James O'Connor (Cork East, Fianna Fail)
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115. To ask the Minister for Transport, Tourism and Sport if he will report on the damage to the Irish aviation sector due to the asymmetries of responses between the member states under the utilisation of relaxed state rules; and if he will make a statement on the matter. [28902/21]

Hildegarde Naughton (Galway West, Fine Gael)
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The impact of the Covid-19 pandemic, coupled with the emergence and spread of variants of concern, has resulted in one of the most sustained and deepest periods of suppression of international travel. Globally, aviation is experiencing its most challenging crisis in its history. In Europe there were 5 million flights in 2020 as against 11 million in the previous year. Restrictions on international travel this year have further suppressed passenger numbers, which are down as low as 3% of normal volumes in Ireland’s State airports.

The continuing crisis in aviation internationally is increasing the pressure on all firms in the industry internationally. All the major airlines have variously issued capital, raised further borrowings drawn on Government supports and taken measures to reduce their cost base. The two main Irish airlines entered the crisis with exceptionally strong balance sheets and they both remain well capitalised at corporate group level.

Throughout the pandemic, Government has provided a significant level of general supports to the economy, with at least €300 million provided to the aviation sector alone through wage supports, business grants, tax and rates alleviations. The bulk of this support is in the form of wage subsidies, which were designed to maintain the link between employers and their workers. In addition to these broad supports, my Department secured almost €80 million in Exchequer funds to help passenger airports navigate this crisis in 2021. Liquidity support from ISIF has also been made available to large aviation enterprises.

A recent Report from the Central Bank on COVID-19 and the Public Finances in Ireland* outlined that the fiscal support package introduced in Ireland was large in a euro area context, with the increase in primary (non-interest) government spending in Ireland the second highest in the euro area in the first three quarters of last year. The report found that fiscal measures introduced have mitigated the impact of the pandemic on households, firms and the broader economy.

This supports the Government’s policy of providing horizontal financial supports with a view to mitigating the impact of the pandemic on the broader economy. Government is confident that this strategy will facilitate a speedy recovery of all sectors, including aviation, as soon as restrictions are lifted.

* www.centralbank.ie/docs/default-source/publications/economic-letters/vol-2021-no-3-covid-19-and-the-public-finances-in-ireland-(conefrey-hickey-and-mcinerney).pdf?sfvrsn=11