Funds for regional air routes to increase by 40%

State spending on regional air services will rise by at least 40 per cent next year to about £23million (€30million), largely as a result of increased subsidies to carriers under the public service obligation (PSO).

The public service obligation effectively grant-aids operators who fly less economic routes. The PSO routes will come up for tender again next July, and successful bidders will be awarded a three-year contract.

The increased funding will also include almost £5million (€6million) for capital projects and £1.5million (€1.9million) to assist development in marketing, security and safety at the six non-Aer Rianta airports in Kerry, Galway, Sligo, Knock, Donegal and Waterford.

It is understood that a large proportion of this expenditure, £15million (€19.3m), will be geared towards maintaining the public services obligation air links to the airports.

Business interests and chambers of commerce in the regions, particularly in Galway where the regional airport is owned by the chamber, are convinced that the presence of air access is a valuable instrument in promoting economic development to domestic and foreign investors.

Since 1995, when the PSO was introduced, overall passenger numbers to the airports have grown from about 350,000 to almost 500,000 - an increase of some 40 per cent.

The Irish Times understands the Cabinet has accepted the principal of the airports as "development drivers" and is committed to make further improvements in the regional air services network.

At present there are five daily flights from Dublin to Galway, and four to Kerry, with a less frequent service to Knock, and Donegal. There are also flights from Waterford and Kerry to the UK.

With increasingly slow road access, some areas, such as Waterford and Donegal, have drive times to Dublin airport in the order of four hours, a factor which argues against balanced regional development, one of the central planks of the National Development Plan.

Meanwhile, both the Irish Business and Employers Confederation (IBEC) and the Irish Council of Trades Unions (ICTU) have described the reduction in services at Shannon airport as a "severe competitive blow" to the mid-west region.

In a joint statement issued last night the bodies called for a concerted effort by Government to restore services for business "before the region suffers further job losses".

The statement points out that 96 flights a week to and from Shannon had been lost in recent times, representing 10,000 inbound seats per week to Shannon airport. The losses have been blamed on the economic downturn and a loss of business from the US post-September 11th.

"This is arguably the greatest challenge facing the west of Ireland to date.

"If the future of the airport is not safeguarded the consequences will be felt in all areas of the western region into the future."