Joint Committee on Transport and Communications Networks díospóireacht

Issues Affecting the Aviation Sector: Discussion (Resumed)

Chairman

We are dealing with issues affecting the aviation sector. I welcome our witnesses. We are joined by Mr. Eddie Wilson, chief executive officer, of Ryanair. I thank him for coming back before the committee a second time. This is an extremely important issue. We are also joined by Mr. Donal Moriarty, interim chief executive officer, and Mr. Reid Moody, chief strategy and planning officer, of Aer Lingus. I thank them for being with us virtually today.

Before commencing, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards reference the witnesses may make to other persons in their evidence. The evidence of witnesses physically present who give evidence from within the parliamentary precincts is protected pursuant to both the Constitution and the statute by absolute privilege. However, today's witnesses are giving their evidence remotely from a place outside the parliamentary precincts and as such may not benefit from the same level of immunity from legal proceedings as a witness physically present does. Witnesses are again reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to the identified person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such 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 or an official, either by name or in such a way as to make him or her identifiable.

Members are also reminded that committee meetings should conclude within two hours in any one day. The committee is scheduled to sit twice today for a cumulative time of just under four hours. Therefore, members are asked to rotate in and out of the meeting when they have finished asking their questions. With this in mind, I propose Deputy Joe Carey to act as temporary Chair, as he did previously, for the part of today's meeting where I will be rotating out of the meeting to abide by the two-hour rule. Is that agreed? Agreed.

I call Mr. Wilson to make his opening statement.

Mr. Eddie Wilson

I thank the Chairman for having me back today. Unfortunately since we here on the last occasion on 7 October nothing has changed regarding aviation policy and the strangulation of this industry. The green list system has been a complete and utter disaster for this economy and despite the promises that we are going to adopt a new system, nothing has happened. We have cut ourselves off from Europe. Before anyone comes back and talks about the traffic light system in terms of what other EU countries are doing, this morning in Germany, France, Sweden, Belgium and Spain, one can travel anywhere within the European Union. There is no restriction on flights whatsoever. A direct consequence of this strangulation of our industry is that the Ryanair bases in Cork and Shannon, which we had flagged explicitly based on this because we had no bookings, have now closed and the question is whether they will reopen next summer. That could have been averted. I find it extraordinary that after coming to this committee on the last occasion we did not get one call from either the Minister, Deputy Eamon Ryan, or the Minister of State, Deputy Naughton. The closure of our bases in Cork and Shannon could have been averted or minimised in some way. We did not even get a telephone call from them.

The aviation task force has been reported on since 7 July, more than four months ago, and nothing has been done about it.

People from Ryanair, Aer Lingus, the airports and the leasing companies put in their good time last June and July to put together a report, and it is inexplicable that this Minister has done nothing about it whatsoever.

The market update that I gave the committee the last time I attended has deteriorated. Airlines across Europe are in a bad place. The two airlines that are represented at the committee today are well capitalised, but what is happening is that there will be smaller fleets within Europe next year. Ireland is bottom of the list at the moment, because we are closed for business. Having lost this summer, for summer 2021, nothing has been done to attract business, on which 140,000 people in aviation and 325,000 people in tourism depend for their jobs.

We are calling on the Minister today to do some very simple things, and we have been doing so for months now. The EU traffic light system must be implemented today. We must stop waiting around. There are already countries that are green and amber, and they should be opened straight away. For example, the Greek Islands, the Canary Islands, Germany, Sweden, and parts of Italy could be open today. We do not know what the delay is. As it stands, Government policy is to say that nobody should fly anywhere in and off this small island economy. A key part of this EU traffic light system is that there should be regionalisation, and unless the Government adopts it, it will be useless. Countries should not be cut off in full, so that one can still fly to some places, for example, the Canary Islands, when one may not fly to Madrid, as it is part of Spain.

The aviation task force must be implemented. Why is it still sitting there and why have the Minister for Transport and the Minister of State, Deputy Naughton, not done anything about it?

We want consultation. There are many things happening at the moment on which none of the airlines and stakeholders are being consulted. When has one ever heard of Ryanair, Aer Lingus and the Dublin Airport Authority, DAA, all saying exactly the same thing?

This industry is in decline, and we lost this summer due to Government policy failures and advice not to travel. I note that this morning that the National Public Health Emergency Team, NPHET, stated that Christmas travel should be suspended. I am sorry, but being worried is not good enough for us. We need data, and there are no data that state that air travel is not safe. It is the safest place where people can congregate, due to a combination of 100% compliance in the wearing of face masks, high efficiency particulate air filters being used, and policies and procedures from the European Centre of Disease Prevention and Control, ECDC, being followed.

We need to get the balance right in this economy, which means that we need to be able to preserve jobs and protect those who are most vulnerable, and we should be able to do this. NPHET got it wrong on care homes, meat factories, face masks, and on travel throughout this summer when it should have been concentrating on increasing capacity and getting a properly functioning track and trace system.

The two points I wish to make to the Minister are as follows. The EU traffic light system must be implemented with regionalisation, and it must be done today. We are closed when all the other economies within Europe are open. Second, the Minister must implement the aviation task force, which has not been done to date. This includes in particular the incentives to get airlines to return to Ireland, especially for summer 2021, including the specific recommendation for the rebate of airport charges for a period of three years, which would apply to all airlines within the industry.

Chairman

I thank Mr. Wilson. Dr. Tony Holohan and NPHET will be appearing before the committee next week, and we will put the points raised by the witness to them. I now call on Mr. Moriarty to make his opening statement.

Mr. Donal Moriarty

I thank the committee for having the opportunity to speak before it again. Aer Lingus has previously outlined, both in July at the Oireachtas Special Committee on Covid-19 Response and again at our appearance before this committee on 7 October, the catastrophic effects that the Covid-19 pandemic continues to have on the global aviation sector.

The committee is aware of how important aviation is for the Irish economy and its prospects for future recovery. The members all know that the international businesses that headquarter in Ireland, that manufacture in Ireland, that carry out critical research and development in Ireland, and that secure investment from their boards for Ireland do so because Ireland is a connected, progressive, business-friendly country. Connectivity is key. We are an island nation, and that connectivity can never be taken for granted. It is a key element of foreign inward investment and in helping our domestic businesses to grow and develop.

Now is the time to put a framework in place so that all businesses can plan for 2021. Fortunately, there are elements of that framework already in existence. Crucially, we know that air travel is safe. Aer Lingus and other airlines have put in place measures in line with European Union Aviation Safety Agency, EASA, and ECDC guidelines that very effectively mitigate the risk of transmission during travel. Indeed, a recent study by the International Air Transport Association, IATA, indicated that risk of transmission on board an aircraft is as low as one in 27 million. Second, the traffic light system introduced by the European Council recently is an important step towards ensuring greater harmonisation for safer travel across Europe, and I will address that in more detail later. Third, new and more effective means of testing are being used globally, and their introduction into this country can increase the level of safe international travel.

I now turn to the decision of the European Council on the traffic light system. The decision at the European Council on 13 October aims to co-ordinate the approach to free movement in response to the Covid-19 pandemic. The wider aviation sector has been somewhat critical of the ultimate decision that emerged from the European Council. The Council recommended a co-ordinated approach to free movement and set out some guidance for member states, but it falls considerably short of what was originally proposed by the European Commission on 4 September, which was to encourage a restart of travel through effective co-ordination and proportionate, predictable and non-discriminatory measures.

Despite this assessment of the European Council decision, Aer Lingus has constructively shared an implementation approach with the Department of Transport that could support safely increasing international travel. Although it has not yet been published, Aer Lingus understands that the Government approach to implementing the European traffic light system will involve a number of elements. First, persons arriving from green list locations can enter the State without the requirement to restrict movement or undergo testing. Second, people arriving from orange-listed locations should have the option to disapply the requirement to restrict movements if they have negative test result of an appropriate standard done pre-departure. Third, people coming from red-listed countries should have the option to disapply the requirement to restrict movements following a negative test result taken five days after arrival. We understand that that is the Government's proposal, although it has not been published yet.

We would describe the proposed approach as a fairly tentative and moderately positive step forward, but it urgently needs to evolve and move to something quite different. Aer Lingus is actively engaging with the Government and will seek to influence the implementation of an appropriate solution before 8 November 2020, which I understand is the date the Government has in mind.

Aer Lingus notes that the intention is to allow travel from orange-coded countries and areas without a requirement to restrict movements on arrival if a pre-departure test is taken. In our view, it is critical that if pre-departure tests are required for passengers travelling from orange-coded countries, it has to be based on a rapid, affordable antigen testing solution. Only a rapid antigen testing solution will facilitate a meaningful increase in safe international travel. For passengers coming from high-risk or red countries, the European Council decision specifically enables the replacement of quarantine and movement restrictions by the introduction of a testing regime.

Aer Lingus also welcomes the exemption in the European Council decision for passengers with an essential function from the requirement to undertake restricted movement or testing while exercising this essential function, and this includes those in critical occupations, students and persons travelling for imperative family or business reasons. This exemption will allow passengers with an essential function to travel without restriction, be that a test or a movement restriction.

Aer Lingus believes that following the initial implementation of the measures, the fortnightly review process, which we understand the Government intends to apply, should quickly lead to a streamlining of the processes to allow a meaningful increase in safe international travel. This streamlining should look like a limited form of random rapid testing for passengers arriving from higher risk orange-coded countries, and a pre-departure testing for countries classified as red.

Aer Lingus believes that through the adoption of a co-ordinated and multilayered risk mitigation approach the level of safe international travel can be increased. The multiple layers involve pre-travel health declarations; mandatory use of face masks; enhanced cleaning on aircraft and in the airport environment; the use of state-of-the-art air filtration technology on board the aircraft; the use of the e-passenger locator forms, ePLF; the use of the Covid tracker app and its integration with similar apps in other countries; and agreed international travel protocols such as the European traffic light system. It is based on this range of risk mitigation measures, which are already in place, that we believe aviation requires a screening standard of testing, not a diagnostic standard of testing. In summary, Ireland must implement the European Council’s decision in such a way that the traffic light system delivers a meaningful contribution to increasing safe international travel.

I will turn briefly to testing and rapid testing. First, I draw the committee's attention to the International Air Transport Association, IATA, study which indicates that the risk of on-board transmission is one in 27 million. So far in 2020, 1.2 billion passengers have travelled by air and IATA says there are only 44 cases of Covid-19 being transmitted on board an aircraft in that period of time. Second, the European Centre for Disease Prevention and Control, ECDC, notes that in the current epidemiological situation it does not recommend that passengers should be systematically tested when crossing internal or external administrative borders. I also point to the recent data released by the Health Protection Surveillance Centre, HPSC, on 21 October, which highlighted that four cases were reported in the previous 14 days that were travel related. There were 80,000 passengers in that period of time, which represents 0.05% of cases in that period. The evidence, therefore, is that international travel is simply not a vector of transmission for Covid-19. Interestingly, the HPSC report published on 21 October has not been published since. We believe the continued publication of the report would be a helpful statistic and it should continue. I do not understand why it has been discontinued.

All this highlights the effectiveness of the measures introduced by the-----

Chairman

Excuse me, Mr. Moriarty. Do you have much more of your presentation to make in terms of the time?

Mr. Donal Moriarty

About three minutes.

Chairman

That is fine.

Mr. Donal Moriarty

All that I have said highlights the effectiveness of the measures introduced by the European Aviation Safety Agency, EASA, and the ECDC.

I will turn now to some specifics on antigen testing and why we believe it is the route forward. Italy has recently introduced a testing requirement for arrivals from high-risk or red-coded countries that includes antigen testing as an appropriate standard. On 18 October last, the French minister for transport announced plans to introduce rapid antigen testing at airports on departure to countries such as the US and on arrival from red-zone countries. On 13 October, Germany's Robert Koch Institute, RKI, recommended antigen testing to complement existing molecular PCR tests. Several European airports, including Milan, Rome, Frankfurt, Heathrow and Paris, are in the process of equipping themselves for antigen testing in the future. Alitalia is already using it and Lufthansa has announced plans to do so. Similarly, Austrian Airlines has recently announced a trial programme for antigen testing. It is clear that antigen testing, at a screening standard, is becoming prevalent, and the solution in terms of facilitating international travel.

I will briefly mention regional operations, in Cork and Shannon airports in particular. Aer Lingus has published its 2021 summer schedule, and there are extensive operations planned from both Cork and Shannon airports. However, the easing of international travel restrictions is assumed in the publication of that summer schedule for 2021. Urgent progress along the lines I have just outlined must be made in the appropriate introduction of a traffic light system and testing regime. We have highlighted these issues repeatedly to this committee and to the Special Committee on Covid-19 Response since July. We have referred to the recommendations of the aviation recovery task force, published on 7 July, which have not been implemented. In our view, all these changes must be implemented now.

I will conclude by referring to the Government's resilience and recovery plan. It says that there is a need to keep airports and travel routes open and that Ireland depends on airports for supply chains and economic activity. It says there is a need for travel for essential reasons, and that significant employment and other direct economic impacts result from aviation. It also states that aviation’s strategic importance underpins tourism and business generally, and that rebuilding the national economy has a critical dependence on aviation. That is what the resilience and recovery plan says, but we do not have any evidence of policy decisions and actions being taken in pursuit of that plan.

Our economy needs certainty about connectivity. This must be prioritised urgently for 2021. Businesses and the economy in general are critically dependent on it. I thank the committee for the opportunity to make these remarks.

Chairman

Thank you, Mr. Moriarty. You are probably aware that representatives of Aeroporti di Roma will be appearing before the committee this afternoon to discuss rapid testing at the airports. That should shed some light on the matter.

I now move to questions from the members. Deputy Darren O'Rourke has seven minutes and he must abide by that.

Deputy Darren O'Rourke

Chairman

I thank Mr. Wilson. I call Deputy Crowe.

Deputy Cathal Crowe

It was a devastating blow to County Clare and Shannon that in the same week the traffic light system was announced, the Ryanair base at Shannon closed. I would largely agree with Mr. Wilson regarding the regionalisation argument. The Covid-19 figures are released around teatime every evening. When the ECDC talks about regionalising risk, it seems, and I made this point yesterday, that it is looking at countries more than regions. As far as I can see, there is only one region, which is Calabria, in the south of Italy, to which one can fly and Ryanair is certainly not flying from Shannon to Calabria. If we were to look at the figures provided last night and if Tipperary and Wicklow had airports, their incidence rates have dropped below 150. There is another metric where a region has to have a positivity rate of 4% or lower, but on that metric alone, if we looked at better regionalisation for collecting data, parts of Ireland would be creeping back to levels which would be deemed orange. We need the European Commission and the Department of Transport to urgently clarify the regions Europe is using to designate those regions.

I ask Mr. Moriarty to take up the point on which the Chairman concluded. I hear what he is saying about the uncertainty relating to orange and red routes. Both witnesses were very clear about that but how much of their decision to not fly from Shannon is based on the traffic light system and how much is based on a commercial decision? Could they apportion that out? There has been rigorous questioning from various members. If we get to 8 November and other measures are brought in or we see commonality across members states, they are still saying that they will not be flying until next April. How much of their decision on that would they apportion to corporate and commercial reasoning?

Mr. Donal Moriarty

The commercial is absolutely linked to the ability to fly and having the environment in terms of easing of restrictions to allow us to fly. I will ask my colleague, Mr. Moody, to comment on that more specifically.

Mr. Reid Moody

Everything that we do at the minute is based on economic and commercial viability. They are completely linked to the traffic light system and therefore the demand picture and, ultimately, the capacity that we will put on the network. For the sequence to happen consumer confidence needs to be restored. For that to happen, there needs to be adoption of the traffic light system in addition to full adoption of the aviation recovery task force recommendations. If, as a result of that, confidence in the market starts to build, as Mr. Wilson said, we will look at the demand and adjust capacity in accordance with that demand but the sequence has to start and at the minute the sequence is not starting.

Deputy Cathal Crowe

If Aer Lingus is not committed to flying from Shannon between now and April, under what circumstances would it review that? I believe one can book flights from Shannon to Heathrow from 7 December onwards on the website. First, what does Aer Lingus need to happen? Second, what is Aer Lingus's intentions for its aircraft based in Shannon between now and the time they will be airborne again?

Mr. Reid Moody

In the next couple of days, we will be finalising our winter schedule. That will see the removal of Shannon-Heathrow flights from aerlingus.com. We will be revising the full schedule for the rest of the network. That will be updated in the coming days and it will show the removal of the Heathrow flight rights through to the end of February. Unless there is a significant sea change in that demand picture I do not see the flying from Shannon situation changing before the end of February. We are starting to put aircraft into longer-term storage. Most of that is moving to Spain because of the arid conditions there versus the more-----

Deputy Cathal Crowe

Can Mr. Moody give commitments as to what will happen those aircraft? Are they to come back to Shannon, particularly transatlantic aircraft? Also, what can Mr. Moody say to the Shannon-based staff of his airline today in light of the April date he is now flagging?

Mr. Donal Moriarty

I will address that. We communicate with our staff on a more than weekly basis. We have local sessions with them also so they are well aware of the constraints and challenges we have in terms of our winter operation and our plans for the summer schedule.

In terms of the aircraft, we are planning to resume operations on the Boston and JFK routes for summer 2021. There will be no change in terms of deployment of aircraft. That is our planned schedule and it is built in but as I said, it is critically dependent upon the environment being right for us to-----

Deputy Cathal Crowe

Would Mr. Moriarty consider a stopover facility in these months to ensure that he is satisfying the needs of a customer base in the mid-west and-or in Cork?

Mr. Donal Moriarty

The Shannon stopover concept is something we are not inclined to revive.

Deputy Joe Carey took the Chair.

Deputy Cathal Crowe

My next question is for Mr. Wilson. We have heard his traffic light system argument. We have heard him talk about Ireland being an outlier. There are 28 European Union countries, four of which have a policy Ryanair likes, so 24 of them, including Ireland, have a policy Ryanair does not like.

Deputy Ruairí Ó Murchú

Most people in this room accept and have worked individually and collectively from the point of view that there is a requirement for a framework. Everyone accepts that. We have all asked individual and collective questions on when we can get antigen testing in operation if that is up to specification so we do not take away from community testing. Most people are in that scenario. We accept how difficult it has been for the aviation sector and the absolute necessity to ensure we have an aviation sector when we get beyond this.

When we talk about the likes of Germany, Italy, France, Spain and Ireland at the minute, we are dealing with places that are either introducing new restrictions or have already done so on the basis that we have a huge amount of community transmission. That will obviously impact flying now. I accept we need the framework up and running. The European Commission and the Irish Aviation Authority, IAA, appeared before the committee yesterday. There is talk, obviously, of these European Union Aviation Safety Agency, EASA, and ECDC protocols which will be in operation and that would relate to testing. There is no surety, however, that we have any level of agreement across Europe that we will have anything close to harmonisation. That is before we talk about the difficulties here as regards Brexit and the fact we obviously must get an all-Ireland response but there also needs to be some element of a deal or harmonisation with the British Government, which is very difficult at the minute. We all accept the Irish Government needs to move as soon as possible. That is accepted.

When we talk about Aer Lingus and Ryanair we are dealing with two major airlines which have already spoken from the point of view of seeking to have this framework up and running. They are not necessarily looking for State money at this point. They are talking about rebates with regard to the future. We hope that when we talk about travel next summer, we are also talking about a period when we will probably have the outworking of a vaccine. None of this, however, is absolutely sure.

I want to put this question to Mr. Wilson. We also had travel agents before the committee, particularly travel agents who have block booked and who stated they were having incredible difficulty in getting moneys back from Ryanair. There is all this talk about dealing directly with customers but in some cases these were block bookings for school groups and such. Could we get that sort of problem resolved? I have a further question after that.

Mr. Eddie Wilson

Sorry, I do not know which question the Deputy wants answered. Which one does he want answered first?

Deputy Ruairí Ó Murchú

Mr. Wilson has stated what he wants. We all know there is a need for a framework. Mr. Wilson has been incredibly clear that he needs the Government to move. The first question is on the difficulty regarding harmonisation across Europe.

My second question concerns the travel agents we had in before the committee who spoke about the fact they and individual consumers have had incredible difficulty in getting money back for flights that did not fly at an earlier stage in the pandemic.

Mr. Eddie Wilson

I keep saying with regard to harmonisation at the moment, and I do not know how many times I have to say it, that regardless of the traffic light system, outside of this jurisdiction at the moment a person can fly to any country in Europe, even those that are affected now, because they have land borders, not unlike Northern Ireland with the Republic. We are cutting ourselves off from the rest of Europe. I do not think people here get it and it is going to get worse because there will be fewer airline seats in Europe when this comes back. There are going to be fewer airline seats throughout the world. Our policy at the moment is to wander around in the darkness and say we might be doing something and we are having an expert group and all sorts of things rather than doing something.

Mr. Donal Moriarty

I take it the Deputy's question relates to the temporary wage subsidy scheme rather than the employment wage subsidy scheme, EWSS. In the period since the TWSS was brought in and up to the point of its expiry on 31 August, we complied with the direction we got from the Department and from the Revenue Commissioners. That included the way in which we were to complete the forms to which the Deputy refers. We completed them in exactly the way we were directed to do so by the Department.

Acting Chairman (Deputy Joe Carey)

Moving on to my questions, I wish to direct my first set of questions to Mr. Wilson of Ryanair. Today's news from Ryanair that it will not fly any flights from Shannon or Cork airports from 4 November until 12 December is extremely disappointing. When Ryanair made this decision, had it communicated this decision to the Shannon Airport Authority and to Ryanair's workers? Are there any circumstances under which Ryanair could review this position?

It is my understanding that last weekend there were more than 100 people on the Shannon to Stansted flight. What makes it sustainable for Ryanair to fly that route? That represents a significant improvement on the number of passengers travelling from Shannon to Stansted. At what point does Ryanair say this is economical and it can fly? This is going to have a major, devastating impact on the economy of the mid-west, from a business point of view in particular.

Mr. Eddie Wilson

Just to make one thing clear, when we made the decision about the based aircraft, that affects the pilots and cabin crew who are based in Shannon and in Cork. These additional cutbacks clearly do not affect those staff because these are flights that originate from London or other bases elsewhere. It is entirely due to demand, however. The reason there is no demand is that the Government is saying, "Don't fly". The Government has not opened up the green list. That is the only option. Today it says all of Europe and the UK is closed. One cannot operate an airline without passengers. While there may well be some flights that are better booked than others, I can tell the Acting Chairman that the bookings out of Cork and Shannon are absolutely shocking. If something is to be done for those airports, it needs to be done now by the Minister. We put a lot of time into this. We went down and met all of the politicians in Cork. We met airport management and our staff. We telegraphed this very clearly for more than six weeks and we did not get one phone call from the Government about what it could do to avert it. We are still flailing around in the darkness as to what we are going to do. One cannot run an airline without demand. At its most basic, we are an island nation and we must be able to say to people that they will not be demonised for travelling. We are responsible in this industry, we do everything that is risk-based and we are not going to make money-----

Acting Chairman (Deputy Joe Carey)

From 12 December on, what traffic volume does Mr. Wilson foresee through Shannon Airport?

Mr. Eddie Wilson

Some of that traffic may come back from other non-based activity because there may well be traffic for Christmas. However, reading this morning's newspapers and NPHET's comments, which have no scientific basis, they are now saying people should not travel for that because they are very worried. As I said earlier, being worried is not good enough; we want to see the data. The data are there that airline travel itself is safe and we need a framework as to what countries and regions to balance the risk. Life has to go on. We have got to look after the most vulnerable and we have got to be able to have a functioning economy. As an island economy without any connectivity, we do not have a lot of hope on that so I hope the Government will do something about this today.

Acting Chairman (Deputy Joe Carey)

Turning to Mr. Moriarty and Aer Lingus, the Heathrow route is of strategic importance to our region and we have been missing it since last March. There was conflicting evidence given between him and Mr. Moody. He gave February as a possible return date for that particular route whereas Mr. Moriarty said April.

Mr. Donal Moriarty

I do not think that there was-----

Acting Chairman (Deputy Joe Carey)

Can they clarify that? Are there any circumstances under which they can see an earlier return of that vital connectivity?

Mr. Donal Moriarty

I do not think that there was a contradiction. What I said was we plan to operate it as part of our summer schedule and our summer schedule is planned from April. That is the normal date from the airline industry perspective. Mr. Moody may wish to address the specific point.

Mr. Reid Moody

The reason I mentioned February was purely that it is the next planning horizon that I have based the most recent schedule on, so there is no difference there in any of the information between myself and Mr. Moriarty.

I would like to update the committee as well. As of last night we have communicated to Cork Airport that we will reduce frequency on Cork to Heathrow as well. Again, to echo Mr. Wilson's comments, the demand outlook is so weak that we have no other choice but to reduce frequencies.

Deputy James O'Connor

I offer sincere congratulations to Mr. Seán Doyle on his appointment as head of British Airways. He is working with Aer Lingus's parent group AIG at the moment and is a very proud son of Youghal. I wish the new acting CEO the best of luck.

Mr. Wilson is probably aware that I gave a significant presentation at Cork Airport when he visited us about my concerns. A reference we have heard a lot today from the representatives of the aviation sector is the toxicity around flying and people's attitude to it, particularly around short-haul flights. I am incredibly concerned about the attitude people have towards aviation because 120,000 jobs were fully supported by this industry prior to the onset of Covid-19. The witnesses have said a great deal about demand and that is obviously king when it comes to providing flights out of Cork Airport, which is absolutely critical to the entire province of Munster. Shannon Airport is very important as well.

I am very concerned to hear some of the statements made by Mr. Wilson regarding engagement by senior representatives from Government. The representatives of the Government parties will feed that back. It is not good enough because if what he is saying is true, it has cost jobs and flights out of Cork Airport, which I am incredibly concerned about. I am also very concerned to hear that Aer Lingus will reduce its Cork to Heathrow capacity, which is the major link Cork has to airports internationally. We are fighting hard to hold on to the flights we have left and it is important that the public understands just how serious this is.

My first question is for Aer Lingus. When do Mr. Moriarty and Mr. Moody foresee some degree of normality returning to its transatlantic passenger traffic? It is important. There is a very problematic geopolitical situation there now but when do they see normality coming back to transatlantic travel, which is important to tourism in Ireland.

Mr. Donal Moriarty

Clearly, transatlantic travel will not be restored by the adoption of the traffic light system but the approach of a pre-departure test as a standard for facilitating traffic within the EU is a model that could be applied to traffic to and from North America. We would very much advocate that engagement happen with the US and Canadian authorities-----

Deputy James O'Connor

I apologise for interrupting Mr. Moriarty but is any engagement ongoing between the European Commission and representatives from the US and Canada, to his knowledge?

Mr. Donal Moriarty

I am aware that there is some contact. We need to remember that Ireland is not in the Schengen area, so we have a slightly different regime with respect to traffic between Ireland and the US. There needs to be bilateral engagement, therefore, between the Irish Government and the US authorities to establish a safe travel corridor. The basis for doing so is similar to the one I outlined earlier, based upon a pre-departure test regime that facilitates traffic. Ireland is somewhat uniquely positioned to benefit from the relationships we have with the US. We have customs and border protection, CBP, facilities in Dublin and Shannon airports and that gives us a significant advantage in being able to have these safety and health technical conversations with the US authorities.

Deputy James O'Connor

The Chairman has put a lot of work into trying to get a representative from NPHET to come before the committee and I understand the chief medical officer, CMO, may appear before us very soon. As the two key airlines in the State, it is important I ask the representatives what message would they like this committee to convey to the CMO when he appears before us. Perhaps Mr. Wilson might like to answer that one first.

Mr. Eddie Wilson

What we have is this drip-drip on airline travel. We always hear about the data but travel has been demonised. We were told throughout the summer that if people did not travel abroad, everything would be fine and, as we now know, it was driven by domestic factors and Government policy failures on track and trace and increasing capacity. I would say to NPHET that if it is going to have an opinion on aviation, maybe it should look at what the experts outside this country say.

NPHET could look to what is being said by the US Department of Defense, the Boeing Company, the World Health Organization and the European Centre for Disease Prevention and Control, ECDC. For some reason, however, it is ignoring all that. We saw that on 1 July when people were advised not to travel, which was not in line with what the ECDC, which we are supposedly following, was saying. As soon as the new traffic light system, or whatever derivative we have, was announced, people were already being told that they might not be able to come home for Christmas. It is not clear why people would not be able to return from green countries or orange countries or whatever, but it seems to be to do with testing. NPHET is dealing a death blow to the industry in Ireland while the rest of Europe looks to move on. People sometimes forget that no airline in this country is State-owned. Airlines are being bailed out throughout Europe and we will have to go to where we will get a return. At the moment, Ireland is bottom of the list because aviation has been demonised, particularly by NPHET. That body should stick to what it knows best.

Deputy James O'Connor

I thank Mr. Wilson. In the minute that is remaining to me, will the representatives from Aer Lingus comment on the same issue?

Mr. Donal Moriarty

The key message from our perspective is that there is a range of measures in place that significantly de-risk aviation as a vector of transmission of Covid-19. These include health questionnaires, mandatory use of face masks, aircraft and airport cleaning, technology and so on. The act of travel itself is safe. We are suggesting, therefore, that a standard of testing needs to be introduced that is a screening standard, not a diagnostic standard. That standard of testing should be applied on a pre-departure basis from orange-list and red-list countries. By doing so, we believe that aviation can resume contributing to the Irish economy, which is urgently required, and it can be done safely.

The witnesses mentioned the importance of planning and scheduling of flights. However, there has been no progress in this regard in the period from the meetings of the Covid committee in July, the meeting of this committee on 7 October, through to this meeting today. If the Government continues to make no progress through November, December and into the start of next year, what plans are the witnesses putting in place in terms of their workforces? I am not trying to create any extra fear because the workers are already very scared and uncertain about their future. What kinds of implications will continuing Government inaction have for the airlines' ability to sustain their workforce at current levels?

Mr. Donal Moriarty

Before answering that question, I would like to correct something I said in response to the Deputy's previous question. We spoke to the Minister, Deputy Eamon Ryan, on the evening after we last appeared before the committee, rather than just before it, as I stated.

To answer the question the Deputy just asked, we are communicating very regularly with our workforce. We continue to emphasise the importance of the adoption by the State at a policy level of the traffic light system and a meaningful and appropriate implementation of that system. We are planning our business and resources on that basis. We have not engaged or communicated a detailed plan as to what would happen if that policy step and that implementation is not done. We are emphasising today the critical importance of ensuring those steps are taken urgently. Doing so will facilitate a recovery over time, a restoration of demand and, indeed, a restoration of confidence that it is, in fact, okay to travel. That is the important first step. As both Mr. Wilson and I have said, that first step has to be taken and then we can get into the phase of planning for what the future is going to look like.

Mr. Eddie Wilson

Looking at Cork and Shannon, I would say that the mood among our staff is utterly despondent as to what is going on and how it was allowed to happen without any intervention. We have more than 80 locations throughout Europe where our aircraft are based, similar to Cork and Shannon, and we must make commercial decisions about all of them. This limping along is not going to do anything for anybody. Life will be difficult enough as Europe works its ways through the current spike of infections and until confidence returns at some point with the introduction of a vaccine. It is hard to get across how truly extraordinary it is that this country - an island nation that needs air connectivity more than most - instead of leading the pack in seeking to bring aviation back in a more expedited way, is actually at the bottom of the class in this regard. I really do not understand it, especially when the answer is on the Minister's desk. That solution would give us a fighting chance. In its absence, things are going to get a lot worse before they get better and I really fear for our tourism sector next summer. If there are no aircraft coming into the country, there will be nobody coming here to fill the hotel rooms and visit the attractions. We are making our decisions with that prospect in view and the Government needs to get to grips with it. No other airlines are coming in. Operators throughout Europe are getting much smaller and airports already realise they need to attract people for next summer. Other countries are working on that but nothing is being done here in Ireland. It is a shame.

Deputy Duncan Smith

If we get this first step wrong or do not take it, are we going to see extensive job losses in the two airlines next year?

Mr. Eddie Wilson

I really do not want to be thinking about that. Aviation is one of those industries where people can be more transferable. They might not want to do it but pilots and cabin crew in Cork and Shannon may well move with their aircraft in the hope that things will come back. The thing about aviation is that we have relatively small numbers of people for the movement of the aircraft. Of course, there are significant implications for the wider economy, including people working at the airports, taxi drivers operating out of them, hotels, attractions and all of that. I do not want to be thinking about job losses because we will continue to work with our people. We have implemented agreements whereby we have not made anyone redundant among our crews in Cork, Shannon and Dublin. We want to be able to bring them back. If that means that those aircraft go elsewhere, then it may be an unpalatable solution for some of our people but they will be doing so in the hope that we would come back at some other stage. In the short term, this is going to be disastrous for Ireland and I do not think people realise what is coming next summer.

We are going to miss the boat or the plane.

Deputy Michael Lowry

I can feel the frustration. Indeed, that is felt here at committee level as well on the basis that we seem to have made no progress since our last discussion. The scenario that has been pointed out today is frank and forthright but very bleak. We started this process in the past few days and the whole aviation scenario tends to look catastrophic. We have a situation where the prospects for airlines are bleak and where Cork, Shannon and Knock airports are effectively wastelands and deserted as we speak. Plus tourism is non-existent. Both Aer Lingus and Ryanair bring many people to Ireland through the commercial and business sector so they have a good idea of their profile. We all talk about tourism and the impact on the economy, which is correct. Will the witnesses outline their assessment of the damage that has been, and is being, done to our business and corporate sector due to a lack of connectivity?

Have both airlines requested state aid from the Government? Yesterday, we heard from a representative of the European Commission that he was not aware of any application for state aid being made on Ireland's behalf. Aer Lingus and Ryanair mentioned on several occasions in the recent past that they must compete with other airlines in other countries that have the assistance and support of state aid within their jurisdiction. Has the Government made an application? Yesterday, I was gobsmacked to hear the representative of the European Commission say that there were a number of funds available to be accessed but he was not aware as to whether the Irish Department, Ministry or Government had made an application.

Yesterday, a refund issue arose. What is the refund position with both airlines? We have had many complaints from consumers who are entitled and eligible for a refund. The process seems extremely slow and the Irish Travel Agents Association has taken a huge amount of criticism as a result. Will the witnesses update us? What is their attitude to refunds? How have the airlines approached that?

Do the witnesses agree we have no possibility of opening the airports and bringing people on to aircrafts unless we put a rapid testing system in place? This is all about people having the confidence to board an aircraft and fly. Obviously, the movement of people generates movement within the economy but, as things stand, we are at a complete standstill. What is the view on rapid testing? What is the level of communication between the airlines and the Dublin Airport Authority and the Department on rapid testing? How do the witnesses see that progressing?

In terms of Christmas, I understood from the way we were moving yesterday and from the statements emanating from Government previously that we hoped for some happy reunions at Christmas. Therefore, I hoped that we would have a co-ordinated policy, and that guidelines would be set out so people could understand the basis on which they could return home for Christmas. However, yesterday, the Chief Medical Officer, CMO, and NPHET poured cold water on that. There does not seem to be a co-ordinated approach of one voice and one action. The policy is all over the shop and we seem to be making it up as we go along. There is no place more impacted than the aviation industry because of a lack of direction and policy.

Mr. Donal Moriarty

I am happy to give Aer Lingus's response to those questions, if I may?

Acting Chairman (Deputy Joe Carey)

Please be brief.

Mr. Donal Moriarty

With respect to the first question from Deputy Lowry that related to the business community and the impact a lack of connectivity is having on it, increasingly, we are hearing voices from the business community expressing concern about the lack of connectivity. I have heard it expressed best by some executives with significant investments in Ireland who expressed a wish to walk the land and review their investment in Ireland but that is not something they can do. That not only impacts on the existing foreign direct investment in Ireland but also future investments that may or may not be made. It is quite clear that Ireland is putting itself at a significant disadvantage by the policies it has adopted in preventing business traffic.

With respect to state aid and the appearance by Mr. Cornelis at the committee yesterday, I confirm that the aviation recovery task force made a number of recommendations but none of them has been implemented. First, two of the recommendations related to the application of waivers or rebates with respect to airport and air navigation charges. Second, the task force spoke about a stimulus package with respect to regional airports. It is not clear to me whether they would constitute state aid or not but the State should consider implementing the recommendations, and if that requires an application to be lodged with the European Commission, then it should make it. To be clear, Aer Lingus has not made any application to the State for state aid, on a direct basis.

With respect to the refund issue, Aer Lingus has received in excess of 2 million refund or voucher requests since the start of the crisis and that is driven by the unprecedented level of flight cancellations. To date, we have processed 1.8 million refunds and vouchers, which is more than 90% of the requests we have received. Of the remaining 10%, we are working through them. Some of them are very challenging in terms of the complexity of the bookings. We are working through them and are committed to getting those refunds to our customers.

With respect to rapid testing, and I am not sure whether the Acting Chairman heard my remarks earlier, Aer Lingus believes that a rapid, affordable testing solution, based on antigen testing, is critical in order to meaningfully increase the level of international travel, and safely do so. It is our view that that testing needs to be at a screening standard, not at a diagnostic standard. The reason for that is that there are many other risk mitigations that make travel safe.

With respect to the comments on Christmas, I would agree that a lack of co-ordination and lack of a consistent and clear voice as to what the policy is has bedevilled aviation since March. I am aware of the comments that have been referred to but the lack of consistency has been a feature of the crisis since the start.

Acting Chairman (Deputy Joe Carey)

I thank Mr. Moriarty.

Mr. Eddie Wilson

Does the Acting Chairman want me to continue?

Acting Chairman (Deputy Joe Carey)

Unfortunately, we do not have the time to hear the response of Mr. Wilson. I must move on to the next lot and call Senator McCallion who has seven minutes.

Senator Elisha McCallion

It is clearly very evident from the representatives of both airlines that they are frustrated by how the Government has handled the entire aviation situation. Mr. Wilson, in his opening statement, referred to the decisions taken on the Cork and Shannon bases. He said he was really disappointed that he had not heard from either the Minister for Transport, Deputy Eamon Ryan, or the Minister of State, Deputy Naughton, at the time. He said the decision could have been averted had he had a conversation with either the Minister or Minister of State. I ask him to quickly elaborate on that point.

Mr. Eddie Wilson

It could, potentially, have been averted if they had come to us before the decision. We had that well signalled, in that if they had adopted the traffic light system, as initially put forward by the European Council of Ministers, which was the freedom of movement for green and amber countries. We made our stance absolutely clear to this committee and the Special Committee on Covid-19 Response. We wrote to the Minister on that basis on several occasions and yet we had no engagement whatsoever.

I thank Mr. Moody. Those are all the questions I have for now.

Senator Timmy Dooley

I will address the next question to Mr. Moriarty. Some of the staff at our airports are on reduced pay, temporarily laid off or both. Has Mr. Moriarty looked to engage with the HSE about having some of those staff members available to do contact tracing?

Aer Lingus will not see much activity in those areas over the next number of months. Have Mr. Moriarty and his colleagues given any consideration to the redeployment of staff to assist with contact tracing?

Mr. Donal Moriarty

We have not. I assume the Senator is referring to staff in Shannon Airport. Throughout the crisis, we have tried to align working hours and pay with the amount of work that needs to be done. We made some recent changes in respect of our staff at Shannon Airport by giving them an option to return to a work pool at 40% pay in preparation for a resumption of operations or a winter lay-off. We put a similar arrangement in place for our cabin crew at Shannon. We have also launched voluntary severance schemes and incentivised career break schemes for our cabin crew. We have not taken the step of offering our staff to the HSE for the purpose of contact tracing. To be honest, it is our assumption that there is sufficient availability within the public sector to provide that facility.

Senator Timmy Dooley

I thank Mr. Moriarty.

Deputy Darren O'Rourke

I wish to follow up on the issue of workforce planning. Will Mr. Moriarty indicate where Aer Lingus expects to be in that regard in the months ahead? For example, it has a voluntary redundancy package. By what number is it looking to reduce its head count?

Mr. Donal Moriarty

Our approach throughout the crisis has been to maintain the employment relationship with as many of our employees as possible. That has been our approach across our business regardless of location. Employees in the form of fixed-term contractors have left our business and contractors who were due to join our business over the busy summer period ultimately did not do so. We have engaged in consultation with our staff and their representatives on redundancies. When we wrote to the Minister in that regard, we told him that we were looking at up to 500 redundancies. Consultation and the deployment of schemes are ongoing, but we now anticipate that the number of redundancies will be approximately 250. That figure is based on our assumptions about the recovery. Our plan is to run a significant operation in summer 2021 from all of our bases. In order to facilitate that, certain changes in policy and the implementation of the traffic light system have to take place.

Deputy Darren O'Rourke

We heard Mr. Moriarty loud and clear as regards those requests. I thank him.

Deputy Michael Lowry

I will give Mr. Wilson an opportunity to reply to the questions on reuniting families at Christmas and mixed messages, to set out Ryanair's position on those who are eligible for refunds and the lack of rapid testing, and to outline his views on the fact that competitors have access to state aid, which puts our airlines at a disadvantage.

Deputy Kieran O'Donnell resumed the Chair.

Mr. Eddie Wilson

Our view is that most of the state aid in Europe is illegal. In extraordinary times, however, it is possible to have state aid that is legal. As set out in the task force's recommendations, Aer Lingus, Ryanair and any other airline that flies in and out of Ireland could access reduced rates of airport charges or rebates on same. That would be fundamental in decisions to base aircraft in Ireland from next summer. We urge the Minister to do something on that.

Regarding businesses that are involved, we carry a large number of people to and from the UK. Many of them work in the National Health Service, NHS, and so on. They have been discommoded by travel bans. One can only imagine what is going on in Pfizer and Johnson & Johnson in Cork where they are battling to develop a vaccine but it looks like access out of Cork Airport is slowly being strangled.

Anyone who wanted a cash refund has got a cash refund. It is accessible on the website. One will find people who are noisy about this but who were not entitled to refunds. If someone is entitled to a valid refund, he or she will get it.

In terms of flying at Christmas and putting on extra flights, I want to hear from both airlines about their short-term and medium-term commitments to getting planes flying out of Shannon Airport again. Under what circumstances will they revise their spring and summer schedule? I want to hear what both airlines can say to the staff they have based in Shannon Airport because I am aware they talk about good communications. I have seen staff getting videos and WhatsApp messages. They need to know, unequivocally, from both airlines what the coming months will be like for them as workers who work for those companies out of the Shannon base. Will the airlines use staff based in their Dublin base to supplement what they are doing or to replace them if there are flights? I am specifically talking about cabin crew. I want to hear from both witnesses on that, please.

Mr. Eddie Wilson

That is probably a question for Mr. Moriarty.

Deputy Cathal Crowe

It is a question for both, Chairman.

Chairman

Mr. Wilson will not be left out.

Mr. Donal Moriarty

We demonstrated our commitment to Shannon Airport by announcing our summer schedule 2021 and that being an extensive schedule. That is what we want to do. I am aware I am reiterating what I said earlier but there are key things that must be done to enable that to happen successfully. They are the policy change and the appropriate implementation of the traffic light system and the rapid antigen testing regime I outlined.

We have been communicating extensively with our colleagues based in Shannon Airport. As the Deputy said, we are doing so by video message. I do not really apologise for that. It is entirely appropriate in the context of the Covid-19 pandemic. We have also made significant changes recently in terms of pay through the introduction of 40% pay for availability to be in a work pool or winter leave, and we have introduced voluntary severance programmes.

We are, therefore, engaging extensively with our staff about all the options open to them and about the future in terms of our ambition. As I said, our ambition is to maintain an employment relationship with as many of our employees as we possibly can and to do that we want to restore our operations to a sustainable level. We need, however, the support of the State at a policy level to enable that to happen.

Mr. Eddie Wilson

We had the announcement that flights from other bases do not affect our staff in Shannon and Cork airports. We spoke to them about the closures of those bases in recent weeks in terms of the winter schedule. Our hope is that we will reopen those bases next summer, that is, from 1 April onwards. What we need, however, is some basis for doing that and as a start we must be able to, at least, have a fighting chance before we get demand to recover. Flights for Christmas will be there from 14 December onwards and we would hope that people will be back travelling by that time.

We are committed to Shannon and Cork Airports but the demand is just not there at the moment. November is typically one of the worst months to try to stimulate people to travel and pricing is not going to do that. It is the policy failures of this Government and it needs to rapidly do something about it before this situation gets worse. It does not affect our colleagues there at the moment because, unfortunately, they have already been laid off and we would hope to have them back next summer. I hope there is some action as a result of this meeting, in particular by the Minister, to adopt the aviation task force recommendations and put something in place for next summer to attract traffic back into Cork and Shannon airports.

Deputy Ruairí Ó Murchú

I will be very quick as some of my questions have been answered. What refunds have been paid, in both percentage and monetary terms, and what refunds are still to be paid? What flights across Europe have been reduced and what other bases have been dropped?

Mr. Eddie Wilson

Mr. Donal Moriarty

We have reduced our capacity very significantly. Throughout the crisis we were down to below 20% and we are slightly above that at this point. Our capacity has dramatically reduced because of the crisis. That remains the case for the winter.

Chairman

We will have Dr. Tony Holohan, the Chief Medical Officer and the chair of the National Public Health Emergency Team, NPHET, before us next Tuesday, along with the Minister for Transport, Deputy Eamon Ryan. I hope both of the witnesses will be tuning in as we will put questions to the Minister and Dr. Holohan. We ask that they bear with us until the new system for flights is introduced by the Government on 8 November. Ryanair and Aer Lingus are very important to us because of the number of people they employ. This is a national crisis and we hope the airlines, like everyone else, will play their part to ensure we can get flights back in the air in a safe way. I thank our witnesses, including Mr. Wilson, Mr. Moriarty and Mr. Moody, for today's engagement with the committee.

Sitting suspended at 1.34 p.m. and resumed at 3.01 p.m.

Chairman

I welcome Ms Mary Considine, CEO of Shannon Group; Mr. Dalton Philips, CEO of the Dublin Airport Authority, DAA; Mr. Niall MacCarthy, managing director of Cork Airport; Mr. Ivan Bassato, executive vice president airport management, Aeroporti di Roma; and Ms Veronica Pamio, chief communication and public affairs officer, Aeroporti di Roma. Members should be aware that the representatives from Aeroporti di Roma have informed us that they will leave the meeting after one hour. I propose to reduce the time for questions from seven minutes to five minutes in that context. Is that agreed? Agreed.

Witnesses attending in the committee room are protected by absolute privilege in respect of the presentation they make to the committee. This means they will have an absolute defence against any defamation action for anything said at the meeting. However, they are expected not to abuse this privilege and it is my duty as Chair to ensure that this privilege is not abused. If statements are potentially defamatory, therefore, regarding an identified person or entity, witnesses will be directed to discontinue their remarks. It is imperative that the witnesses comply with any such direction. For witnesses attending the meeting remotely, there are some limitations to parliamentary privilege, and they may not benefit from the same level of immunity from legal proceedings as witnesses who are physically present. Witnesses participating in this meeting from jurisdictions outside this State are also advised that they should be mindful of their domestic law and how that may apply to the evidence they give. All witnesses are again reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory regarding the identified person or entity, the witnesses will be directed to discontinue their remarks. It is imperative that they comply with any such 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 or an official, either by name or in such a way as to make him or her identifiable. Members are also reminded that committee meetings should conclude within two hours in any one day. This committee is scheduled to sit twice today, and this is the second sitting, for a cumulative time of just under four hours. Members, therefore, are asked to rotate in and out of the meeting when they have finished asking their questions. With the indulgence of the other witnesses, in the context of Mr. Bassato having to go within an hour, I ask him to be the first to make a presentation. Is that okay with Ms Considine?

Ms Mary Considine

That is fine.

Chairman

We thank Mr. Bassato for taking time out of his busy schedule at Rome Fiumicino Airport, and I ask him to make his opening statement.

Mr. Ivan Bassato

I thank the committee for the invitation. We are very proud and happy to be part of this committee sitting. I thank the members of the committee for inviting me to contribute to this session. It is an honour for me to have the opportunity to share with the members of the committee the views of Aeroporti di Roma on the future of travel in the aviation sector.

The pandemic has posed an unprecedented challenge to airports, which have found themselves with a need to evolve their approach rapidly to comply with the paradigm shift in travel and tourism. Aeroporti di Roma's primary commitment today is to create the necessary conditions to relaunch traffic in maximum safety. We have been working relentlessly to implement effective protection measures and a strong prevention plan. We installed multiple screening tools, engaged in a series of sanitation activities and supported the Italian health authorities' testing operations by establishing a testing area in the arrivals hall and a large drive-through testing facility at the long-term stay parking facility of the airport. We are also, however, the first airport in Europe to have trialled a system of 100% Covid-tested flights, on the Rome-Milan route, in partnership with Alitalia and the health authorities of the Lazio region.

Our long-term goal in this respect is to use the expertise we developed to contribute to the creation and implementation of new global travel protocols, focusing on expanding the 100% Covid-tested flight system. Indeed, we regard the use of large-scale pre-departure rapid testing as one of the safest alternatives to current restrictions on non-EU travel flows, especially in respect of mandatory self-quarantine, as well as a protocol that would simultaneously increase passengers’ confidence. I am proud to say that the effectiveness of our health safety plan has been recognized by international bodies such as RINA, Airports Council International, ACI, and Skytrax, which rated Rome Fiumicino Airport with the highest score of five stars for its measures and protocols, as well as by primary international media that have endorsed the Covid-testing system available at Rome's airports.

To adapt to the new normal is a big challenge for all of us. I am confident that with efforts and international co-operation, we will succeed. I thank the committee for the time dedicated to me, and I remain available for any questions.

Chairman

Mr. Bassato also sent the committee a presentation document. Is he going to comment on that document, or is that intended just for the information of the committee?

Mr. Ivan Bassato

I submitted that for the information of the committee. If there is a possibility of going through it now, I will do so.

Chairman

No, that is fine. There is no need for Mr. Bassato to do that. We have read that document and that is fine. We will proceed to the other witnesses. There will then be questions after that. I thank Mr. Bassato, and I call Ms Considine to make her presentation on behalf of Shannon Group.

Ms Mary Considine

I know it is said that a week is a long time in politics, but it is a very long time in aviation these days. The prospects for the global aviation sector have worsened as the virus continues its hold on our people, our way of life and our economy. The situation in which we now find ourselves as a result of the Covid-19 pandemic is a far cry from the positivity back in January, when we were anticipating growth across all our Shannon Group businesses, including the airport.

Since presenting to the joint committee on 7 October, the situation at Shannon Airport has deteriorated considerably, unfortunately. On 15 October, Ryanair announced its decision to temporarily close its bases at Shannon and Cork airports for the winter period. We have since moved into level 5 restrictions, and Ryanair has advised us that it has seen a total collapse in its forward bookings. The airline now plans to cancel its flights from Shannon Airport for a month, from 14 November to 12 December. This is really disappointing news for us and for the other airports affected. As a result, we now expect passenger numbers to be down by more than 80% by the end of the year.

This is also very disheartening for our airport employees, who have worked hard to keep the airport operational throughout the pandemic. There is genuine worry now among businesses in this region who rely on the connectivity that the airport provides and also for those involved in tourism who rely on inbound and outbound flights from Shannon Airport to make a living. There is great disappointment among our loyal customers as well, whose continued support we depend on. This latest announcement shows just how critical the situation has become, and how vulnerable the aviation sector is right now.

It copper-fastens the urgent need for targeted financial assistance to protect our airports, airlines and our air connectivity. To put the situation in context, we have had no transatlantic services operating from Shannon since March of this year. Two of our US carriers, Delta and United, have advised that they will not resume services into Shannon until 2022 at the earliest. Aer Lingus has also suspended its transatlantic and Heathrow services.

It is ironic that we have just marked the 75th anniversary of the first ever scheduled commercial transatlantic passenger plane which landed at Shannon Airport on 24 October 1945. As a result of that first transatlantic service, Shannon became the original airport gateway between the US and Europe, developing a strong transatlantic business and becoming the home to many global firsts for aviation.

All of this, unfortunately, is poles apart from where we find ourselves today. It creates a determination and resolve, however, to restore our lost connectivity. Since we last met, we welcomed the announcement in budget 2021 of €5 million capital funding for Shannon Airport. It will also provide for the extension of the employment wage subsidy scheme and the waiver on commercial rates. However, in light of the group’s revenues being down on average €1.3 million a week since the onset of the pandemic, we urgently require further supports.

The aviation sector is in free fall. As an island nation we need to connect to the rest of the world. Our economy is dependent on a thriving aviation industry. While recovery in the aviation sector is some time off, we must protect our nation’s air connectivity and our vital airport infrastructure. What we need now is a clear pathway to recovery for aviation, a robust system to allow us to get aviation moving. We welcome the decision by the Government to implement the EU traffic light system. There is still confusion, however, as to how it will be implemented which urgently needs to be addressed at EU level. There needs to be one streamlined, harmonised system that is applied throughout Europe for it to work in a meaningful way.

The continuation of current travel restrictions is heavily impacting passenger numbers. Testing instead of restriction on movements has to be the way forward.

(Interruptions).

Ms Mary Considine

-----and for further financial support for aviation as the Covid-19 shutdown of air transport continues.

To support the EU traffic light system, Shannon Group has called for the development and implementation of routine Covid-19 testing for passengers boarding flights out of the country, as this will help aviation to resume in a safe manner.

For our part, we are working closely with our peers in the industry and the Department of Transport. We are ready to roll out a pre-departure Covid-19 testing regime at the airport once agreed testing protocols are in place. Pre-departure testing is already proving effective in many other countries. A robust testing regime at airports can help to restore confidence and get aviation moving safely again.

Our economy is dependent on a thriving aviation industry and restoring air connectivity is now critical as we learn to coexist with the virus. In the meantime, we must protect our airports to ensure they can continue to do what they do best, namely, welcome passengers, play a crucial role in globalisation, connect cities and countries, foster economic activity and encourage international commerce and tourism, all of which generate employment in our regions.

While the latest news on the development of a vaccine is encouraging, we know recovery will take time. It is important we plan now for the safe restoration of air services. We urgently need to see the full implementation of the aviation recovery task force recommendations published on 7 July. These call for supports for aviation and, particularly in the case of Shannon, support for regional airports, as well as rebuilding and international connectivity. In the context of the devastating financial impact of this pandemic, there is an urgent need for Shannon Airport to be incorporated into the regional airports programme. This would see the airport receive vitally needed operational, as well as capital expenditure, supports.

As I have outlined to the committee previously, businesses on the western seaboard which rely on air connectivity to sustain their operations need critical air services from Shannon Airport to the UK, US, and, particularly in the context of Brexit, to a central European hub. None of these air services, however, will be viable until the markets recover which experts say could be as far out as 2024. In the context of the Covid-19 pandemic, which is ravaging the aviation sector across the globe, we are calling on the Government to provide financial supports for these vital air services until they can return to normal commercial levels of activity. We are asking the Government to support us to ensure these routes are not lost to the region.

We have taken many short-term difficult decisions in Shannon Group to deal with Covid-19 in order to preserve our businesses for the future. Shannon Airport is the hub which connects the region’s people and industry with the world. This will be needed more than ever as we recover from this crisis. Shannon Airport is a valuable State asset which needs to be protected and supported. We hope this will be provided for in the forthcoming national economic plan which we expect to be published next month.

Chairman

Thank you, Ms Considine. I call on Mr. Philips, Dublin Airport Authority, to make his opening statement.

Mr. Dalton Philips

I thank the committee for the opportunity to continue the discussion regarding the ongoing devastating impact of Covid-19 on the aviation sector. Since my last appearance before the committee on 7 October, we have lost a further 1.5 million passengers, the population of Dublin, Cork and Limerick cities combined.

The European Commission has also adopted the framework for a common approach to travel within the EU. The Government’s decision to adopt that framework is the first step on a long road to rebuilding our connectivity. Unfortunately, however, the final European framework did not go nearly as far as anticipated. While we have this traffic light system in place, the road ahead for safely reopening European aviation is still littered with obstacles. Of primary concern is the fact that EU member states will set their own testing and quarantine rules without harmonisation. What we need is a system that delivers effective EU-wide co-ordination.

The Government has yet to formally announce how it will apply the new traffic light system in Ireland. From comments made by the Minister of State at the Department of Transport, Deputy Hildegarde Naughton, when she addressed the committee last week, it appears that 14-day movement restrictions will continue to apply to passengers from red and amber countries. This may be waived for those arriving from amber areas if they have a negative pre-departure test. There is a suggestion that movement restrictions for those arriving from red areas may be reduced to five days if a person has a negative test five days after arrival in Ireland.

In contrast, the European Centre for Disease Prevention and Control, ECDC, has noted that travel restrictions are of “questionable effectiveness” when community transmission is ongoing, which is currently the case in most of Europe. Accordingly, opportunities for any significant uplift in travel as a result of this system are likely to be extremely limited. Red and amber zones currently account for about 98% of our potential passengers. Travel restrictions will continue to apply to these passengers. Even when case levels decrease in other European countries, travel to Ireland will remain closed off if quarantines continue to apply. In our view, pre-departure testing for both orange and red zone locations would be a safer alternative as it would mean we could screen out a significant proportion of risk before a passenger arrives in Ireland. This view is shared by all of Europe’s airports and airlines.

A recent survey of consumers conducted for the International Air Transport Association, IATA, shows widespread support for testing rather than quarantines or movement restrictions.

Some 83% of consumers said they will not fly if they have to quarantine on arrival, but 88% said they are willing to be tested to facilitate travel. Two thirds of European countries now offer testing at their airports. As I noted previously, DAA had secured suppliers to deliver pre-departure testing facilities at our airports using PCR methodology as a first step. Unfortunately, thus far the State has not provided DAA with the planning exemption required to establish these facilities, which has been granted to others, and we cannot therefore offer on-site testing at our airports at this point. As there is market demand for pre-testing, we will share information on private sector providers via our websites and other channels, although our preference remains to offer pre-departure testing on site. We will continue to engage with the relevant authorities on this.

We have spent months working on potential pre-departure testing at our airports in the belief that there would be a harmonised European system and that the Government would unequivocally support a pre-departure testing approach. Unfortunately, this does not seem to be the emerging picture. An outbound testing facility is required to support reciprocal arrangements in other countries and to facilitate reinstating Ireland’s connectivity. Ultimately, the slow turnaround time and the cost of PCR means that it will not represent a viable, long-term testing option. To truly get people moving again we must look at rapid, affordable and scalable testing options such as loop-mediated isothermal amplification, LAMP, and antigen testing. In this respect, the Health Information and Quality Authority, HIQA, recently published a report which advised NPHET to consider implementing such tests. There is evidence to show that other countries are starting to embrace these technologies. We have just heard about it from Rome. Five airports are currently offering rapid testing, including Heathrow and Paris Charles De Gaulle. Ironically, it appears that under the Government’s planned application of the traffic light system, Ireland will accept a pre-departure antigen test if it is approved in another EU state, but will not endorse this system at home.

The view of the aviation industry is that without the traffic light model, EU member states should focus on pre-testing rather than other measures. However, if we fail to also improve the delivery and cost-effectiveness of the testing regime that underpins it, we will most certainly suffer further significant losses in services, as has been the unfortunate experience at Cork Airport recently and in what we have just heard from Ms Considine in Shannon. In closing, Christmas is just 58 days away. We want to welcome home our loved ones safely and to allow those living here who have not been able to see their families overseas to be reunited. We appeal for the committee's support for the adoption of a rapid, affordable, scalable approach to pre-departure testing that will facilitate reinstating travel in the long-term economic and social interests of our country.

Chairman

Thank you. Before proceeding with questions from members, I have some questions. Mr. Bassato, with regard to the rapid testing that has been introduced in Rome airport, according to your presentation there is a 30-minute turnaround. What is the level of positive tests? Who pays for the test? Is it paid by the airport or through the ticket of the passenger? Who carries out the test? Are they employees of the airport or has the airport contracted it to a third party company? Furthermore, did the airport require planning permission from the state authorities to establish such a facility? How long did it take to establish it? I understand it is applied to 100% of passengers on the Rome to Milan flight. Perhaps, Mr. Bassato will give us an overall view. It is something we are seeking to promote here, but you are doing it in real time at Rome airport today so perhaps you will describe exactly how it works.

Mr. Ivan Bassato

Currently there are two large screening operations going on in Fiumicino airport and one in Ciampino airport. We manage the two airports in Rome, Fiumicino, the biggest one, and the smallest, Ciampino. There are two operations in Fiumicino and one in Ciampino. The screening operation is directly managed by the health authorities of the region of Rome. Healthcare operations in Italy are under the exclusive authority of the 20 regions of Italy.

The operation started on 16 August following an order of the national government of Italy to test the passengers arriving from countries within the European Union who were considered tourists. The Italian rule now foresees that there are two different regimes. There were no restrictions on intra-EU travel up to that date, at least between the lockdown and 12 August. Then the government introduced restrictions, and I will discuss them in a few seconds. The second part of the regime is for passengers coming from non-EU destinations outside the external border of the European Union. In that case quarantine or self-isolation for 14 days and limitations and restrictions apply. The passengers were mandated to test when they came to Italy from 12 August and we implemented that requirement on 16 August, four days later. At that time the four countries within the Union that were considered highly at risk were Spain, Greece, Croatia and Malta. That list changed following the evolution of the pandemic on the Continent. Currently, there is a requirement for passengers to test before entering Italy - at the airport, where possible, or within 48 hours after entering Italy - if they are coming from the following European states: Spain, France, United Kingdom, Belgium, the Netherlands and Czech Republic. All the remaining European Union member states, including Ireland, are not subject to the limitations at present upon entry into Italy.

The passengers have two options. They are asked to test, negative or positive. If they test negative obviously there is a certain course of action. If they test positive there is another course of action. They can choose between the two options - molecular or antigen testing before leaving their country of origin within a time limit of 72 hours.

Chairman

We will speak specifically about the system introduced at Rome airport for rapid antigen testing. There is 100% Covid antigen testing on a flight between Rome and Milan. Under the system that has been introduced, is the turnaround time 30 minutes?

Mr. Ivan Bassato

Yes.

Chairman

What is the positive rate of tests among the people who have been tested? Who pays for the test - the passenger or the airport? Perhaps you will answer those questions on the rapid testing that has been introduced.

Mr. Ivan Bassato

Deputy James O'Connor

It is deeply worrying to hear that. There is a major requirement for the Department of Transport to act on that immediately in parallel with the Departments with responsibility for expenditure and capital investment. I am sure other representatives will follow up on that.

I will make a final point to Ms Considine and Mr. Philips. Transatlantic travel is important to the DAA and to Shannon Airport but it is also important we have political engagement with our respective colleagues in the US and Canada to get our transatlantic services resumed as quickly as possible. It is disappointing to hear it will be 2022 before transatlantic flights depart from Shannon Airport again. That needs to be expedited as much as possible if we see a recovery before then. I thank the witnesses.

Deputy Darren O'Rourke

I thank the witnesses. Mr. Bassato has come through an experience that Ireland is struggling with. I have a couple of questions which I hope he will be able to answer. In terms of rapid antigen testing, what is the sample? Is it a nasal swab, a throat swab or both? Who are the manufacturers and suppliers of the rapid antigen tests? What system is being used? Does Mr. Bassato know about the performance of the test? Does it meet the standard of clinical sensitivity of greater than 80%, which is a requirement set out in a recent report by our quality authority here?

Mr. Ivan Bassato

I thank the Deputy. In answer to the first question, the rapid test is an antigen test made on a nasal swab sample. The name of the product chosen by the Italian health authorities is SD BIOSENSOR. This is in use in Rome but it may be that in other locations in Italy, other products will be used.

Information regarding the clinical performance of the test is not available to the airport authorities. I am sorry to say this again but it should be requested from the health authorities operating the testing.

Deputy Darren O'Rourke

That is no problem. Has the impact of the introduction of this system on the demand for flights and the number of people travelling been monitored or measured? If so, is the impact positive or negative?

Mr. Ivan Bassato

We are proposing to the authorities the model of pre-departure testing after an improvement with the Rome-Milan route that is operationally feasible. The experience in Rome has been mainly of passengers arriving to Rome, following the regulations issued by the Italian Government. We observed that the number of passengers coming from those countries subject to an obligatory test upon arrival has been declining. On the Rome-Milan route, which we are testing only partially since 16 September, that is, almost a month and a half, there is stability in the number of passengers.

Deputy Joe Carey took the Chair.

Deputy Darren O'Rourke

From the time of conception to the time of implementation, how long did it take to introduce this system? What sort of capital investment was required?

Mr. Ivan Bassato

The level of capital investment required was limited. We had been planning with the authorities from early July until there was a mandatory requirement by the Government. With the authorities, we did some planning and prepared different scenarios for the evolution of the pandemic. When the order was introduced, it took four days. The level of capital expenditure was low because we began in an area that was available in the arrival hall, on the ground floor of the terminal. We dedicated about 1,000 sq. m to the operation. Of course, social distancing was required in the area.

The level of capital expenditure for the testing machinery and kits is not known accurately but I would say it is also low because the rapid antigen technology does not require a big investment.

Deputy Darren O'Rourke

I thank Mr. Bassato for those responses. I echo a point made earlier by Mr. Philips. We are entering a scenario whereby we will accept people coming into this country on the back of a negative rapid antigen test but we seem to be indicating it is not satisfactory for people departing the country. There is an immediate contradiction in that position.

Acting Chairman (Deputy Joe Carey)

I agree with the Deputy.

Is Mr. Bassato familiar with the EU traffic light system?

Mr. Ivan Bassato

Yes.

Acting Chairman (Deputy Joe Carey)

How would his system fit with the EU traffic light system itself? Does he recognise green, orange and red countries in the way the traffic light system is supposed to? Has he a view on that?

Mr. Ivan Bassato

We are familiar with the system as members of Airports Council International Europe so we continue to listen to this discussion. The system itself has not been implemented yet in the country but we started with a similar regime. As I stated, the country experienced, in the first part of the summer of 2020, the importation of cases from abroad, in the first instance from countries far from the external border of the EU. In August, there was a surge of cases among passengers - many were Italian - coming back from holidays in Spain, Greece, Croatia and Malta. Some countries within the EU were identified as countries bearing a higher risk. They were not coded at the time as red or amber. I do not dispute that in the evolution of the legislation in Italy, the system based on the recommendations of the EU can be adopted by our Government. We have set out six groups of countries, three of which involve EU member states and three of which do not.

Acting Chairman (Deputy Joe Carey)

Mr. Bassato referred to two airports in Rome. Is the system he is talking about available in other airports in Italy?

Mr. Ivan Bassato

It is available in national airports. Before entering the country, the requirement for testing applies to all means of transport, not only to air transport. It applies to passengers coming by train or automobile. Many airports, although not all of them, have screening operations on the way. Not all involve antigen screening. It is a question of which is most accessible to the passenger. The utilisation of antigen testing is growing, however, and the level is much higher by comparison with two months ago, for example.

Acting Chairman (Deputy Joe Carey)

I thank Mr. Bassato. I have a brief question for Ms Considine on rebuilding confidence in the aviation sector and getting people to travel. It is obvious that we need a testing regime of our own. In her presentation, she confirmed that she has worked to apply such a system. Could she expand on that and explain the extent to which she can roll out testing at Shannon Airport and the numbers that can be catered for if the system is rolled out across Ireland? Does she envisage that it would be delivered by a private contractor?

Ms Mary Considine

On that query, we have engaged with a private commercial operator who is available to come on site to provide pre-departure Covid-19 testing. Initially, it would be PCR testing, which is more expensive and takes longer, but subject to approval regarding the LAMP testing, there would be capability to do as envisaged.

We have also engaged with our planning authority, who advises us that it does not consider planning to be required for this because it is ancillary to the airport's activity. In that regard, if there were agreed protocols on testing, we would be in a position to engage in implementation. Unfortunately, because of the ongoing travel restrictions, we will not have any scheduled airline services here for a month or so. That is very concerning. Everything we can do now to restore confidence and to get people back travelling will be really important. In the absence of that, however, the private operator would provide a service for other businesses in the region because we do not have enough volume at this stage to warrant an operator coming on site. It is important, therefore, that the service be made available to other businesses in the region, and there is willingness to do that. The service would be operated on site at the airport.

Senator Timmy Dooley

I welcome the presentations from all concerned. It is good to see representatives of Shannon, Cork and Dublin airports back before us. I compliment them on the work they have done in the intervening period. They have moved pretty fast in addressing the potential for testing. They have provided many answers in advance of the questions being posed today, which is welcome. We can rightly use a considerable amount of information from what we have heard about the situation in Rome. Bearing in mind the earlier session with the airlines, what is coming across to us today, and certainly to me, is that one of the main issues is that no matter what we do, we cannot do so in isolation in Ireland. We either move ahead or stall. Acting in isolation is effectively not going to be of any great benefit because we need to see the harmonised approach at European level. I suggest to the committee that we invite the Minister of State responsible for European affairs or the Minister for Foreign Affairs to our committee in due course to gain an understanding of the progress on achieving a harmonised approach before we conclude our work.

There has been talk of capital investment at Shannon Airport. Operational investment will be required. What is the current financial position? What assistance will be needed in the medium term? It is now quite clear, based on NPHET's advice, that there will not be a lot of activity between now and Christmas in the airports. Ms Considine has already painted a fairly dark picture as to what the early part of next year will be like. Can she outline the financial supports for the airport on which this committee might make recommendations?

Ms Considine has been working with the HSE on trying to find alternative employment for staff during this difficult period to help them to increase their incomes and pay their bills. It is really important. I thank her for the work she has done in this regard. Has she any update on that?

My next question is not relevant to my constituency but I am asking it because this is a transport committee.

Has the DAA looked at assisting staff who have had to take very significant drops in income? Have the witnesses looked at helping them to augment or supplement that through them acting as contact tracers with the HSE?

Ms Mary Considine

To address the Senator's question about funding, we have through the budget secured a contribution towards capital funding for next year, which is very welcome. The real challenge for us is the level of operational losses and in the context of that, our immediate ask of Government, which we hope will be included in the national economic plan, is inclusion in the regional airports programme, which would see us benefit from operational funding to cover essential costs like the cost of providing fire service and security cover at the airport. That would be an immediate ask of Government to help us survive this crisis so we can recover and rebuild.

The Senator referred to the ongoing dialogue with the HSE. We have engaged with our employees, a number of whom, particularly those on continuing temporary lay-off or on a reduced working week, would be interested in taking up additional work as contact tracers. We have passed that information to the HSE and are in ongoing discussions with it.

Mr. Dalton Philips

In the case of Dublin and Cork, we are in a very material downsizing at the moment. We are having to say goodbye to over a quarter of our workforce. Both Dublin and Cork have been heavily impacted. We do not see the recovery happening until 2023 to 2024 and, therefore, at the moment, we have to say goodbye to people permanently. We have a voluntary severance scheme in place. Having said that, Senator Dooley's suggestion about seeing whether we can connect people who are departing with the HSE if they have the requisite skills is a good one and I will follow up on it.

Senator Timmy Dooley

There is an element of see-saw because one would hope that when the aviation industry recovers, the necessity for testing and tracing will, hopefully, not be there by then.

Deputy Ruairí Ó Murchú

I thank the witnesses, particularly Mr. Bassato. I assume this probably gives us some element of solace of a possibility. I agree with Senator Dooley that we probably do need a discussion with either the Minister for Foreign Affairs or the Minister of State with responsibility for European affairs because we have had this discussion over the past two decades regarding harmonisation. What we can do is get our own ducks in a row. This committee will be discussing matters with NPHET and HIQA, particularly rapid testing, so we should build a conversation regarding the type of antigen testing that is being operated in Rome Airport. We need to reach some kind of conclusion and put some kind of framework together. I reiterate the point made by Deputy O'Rourke. We need some sort of pre-departure testing system that operates from here rather than just to here.

I accept that the airports are having significant difficulties, which means significant worries for workers. Could Mr. Philips address the proposal on new ways of working, which a number of craft workers have not accepted? They are now on 60% time. There is a belief among some of them that these are work practice changes and it is almost a case of "never waste an opportunity like this", namely, the Covid-19 pandemic.

As some workers working in terminal 2 are on contracts that are not as good as those of people working in terminal 1, they have an issue with pay parity while accepting the difficulties faced by the DAA at this point in time. We need an operating system across the board to get workers and management through this.

Mr. Dalton Philips

People make up 60% of our total cost base. The traffic is not coming back. We have lost 25 years of traffic and are back at 1995 levels. We are a commercial organisation that needs to fulfil a critical State role. If we do not lower our cost base, we will hit a wall and go bust. We are saying goodbye to about a quarter to a third of our workforce, somewhere between 750 and 850 people. For those who remain, we are saying that we can guarantee their wages at 80% with a plan to get them back to 100%, which is unprecedented in the sector because, as we know, many people are on significantly lower levels than that. We have balloted all our team members and 93% of the groups represented by ballots have voted in favour of the new work practices, which are very fair and in most cases, and I can use crafts as an example, have been in place for the past ten years. We are dealing with a group of craft workers who, unfortunately, are not in favour of these new work practices, which a number of their colleagues have been operating for the past ten years. I am talking about people in the same teams. We are working through that and will continue to engage. I am very closely involved here. We do not want to see anybody suffer and I wish it was not the case.

Regarding the Deputy's second question, we do have two people doing the same job in the same airport on different terms and conditions. This disparity between those who came in on new market-based contracts and those with slightly older contracts has existed for nearly ten years. It is something of which we are very aware. Where we can look to bridge that gap, we try to do so but we cannot do it in all cases. At the moment, it is particularly difficult.

Deputy Ruairí Ó Murchú

I accept the difficulties but we need to reach whatever solution we can. I imagine that this is a wider conversation that the DAA must have with regard to Government and being able to ensure we deliver when we have operational aviation, as we, hopefully, will have if we go down the road of vaccines and antigen testing.

Mr. Dalton Philips

That is correct. Our North Star in this regard is to have market-based salaries so we do not want to see anybody below the market but we have situations where, with similar-type roles, some people are being paid the equivalent in the market but others are being paid above the market rate. This issue has been with us for a number of years.

Deputy Duncan Smith

I thank all the witnesses for returning so soon. We have two realities here. We have the reality of what has been happening in this committee over the past two days with all the witnesses increasingly frustrated and understandably angry at the lack of progress and we have the reality of the Minister for Transport cycling to a Cabinet meeting today saying that he would love to see airport testing take place. It is incredible. Based on everything we are hearing from witnesses, there is no urgency on the part of the Minister regarding this and he has not been taking the lead on this. This needs to be hammered home by this committee.

I thank our guest from Rome Airport for his wonderful presentation, which is a template for our Government. Our stakeholders are pushing this as hard this as possible. I have a few questions for Mr. Philips. There was a motion in 28 July 2020 in the Dáil regarding the proposed approval by Dáil Éireann of the Planning and Development Act 2000 (Exempted Development) (No. 3) Regulations 2020 concerning airport Covid temporary structures for passenger movement. That was brought in on 28 July. Can Mr. Philips speak to that? Does he have any visibility on that? I think he mentioned something to Deputy O'Connor.

There was no debate on it. It seems like there was some movement from the Department in terms of providing an exemption for temporary structures for Covid testing. That is the language used.

Mr. Dalton Philips

At the initial stages of this outbreak we thought we would to have to erect marquees outside to protect people because we assumed the traffic would come back at the beginning of July. Due to social distancing, we have reduced the overall capacity of the terminal by 70% and we would need to have people outside. We were aware of the planning exemption and were going to avail of it for things like temporary marquee structures.

Deputy Duncan Smith

Was that for testing or passengers?

Mr. Dalton Philips

We pressure tested it for external queueing areas. We have obviously followed up on SI 93 of 2020 to determine whether we could move forward with the planning exemption to introduce a testing facility. I was interested to hear Ms Considine from the Shannon Group say that through her planning authorities she thinks she will be able to get permission. We are not able to get it at the moment. Our only route at the moment is to go through the normal planning process which, as the Deputy knows, takes a huge amount of time.

On Deputy O'Rourke's point, we have to have pre-departure to get people out of the country. We cannot let all the other European countries do the work to get people in.

Deputy Duncan Smith

Cork Airport has been discussed. There is pressure on all our international and regional airports. We know Cork Airport is worth up to €1 billion a year to the economy of Cork and the south. What level of engagement has taken place between the Minister, Deputy Ryan, and the DAA on Cork Airport, in particular? I am very interested in the level of engagement with the Minister and senior officials on this. It is one of my lines of consistent questioning.

Mr. Dalton Philips

If it is okay with Deputy Smith, I am happy to bring in Mr. Niall MacCarthy, managing director of Cork. I am also happy to answer the question myself.

Mr. Niall MacCarthy

We are very active with all our Ministers, Deputies and Senators, including meeting the Taoiseach. We have engaged with the Minister of State with responsibility for aviation, Deputy Naughton, and the Minister, Deputy Ryan, through the DAA and directly. We are very pleased with the €5 million capital allocation, but our ask is united. The committee has heard that from every airline and airport. We have to get our act together on pre-departure testing.

Smaller airports will need financial, capital and regional supports. Airports and airlines traditionally spend their time disagreeing and in conflict, but the industry is united. It is on its knees and has had various announcements. Ms Considine adverted to Ryanair announcing further cuts in the past few days. If we do not get pre-departure testing soon, there will be very little aviation infrastructure available to return to.

We will need financial, capital and operational supports. We have €5 million in capital support and a substantial capital programme to get through in Cork, totalling €70 million over the next number of years. We built a new terminal in 2005 and have not really invested in capital since then because it was not needed, but the airport now needs a lot of airside infrastructure. This year we will lose in excess of €40 million in operating profits and €20 million after depreciation. We will need support. I hope that answered Deputy Smith's question.

Deputy Duncan Smith

I thank Mr. MacCarthy.

Acting Chairman (Deputy Joe Carey)

I want to recognise the input of our witness from Rome, Mr. Bassato. He is a very good witness and I thank him from the bottom of our hearts here in Ireland for his input to the hearing. We will include his input in our report.

As to the traffic light system, there is a lot of confusion on red at the moment. We are saying that amber is pre-departure testing but red should be also pre-departure testing because we do not want to import the virus and then have to deal with it here.

Deputy Kieran O'Donnell

On a question to Ms Considine, how quickly would Shannon be up and running with pre-departure testing and what would be the cost?

Ms Mary Considine

I do not have a cost for antigen because that is not an accredited testing regime at the moment. We could be up and running in a matter of days with PCR or lab testing but antigen is the most cost-effective.

Senator Paul Gavan

I thank the witnesses, in particular for their patience. I compliment the committee because what we have heard today from our colleague in Rome gives us all very strong food for thought in terms of the direction in which we need to go. I was particularly concerned about the presentation by the Ryanair CEO, Eddie Wilson, this morning, where he said that if something is to be done for Cork and Shannon, it must be done now. He also spoke about the lack of communication with the airlines by the Ministers. Would Ms Considine like to comment about the lack of communication the airlines say they have received from the Ministers? The Irish Times is telling us these cancellations could have been averted.

Ms Mary Considine

I cannot comment for the airlines. I heard Mr. Wilson's comments on the lack of dialogue with Ministers. For our part, we have been in ongoing discussions with the officials in the Department of Transport and with Oireachtas Members, and we have briefed both the Minister of State and the Minister for Transport, Deputy Ryan. They are all aware of the challenges we are facing in the business. We have heard the industry and the airports collectively saying we all need to work together. If we want to reopen aviation in a safe manner, we need to adopt the European traffic light system, it needs to be harmonised across Europe and we need to adopt pre-departure testing. The most effective test would be the most cost-effective, which is antigen. We have all flagged that if things are not done quickly, the risks are very severe for airports like ourselves. Ryanair had flagged for a good while that the market had collapsed and that if we did not reopen aviation, these services were at risk. Unfortunately, this has come to pass.

Senator Paul Gavan

Yes. In fact, he went on to threaten next summer's business as well, which I found particular disconcerting in regard to Shannon. I want to broaden out the conversation to ask Ms Considine about leverage. What leverage does Shannon Airport have right now in this marketplace? We are all horrified that there are going to be no flights out of Shannon for over a month, in effect. However, while Aer Lingus has cut back services, it has kept a service from Cork and there are services from Dublin. Why has Shannon been singled out as the airport that has no services for the next three months at a minimum?

Ms Mary Considine

I cannot speak for Aer Lingus. We are in ongoing dialogue with it and it is a very important customer to us and services very important markets. Transatlantic services are key for us and, obviously the Heathrow service is our main hub into Europe at the moment, before Brexit. It is a really important customer and we have been in ongoing dialogue with it. The reality is that Covid has decimated aviation and decimated demand. The restrictions in place means people have been advised not to travel except for essential purposes, and we are not supposed to travel beyond 5 km from our home unless it is for essential work. That is the reality. The Government is advising people not to travel and, therefore, the demand has fallen through the floor and nobody is booking flights. As a consequence, the airlines have made the very difficult decision to pull services. This is devastating for us. It is devastating for our employees and for the people of this region, who rely on the services. That is why we all need to do everything we can to get aviation reopened in a safe manner.

We all know there will be a very slow recovery and that is why the measures we are calling for are so important until normal commercial activity resumes. All the analysts say it probably will be 2024 before the market resumes at normal activity levels. After that, they are talking about up to five or ten years before there is a full recovery in yield. That is a real concern and is why supports are needed in the near term and medium term as we recover from this crisis.

Senator Paul Gavan

My final point is a key one. I am not convinced that Shannon as a stand-alone airport has the leverage to win back that business in the difficult next three or four years. It is striking to note that 96% of the airport growth prior to this crisis was all on the east coast. I cannot understand how people in the mid-west can benefit from a model which puts Shannon in direct competition with Cork and Dublin. Is it not time for a rethink?

Ms Mary Considine

Chairman

As it stands at the moment, Mr. Phillips, is the level of cash the DAA is burning per week for it to continue to exist in the public domain?

To give a quick response to the question, we have indicated already that our group revenue is down more than €1.3 million on average per week since the pandemic hit us in March. The committee can imagine how significant that is for an entity of our size. We have put difficult measures in place to reduce the amount of cash burn and that has been hard. It has been very difficult for staff who have had to take pain. We initially reduced hours of operation and we need to look at that again, so it has been tough. We have taken a number of measures to try to ensure we can trade our way through this but the longer it goes on, the more difficult it is and that is why operational support would be very important to us. On reopening the country, as an industry we have stepped up to the plate. We very quickly implemented all the measures to try to rebuild consumer confidence. We have made the journey through the airport as contactless as possible. We are, as an entity, advocating for pre-departure testing to restore confidence and working with the European traffic light system, and the committee has heard Mr. Philips talking about the decisions the Government needs to take. We have stepped up to the plate, as an industry, we have done all we can. We want to reopen aviation in a safe manner, we are very conscious of our public health obligations and we do not believe aviation is contributing to the spike in virus rates across the country that we are currently experiencing. It is certainly not the cause of us moving to level 5 restrictions, so we need to have a grown-up conversation and decisions need to be taken quickly about reopening the country.

Mr. Niall MacCarthy

We are an island nation. We are pioneers of aviation. If one looks at Australia, Mr. Alan Joyce of Qantas, is from Tallaght. If one looks at British Airways, Mr. Seán Doyle is from County Cork. The first duty-free operation in the world was in Shannon Airport. Aer Rianta International is in duty-free. We have the leasing sector-----

Chairman

With all due respect Mr. MacCarthy, that was taken from us.

Mr. Niall MacCarthy

Deputy Darren O'Rourke

I am sorry to have to dip in and out of the meeting, such is the nature of Covid-19. Mr. Philips referred to the liquidity ask with regard to Dublin and Cork Airports. I ask the same question of Ms Considine.

I want to also ask about the risks associated with flying. Earlier we discussed the argument that the risk is minimal. I believe it is a question of managing the risk. There is far greater opportunity in having a frank conversation on it and saying there are risks associated with it. That is why we have quarantines. It is about managing those risks. It is far better to be tested negative getting onto the plane than a one in 27 million chance of getting Covid while on the plane. This stresses the need for testing. How quickly could we deliver testing at the airport if we decided today that it was going to happen and if we decided on a methodology, perhaps PCR now and then moving to rapid antigen testing when people are satisfied that this is sufficient? On the threshold of greater than 80% clinical sensitivity, I would make the point that there are many rapid antigen tests that meet this bar while sometimes PCR tests do not meet the bar. This is what we are dealing with. If these measures were to be implemented how quickly could testing be done at airports? Will Ms Considine also comment on the liquidity demands of Dublin, Cork and Shannon Airports?

Chairman

On foot of that, have the airport groups had discussions with Government and the Departments on their liquidity requirements?

Ms Mary Considine

I am happy to take the question. Once we have clarity on the testing protocols we should be ready to go in a matter of days. It is critical that we get clarity on the type of testing. Ideally, we would all like the rapid antigen testing, but failing that we are ready to go with PCR testing. It needs to be clarified quickly. We have already talked at length on that today.

On the liquidity, our revenues are down on average €1.3 million per week since the onset of the pandemic. This is extremely significant for an entity of our size. While we have taken measures to reduce costs and reserve liquidity, it is now critical in light of the slow recovery envisaged for the industry and given the recent announcements by Ryanair on closing its bases through the winter and Aer Lingus not resuming its services from Shannon until the summer schedule of next year. At this stage we have only one confirmed US carrier for next year, which is American Airlines, but this is all dependent on how the virus evolves between now and then and where we are with the vaccine. There is a huge number of variables and that is why we need clarity on the supports we are going to get from Government. We hope that the national economic plan in November will address that. It is really urgent that we are included in the regional airports' programme, which will provide operational funding as well as capital funding. We need to continue to provide a level of operational facilities such as cargo movements, general aviation transits and a resumption of scheduled traffic, albeit we will not get back up to normal levels of activity. To do all that there is a significant cost to keeping the airport open. This is why operational funding will be very important to sustain us through this recovery.

Mr. Dalton Philips

We can get up and running in a matter of days, we just need the planning exemption. On liquidity, the Cork Airport situation is acute. Dublin Airport's situation is slightly different whereby we are using up all our capital reserves that we had put aside and apportioned for infrastructure development to help fuel Dublin's economy, and I would argue Ireland's economy. All the money that was reserved for infrastructure is now being depleted on operating costs because we are losing €1 million a day. The challenge there is that we will need new infrastructure to bounce back out from Covid and Brexit. That money is being wasted, or being used up, keeping the airport alive, so to speak. We have shared all this with the Government.

Chairman

I thank Mr. Philips, Ms Considine and Mr. MacCarthy for their engagement with the committee. We will have follow-on hearings next week with the Chief Medical Officer and chairman of NPHET, Dr. Holohan, and with the Minister for Transport, Deputy Eamon Ryan, around the whole area of testing and the HIQA report. I hope the witnesses will tune into it. The committee will then issue a report.

The joint committee adjourned at 4.58 p.m. until 11 a.m. on Tuesday, 3 November 2020.

Joint Committee on Transport and Communications Networks díospóireacht - Wednesday, 28 Oct 2020

Issues Affecting the Aviation Sector: Discussion (Resumed)

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Reid Moody

Mr. Reid Moody

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Reid Moody

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Eddie Wilson

Mr. Donal Moriarty

Mr. Reid Moody

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Mr. Eddie Wilson

Joint Committee on Transport and Communications Networks díospóireacht -
Wednesday, 28 Oct 2020