Seanad Éireann debate -
Wednesday, 7 Jul 1999

Vol. 160 No. 5

Adjournment Matters. - Regional Airports.

Mr. Chambers

I concur with the previous speaker in thanking you, a Chathaoirligh, for your courtesy in this House. I apologise for the absence of the Minister for Public Enterprise, Deputy O'Rourke. When I tabled the motion I did not realise she could not be present. I thank the Minister of State, Deputy Jacob, for being present to take this matter.

The purpose of the motion is to focus attention on the importance of strategic investment in the development of our regional airports. Over the years the Government has given substantial money to the airport companies for the development of the basic infrastructure of our airports such as runways, terminals, reception and duty free areas.

In return the airports have proved themselves to be a gateway for the development of our tourism industry. They have provided transport facilities for the business sector and have opened new opportunities for investment in rural and regional areas.

The recent decision by the EU to withdraw the duty free status from our airports will have a profound effect on the financial viability of regional airports. The Government has an opportunity to look at the long-term strategic development of these airports. I understand the Government is giving some consideration to dealing with this matter.

I understand that the management of Knock International Airport has put forward specific plans to Government outlining its needs and considerations for further development. It has highlighted the need for investment in water and sewerage facilities. I stress the fundamental importance of putting in place these services as part of any long-term planning for the economic development and future of the airport and if it is to play a part in regional development and job creation. These are fundamental needs. The management of Knock International Airport has looked for tax incentives to encourage large companies to invest and provide jobs close to the airport. Such incentives would provide many jobs in an region which has recently experienced the closure of a factory in the Charlestown area, leaving almost 100 people unemployed.

I ask the Minister of State to ask Aer Rianta to play a greater part in the overall development of flight services to regional airports. This should be part of a substantial overall plan. As the national airport body it should be encouraged to support the Government's investment in the regions by providing more services and flights to those areas.

The time is right for the Minister and the Government to set out a blueprint for investment in our airports in conjunction with development agencies, such as Forfás, local authorities and other Government agencies, as part of our national development plan. There is a great opportunity and challenge here. If we believe in the thrust of the Government's policy on regional development to encourage greater development and concentration of jobs and opportunities in rural areas, our airports should be the hubs of such development. It would spearhead much good thinking and planning. One need only look at the development of Shannon Airport since the 1950s and the development it has brought to that region. We welcome the great challenges and opportunities to be faced and on this premise I commend this matter to the Minister of State.

Mr. Jacob

I thank Senator Chambers for raising this important issue. I remind the House that support for the network of regional airports is an express element of the programme for Government and in this regard, I have noted carefully the views expressed by Senator Chambers. This Government's commitment to the regional airports has been demonstrated through three separate grant schemes which are administered to help develop and sustain the regional airport network.

With regard to infrastructural grants, the Government made Exchequer funding of £5 million available for improvements at regional airports in Donegal, Galway, Knock, Sligo and Waterford in 1998. This scheme was devised to ensure airports would be in a position to complete the substantial development programmes which they had undertaken over the past decade or so, with assistance from State and EU funding. The funding was provided by way of grants of 50 to 75 per cent towards the completion of essential upgrading of the infrastructure and facilities at these airports, thereby enhancing the prospects of attracting additional air services and tourism to these regions. Developments include runway upgrading, hangar accommodation and navigational and technical improvements.

Due to land acquisition delays, environmental objections and other reasons, the airports were unable to complete all planned developments in 1998 and over £3 million of this funding has been rolled over into 1999. I am very hopeful the airports will be in a position to complete their approved developments and draw down this funding in the current year.

The Government is also supporting all six regional airports through a grant scheme to assist them with marketing promotion for 1996-99, inclusive. The purpose of the marketing grant is to help regional airports with the necessary work of winning new customers and exploiting new markets. This is with a view to their achieving the critical mass of business necessary to achieve long-term profitability. Under this scheme, a total of £587,500 was made available each year to the airports from 1996 to 1998. This year it was decided to increase the level of support under this scheme to £700,000 in order to provide additional funding for Waterford Airport to assist the company with tackling their objective of developing more services to the UK.

My Department also supports the operation of four essential air service routes under an EU regulation which allows for the imposition of a public service obligation on regional air routes to improve accessibility and encourage the growth both industry and tourism related activities.

The routes supported are those between Dublin and Galway, Sligo, Donegal and Kerry. They have operated since 1995. A competition was held at the end of 1997 to find operators for the routes for 1998-2001. Aer Lingus won the contract to operate three routes and El Air Exports Ltd., trading as Ireland Airways, was awarded the Donegal route. El Air Exports Ltd. operated the Donegal route until February 1998 when it went into liquidation. Aer Arann was selected to operate the Donegal route on an interim basis from March to December 1998. Following a competitive tendering process the contract was awarded to the same company for 1999-2001. Under this scheme, over £3.2 million was paid in 1998 to the airlines concerned and my Department's Estimates for the current year have a provision for a further £3.3 million.

Exchequer funding has enabled regional airports to make their contribution towards attracting inward investment and tourists while at the same time providing access to markets and services to industry. There has been a significant increase in passenger traffic through the airports, with the total passenger traffic through the six regional airports in 1998 at almost 500,000. This represented an overall increase of about 14 per cent over 1997 figures.

The six regional airports are privately owned and it is, of course, a matter for the board and management of each company to devise and implement the strategy they consider most appropriate to sustain and develop the airports. In that regard, I am aware that the regional airports have been reviewing their operations over recent months and giving consideration to the kind of developments they envisage in the years ahead. I am also aware the recent abolition of duty free facilities will impact adversely on regional airports. I regret that despite the strenuous efforts on the part of the Government, we were unable to achieve the unanimity at EU Council level necessary to reverse the original decision.

The House will be aware that my Department has recently received a report from Aer Rianta on that company's future strategic direction. The report is currently being carefully examined in consultation with the Minister for Finance and a team of advisors has been appointed to assist with this examination. This broad review of the future strategic development of State airports will provide a context in which consideration can be given to the contribution which regional airports can best make to the enhancement of the wider transport infrastructure. This will also be the appropriate context in which consideration can be given by the Government to the best way in which it can continue to express its support for regional airports.

The Seanad adjourned at 9.50 p.m. sine die.