Adjournment Debate. - Regional Airports.

These are very critical days for the Waterford Airport company. They may well have to cease operations unless the Government provides the type of subvention which they are seeking, approximately £500,000. What is being offered to the company conditionally is a marketing grant of £165,000, that being contingent on local contributions to the amount of about £335,000. This is not a runner. Local industry and local authorities in the region have been giving the company considerable support over a number of years and they cannot go on doing so indefinitely. The amount of money involved is quite considerable. We have been very unlucky in Waterford in that the carriers engaged over a number of years have not retained the franchise as we would have wished. British Regional withdrew the daily service on 5 January last. The timing of the application for a sizeable grant of half a million pounds is particularly opportune and the Government should treat it as such.

The new carrier engaged by Waterford Regional Airport, Euro-Celtic, happens to be a very compatible operation for Waterford Airport. The proprietor of the company has local connections with the south-eastern region. The company are particularly happy with the performance of the service since it was inaugurated on 14 February, 2001, just over one month ago. The flight frequency is one flight a day but it is intended that from 14 May this carrier will operate two flights per day from Waterford to Luton. However, to underwrite this operation will require the sort of money I spoke about, that is, £500,000.

What is being offered in a letter from the assistant secretary of the Department of Public Enterprise is a marketing grant of £165,000, and that is conditional. That is not sufficient and I am asking that the Minister for Public Enterprise sit down with the board of Waterford Regional Airport and work out a system to enable the airport to become viable. It will become viable with the involvement of the present carrier if it is given the necessary support. Further support has been promised by Waterford Corporation and by Waterford County Council and local industry. The amount of money involved is so considerable that we need substantial Government aid.

Waterford's main difficulty over the years has been access. The roads and the railway are all substandard. It takes two and a half hours to get from Waterford to Dublin by rail and it is less than one hundred miles in distance. It takes the same time to get from Cork to Dublin and that is a distance of 160 miles. The road is hugely inferior and we can ill-afford to lose one of our most valuable assets, access by air to the south-eastern region. I am pleading with the Government to ensure that the airport does not go down, that the company does not have to fold up. The Government must bear in mind that there are over 35 jobs involved and half a million pounds is not a lot of money.

Waterford Regional Airport is facing closure at the end of the month unless it can secure £500,000. The Minister's Department has indicated that £165,000 in marketing support could be allocated very quickly if the Department could be assured that the balance of the half million pounds needed for this would be forthcoming to the airport. The Department of Public Enterprise has suggested to the Department of Enterprise, Trade and Employment that, given the principal beneficiaries of the existence of the airport are local industry and commercial interests, some of whom use the airport for their privately-owned or chartered aircraft, the Department of Enterprise, Trade and Employment agencies should contribute some or all of the necessary £335,000 with local commercial interests also contributing, in order to support the airport at least for the remainder of the year.

Last Friday morning, I sent fax messages to the Taoiseach' office, the office of the Tánaiste and Minister for Enterprise, Trade and Employment, the office of the Minister for Public Enterprise, the office of the Minister for Tourism, Sport and Recreation, the office of the chief executive of IDA Ireland and the chief executive of Enterprise Ireland, seeking in each case urgent intervention to secure the future of Waterford Regional Airport. It is absolutely unthinkable that Waterford Regional Airport should close in 11 days from now. The blow to Waterford and the south-east region would be inestimable but the effect on morale would be profound. There must be Government intervention.

The British Regional service which operated a daily return flight to the UK ceased on 5 January 2001. This service was discontinued because of changes of aircraft and schedules in British Regional. There is now a new airline, Euro-Celtic, which has received the appropriate licence and the service is currently operating. The best estimates in regard to the cost of annual support services is £500,000 to guarantee continuity of service. If Waterford Regional Airport is granted a public service obligation licence, this should add £300,000 to the airport's finances. The foot and mouth disease scare is certainly also affecting Waterford Regional Airport. It is incumbent on the Government not alone to assist Waterford Regional Airport through its present crisis but to put it on a footing to secure its future. At a time when the Taoiseach is flinging tens of millions of pounds in all directions in reckless fashion to ensure the Stadium Ireland project goes ahead, surely his Government can provide sufficient funds to ensure the survival of Waterford Regional Airport, bearing in mind its pivotal role in the development of Waterford and the south-east region.

There are 35 individuals or whole-time equivalents currently employed at the airport. There are 18 direct employees. There are also implications for the marine rescue centre. Waterford Regional Airport must be saved and I look to the Minister to ensure that this happens.

My colleague, the Minister for Public Enterprise, is aware of the financial position of Waterford Airport and senior officials of her Department have been in recent contact with the chairman of the board of the airport regarding the situation. As the Deputies are aware, Waterford Airport is a commercial enterprise and, like all the regional airports, there is no element of State ownership in the facility. Decisions on any of the regional airports are ultimately a matter for the shareholders and management boards of those airports.

The financial situation at Waterford Airport is not an entirely new phenomenon and predates any additional difficulties arising from the recent national campaign to prevent the spread of foot and mouth disease. Among the six regional airports, Waterford has experienced a steady decline in passenger numbers over the past five years, falling from in excess of 23,000 in 1995 to under 16,000 in 2000. All the other regional airports have succeeded in increasing their passenger throughput over that period, including Donegal and Sligo airports, which are comparable in terms of passenger numbers with Waterford.

Within the Government's commitment towards supporting the regional airport network, the Minister for Public Enterprise substantially increased the funding she provided for marketing and promotional efforts to Waterford Airport in 1999. Prior to that, Waterford had, for a number of years, been allocated an annual marketing grant of £40,000. In 1999, however, in recognition of the difficulties the airport was experiencing at the time, the grant to Waterford Airport was almost quadrupled to more than £150,000. Despite that substantial increase, passenger throughput fell again at Waterford by approximately 1,000 passengers in 1999.

Last year, out of a total budget for marketing support of £1.5 million, Waterford Airport was again allocated a very substantial sum of £155,000 by the Department of Public Enterprise. The budget allocation model is based loosely around the passenger throughput at the six regional airports, but it took special account of the position of the three smaller airports at Waterford, Donegal and Sligo by setting a minimum "floor" of £100,000 to the level of support for marketing activities. Even allowing for that, however, Waterford Airport enjoyed an allocation which was 50% higher than that for Donegal and Sligo, and its allocation last year was 25% greater than that for Galway Airport which handles five times more passengers than Waterford. Again, however, passenger numbers using Waterford Airport declined further last year. In treating Waterford Airport in this favourable manner in recent years, we were able, up to a point, to take account of its special circumstances. This took account of the threatened loss last year of the service provided by British Regional Express to London and our understanding that the financial difficulties of the airport were temporary in nature.

While the Department of Public Enterprise will continue to provide support to assist with marketing and promotional activities, it is not appropriate to provide direct operational subsidies to the regional airports. Beyond a certain level of support for marketing purposes, a stage is reached when we risk straying into the area of operational subsidies for a particular airport. Out of this year's budget for marketing support which, at £1.5 million, is the same as last year's, the Minister for Public Enterprise is prepared to allocate a further sum of £165,000 to Waterford Airport. While this again will be substantially more than that justified by apro rata allocation model based on passenger throughput, the Minister is prepared to sustain this high level of support this year in recognition of the airport's difficulties and also in the context of supporting the new service to London which was commenced recently by Euroceltic.

The Minister is aware, however, that the airport authorities have indicated a much greater level of support is required this year and annually to maintain airport operations. The level of financial assistance which Waterford Airport has indicated it needs to remain in operation is out of all proportion to what is available from the Department of Public Enterprise for the other regional airports. Our proposal to allocate a sum of £165,000 for marketing activities is, therefore, in the context of the balance of the airport's requirements being found from other sources, for example, local industrial and commercial interests, some of whom I understand use the airport for their privately owned or chartered aircraft. The Department of Public Enterprise also suggested to the Department of Enterprise, Trade and Employment that it or the development agencies under its aegis should provide support to Waterford Airport, at least for the remainder of this year. The Minister believes that, within the policy constraints which her Department operates in terms of funding for the regional airports, her proposed allocation to Waterford Airport for marketing support this year is generous, as it has been for the past two years.

It is for the shareholders and the board of Waterford Airport to decide on its future potential viability. In reaching its decision, the board will no doubt have regard not just to the possibilities for sustaining scheduled air services but also to the commercial prospects for other activities, such as the further development of private executive aviation, pilot training and the possibility of search and rescue services which the Department of the Marine and Natural Resources may wish to position at the airport. However, if, having considered the difficult financial position and the prospects for the future of scheduled air services, the board decides to cease operations at the airport, notwithstanding the level of assistance the Department of Public Enterprise is prepared to offer, this will be disappointing.