Covid-19: Issues Affecting the Aviation Sector

I welcome Mr. Sean Doyle and Mr. Donal Moriarty from Aer Lingus, Mr. Eddie Wilson and Mr. Darrell Hughes from Ryanair, Ms Mary Considine from Shannon Group, and Mr. Dalton Philips and Mr. Niall MacCarthy from the Dublin Airport Authority, DAA. I ask those witnesses joining the meeting virtually to keep their microphones on mute if possible.

I draw the attention of the witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I advise the witnesses giving evidence from a location outside of the parliamentary precinct to note the constitutional protections afforded to witnesses attending to give evidence before committees may not be extended to them. No clear guidelines can be given on whether, or the extent to which, the evidence is covered by absolute privilege of a statutory nature. Persons giving evidence from another jurisdiction should also be mindful of their domestic statutory regime. If witnesses are directed by the committee to cease giving evidence on a particular matter, they must respect that direction.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses of the Oireachtas or an official either by name or in such a way as to make him or her identifiable.

I call Mr. Sean Doyle to make his opening statement.

Mr. Sean Doyle

Aer Lingus appeared before the Oireachtas Special Committee on Covid-19 Response on 28 July, and rather than read the full details of that submission again, I am happy to forward it in its entirety to the members of the committee. When attending the committee in July, we outlined the catastrophic effect the Covid-19 pandemic has had on the aviation sector. As early as this morning, the IATA has predicted that airlines will globally burn through $77 billion of cash this winter. We also outlined the critical importance of the aviation sector for the Irish economy.

Prior to this crisis, we enjoyed unprecedented levels of international connectivity. It was the envy of other countries, cities and markets throughout the world. It allowed a number of things to happen in the Irish economy. It allowed business to be done internationally and significant foreign direct investment to take place. Key business and service sectors, such as technology, software, pharmaceutical, medical, finance and food and beverage, depend on this connectivity, and of course legions of small businesses throughout the country depend on inbound tourism brought to the country by the aviation sector. We also should not forget the ability of friends and relatives who are based and dispersed internationally to connect and come home to visit their loved ones. Aviation provides this connectivity. The grim reality is this connectivity is gone and there is no sight as to when it will return.

In July, we outlined the recommendations of the final report of the aviation recovery task force. It was published on 10 July. Three months later, none of the key recommendations have been implemented. In July, we also outlined how we have the most restrictive travel policy in Europe. Effectively, Ireland is closed for business and this will have a profound impact on jobs and the Irish economy. We were encouraged on 15 September, when the Government said it would adopt the framework for free movement as proposed by the European Commission, but on 17 September, 24 September and 1 October the Government's policy on the green list rowed in exactly the opposite direction to that outlined by the European Commission. As it stands today, we are more closed for business than ever before. We are where we were in July when we said we were in the unfortunate position of having the most restrictive travel policy in Europe but having done the least to support the aviation sector thus far. While we do see a change in approach being signalled and we welcome it, so far it has not been delivered.

I will now turn to the specific items on which Aer Lingus was asked to address the committee. I will first speak about the European Commission's proposal. It is referred to as the traffic light system and for the convenience of committee members we have included in the appendix of our submission an illustration of what adoption of the proposal would look like. We should, if we adopt it in its entirety, have 16 countries open for travel today instead of the four we do have. To be clear, the approach recommends we do not have travel restrictions for green and orange coded countries and areas. Hence, we should not restrict movement or quarantine on arrival. For passengers coming from red areas, the European Commission proposes that quarantine and movement restrictions are replaced by the introduction of a testing regime for passengers. This is what alignment with the framework looks like, and this alignment needs to be complete if the adoption of the traffic light system will make any difference to the prospects for aviation. As we outlined, we are very keen to ensure international travel is increased safely, but I encourage the committee to move with speed to adopt this framework. I am concerned that what we will get on 13 October will be nowhere near close to full adoption, based on the commentary we just heard in the previous session.

We believe there are a number of issues to be examined and not just testing and travel restrictions when considering how safe it is to travel. We have pre-travel health declarations. We have the use of face masks.

We have enhanced cleaning on the aircraft. We have state-of-the-art air filtration and electronic passenger locator forms. We can link our Covid tracker app to other jurisdictions and create complete coverage of contact tracing for everyone who travels internationally. That, coupled with the protocols the EU has outlined, and the advancements in rapid testing, could create a situation where international travel will be much safer and have much lower risks of transmission than we see in the broader community.

Rapid testing has been debated at length. I thought I would speak about it again in the context of the multilayered approach for this management that we spoke about. We need to bring a testing protocol into Ireland. We need to make sure that it is aligned with the EU framework and that it enables the lifting of restrictions. Again, we need to be clear that the testing framework should only apply to red countries. There are a number of ways in which we could do this. The European Commission proposal also needs to take into account some of the work done by Airlines for Europe and IATA, which looked at this and issued a publication on 1 October. The first is that we could have a test certified by a health regulator, made in advance of travel, involving something around the 72-hour window. The second is that we would look at a rapid test at the airport premises, preferably before entering the terminal. The third is that we would have a rapid test available at the airport premises. We think we just need to alight on a testing regime and go on and enable it for high-risk countries. However, we should be looking at this using a number of criteria. The first criterion is that the testing regime should not consume the State's testing capacity. The second is that it should be scaleable. The third is that it should be affordable. The fourth is that it should be able to give rapid results.

We must be clear that aviation requires a screen testing capability, not necessarily a diagnostic testing capability. For this reason, we believe the advances in antigen testing are the most appropriate to consider in this regard. IATA advises that rapid and affordable antigen testing can be administered by non-medical staff, which is another major benefit as it would not place a burden on the health system of the country of arrival for passengers. IATA is working with the International Civil Aviation Organization, ICAO, to try to get endorsement for antigen testing as a solution for the restoration of international travel. Airlines are deploying these solutions. Alitalia and Lufthansa are both deploying the Abbott and Roche antigen testing solutions as we speak. We call for an urgent evaluation of testing solutions. Antigen testing is a solution that can really scale up effectively and deliver on all of the criteria we have set out in the paper. In the absence of immediate endorsement of antigen testing, we should look at testing protocols that can be implemented for high-risk countries that meet the current health standards, for example, polymerase chain reaction or PCR testing.

The second matter on which I would like to update the committee is the temporary wage subsidy scheme, TWSS. We have been the subject of a lot of commentary, much of it inaccurate, in terms of how we as an organisation have applied the TWSS. We are acutely aware of the impact the Covid-19 crisis is having on the employees of Aer Lingus and employees in the aviation and hospitality sectors. It has been made worse for people in Ireland because of the uniquely restricted travel policies that we have. As a consequence, everybody in Aer Lingus has had to be placed on reduced hours and pay. We took a decision to maintain, insofar as possible, a direct employment relationship with all of our employees. That was the stated aim of the TWSS and Aer Lingus has very much embraced the programme with that in mind. An alternative approach, one taken by many employers, would have been to lay off significant numbers of employees and direct them exclusively towards the social protection system for welfare support. That is a decision we did not take.

In terms of clearing the record and clarifying some of the inaccurate commentary that I mentioned, we have at all times acted fully in accordance with the guidance received from the Revenue Commissioners and the Department of Employment Affairs and Social Protection on both the TWSS, the employment wage subsidy scheme, EWSS, and the various jobseeker schemes that are available. In all cases, the TWSS was calculated in the first instance on the average Revenue net weekly pay for January and February 2020. That was the period defined by the Revenue Commissioners and that was the baseline before cuts to hours or pay were applied to Aer Lingus employees. As such, our subsidies that were passed through were based on the unreduced salaries of our employees. As the qualification was based on the average net weekly wage in January and February, the subsequent reduction in hours that we had to introduce as a result of the reduction in activity did not reduce the subsidy payments calculated or made under the TWSS. Aer Lingus applied the full amount of those subsidies and passed it on in full to all of its employees.

We request that the committee lend its voice to calling for the urgent and complete adoption by Ireland of the co-ordinated approach to free movement across the European Union that was proposed by the European Commission, that is, the traffic light system; the early development of a rapid testing regime for the safe implementation of international travel; and the urgent implementation of the key recommendations of the aviation task force, as outlined on 10 July. All of these are critical to ensuring that the aviation sector recovers and plays a critical part in the recovery of the economy as we come out of the pandemic.

Mr. Eddie Wilson

I am a bit disappointed by what I heard in the previous session. What has happened with Government policy on aviation in recent months has been catastrophic. The idea is that somehow or other we have adopted European regulations. We have not done so; we have gone in the opposite direction. On 1 July, and up to today, every other European country has returned to flying and they do not have restrictions in place. People in European countries also have the benefit of moving across borders by train, car and other modes of transport. We took a conscious decision in this country not to do what every other European country has done and the outcome of that policy has been devastating. Ministers throughout the summer period encouraged people not to engage in foreign travel when there was no scientific basis for that whatsoever. The HSE website this morning indicates that travel accounts for less than 2% of infection rates. While air travel was demonised throughout the summer, Covid rates have soared within Ireland due to domestic factors. We are trying to solve problems that do not exist.

As Mr. Doyle indicated, air travel is one of the safest ways of travelling in this environment. Risk assessment and safety are our business. The outcome of this policy now is that we have wiped out summer 2020 and winter 2020 is the bleakest that I have ever seen. Potentially, from a Ryanair perspective, Cork and Shannon airports will close for the winter unless the Government does something now. There is a way for it to do that. Regional airports will be practically wiped out because we have no basis for travelling. We have this bloody green list that does not work. Four countries are on it. Tomorrow, I think even Liechtenstein, which does not even have an airport, will no longer be on it because the incidence rate of infection used is 25 per 100,000 population. There is no basis for that whatever. I think, as of tomorrow, none of the EU 27 will be on the Government's green list. We found out in the High Court last week that after all the demonisation of air travel throughout the summer, which had no scientific basis, there was no quarantine and it was only advice. It would seem today that there were no restrictions.

We also need to look at what is happening in Europe. We do not live just in Ireland. We live in Europe and the Europeans are bailing out their airlines. We have two well capitalised airlines in Ireland. Lufthansa has received €11 billion worth of state aid. Air France has received in the order of €7 billion and Alitalia has received €3 billion. European airports are being bailed out. The Europeans know what is coming and they are preparing for this. Capacity will reduce in Europe and next summer those countries, regions and airports will be scrambling around for traffic. Let us look at what Ireland has done. It has said we are closed for business. Tomorrow, when the green list comes out it will say we are closed to every country in Europe. However, there is a way out. There are two things the Government needs to do, both of which are blindingly obvious. One is to adopt the traffic light system, or rather not just adopt it but go to Europe next week and champion it. Rather than obsessing about testing, we need to take a risk-based approach.

The WHO and ECDC are saying that air travel is safe and we are trying to solve a problem in a disproportionate way. The traffic light system has green and amber countries and they should have no restrictions for moving throughout the European Union, as it is today when moving between Germany and France or France and Italy. These are countries with substantially lower Covid rates than Ireland at present. If we adopt the traffic light system, it would mean free movement for green and orange countries. For red countries in the European Union, it is up to individual member states to decide what suite of measures they will put in place. Let them put those in place, but we should be talking about those now, not talking in circles about this. Government did not adopt the European policy from 1 July when everybody else had returned. They are bailing out their countries and maintaining connectivity. We are shutting down connectivity.

Drastic decisions will have to be taken, especially with regional airports. Airlines need to make decisions now. We should be having conversations about next summer. If we do not make decisions now, then next summer, that traffic will migrate elsewhere in Europe. It will not bounce back. The Government seems to think it will bounce back. It will not. All airlines in Europe are getting smaller. Airlines such as Ryanair should be allowed to carry out their business by being able to transport people. We are flying people out of some regional airports with five or six passengers and that cannot continue. The people on the ground know that.

The Government needs to adopt the traffic light system and champion that at the meeting on 13 October. If the Government cannot get agreement to implement it, it should implement it today. The aviation task force recommendations have not been implemented whatsoever. The wage subsidy scheme is there for everyone, not just for aviation. If we are to attract and retain connectivity in this country, we need to have a programme, as recommended by the aviation task force, of rebates for airport charges. That will ensure that airlines such as Ryanair and Aer Lingus can plan their schedule for next summer on the basis that Ireland is in some way attractive to retain that connectivity. We blew our chance at a European solution on 1 July. We now have a second chance and we should get ahead and save the jobs that we have here. There are 140,000 jobs in aviation and 325,000 jobs in tourism. If we do not get those decisions now, not only will this winter be lost and will those bases be gone, but next summer will be devastating for tourism and connectivity in the country.

Ms Mary Considine

I thank the committee for the opportunity to outline the devastating impact that Covid-19 has had on our businesses and, more important, as the previous speakers have said, to discuss measures that are now required as we navigate our way through and recover from this crisis.

Shannon Group is a commercial semi-State company and, before Covid, we employed more than 600 people across our businesses, including Shannon Airport, Shannon Commercial Properties and Shannon Heritage. Through our international aviation services centre, we support the development of a cluster of more than 80 aviation companies based in and around Shannon Airport. Shannon Group is a key driver of economic growth, not only in the mid-west but right along the Atlantic seaboard. Our activities support 46,000 jobs. Shannon Airport is vital. It is the lifeblood of the region. The connectivity it provides is vital for the business and tourism industries located in our region, providing access to international markets. It is also a key enabler for the Government to deliver on its stated aim of a balanced national economy, as envisaged in Project Ireland 2040.

As the committee has heard today, our business and the wider aviation, tourism and hospitality sectors have weathered many economic storms in the past but never on the scale caused by the current pandemic. While we will eventually recover from this, it will undoubtedly take a number of years for activity levels to return to anything like normal. Right now, the aviation industry is on its knees. Like airports globally, Shannon has witnessed an almost total collapse in airport traffic connectivity and revenues. Our passenger numbers have been declining since scheduled services recommenced on 1 July. We were hopeful at that stage, when Ryanair brought back in 16 services, that we would see some pick-up, with talk of the green list coming in. Unfortunately we have seen a decline. In August, numbers were down by 86% and that declined further in September, when we were down by 91%. If this trend continues, we expect to see a decline of over 80% in our passenger numbers for this year.

Faced with the fact that since the beginning of March, Shannon Group's revenue has been down by over €1.3 million per week, we project an overall drop in Shannon Group revenue of 60% revenue, and our focus has been on taking the necessary steps to allow us to survive, recover and rebuild from this crisis. Early on, we took decisive short-term actions to preserve our businesses and to protect jobs in the future. I acknowledge that it has been a difficult time for our employees, customers and everybody operating at the airport.

Restoring air transport connectivity is critical as we learn to co-exist with the virus. We must find a way to facilitate the reopening of access for business and tourism as soon and as fast as public health considerations can allow. Government action is urgently required and I welcome the Minister's confirmation that Ireland is willing to adopt the pan-European traffic light system, which we have discussed at length here, and to agree a European-wide testing protocol to allow aviation to reopen in a safe manner. We need financial supports for our airports and airlines as we recover and start the slow process of rebuilding from this crisis.

The continuation of current travel restrictions are heavily impacting on passenger numbers and confidence. Testing instead of restriction of movement has to be the way forward. It is imperative that we find a way to safeguard vital connectivity. If we do not, the consequences are unthinkable. The continued Government guidance of warning against non-essential air travel has had the effect of increasing the probability of further job losses throughout the country, long-term loss of connectivity, further imbalanced regional development and economic damage. There is a real risk to our foreign direct investment, a sector that we are heavily reliant on as a country during this pandemic. For our part, we are working with peers in the industry, exploring options including a pre-departure Covid-19 testing regime, which is already proving effective and is tried and tested in 15 other countries. The impact of the pandemic has been devastating for aviation and tourism. That is why the urgent implementation of the full recommendations of the aviation recovery task force are key to assist the sector. Included in these is a much-needed stimulus package for airports in the regions, to enable us to rebuild traffic.

The Covid-19 pandemic has caused significant disruption. It has changed how we work and live, which I spoke about when we attended the Special Committee on Covid-19 Response in July. We can and will get through this but we need decisive action now. We need to support this vital industry that in turn supports 140,000 jobs across the country.

Mr. Dalton Philips

I thank the committee for the invitation to discuss these extraordinary challenges that DAA and the aviation sector in general face. As I speak to the committee today, I am thinking of people like Rob Rankin from Vagabond Tours in Wicklow, who has had virtually no revenue since March because there have been no international visitors. I am thinking of Stephen Teeling of Teeling Distillery in the Liberties, which relies on our shops as its biggest sales outlet. I am thinking of Aaron Mansworth of Trigon Hotels in Cork, who has seen occupancy plummet and one hotel close. I am thinking of the 145,000 people across the country who depend on Cork and Dublin airports for their livelihoods and the 750 people who are leaving our company because we do not have work for them.

Dublin and Cork airports have been engines of the Irish economy but now they are running on empty. In total, our airports have already lost 20 million passengers compared with 2019. Dublin Airport will have fewer than 9 million passengers this year. That means we are back at 1995 levels. We have lost 25 years of growth. Our sector has been demonised since this pandemic began. Other key sectors have been allowed to reopen with the understanding and acceptance that there is an element of risk involved.

The Irish aviation sector, however, has been held to a much higher and, quite frankly, unreasonable standard with continued constraints being placed on opening up international travel. It is because of this that Ireland's connectivity to the world is faltering. It is dangerous for anyone to assume that routes withdrawn in the last six months will simply re-emerge overnight. In football terms, we hauled ourselves into the premiership over the last two to three years but we have just been relegated again.

Last week, American Airlines withdrew a Dallas flight from Dublin. This means that for the first time in ten years it will not have a presence in Ireland this coming winter. Once such connectivity is lost, it is incredibly difficult to re-establish. It can take up to four years of intensive effort to win a route, particularly a strategic long-haul route. We can be competing against ten to 15 cities worldwide to get a single aircraft allocated to one of our airports. Industry sources suggest it could be 2024 or beyond before we see a recovery in this sector. Rebuilding lost business will take years, but first we need to help to stop the decline in connectivity.

The collapse of the aviation sector has meant that our liquidity has already been depleted. We have accumulated more than €150 million in losses since the pandemic began and our net debt will have doubled by the end of 2020. Dublin Airport was the largest State gateway pre-Covid and has suffered more than any other airport due to the collapse in passenger traffic. As the key gateway to the country, it will need significant financial support to rebuild.

Cork Airport was Ireland’s fastest growing airport in 2019 and was on course to be so again in 2020. Instead, over half of its airlines have withdrawn, traffic is down 90% and it is facing into losses of €20 million this year. In stark contrast to its other regional airport peers, Cork has received no direct State funding to date and now requires specific provisions including access to the regional airport operating expenditure and capital funding programmes.

Ireland has continued to operate one of the most cautious travel policies in the EU. In the meantime, the aviation, tourism and hospitality sectors have suffered untold damage. Therefore, I strongly welcome the recent announcement that the Government is now seeking to align with the European Commission's plans for co-ordinating travel. This new traffic light system needs to be accompanied by testing protocols for high-risk regions, discarding blunt travel restrictions and quarantines.

To facilitate the adoption of the EU framework, the DAA has undertaken significant research and engaged with the market and Government agencies. We have developed proposals to facilitate mobilising pre-departure PCR testing at Dublin and Cork airports by mid-October, with a capability to deliver up to 15,000 tests per day as business recovers without impacting the public health system.

Ultimately, the Government needs to approve a rapid turnaround, low-cost, scalable testing solution for use in Irish airports so we can move quickly as the market introduces products better suited to airport operations, for example, loop-mediated isothermal amplification, LAMP, or antigen testing. In doing so, it will allow work to begin on reconnecting Ireland to the world and on rebuilding the businesses and livelihoods that depend on that connectivity.

Thank you, Mr. Philips. I will now move on to the members' questions. I will share the Fine Gael slot with Senator Buttimer.

I welcome everyone to the meeting. My first question is for Mr. Wilson and Mr. Doyle and relates to this morning's message from the Government. Mr. Wilson expressed disappointment at the Government response. How would he propose to engage with the Government again to ensure we get safe travel up and running?

Mr. Philips is joined by the manager of Cork Airport, Mr. Niall MacCarthy. I wish to pay tribute to the staff of our airports in Cork, Shannon and Dublin, and indeed our airline staff as well, for the huge work they have done to change work practices and the commitment and sacrifices they have made. I am familiar with the work being done by the staff in Cork Airport to make sure we have a functioning airport. In the context of his presentation, can Mr. Philips expand a little on the testing and the rapid turnaround? What does he think is tenable for us as an airport?

Finally, in the context of Aer Lingus and the North American routes, will Mr. Doyle explain what the plan is with the aviation sector in the United States in terms of keeping connectivity with us here in Ireland?

There are questions for Mr. Doyle.

Mr. Sean Doyle

I thank the Senator. My answer to his first question, which was about what the Government can do to enable restoration of travel, is quite simple. It can adopt the EU framework, as outlined by the Commission on 13 October, to ensure there are no restrictions on movement for countries that are green and orange. That would open up 16 markets for travel. That is a safe strategy in the context of the underlying risks of transmission. The answer is in front of us. We need to get on and adopt it and be proactive. The aviation sector in this country has a reputation for getting out in front, being proactive and showing leadership. I echo Mr. Wilson's comments that we should adopt the framework, lead the way and set an example.

With regard to the transatlantic routes, based on the criteria for US travel at the minute it is obvious we will need a testing protocol. Again, Ireland has some advantages as a natural gateway for US passengers. Ireland is a strong destination. I believe approximately 80% of our foreign direct investment, FDI, has been coming from the US. I am aware business leaders are increasingly concerned about the inability to get critical investors and critical leaders into the country. I believe a testing protocol would form part of an innovative solution we could deploy to try to open up the transatlantic market. It is important to Aer Lingus but I believe the importance of the transatlantic market to the wider Irish economy is incredibly material.

I would like to ask Mr. Doyle about the commitment of Aer Lingus to Shannon Airport. Transatlantic services are of vital importance to FDI and tourism right along the western seaboard. Is the airline committed to restoring those American routes and, in particular, the Heathrow route? I note that Aer Lingus operates routes out of Cork, Dublin and Belfast. Mr. Doyle has spoken about Ireland being an outlier. Shannon Airport is an outlier because it is not being treated the same as any other airport that has a connection to Heathrow Airport. When does Aer Lingus intend to restore that route?

Mr. Sean Doyle

I cannot give the Chair an answer on when we intend to restore it because it depends on the Government approach to opening up travel. If we had a level playing field with the rest of Europe, restoring Shannon Airport would have been in evaluation much earlier than it has been. If we carry on with the current green list process, however, or if we do not adopt the approach that has been outlined by the Commission on 13 October, I do not see any prospect of us resuming short-haul services at Shannon Airport this winter.

If I look to next summer, we are committed to Shannon Airport. We believe the north Atlantic services worked well for everybody in the region and see a long-term commitment to reinstate those transatlantic services. At the minute, however, Aer Lingus is operating just three north Atlantic routes out of Dublin and those routes are showing low load factors. We have one route operating out of Cork Airport which is to Heathrow. Again, that is struggling as we head into the winter with the current travel policy. Government policy will be the fundamental dictator of when we can reinstate services in places such as Shannon Airport.

Okay. We are tight for time. I must move on to the Green Party slot.

I thank the witnesses for their statements and their presence here today. The issue of connectivity has been mentioned. It is important for our island and for the preservation of jobs within the airline industry, not just directly in the airports and among the airline crew but also in all the ancillary services such as those provided by infrastructure, service and maintenance crews. It is a huge family and I understand that. Every one of those jobs has a family attached to it and they are all concerned and worried.

We need to support the sector to protect those jobs. That applies also to the entire tourism sector which depends on aircraft coming in, for example, travel agents who work to ensure aircraft are full when they fly out of the country. That is also part of the whole process. Most of that is on hold for the moment. It is clear from the statements submitted today that jobs are at risk and the industry is in real difficulty. It has been suggested to me a number of times that both the airlines represented here are very well resourced financially and in a better position than many industries to survive through this significant downturn. I would welcome a comment on that.

Recently, Oxford University produced a paper on Covid recovery investments, such as green deal investments, and multipliers, in other words, the returns on those investments and opportunities to decarbonise as part of those investments. About 200 economists and heads of finance contributed to the paper. It suggests that state investment in airlines will be required to protect the many jobs in the sector but as part of that investment, there should be a recognition that the airline industry needs to play its part in addressing climate change and that objectives on emission reductions or offsetting should and could be part of that investment. There has been much talk about the climate action Bill. We know that every industry has a role to play in reducing emissions. The Government must ensure that the journey to carbon neutrality protects jobs and creates many new jobs. There is a huge opportunity for investment in industries that may have a poor emissions record. I am sure that those airline industries that are modern, forward-thinking, successful and have an excellent safety record would want to join us on the journey to reduce carbon emissions. Should State investment in airlines have more ambitious targets for carbon emission reduction or offsetting? Are the airlines willing to agree to that?

The Deputy has asked a number of questions.

I asked two questions about a more ambitious reduction in emissions.

Who does the Deputy want to answer his questions?

The two representatives of the airlines, Mr. Doyle and Mr. Wilson, but any of the witnesses can comment.

Mr. Sean Doyle

Aer Lingus is very committed to a sustainable business model for aviation and believes in taking proactive action. We were the first group globally to commit to carbon net-zero by 2050. We are committing to, I believe, a 30% reduction by 2030.

The Deputy's point about the resilience of airlines is linked to the sustainability agenda. Although Ryanair and Aer Lingus were very strong financially coming into the crisis, this crisis is unprecedented in terms of its impact. The impact of the attacks on 11 September 2001 and the global financial crisis are dwarfed by the scale of the pandemic. The sooner we come out of the crisis and start trading and generating cash again, the sooner we will have the balance sheets to re-equip our fleets with modern aircraft. We are very committed to modern aircraft. We have taken delivery of new generation A321neo aircraft and we have more coming. All of that is linked to the ability of the airlines to trade again. The industry is going through a seismic shock over an unprecedented period. The sooner we get the industry back on its feet, the sooner we will be able to invest in the sustainability initiatives the Deputy described.

Mr. Eddie Wilson

Ryanair has the lowest carbon emissions on a per passenger basis and the youngest short-haul fleet in Europe. I am always taken aback by the disproportionate flak that aviation takes on these things. Aviation is responsible for, I think, around 2% of global emissions and is probably the most responsible industry in trying to work towards reducing that even further. Much of this is being played out in the current Covid-19 crisis, with 2% - the same figure again - of infections attributed to aviation. This is a fraction of the infection rates, yet we have this disproportionate focus on airlines to solve problems. The only reason this issue comes up is that Air France, Lufthansa and KLM, in an effort to get extra money from taxpayers of the order of about €30 billion, are making some big promises about climate action and might trade in some of their gas-guzzling aircraft. What we would want to say in Ireland is that we should be mindful that we have two private airlines that are well capitalised and do not require state bailouts, whereas there are bailouts going on elsewhere - €11 billion in Germany, €7 billion in the Netherlands and €3 billion in Italy in illegal state aid - and those companies will come back for more, probably by early next year. In this crisis, 50% of long-haul aircraft and 25% of short-haul aircraft have been mothballed already in Europe. That is the crisis. We have an island mentality on this issue. We are in-----

I am very sorry but we must move on.

I will ask a group of questions first, after which I hope to have some time to ask Ms Considine a question. My first question is for Mr. Philips, Mr. Doyle and Mr. Wilson.

At the start of this crisis, we did not know a lot about the virus and there was a great deal of hysteria about it in the airline industry. From early summer, we realised that we needed to prepare a plan to get the aviation industry back up and running. A part of this multi-system approach would be testing. I was a member of the Special Committee on Covid-19 Response which discussed this issue from early summer until last week. I note that testing was mentioned in all of the submissions. The Minister for Health, Deputy Donnelly, indicated that we would move towards random testing at the start of August, which was two months ago. Where were the blockages to introducing some kind of testing regime at or around airports as part of a strategy? Where have the witnesses seen the blockages?

Mr. Dalton Philips

The incidence of confirmed cases in the country coming from foreign travel was 20 over the past 14 days. We have brought in 140,000 passengers in the last 14 days so the incidence rate is well under 1%. To answer the question, we have advocated for a testing regime to be in place. We were before this committee in July but we do not set the criteria. They are set by the Government with the input of NPHET and other key stakeholders. We are ready to go. We have the capacity to do testing and we have teams ready. We believe that PCR is not the ideal solution but it is a start. If we prove the concept with PCR, in time we will be able to move to LAMP testing and then antigen testing.

I agree that there is no silver bullet. We all know that. This is all about risk mitigation, increasing confidence and reducing the stigma about travel. People would be more confident travelling after talking to family and neighbours who have gone through a testing regime. I ask Mr. Doyle to comment on that.

Mr. Sean Doyle

We have called for a testing regime for the last two months. We have been trying to engage and we are ready to engage. We are now beginning to see that debate take place in the right Departments but it needs very quick alignment.

Back in April and May, Ryanair and Aer Lingus established a reassurance framework to make sure travel was safe. We did that very effectively in about two weeks. We took control of what was in the protocol issued by the European Union Aviation Safety Agency and implemented it. We have had a zero level of onboard transmissions since we executed that. This industry can get stuff done and we are ready and waiting to get stuff done. The airports and airlines can deploy a lot of resources and capability but we need Government will to unblock this.

We should not lose sight of the fact that testing is part of the solution in the EU framework but the biggest single enabler would be the adoption of the simple protocols for green and amber, which do not require testing. Let us not get distracted by testing being the silver bullet on 13 October. There are big steps forward that we can take just be adopting the protocol as outlined.

I thank the witnesses for their replies. It is incredible that the capacity and teams are ready but the Government has not pushed forward on this matter, especially when the jobs of so many workers hanging by a thread.

That is quite incredible.

Ms Considine's opening statement is pretty stark and I know there has been much financial turmoil and difficulty with the Shannon group. The workers have taken a 20% pay cut across the board in the past month. Is Ms Considine confident that the pay cut is in compliance with the Payment of Wages Act 1991, the State Airports Act 2004 and the State Airports (Shannon Group) Act 2014? I refer to these being in line with discussions with worker representatives.

Ms Mary Considine

As already stated, since the onset of the pandemic we have taken very difficult measures to deal with the significant fall in revenues across the group. In all those measures we have endeavoured at all times to maintain as much employment as possible, keep our airport operational and keep our sites open in heritage and across the group. The Deputy is referring specifically to the airport.

Ms Mary Considine

At the onset of the pandemic, we implemented measures such as reduced working hours and, unfortunately, we had to temporarily lay off some of our staff. At all times we have tried to maintain as much employment as possible. In early July we outlined a range of measures to our employees, including a number of options like career breaks, reduced working hours and a voluntary severance scheme. We advised that we would be implementing a temporary reduction in pay, effective from 1 September. That only applies to staff paid more than €30,000, so we tried to protect lower-paid staff.

Does it apply to the management?

Ms Mary Considine

Yes, it applies to all management. We tried to protect lower-paid staff on €30,000 or below. It applies to staff in full-time employment but not to those already on reduced working hours.

It is difficult and these are exceptional circumstances. We are in a crisis. Our traffic was down 91% in September so we were operating at 9% of activity levels but we are endeavouring to maintain 80% of pay. It is very challenging from a financial perspective. I outlined this morning the devastation the pandemic has caused and we are trying to deal we that as effectively as we can.

I thank the witnesses.

I have a few comments and it is a pity the Minister and Minister of State were not present to hear the presentations made by the key stakeholders in the industry. They should be informed and they could learn a lot. This exercise is futile without the presence of the relevant Ministers.

Everybody in the country knows that the pandemic has hammered our health system and the economy. It has badly damaged the spirit of the people and it has certainly crippled airlines and the aviation industry. The problem rests with the Government. We made a huge mistake in the unilateral approach that was taken, with a restrictive and rigid regime being imposed. Ours is an island country and it depends on connectivity. We took the wrong decisions.

I was very disappointed hearing from the Minister and Minister of State that they are still talking about a testing regime seven months after the crisis emerged. I have massive sympathy for Aer Lingus and Ryanair, as they have consistently argued that if they were not afforded some flexibility, they would have problems. Aer Lingus and Ryanair are strong but no company could withstand the stalemate that has been evident in the travel sector over the past seven months. No matter how strong they are, airlines are teetering on the edge and the workforce is paying the price.

Airport authorities are on the brink of collapse. There is anger, fear and trepidation in the workforce across the aviation sector. The position of Shannon and Cork is particularly acute. In my region, Shannon is the driver of the mid west in business, enterprise, tourism and hospitality. I was in Shannon and it is frightening to walk through it now; it is deserted. How long can we sustain this or keep this failed policy that we have been implementing?

If we do not put in place a testing regime, we will not restore public confidence or get people back on aircraft. We need a quick, efficient, reliable and authentic testing system. The sooner we can sign up to that, the better. It is disturbing that the Minister told us this morning that he is not sure we will have an agreement on 13 October and we are not sure what kind of testing system Ireland will put in place.

This committee must ensure that the Government agrees to adopt the European Union travel framework. We must also ensure it adopts the aviation recovery task force recommendations and that it provides a substantial stimulus funding package taking in ongoing revenue and capital projects. That should apply to all our regional airports and particularly Cork and Shannon.

There are couple of minutes left and the next slot is for Fianna Fáil.

I thank the witnesses for their presentations. Mr. Wilson and Mr. Doyle have put it clearly to us that from a political perspective, they want to see the European framework being adopted. That is our challenge. As a political body, we can ensure this happens but will the witnesses make commitments to the future services at Shannon in particular, as it is in my constituency?

Ms Considine indicated a necessity for Government support but will she clarify if she is getting the required support from the Government? Will she clarify some of the issues around Shannon Heritage? There was a proposal from the Government to provide funding of €2.4 million but it now seems the Department of Transport will only provide approximately €550,000 from that. Will she clarify the position as she understands it?

Ms Mary Considine

Shannon Heritage is a commercial entity and the business has been devastated by the impact of the lack of international visitors to the country. We have had to make difficult decisions. We were looking at a really bleak winter and on the back of that and an 80% drop in international visitors, we made a submission to the Government to seek funding to cover operational losses and capital funding of the business through to next year in the hope there would be a pick-up in international visitors. The figure referred to by the Senator relate to operational losses and capital funding required for the period from July to the end of December.

In consultation with officials, our understanding is the Government is committed to the funding to cover incremental losses of keeping those sites open from September through to the end of December. That funding is welcome as it allows us to keep Bunratty Castle and King John's Castle open. The funding we sought was for the entire heritage portfolio but those two sites will be kept open, with those people kept in employment. This is all subject to the restrictions and the level 3 restriction imposed last night means that once again, King John's Castle must be temporarily shut until the end of October. There are a number of moving parts.

Mr. Sean Doyle

We have already published our summer schedule for Shannon and we are keen to operate the North Atlantic routes and reinstate the Heathrow route. We have made our ambition clear. If the common travel area was open to unrestricted movement, we would certainly look at reinstating the Heathrow service earlier than next summer. We have people at Shannon who are ready to be reinstated if the policies support such action. The aviation task force was looking at supports to stimulate demand, and these are an important part of what is needed to get back on our feet.

Mr. Eddie Wilson

The winter schedule comes into effect in the next three weeks. The political decisions needed to be taken weeks ago.

If the amber list included the common travel area, including the UK, it would go a long way towards keeping Cork and Shannon open. I am not hopeful for that for the winter because ultimately this is about demand and, from what I have seen today, I do not see any action from the Government that is decisive about adopting this EU list. The Government could do it today. Tomorrow, the Government will release a list that states that we cannot travel anywhere in the European Union. It could publish the EU list tomorrow. It is in the paperwork. It has already been decided by the European Centre for Disease Prevention and Control. The Government can adopt that, just as it decided to move out of the European framework in July, and that would go some way towards saving airports. I do not see that happening and I am not hopeful about Cork and Shannon for this winter.

We should not let Mr. Wilson just conclude on that point. It is important that we, as members-----

Can I make a point?

If time is cut for our group, it is cut for everyone. We have to be fair here. The Senator is hogging time that we would all like to use.

I am not. I am trying to extend the meeting.

On a point of order, might it be appropriate for the committee to consider having a second meeting to follow up with any individuals? It is important-----

I have no difficulty at all but because of Covid restrictions, we have to be out of the room now.

I appreciate that.

That is all I am doing. I thank the witnesses for attending and for their engagement with the committee. We will issue a report in respect of these proceedings and send it to Government. We take on board the witnesses' concerns and listen to what they have to say.

The joint committee adjourned at 1.35 p.m. until 2 p.m. on Thursday, 8 October 2020.