)
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Question 494: To ask the Minister for Transport if he has considered the report on the future operation of public service obligation for the regional airports; if a decision has been reached on which PSOs will continue to operate after 21 July 2011; and if he will make a statement on the matter. [1677/11]

Noel Dempsey (Meath West, Fianna Fail)
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I propose to take Questions Nos. 493 and 494 together.

Following the termination of Ryanair's contract to operate the Kerry Dublin PSO air service, my Department contacted the next highest ranking tenderer for the service and, in accordance with Paragraph 8 of the original invitation to tender for the service, asked them to consider whether they were in a position to provide the service for the remainder of the concession period, subject to the same conditions and level of compensation applying under the Ryanair contract. The tenderer in question, having considered the matter, informed the Department that they were not in a position to accept the PSO contract on this basis. All the current Public Service Obligation (PSO) contracts for services linking Dublin Airport with the regional airports at Derry, Donegal, Sligo, Ireland West Airport Knock, Galway and Kerry Airports commenced on 22 July 2008 and are due to expire on 21 July 2011.

The Value for Money (VFM) Review of Exchequer Expenditure on the regional airports programme has been considered by Government and was published today. Having considered the conclusions and recommendations of the Review, the Government has agreed to support the continuation of a Public Service Obligation (PSO) route between Donegal and Dublin and between Kerry and Dublin. Arrangements are being put in place for a tender competition in respect of these two routes. In line with the Review, the Government has also agreed to cease requiring PSO routes between Dublin and Sligo, Knock, Galway and Derry, from July 2011 recognising, inter alia, the improvements in alternative transport modes by rail and road which have taken place particularly with Government investment under Transport 21 in recent years.

It must also be borne in mind that there are many demands on the Department of Transport's Vote and trying to maintain a level of expenditure on the Regional Airports Programme which is no longer justified or sustainable would impact negatively on other areas such as public transport provision and/or road maintenance. I envisage that implementation of the recommendations of the Value for Money Review will result in the appropriate use of scarce Exchequer resources in a more focused way to secure an adequate network of regional airports serving the Irish public, both in terms of business and tourism. Where a PSO route is being terminated from mid July 2011, the route will be open to commercial air services from that date.

Overall, I believe that the combination of an improved surface transport network together with a more consolidated air service network to regional airports, along with the State Airports at Cork, Shannon and Dublin, provides the necessary transport access to underpin Ireland's sustainable development.