Cork airport seeks State aid as Covid-19 eats away its revenues

Cork airport should get State aid alongside regional gateways such as Knock and Kerry as Covid-19 has almost wiped out its revenues, TDs and Senators will hear Tuesday.

Dublin and Cork airports are losing €1 million a day between them, according to a submission to the Oireachtas Special Committee on Covid-19 Response by the DAA, the State company responsible for both airports.

The company argues Cork airport needs support to offset costs and boost route development as it plays a critical role in the south. Yet its revenues have “all but” disappeared.

“Cork should also be admitted to the existing regional airport capital funding programme,” DAA will argue.

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Regional airports receive €2.5m in grants from exchequer

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Donegal, Kerry and Knock airports recently received a total of €2.5 million from the Government under this programme, but Cork, Dublin and Shannon – all owned by the State – do not get this funding.

Shannon has also lobbied for cash from the programme, which provides regional airports with aid for spending on security and development, but not running costs.

DAA warns that its losses are very significant, and it is relying on borrowing to fund day-to-day operations. “This is simply not sustainable, and puts the maintenance and delivery of strategic airport infrastructure for a small open economy at risk. It is important that the State intervenes now to offset this risk.”

This should include the extension of the temporary wage support scheme, which the Government has pledged to do, funding for coronavirus safety measures, waiving rates and State fees, and an incentive fund to develop new routes.

Redundancies

DAA is seeking voluntary redundancies from the 3,500 workers it employs across Dublin and Cork. It has also taken other steps to cut costs in the face of the damage that pandemic travel restrictions have done to air travel.

The airport company's head of strategy, Miriam Ryan, and chief financial officer, Ray Gray, will give evidence to the Oireachtas committee on Tuesday.

Mary Considine, chief executive of Shannon Group, is also due to appear before the committee.The State-owned group, responsible for Shannon airport, property development and various tourist-related businesses, warns that Government travel restrictions threaten multi-national investment and will cause job losses.

Shannon Group says air connectivity is vital for foreign direct investment and indigenous businesses in its region.

It notes that more than 40 per cent of US foreign direct investment was located within the catchment area of Shannon airport.

“ Equally, our airport’s location as the transatlantic gateway to the Wild Atlantic Way is crucial for the tourism industry right along the west coast,” the group says.

"The continuation of current travel restrictions are heavily impacting passenger numbers. The blanket 14-day quarantine requirement effectively closes Ireland to all overseas visitors. We must find a way to facilitate the reopening of access for overseas tourism as soon and as fast as public health considerations can allow."

Quarantine

The group warns that the Government should quickly implement the recommendations of the Task Force on Aviation Recovery, which call for the easing of restrictions, including the quarantine.

Shannon Group expects its revenues to fall €47 million this year, almost 60 per cent. It calculates that Shannon airport turnover will fall 62 per cent, while revenue from its heritage business, which includes tourist attraction Bunratty Castle, will fall 86 per cent.

“Faced with the fact that since March we have seen our group revenue down over €1.3 million per week, we took decisive action to preserve our businesses and protect jobs in the long-term,” Shannon says.

“This required us taking difficult but necessary short-term measures to preserve the business for the future, and allow us to recover and rebuild from this crisis.”