Dáil Éireann debate -
Wednesday, 15 Dec 1999

Vol. 512 No. 7

Adjournment Debate. - Knock Airport.

Mr. Higgins

(Mayo): I wish to share my time with Deputies Ring and Kenny.

The announcement yesterday evening by Ryanair that it will pull out of Knock Airport on 11 January is described in newspapers today as a boycott. Let us call it what it is. It is nothing other than sheer blackmail. Ryanair knows it has Knock literally over a barrel. Ryanair accounts for 90% of Knock air traffic business. Michael O'Leary and Ryanair know well that by pulling out of Knock, they will not just cripple Knock Airport, they will close it. Ryanair would like to have Knock Airport understand that they have always done Knock Airport a service or a favour. It was a service or a favour that paid Ryanair rich dividends. When Ryanair was a struggling company, the people of the west rallied and supported it. They paid, and still pay way above the going rate. While Ryanair offered cut price fares of £19.99 from Dublin to UK destinations, passengers to and from Knock paid an additional £120 or £130 to and from the same destinations. People paid this out of a sense of service and loyalty to Knock and Ryanair. Six months ago Ryanair had such an interest in the west coast that it was prepared to guarantee at least 750,000 passengers through Shannon each week provided it got a terminal at Dublin Airport, yet yesterday it pulled out of Knock because of an argument about a mere £6 extra per passenger. It is obvious that Knock is a pawn in a powerplay. I am appalled, but not surprised, by Ryanair's ruthlessness.

The Government has a clear responsibility here. Knock is an excellent facility, an international airport run on a shoestring, with staff double jobbing on modest pay. They provide an international airport service for a fraction of Aer Rianta costs. Every penny received from duty free sales was ploughed back into support facilities and services and to reduce handling services. Without duty free sales, there was literally nowhere to go. Last week, the Government found £250 million overnight to defuse the budget controversy. I appeal to the Minister tonight to approve a subvention of £1 million for Knock to ensure that the vision of Monsignor Horan is not extinguished. This is a small price to pay to retain a service that links the remotest corner of rural Ireland with the capital of the United Kingdom in less than one hour. It links fathers working in Kilburn with their families in Kiltimagh and young people working in Glasgow with their fam ilies in Geesala. There is a social and economic dimension to this.

We need to look at the structure of boards of management. They leave much to be desired.

Mr. Ring

I thank Deputy Higgins for allowing me to share his time. What has developed at Knock Regional Airport is very serious. Deputy Higgins has pointed the finger in relation to Ryanair and the board itself. I am calling on the Minister tonight to try to help the board out of the financial difficulties in which it finds itself at the moment because of the abolition of duty free sales. The Minister should meet the board as a matter of urgency to see how she can help in solving the difficulties at Knock Airport. The board, together with Ryanair, must take much of the blame for them. Both acted very badly in this matter.

It would be a major disaster for County Mayo and the west of Ireland if anything happened to this important infrastructure. I say to the Minister, as did Deputy Higgins, that this infrastructure links our emigrants to home. In the past, they supported Knock during a dispute involving the handlers and the carriers. I am glad that was resolved. Again, the pressure was being put on the board and on the general public.

I ask the Minister to do whatever she can to support Knock Airport the way she supported Galway, Shannon and the other regional airports throughout the country. We are only looking for fair play. The board of Knock Airport must also get its act together. This is an important infrastructure in the west and we do not want anything to happen to it. We have retained Objective One status and it is important that this infrastructure is retained also.

Mr. Kenny

I am happy to join with my colleagues, Deputies Higgins and Ring, and indeed all Deputies from County Mayo, on this matter. The airport manager describes this issue as a question of survival. Knock Airport has a distinct advantage in that it has an international size runway. It lies at the very heart of the Border, midlands and western region, which now has Objective One status. The major objectives of the BMW region, as stated in the national plan, are to increase the potential of the region, to act as a counterbalance to the southern and eastern region, especially Dublin, and to pursue more balanced and diversified growth within the region. I understand Sligo has a subsidy, Galway has a subvention, and Shannon has a £5 million marketing fund.

I disagree with Michael O'Leary's decision. Knock is being used as a pawn. I am well aware of the ruthlessness of this cut-throat business. He has a duty and, as the manager has pointed out, it is a question of survival, but the Government has a duty to ensure that the infrastructure of this region is developed. As stated in the national plan, and in the words of the Taoiseach when he opened the Western Development Commission offices in Ballaghaderreen, this area must never again be disadvantaged to the detriment of its people in comparison to other areas.

The Minister has a responsibility. I would like her to prove me wrong when I say that she does not express sufficient interest in the development of Knock Airport. I would like her to go down to Knock and to give the airport the money Deputy Higgins spoke about, which is chicken feed in comparison to what is being allocated to many other areas of the country. This region has no Cabinet Minister. It has no funding from the Western Development Commission. There is no proposal for an extension of the gas pipeline by Bord Gáis. There is no major road from Letterkenny to Derry through Sligo and on to Galway. This region has no political clout. We have to rely on the Minister in Athlone to do this job for us. I expect, on behalf of the people of Connacht, in whom this airport is kept in trust, she will, on behalf of the Government, make sufficient moneys available to ensure that the survival referred to by the airport manager will be assured and that, at the close of the century, this vital piece of infrastructure will be retained.

An Leas-Cheann Comhairle

Deputy Cooper-Flynn has given me notice of her intention to raise the impact on Knock Airport of the curtailment of services by Ryanair.

Mr. Kenny

Her flight got here just in time.

Mr. Ring

Her flight has landed.

Ms Cooper-Flynn

I wish to share my time with the Minister of State, Deputy Moffatt. It is unfortunate that I have to comment on this matter this evening. Only two months ago I had to speak on the Adjournment about the decision of Aer Lingus to cease services to Knock Airport. I am very disappointed at the news that Ryanair intends to pull its services from Knock Airport. This is an excellent facility which means much to the people in the west.

Knock Airport has been in existence for a period of 20 years and over that time it has operated at a small profit, mainly thanks to the operation of duty free. Duty free has now been abolished and, as a result, there is a projected loss to the airport of approximately £600,000 per annum. This must be made up by the board of Knock Airport.

Knock Airport is a private company and the shares are held in trust for the people of Connacht. This is an important point because this airport serves the community. Its objective is not to pay dividends to shareholders or to make a profit. All we want is to be able to bring our people to and from the region. We want to generate tourism and offer an opportunity to people to do business in the west, and Knock Airport is an important part of that. Knock Airport has an energetic and committed staff but they have to be paid, and there is an annual wage Bill of £660,000. I am concerned about the future of those jobs because the staff are so committed and they want to do everything possible to ensure that Knock Airport remains in operation.

There are only two carriers currently operating in and out of Knock Airport. During its winter schedule Ryanair operates 12 flights per week and 14 in the summer. British Regional Air travels four times a week to the UK, and charter flights operate during the summer. People are well aware of the catastrophic consequences of Ryanair deciding to pull the plug on Knock Airport, which is not justified in light of the fact that Knock Airport believes it must introduce a £6 departure fee per passenger. It is not justified for a number of other reasons. In 1992, when Ryanair operated in and out of Knock Airport, it was paying a landing fee of £7 per passenger. Today it pays £2.50 for the first 60,000 passengers and nothing for passengers in excess of 60,000. This works out at an average rate per passenger of £1.80. One would not get from Swords into the city centre on a bus for that amount of money. Ground handling fees are provided free of charge because the job is done by the staff of the airport.

There is no doubt that Ryanair has used its strength in Knock over the years to negotiate a competitive deal for itself. I appreciate it is a very successful company and its job is to make a profit. Ryanair is a commercial entity. My objective as a representative of the people of Mayo is to keep open a vital facility that is very important to my region. It is unfair that an airline that has done so well out of business generated in and out of Knock Airport over the years is now prepared, when it recognises that the airport provides a community service, to pull the plug. That is very disappointing news.

I note that £8 million is allocated in the national development plan—

Mrs. O'Rourke

£10 million.

Ms Cooper-Flynn

—for the development of regional airports. I thank the Minister, Deputy O'Rourke, for coming into the House tonight to hear our comments on this matter. I ask her to outline how she can help develop Knock Airport with this money and if it is possible to provide any subsidies to the airport, possibly to operate internal flights in the region.

Minister of State at the Department of Health and Children (Dr. Moffatt)

I thank my colleague, Deputy Cooper-Flynn, for giving me time to highlight the importance of Knock International Airport to the people of Connacht, especially the people of Mayo. The airport has been a profitable operation for Ryanair and, in return, Ryanair has provided a necessary and good service in terms of tourism, inward investment and also to our people at home and abroad.

It is in the interests of all concerned that the current difficulty between Ryanair and the air port management is resolved by further negotiation. The west cannot afford to suffer the loss of such a vital aviation service. I call on my colleagues in Government to assist in any way possible to broker an acceptable solution to this problem. As has been stated, there are moneys in the national development plan and I hope they will be utilised to address this issue. Perhaps something could be done in terms of the marketing fund. I ask my colleagues in Government to examine this issue, which has been highlighted by my colleagues from Mayo, in a favourable light.

Minister for Public Enterprise (Mrs. O'Rourke)

I thank all the Deputies who contributed to this debate. It is a fine mark of the county's solidarity that all of them are present in the House this evening to contribute to this debate. I welcome that. I welcome also the frankness of Deputy Jim Higgins in particular. Everybody was frank but he was particularly so because everything he said was true. That goes for Deputies Ring, Kenny and Cooper-Flynn and for the Minister of State, Deputy Moffatt. They have all spoken trenchantly.

I want to be equally trenchant. This is blackmail. I am speaking under Dáil privilege but I am telling the accurate facts. I asked my officials today to compile what would be the operating profit for Michael O'Leary on the Knock operation and the conservative estimate is that the company is making about £1.6 million per year for Michael O'Leary. He is doing very well out of Knock Airport. The figures are in my script, but I prefer to speak naturally about this matter because I am as incensed as the Deputies. He has worked aeronautical charges down to the bone and the employees of Knock Airport must in turn work themselves to the bone to operate the airport. He is using Irish airports, the Irish people and the Government as pawns for his own business future. Throughout the summer we saw the game he engaged in, saying he would bring 750,000 passengers to Shannon if we gave him a chunk of Dublin Airport. I do not intend to do business that way and I have made that clear publicly time and again. He was in Shannon Airport twice before. He will stay a short time, then flit again.

If the flight was not making a profit, we could not condemn anyone, but it is making a handsome profit. The commercial and tourism needs of the people of the region are huge, as are the needs of the diaspora. It is a peripheral area. There was not always the same feeling from all sides of the House towards the airport or the man who set it up, but that is in the past. Everyone now wants to see Knock Airport prosper.

The charge Knock Airport wishes to impose is for its own viability and has nothing to do with Michael O'Leary or Ryanair. Given that £5 of the airport taxes charged will not be imposed on a certain number of passengers, the difference will be £1. I understand from the work of my officials that consumers are not agitated about the charge.

I understand the reason for this and although I admire enterprise in anyone, I do not like enterprise that is used to bully people, to make them work themselves to the bone when a profit is being made and to escape when the situation does not suit the enterprise. Ryanair uses certain small airports around Europe and Michael O'Leary insists that they cannot impose airport charges. He sees Knock Airport's incursion into that area – which is to help its viability – as a chink in the armour and that it will lead other airports to impose the charge also. He sees this as a break in the stranglehold he has on these airports, though he is giving a good service from these airports. However, I am extremely angry at the way he is using a people, a region and an airport.

He will go, as he has laid that out quite clearly, so there is a need to attract a good quality, low cost airline that will give a similar service to the service Ryanair has provided. That must now be the aim and though I cannot get involved, I have asked others to help attract another airline to the region. There will not be any certainty with Ryanair, even if it says it will remain for six or nine months. Knock Airport must have a regular air service. It has brought vibrancy to the area and many people use the airport. I am from Athlone, but I am from the western side of the town; I am a Connacht woman. There is no exclusivity about this issue.

As I said on the radio, this is a disgraceful act and I echo Deputy Higgins' contribution. A company making good money from a route is capriciously saying that that is the end and it is pulling out. Knock Airport got £1 million in capital development funds last year and I will meet its board again to discuss this. This has been a healthy debate. It is about time people decided there is a decent, fair way to treat people. We are not talking about an uneconomic route – money is being made on this route. People are not stupid; they can see through the strategies. The people of the west do not deserve to be treated by this airline in this intemperate way.