Some regional airports are facing the prospect of closure as the Government indicates cuts to funding may be on the cards
WERE WB Yeats still alive, and flying, he’d surely have been inspired by the experience of sweeping in low over Sligo Bay, framed by Benbulbin and Knocknarea. However, were he an IMF economist analysing regional-airport balance sheets, he might not even bother to look out the cabin window for Strandhill.
Earlier this week, Minister for Transport and Tourism Leo Varadkar indicated that the sums didn’t look good for Sligo and Galway airports. A total of €4 million sought by six airports for capital-spending support this year is twice the amount allocated in the budget, and €7 million for operating subsidies is multiples of what Varadkar says he can afford to give.
He intends to focus sparse exchequer finances on more viable airports, such as those in Knock, Kerry and Donegal. In the southeast, Waterford was reported to be in danger, but Varadkar’s department says that it is not.
Ironically, both Kerry and Donegal are viewed as being more viable because public-service-obligation routes will be maintained for these two regional hubs but cut elsewhere from July.
These routes are funded by the State under EU guidelines on the basis that they are vital for regional economic development. One-hundred-and-sixty-six such routes are subsidised in 12 EU member states. Unlike the three State airports of Dublin, Cork and Shannon, privately owned regional airports established to serve a local need cannot automatically attract low-cost airlines, due in the main to population, market and runway restrictions. EU policy clearly states that regional airports play a major role in balanced development. As a result, they have been able to avail of two other State funding streams: capital expenditure, or capex, which has already been reduced considerably; and operational expenditure, or opex, which runs on a yearly basis.
However, it came as no big surprise in a changed economic landscape when Varadkar’s predecessor, Noel Dempsey, announced last January that most public-service-obligation routes would be discontinued. His department also published a separate value-for-money review, which advised that the capital and operational supports for Sligo and Galway be curtailed.
The review acknowledged that this
could put both airports at risk, particularly Sligo, which also acts as one of four Irish Coast Guard search-and-rescue helicopter bases.
“Out of date,” was Galway Airport’s response to the review. It contained “generalised and unsupported statements”, according to the airport’s managing director, Joe Walsh, and it ignored the fact that Galway, the State’s third-largest population centre, was home to “key clusters” in industries that require access to international markets, such as the life-science industry and the information-and- communication-technology industry.
The airport’s marketing manager, Michael Moloney, says 56,000 passengers to Galway last year were from Britain, and almost 50 per cent of Galway-Dublin travellers are making connections to elsewhere. The airport contributes up to €20 million annually in tourism revenue to the area, he says.
“So we’re not just a domestic regional airport,” says Moloney, while acknowledging that it is restricted by its runway from developing charter routes. “We do need €1.7 million in operational revenue subvention, but this has been falling and will continue to do so as passenger numbers grow.”
Chris Coughlan, who works for Hewlett-Packard and is a member of both the Galway and American chambers of commerce, says there are 86 member companies in the IT sector in Galway alone. “The small amount of subsidy that the State wants to save is a fraction of the spin-off that the airport generates,” he says. “If the Government is committed to its jobs-creation strategy, this airport has to be seen as a part of it.”
A report published by the Western Development Commission two months
ago made a compelling case for retaining Galway and Sligo airports, while the
American chamber of commerce, the Irish Exporters’ Association and the Industrial Development Agency have all acknowledged the importance of regional links to international airports.
Reduced air links will also make it even more difficult for the tourism sector in the west and northwest to compete, particularly for the short-break market, it is argued. While Galway and Dublin are just two hours apart with the new M6, large parts of the western region, including National Spatial Strategy gateways and hubs, still have a journey time of over three hours from a State-designated international airport, according to the commission.
There’s the rub. The Fianna Fáil TD for Galway West, Éamon Ó Cuív, says the Government doesn’t care about the National Spatial Strategy or regions, or related EU policy.
“The Department of Transport’s value-for-money report was flawed, with
some serious errors,” Ó Cuív says. “I agree that the PSO [public service obligation] support to Galway is unsustainable, but the airport said it could survive without it. We decided at Cabinet last February to allow both Galway and Sligo to apply for opex funding, against the value-for-money report recommendation.”
Ó Cuív says some of Varadkar’s comments about regional airports are “disingenuous” given the potential cost of east-coast infrastructure such as Metro North.
“Dublin Bus gets six times as much subsidy per head as Bus Éireann,” says Ó Cuív. “I don’t begrudge Dublin its buses, but the idea that urban Ireland is subsidising rural transport is one big myth.”
