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.