Joint Committee on Transport and Communications debate -
Wednesday, 15 Feb 2023

National Aviation Policy (Resumed): Regional Airports

Acting Chairman (Senator Gerry Horkan)

The purpose of the meeting today is for the joint committee to discuss Ireland's national aviation policy. We are joined by representatives of Ireland's regional airports. On behalf of the committee I am very pleased to welcome Mr. Niall MacCarthy, managing director of Cork Airport; Ms Eilís Docherty, managing director of Donegal Airport; Mr. Stiofán O Cúláin, chairman of Donegal Airport; Mr. Gary Martin, deputy chairman of Donegal Airport; Mr. Joe Gilmore, managing director of Ireland West Airport; Mr. John Mulhern, chief executive officer of Kerry Airport, and Mr. Basil Sheerin, chief financial officer of Kerry Airport; and Ms Mary Considine from Shannon Airport.

Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or 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, their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue such 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. I remind members of the constitutional requirements that members must be physically present within the confines of the Leinster House complex in order to participate in public meetings. I will not permit a member to participate where they are not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts will be asked to leave the meeting. In this regard, I ask any member participating via MS Teams that prior to making their contribution to the meeting they confirm they are on the grounds of the Leinster House campus. If attending in the committee room, members and witnesses are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19.

I invite Mr. Niall MacCarthy to make his opening statement on behalf of Cork Airport. I am conscious that the longer the statements take, the less time we will have for the members and the interactions. Some of the opening statements are quite long. If witnesses are able to summarise them a little bit, that would be fine. Witnesses can read them into the record, but it will take away from the amount of engagement we will have because this room will be needed again. We need to be out of here by about 4.30 p.m. I thank everyone for being here.

Mr. Niall MacCarthy

I will be as swift as I can be. I sincerely thank the Acting Chair and the members of the committee for the invitation to discuss national aviation policy. Cork Airport is the busiest airport in the State, situated in the second largest city, and what will be the fastest growing city in Ireland over the next 20 years. As Ireland’s second busiest airport in 2022, we welcomed a total of 2.24 million arriving and departing passengers. This represents an 86% recovery of 2019 passenger traffic and this year so far, we are exceeding our pre-Covid passenger levels, which demonstrates the strength of demand that exists across the south of Ireland for air services through Cork.

Cork Airport plays a crucial economic role across the south of Ireland, generating €904 million for the Irish economy and contribute to the employment of 12,180 people in Ireland. As well as being a major employer in its own right, Cork Airport indirectly supports thousands of tourism and hospitality jobs across the south of Ireland, a sector that plays no small part in our indigenous economy. Furthermore, the presence of the world’s biggest multinational companies in the Cork region is testament to the great work being done in promoting Ireland and, indeed, Cork as a great place to do business.

We partner with multiple other promotional organisations in the State, including IDA Ireland, Tourism Ireland, Fáilte Ireland, Cork City Council, Cork County Council and Cork Chamber of Commerce in a coalition of the willing to provide the best international connectivity outside of Dublin to and from the UK and continental Europe.

This year, we expect to welcome in excess of 2.4 million passengers across 40 routes. Continued investment by the State in Cork Airport will yield results, both for the local economy and in tax revenues. We are very confident that with continued State support, we will reach 3 million international passengers per annum in the next few years and we have strong ambitions for growth beyond that.

Prior to Covid-19, Cork Airport was not eligible for any funding whatsoever under the regional airports programme given that our passenger levels exceeded the programmes threshold of 1 million passengers. However, with the significant decline in passenger numbers over the duration of the pandemic, the reduced passenger traffic rendered Cork Airport eligible for funding. We are incredibly grateful, and I say that genuinely, for the supports received from the Department of Transport and the Government over the last three years. It is testament to that support that Cork Airport has rebounded extremely well from the effects of the pandemic

Our ask is clear. We would now ask that the eligibility threshold for state aid in regional airports in Ireland be aligned with the EU norm. The EU allows for state aid to regional airports up to 3 million passengers per annum. We are an outlier in that our limit is 1 million. Our request is quite simply that we align with EU eligibility capacity of 3 million passengers per annum. By ensuring that parity exists with our fellow EU regional airports, access to regional airports funding will allow Cork Airport to continue its strong growth trajectory and continue to contribute strongly to tourism and business in the south of Ireland.

The regional airports programme supports key investment in airport infrastructure. It is mostly in the areas of safety and security. It is our wish that any capital investments funded by the regional airports programme will also be focused on the key area of sustainability and addressing the global climate challenge. The aviation sector has an important role to play in reducing its carbon emissions and Cork Airport is committed to achieving net-zero emissions by 2050. As part of the airport carbon accreditation programme, an internationally recognised standard in aviation from our industry body, Airports Council International, we will ensure we meet the criteria to achieve the highest level of transition to address scope 3 emissions by 2025. In addition, Cork Airport will meet the Government's carbon reduction targets for 2030 of 50% ahead of the prescribed deadline and probably in 2026.

This will be achieved by a range of measures but also by including a solar farm to deliver approximately 30% of the airport’s electricity needs in the next 18 months.

Cork Airport is no different from any of the regional airports here today in that our business is facing ever-present challenges of escalating capital costs and ever-increasing operating costs as a result of inflationary pressures. Increasing costs coupled with downward pressure on our revenues driven by the highly competitive market in which we operate, driven by low-cost carriers, makes for an ongoing very challenging financial situation for regional airports, particularly in relation to funding large-scale capital expenditure.

I say again that we are immensely grateful for the supports that have been allocated to date under the regional airports programme. The Department of Transport and the Government have played a significant part in the strong recovery of passenger traffic at Cork Airport and future proofing international connectivity by providing financial support to our critical strategic infrastructure including the newly reconstructed main runway at Cork and a new electrical substation which will be finished in the next few months.

To conclude, we have one primary ask today. Under the national aviation policy, we ask that the regional airport programme threshold be increased to 3 million passengers per annum to ensure Cork Airport continues to grow strongly into the future and so that Cork Airport is treated on a par with our competitor airports in Europe.

Our role is to provide excellent connectivity, to ensure regional balance and support hundreds of thousands of jobs across the South of Ireland as a key economic enabler and as part of the State’s proud and thriving aviation eco system, and we seek the committee's support in that endeavour.

Ms Eilís Docherty

I will hand over to Mr. Ó Cúláin.

Mr. Stiofán Ó Cúláin

Cuireann bainistíocht agus bord stiúrtha Aerfort Dhún na nGall Teo. fáilte roimh an deis seo cur i láthair a dhéanamh don choiste seo inniu. Tá Aerfort Dhún na nGall i mbun gnó ó 1986. Cuireann an comhlacht fostaíocht ar fáil do 30 duine agus tá lúcháir orainn a fhógairt gur éirigh linn achan ball don fhoireann a choinneáil fostaithe le linn Covid-19. De thoradh ar seo, bhí oibrithe cáilithe againn a bhí réidh le dul i mbun oibre chomh luath agus a bhí deireadh leis na srianta ar aerthaisteal. Faoi láthair, tá eitiltí idir Baile Átha Cliath agus Dún na nGall againn dhá uair sa lá agus tá Emerald Airlines i mbun na seirbhísí seo ar chonradh PSO.

Tá sé mar sprioc againn mar chuid de phlean forbartha gnó cúig bliana, méadú de 5% a chur le líon na bpaisinéirí ó bhliain go bliain. I mbliana, tá muid ag díriú ar 5% sa bhreis ar líon na bpaisinéirí i 2019 a bhaint amach ar na heitiltí go Baile Átha Cliath. Mar gheall ar Covid-19, cuireadh deireadh leis na heitiltí rialta a bhí againn go Glaschú, ach tá deiseanna á bplé againn leis na haerlínte chun an tseirbhís sin a chur ar bun arís mar go bhfuil ceangal an-láidir gaolta agus cultúrtha idir an dá cheantar agus tá móréileamh ar eitilt díreach ó Ghlaschú go Dún na nGall.

Ms Eilís Docherty

We at Donegal Airport support the existing national aviation policy and consider it to be a robust framework which facilitates the aviation industry and, specifically for us, regional airports in maintaining the highest standards of safety, security and sustainability, particularly through the regional airports programme 2021-25. The airport management works closely with the competent authorities in implementing both safety and security measures to meet both national and international regulations. The provision of capital grants through the capital expenditure, CAPEX, and public policy remit-capital, PPR-C, schemes allow us to maintain facilities and equipment to the highest standard and the operational, OPEX, grant assists us with the costs associated with core non-economic expenditure in the provision of air traffic control, rescue and fire fighting services. As an example of some of the projects implemented under the PPR-C grant scheme, we were proud to be the first Irish airport to install the European Civil Aviation Conference, ECAC, approved explosive detection systems, EDS, standard 3 cabin baggage screening equipment. This equipment has streamlined the screening process for passengers and gives the screener unparalleled resolution and image quality and thereby enhancing security measures at the airport.

In terms of sustainability, we recognise the importance of urgent action to reduce greenhouse gas emissions and improve energy efficiency to address the increasing threats of climate change. We are committed to an interim target of a 51% reduction in total emissions by 2030 relative to our baseline of 2022 and net zero emissions by 2050. We are in the process of achieving level 1 – carbon footprint mapping under the airport carbon accreditation, ACA, programme and hope to achieve level 2 – carbon footprint reduction by year end. In parallel, we have implemented essential projects to reduce energy consumption, such as the upgrade of our terminal building and runway lighting to full LED, solar PV panels with battery storage for our hangar roof, the replacement of ground support equipment with electric models and the installation of vehicle charging points in our car park. Some of these projects were also funded through the CAPEX grant scheme and we have identified further sustainability projects in our grant applications under the regional airports programme for 2023. I will now hand over to our chairman, Mr. Martin.

Mr. Garry Martin

As stated in the national aviation policy, Ireland is an island nation on the periphery of Europe and we are much more dependent on aviation than other countries within Europe. While Ireland is on the periphery of Europe, Donegal is a peripheral region within Ireland and Donegal Airport is recognised as a key transport and tourism asset for the wider north west region. County Donegal is currently not well served by surface transport networks. There is no rail network, no motorway and very little primary road network. We have included a map in our submission by way of illustration. While improvements have been made to the N56, drive time to the capital still takes on average four hours. This regional imbalance in transport infrastructure is only partially addressed by the provision of a public service obligation route, which provides twice daily flights between Donegal and Dublin Airport, with a flight time of approximately 45 minutes. This service allows the people of the north west to access vital services in the capital, and a large proportion of our passengers travel to avail of medical facilities that are not provided within the north west region. In addition, this route is recognised by the local development authorities such as Údarás na Gaeltachta, IDA Ireland and Enterprise Ireland as a key enabler in attracting companies to locate, establish and expand in the north west region thereby contributing to economic development and job creation in the county. The latest report compiled by Fitzpatrick Associates concluded that the airport contributed €46.6 million in output between direct, indirect and induced investment, with the generation of 393 full time equivalent positions.

While the Donegal-Dublin route and the Aerfort Chonamara - Aran Islands are currently the only two existing public service obligation contracts in Ireland, PSO’s are commonly used both in the UK and throughout Europe. The latest data on public service obligations published in 2019 indicate that there were 176 European PSOs, 22 of which were UK routes. The existing PSO service between Donegal and Dublin complies with relevant EU regulations particularly in respect to serving a peripheral region lacking in alternative transport and accessibility infrastructure. We welcome the continued recognition by the Government of the need to support air access to the region with the PSO which was awarded to Emerald Airlines for the three-year period from February 2022 to 2024 with an option to extend for a further year. We hope the Government will continue to support this vital air access to the region through a further PSO award when the current contract expires.

Mr. Joe Gilmore

The board and chair of Ireland West Airport are pleased to advise the business is in a positive recovery phase following a very difficult and challenging period of significant disruption during the Covid-19 pandemic. We wish to acknowledge the positive Government, Department and Exchequer funding supports received during this period in particular, which has enabled the airport to recover to close to 90% of pre-pandemic business levels in 2022. These supports and the strong recovery and support of our main airline partners, Ryanair and Aer Lingus, has resulted in the airport recovering strongly in the second half of 2022 and returning close to full employment levels, from which we take great comfort.

We welcome the opportunity today to attend this meeting of the committee to raise a number of issues for its consideration in review of Ireland’s national aviation policy, NAP. We wish to point out that the issues we will highlight relate for the most part to the upcoming review of the Government’s regional airport’s programme which is the national policy driver on regional airports and which is designed to optimise conditions for regional development and connectivity.

Members will all know about the airport but briefly, Ireland West Airport currently connects the west, north west and midlands regions of Ireland to 20 international destinations across the UK and Europe including major UK cities such as London, Birmingham, Bristol, East Midlands, Manchester, Liverpool and Edinburgh. The airport also serves a vibrant outbound sun market as well as an inbound tourism market from Italy and Germany.

The importance of the airport to the regions’ economy as a key gateway for the west and north west regions in delivering overseas visitors cannot be overstated. Since the airport officially opened in 1986, more than 13 million passengers have used the facility, further highlighting the major economic, employment and tourism benefits. A recent report by EY estimated that tourism output based on the impact of Ireland West Airport passengers in 2018 was close to €200 million annually, supporting 3,000 jobs and contributing an Exchequer revenue of €30 million.

Its ownership is quite different from some of the other airports respresented here today.

Its ownership structure is a community-public trust operated on a commercial remit for the benefit of all those living in the region. Additionally, seven local authorities across the region have a significant equity stake in the airport. We serve a quarter of the country's landmass, providing critical connectivity to a population catchment of more than 1.2 million. We have the third-longest runway in the country and, at 2,500 m, the capability to handle all types of jet aircraft. We have experienced significant passenger growth since 2010 and we hit more than 800,000 passengers in 2019 for the first time. The airport is identified as a key transport infrastructure hub in the National Development Plan 2018-2027, Project Ireland 2040, national aviation policy and as a key part of the regional airports programme, RAP. The airport is also acknowledged as one of the State’s four main airports and a critical driver of economic and tourism development along the Wild Atlantic Way and Atlantic economic corridor, etc. The investment and commitment by Ryanair to the airport are significant, with 2023 set to be its busiest-ever year at the airport, operating to 16 destinations across the UK and Europe and increasing capacity by a further 15%.

With regard to key developments, there was a recent announcement of a new daily service by Aer Lingus to London Heathrow, meaning for the first time in the airport’s 37-year history, it has secured access to one of Europe’s major international hubs, which is a major boost for the west as it provides onward connectivity to more than 80 destinations globally through Aer Lingus and codeshare partners British Airways and the IAG Group. Like the other airports, we are heavily focused on sustainability and I am pleased to report that we have achieved level 1 in the airport carbon accreditation, ACA, and expect to achieve level 2 accredition later this year.

On issues for consideration in the national aviation policy, the current RAP is due to end in 2025. Our first request is that the programme should continue for at least another five years, given the challenges regional airports faced post Covid-19. We ask the committee to seriously consider a review of the existing 1 million passenger threshold in the context of the challenges resulting from the post-pandemic recovery and current geopolitical situation. For airports with fewer than 1 million passengers, we are seeking that investment aid be allowed to cover 100%. Under current requirements, it is capped at 75% for capital projects, which presents a significant challenge for smaller regional airports to fund the remaining 25% gap on capital projects. We propose that the current limitation, which is currently on safety and security capital expenditure, be expanded to include all capital investment projects at regional airports and include potential terminal and landside expansion and development. It is critical that provision for multi-year programmes is also included. At the moment, it is an annual funding programme. While there is a provision on which we worked closely with the Department, there are no multi-annual criteria to permit projects that will take longer than one year.

As a regional airport, our major challenge is to attract new airlines and new routes to the airport. The introduction of a new route development scheme and potentially also international public service obligations, PSOs, to critical UK and European destinations would provide significant support, in particular, providing some level of marketing and financial support to airlines over years one to three. This would, to a degree, de-risk new connectivity into the regions. I thank the committee for the opportunity to present.

Acting Chairman (Senator Gerry Horkan)

I thank Mr. Gilmore for his remarks and for cutting down his comprehensive opening statement to allow everyone to get in.

Mr. John Mulhern

I thank the committee for this opportunity to meet with the members and contribute to today’s discussion on our national aviation policy. I will take this opportunity on behalf of Kerry Airport, our chairperson, Mr. Denis Cregan, and our board of directors to thank the committee, the Department of Transport, the Government and all political parties for their continued support of aviation, particularly in the regions. It is always important to state and I know many of the members, as representatives of rural constituencies, fully appreciate how vital an airport is as an access point both for industry and tourism in the less-prosperous regions.

2022 was a rebuilding year for Kerry Airport and I am happy to report to the committee that the airport achieved a 97% recovery from our highs of 2019 following two difficult years for aviation, worsened further for Kerry Airport by the failure of Stobart Air and the loss of our PSO on the Dublin to Kerry route. Ryanair stepped into the route on a commercial basis and has made travel to and from our capital both speedy and affordable. I applaud Ryanair in the most public terms for increasing passenger numbers by 50% from what was a record base in 2019. To survive these insults to our business, we have had to be shrewd and resilient in our strategies, which has resulted in limiting our operating hours and reducing our workforce. We share the same ambitious plans for our airport as Michael O’Leary shared with the committee last November to grow our annual passenger numbers from 400,000 to 600,000 by 2027. To achieve this growth, we have two important points to share with the committee and actions we believe should in some form be part of a national aviation policy that supports regional expansion and a modest decentralisation of some air traffic.

Coming to aviation from a background in healthcare management four years ago, I could never have imagined or appreciated the difficulties and, at times, brick walls smaller airports come up against when trying to attract new routes and new airlines. An impressive 26% of tourists to Ireland visit County Kerry, often via other airports, including Dublin. Many tell us they would like to fly direct. A new route will typically result, even on a twice-weekly rotation, in 1,200 additional tourist bed nights per week during the summer season. Members can see how positive that would be for all areas of a rural economy, including employment and local SMEs. It would be encouraging if, as part of the policy development, members could consider new methods, financial and other, to attract airlines to develop inward routes from population centres in Europe and the UK to the regions. This could even be limited to a supported connection to London Heathrow or Amsterdam Schiphol for Kerry Airport. To accommodate this growth, Kerry Airport must expand, but expansion is very costly. We have drawn up a building plan that is modest and achievable. It would enable us to manage cost by maintaining a defined operating window while growing passenger numbers safely. The drawings are done and the planning process is almost complete. I ask the committee, on a one-time-only basis, as I believe was done in the past for others, to consider supporting this expansion and enable us to grow and increase support to our local economy.

I recognise the importance of the RAP and its vital contribution to our airport. The programme has enabled us to achieve the highest standards in security, rescue and air navigation services. A recent highlight was the introduction of the world’s first airport fire and rescue simulator. The simulator means we do not burn any carbon or take any risks when we train our fire crews in airport fire safety. Everybody in Kerry Airport is fire-approved because we all train in every area of the business. We know from our colleagues in Ireland West Airport Knock that the Government has funded a training centre there. It is a state-of-the-art facility and one of the best in Europe. Since our friends in the UK have left the EU, it has become increasingly difficult for fire officers to train and to do safely. We also ask that - not a cost, because we could all contribute - for consideration Ireland's own national training centre for airport fire safety. Through the programme, we also had the benefit of the first Dublin to Kerry PSO, which was vital to keeping our economy connected. Again, I thank Ryanair for getting the route commercially up and running, however if that should change, I urge the committee to ensure that a commitment to re-establishing the PSO in a timely fashion should remain part of any future policy development.

Ms Mary Considine

I thank the committee for the opportunity to present to members.

I would like to start by updating the committee on what we have achieved since the members visited us in May last year. The committee will be aware that the Shannon Airport Group plays a crucial role in the Irish aviation landscape. It is a driver for economic growth, both regionally and nationally, providing connectivity to support our growing foreign direct investment, FDI, and indigenous industries and, importantly, our tourism sector.

Last year, thanks to our staff, airline partners and loyal customers, we experienced a stronger recovery than anticipated as we rebuilt our business in the aftermath of the Covid pandemic. We welcomed more than 1.51 million passengers to Shannon last year, an 88% recovery on 2019 levels and up more than 300% on the prior year. UK and European services recovered strongly with more than 1.17 million passengers. After an absence of almost two years, our trans-Atlantic services returned last March. We saw a strong rebound on our daily services to New York, Boston and Newark.

Our priority for our passengers is to make our airports safe and secure while ensuring that their journey through is as hassle free as possible. We continue to see the positive impact from the introduction of our new, faster airport screening facility which halves the journey time through security. As a result, we have seen an increase in people from all over the country using Shannon Airport. They realise how easy it is to fly through Shannon. The prospects look bright for 2023. Our airline partners will operate 35 routes to 11 countries and we are delighted that we will have more routes this year than we did in 2019, with five new European destinations. Our trans-Atlantic services will be enhanced with the addition of Chicago from this May. These new services, combined with developments such as Ryanair's €10 million investment in its maintenance facility in Shannon and the delivery of our property investment strategy across the Shannon campus have cemented the upward trajectory for the group. We are also very proud that Shannon Airport and Ireland West became the first airports in the world to be recognized as age-friendly airports by the World Health Organization.

We are grateful, as many of our colleagues said, to Government for temporarily including Shannon Airport in the regional airports programme. The work we did with this funding demonstrates how important it is for Shannon to remain in the programme. As the committee has heard already this afternoon, under EU state aid rules, as an airport with under 3 million passengers, Shannon is clearly eligible to be permanently included in the programme. However, a policy change is required. I hope that the mid-term review of the programme, which is under way, will provide for this. Accessing this funding will ensure Shannon Airport can continue to invest in safety and security projects, decarbonise its operations and ultimately grow connectivity to deliver economic benefits for Ireland.

The national aviation policy 2015 predates the publication of Project Ireland 2040 which is Government's overarching strategy for the State. One of the key ambitions of this strategy is to facilitate 75% of growth outside the capital and deliver balanced development for the country. Aviation policy should seek to support further growth and connectivity into the regions and address the current imbalance in the aviation landscape. If we look at the population profile of the country almost 40% of the population are residing in the Munster-Connacht area and yet the five airports along the west coast only account for 15% of airport traffic.

Decarbonisation of the aviation industry is one of the greatest challenges we face in the years ahead and requires Governments and aviation businesses to work together. Rather than building new capacity, the focus should be first on utilising the existing capacity at airports in the State. This approach would be consistent with the overall premise of the circular economy by extracting more value from capacity already in place. I hope this will be factored into the committee's consideration of aviation policy. Alongside the upcoming BusConnects strategies, aviation policy should support enhancing direct, timely bus services to Shannon Airport from the cities of Limerick, Galway and Cork. The assessment of a new rail link to Shannon Airport already identified should also be prioritised and supported.

Finally, I want to mention the recent work of the Shannon Estuary economic task force on which I sit. It has highlighted the significant opportunity for the Shannon Estuary to be the lead location for Atlantic offshore wind. This abundant supply of green energy offers the potential to produce green hydrogen to develop sustainable aviation fuels, SAF. Producing SAF within the estuary creates an opportunity to decarbonise the aviation sector here. Aviation policy should support the development of SAF in the Shannon Estuary and ensure that any obstacles to delivering on this ambition are addressed as a priority. I hope the committee will reflect on the issues I have raised here in consideration of the policy in its future review.

Acting Chairman (Senator Gerry Horkan)

I thank Ms Considine. We now move to our members. The first member is Deputy Cathal Crowe who is substituting for Senator Timmy Dooley. The Deputy has eight minutes and then we will have two minutes to conclude.

Deputy Cathal Crowe

I welcome the witnesses and congratulate them on where they have managed to get their respective airports back to. We met many times as a committee during the abyss of Covid. People were telling us there was a recovery coming in perhaps 2025 or 2026. It was absolutely dismal. Yet, given the seasonality of aviation and that airlines produce their summer and spring schedules the previous winter, many of us were hoping the bounce back could happen a bit better, the seasonality of it lending itself to that. Congratulations to all the witnesses. I know Deputies from Donegal and other counties have lined up here today. I will probably be a bit local with my questioning, so forgive me for that. I know those Deputies will give a positive grilling on Donegal, Knock and everywhere else.

Acting Chairman (Senator Gerry Horkan)

They will be unstoppable but go ahead.

Deputy Cathal Crowe

I want to congratulate Kerry, in particular. The growth rate has been very impressive. I have been keeping an eye on that as well. I want to congratulate Ms Considine and her management team on the 88% recovery rate that has been achieved and the 300% growth since 2019. There is even more space to grow. I say well done to them and to keep that upward trajectory going.

I am sure there is commonality in how the witnesses see things. Some 38% of the population live in the west. All of the witnesses' airports represent that population block and, yet collectively, they are all vying for a 15% share of national aviation. Beyond everything that has been said, how can we recalibrate things more regionally? We are not going to get a 50:50 split between the east and west coasts but how can we get more of a share over to the west coast?

Ms Mary Considine

At the end of the day, what is fundamentally important is that we have a really good offering. We need to be very competitive and that is why our ask to remain in the regional airports growth programme is crucial because it support us in vital capital development. That, in turn, ensures that we are competitive, we have a sustainable business and we are able to put a very attractive proposition to our airline partners. At the end of the day, airlines operate commercial businesses and they will fly where they make money. It is important that all of us are able to put our best foot forward and put forward a really strong proposition for our region.

If we look at some of the research that has been done nationally, particularly by the ESRI, much of it talks about the importance of connectivity into the regions and of the value of that connectivity and how it supports particularly high-tech and high enterprise jobs. If we consider Shannon Airport, 40% of Ireland's FDI is within its immediate catchment area and that is no coincidence. It is there because of the connectivity that is provided through Shannon Airport. We have three flights a day into London Heathrow, a really important hub, and we have daily services to New York and Boston in the US. We will have Newark and Chicago coming on for the summer. That is really important to support industry. It is very important that we have our network of European services that bring tourists into the west of Ireland and support all the businesses along the western seaboard.

We believe we have a very strong proposition. If you look at our other two assets and look at it from a sustainability angle, the first thing to do is max out the capacity within State before looking at building new capacity, particularly under a circular economy. We have spare capacity in Shannon so we are offering a solution to the country to decongest the other airports. The capacity is available, and we want to max it out in the first instance.

Our third ask of the committee is to improve public transport access to the airport.

The better public transport access is, the broader our catchment area. The investment we made during the pandemic in particular broadened our catchment area significantly. People who would never have used Shannon Airport are now using it. This is about growing that.

Deputy Cathal Crowe

Are the curtilages of the airports too large? There is a revenue stream from car parks and so on and, when a large programme has to be undertaken, state aid rules and the like apply. Shannon Airport had to play a role in the river's flood defences, which was costly. Transport Infrastructure Ireland, TII, has been helping in upgrading the roads to the airport. Is there a way of reducing the airports' curtilages – their footprints – so that state aid rules can be targeted more at aviation while state headings are used to fund and support the infrastructure up to the airports' front doors? Is that an option as we revise aviation policy?

Ms Mary Considine

The Deputy is correct in that we have a large footprint that is costly to maintain. The Deputy referred to the embankments. We contend strongly that the embankments should be the responsibility of the State, in particular the Office of Public Works, OPW, and local authority, and that the State fund investment in that regard. It does not only protect the airport, but the entire industrial base in Shannon and Shannon town. Flood defences protect a much broader region than the airport.

Deputy Cathal Crowe

There has to be a way around this. When we, as elected representatives, fight for funding for Shannon Airport and the other airports, we hope that it will be spent solely on what goes into, and lands out of, the sky and the revenue that generates. It is frustrating to see money being channelled towards other projects, albeit necessary ones.

The Copenhagen Economics report spelled out a future vision for Shannon and was probably ahead of its time. When we were briefed on it, it was incredible. Now that we are post Covid, it seems all the more relevant. Will an updated version of it be submitted as part of the national aviation policy?

Has Shannon Airport plans for mainstreaming new aviation? Fabulous stuff is happening at Future Mobility Campus Ireland, FMCI, just down the road from the airport, for example, vertical take-off aircraft and drones. Many such initiatives seem to have moved beyond the experimental phase and are being mainstreamed in continental Europe and the US. Has the airport plans to move some of these initiatives on from the test bed phase and mainstream them at the airport?

Ms Mary Considine

I will start with the Deputy's final point. It is a great opportunity. Innovation will be central to decarbonising aviation. I referred to sustainable aviation fuels, SAFs, and the opportunity for Ireland to be a producer and, ultimately, net exporter, given the abundance of floating offshore wind energy, other green energy and hydrogen that will be derived from that work.

FMCI, in particular FMCI Air, is doing innovative work in, for example, drone technology. It is looking into the first pilot vertiport adjacent to the airport. We are working with and enabling it. It is working closely with the regulator – the IAA – on safety aspects. Taking that technology and bringing it into a live environment in uncongested airspace presents an opportunity. I do not just mean the vertiport itself, but also the industries that grow up around it. Let us consider Shannon's aviation cluster. We have ten hangars on the airfield. They do not just create employment; an entire supply chain supports them.

We are always looking at new opportunities. We in Shannon have always had to think outside the box and are constantly looking at the next thing we can do. We have seen down the years how we need to diversify our revenue base. There is downward pressure on aeronautical revenue. All of our other revenue streams are important to ensuring that our business is resilient and sustainable into the future.

Deputy Cathal Crowe

In her next round of answers, Ms Considine might comment on the Copenhagen Economics report.

Everything happening as regards the fuel farm is exciting. The Shannon Estuary task force has bought into it and there is a memorandum of understanding with the ESB on SAFs and hydrogen. Time and again, though, we seem to miss the opportunity for a national ammonia strategy. Countries such as Germany have reached the post in this regard. We are hearing loudly and clearly from other countries that if we do not have policies and onshore infrastructure to deal with some of this, they will hoover up the space. Our renewable energy output is reliant on wind, of which we have plenty, but fulfilling infrastructural needs and capitalising on the lucrativeness of everything else can be done by other countries.

I wish to ask about the jetty and the fuel farm, which has been at Shannon since the 1970s and is owned by the airport. Has the airport a vision on ammonia? It is viewed as a stable fuel. It is only hydrogen infused with nitrogen and is an easy fuel to create. Other countries have a strategy. It is the real liquid gold that Ireland, and specifically the jetty at Shannon, can export. It does not all have to go into the wings and fuselages of aeroplanes to get them into the sky. Ammonia is the fuel that other countries are exporting. It could position us as an exporter like oil production positioned the Middle East in the 1990s.

Acting Chairman (Senator Gerry Horkan)

That is not something I expected to hear at a discussion on aviation policy, but the Deputy has a valid point.

I will call Deputy Carey and ask Ms Considine to respond to Deputy Crowe in that context. We will run over time if we do not let everyone contribute.

Ms Mary Considine

That is fine.

Acting Chairman (Senator Gerry Horkan)

Senator Craughwell wishes to make a brief comment first.

Senator Gerard P. Craughwell

I live in Dublin and fly from here, but I wish I flew from Shannon, Cork or one of the other regional airports. The presentations were impressive and some of the most positive I have seen at this committee. My colleagues are from the regions and have more pertinent questions to ask, but I support everything for which the witnesses are looking. I have seen Shannon and Cork. I will see the other airports over the coming year. I am delighted to have heard the presentations.

Deputy Joe Carey

I thank the witnesses for attending. As they know, we are working on aviation policy. We want to hear their views on how our committee can influence that policy and get the best out of the strategic assets that are their airports. We have visited Shannon, Cork and Dublin and we hope to visit the other airports as well. We have had hearings with Ryanair, Aer Lingus and the DAA, so it is important that the witnesses are present today.

I thank them for their presentations. It was uplifting – pardon the pun – to hear about the positivity as well as the recovery that had been made. There has been a recovery of nearly 90% to 100% of Covid's tragic figures. I recall walking into Shannon Airport with its lights were off and nothing happening. It was pure devastation. The recovery is great to see. There used to be a slogan: "Keep the recovery going". That is what we want to do.

It is key that we amend aviation policy. Each of the witnesses mentioned the RAP. Until recently, Shannon did not qualify, nor did Cork. A number of the witnesses mentioned that the current policy was not in line with European policy. In other European jurisdictions, an airport can have up to 3 million passengers without being in violation of state aid rules. The committee will make the key recommendation to the Government that aviation policy be amended to allow airports with passenger numbers of up to 3 million to be included in the regional airports programme. Would Ms Considine agree with such a recommendation? Would it be progressive? Will she set out her vision for Shannon Airport over the next five, ten and 20 years in terms of passenger numbers, growth and cargo? She also mentioned the exciting area of SAFs. What would that mean for the airport's future?

Ms Mary Considine

I will deal with Deputy Crowe's points first. The Copenhagen Economics report was commissioned by the joint chambers of commerce, led by Limerick Chamber. I am unsure as to whether they plan to update the work. Within the Shannon Airport Group, we are looking at revising our economic assessment. We are carrying out an economic impact assessment of the value of the activities we undertake. That would be useful in the context of updating the policy.

I am not the expert on ammonia, but we would view our role as enabling.

We know there is a requirement to decarbonise aviation. We are in a prime spot, located on the Shannon Estuary, a deep water port. There are the airport, the deep water port in Foynes and abundant offshore wind in the Atlantic. Moneypoint is already preparing and working on the plans to transition and take this offshore wind. It is about putting the planning and consenting process in place to ensure we can attract the investment, bring that offshore wind onshore and derive the added-value industries from that. One by-product from that is hydrogen, which can be used in the production of SAF. That is where we see a huge opportunity for aviation and for Ireland Inc. Deputy Carey is absolutely correct in that ammonia and hydrogen will be the ways to store the offshore wind. There are significant opportunities for Ireland in this space.

I thank him for all his support. We fully agree the threshold should be increased to 3 million passengers, in line with EU state aid rules. Our request of the committee is that it support us in our ask to have the threshold increased. As it stands, we will fall out of it, and it will require a change in policy to increase the threshold and ensure all airports with under 3 million passengers are included. That will require a change to the regional airports programme and to aviation policy, so the committee's support on that would be most welcome. I thank the committee for all the support it has given us through the very difficult period of the pandemic. The Government's supports were a lifeline to us in this industry, getting us through a very difficult period.

On our vision for Shannon, we are very optimistic about the future. We see great potential. We are ideally located to expand our catchment area significantly. We see with improving road networks and public transport the opportunity to have a rail link into the airport. We are making an investment in growing the cluster of aviation companies in Shannon. We are also investing in our property portfolio, which is a key enabler in attracting more FDI into the region, allowing the companies that are already there to expand and allowing indigenous businesses to grow. We see ourselves as a key international gateway to the Wild Atlantic Way. The year-round US connectivity, and the fact we have customs and border protection, preclearance for not only scheduled traffic but also general aviation, are a unique selling point for Shannon. We actively promote that and see significant opportunity. We have only to look to 2027 and the Ryder Cup coming to Ireland. That will be a considerable opportunity to create a lasting legacy not only for our region but for the entire country, and we foresee ourselves as playing a crucial role in that. We are very excited about the future. We are a bit hesitant to put figures on projections because we are focused on having those key routes to the key hubs and the key tourism destinations that support business and tourism in the west and beyond.

Deputy Joe Carey

I am very encouraged by the work that has been done in respect of US traffic. I look forward to the Chicago route coming on stream later this year. In regard to connectivity to another European hub, we have vital connectivity to Heathrow. What efforts is the group making to get us connected to Schiphol, Frankfurt and Paris as alternatives to Heathrow?

Ms Mary Considine

As the Deputy noted, we are very fortunate to have three flights a day to London Heathrow with Aer Lingus. That is a very important service for us and it allows businesses in the region to transit through that major hub. We would love to have a second, central European hub but it has been challenging, despite all our efforts and discussions with airlines, to secure that. Before the pandemic, we secured services with Aer Lingus into Paris Charles de Gaulle Airport. The route was due to start in March 2020 but the pandemic hit in late February and, unfortunately, that service did not start. Vueling operates into Paris Orly Airport, which is a welcome addition. it started last September and we are delighted to have it operate out of Shannon. We will continue to work hard to secure a major central European club but that will require support. In our submission today, we referred to a connectivity fund or some sort of funding similar to what Tourism Ireland does to support tourism routes. In the early years of a tourism route, Tourism Ireland is very supportive, and perhaps the State could look at a similar mechanism for key industrial routes.

Deputy Joe Carey

Has the group made a submission on that to the Government or the Department of Transport?

Ms Mary Considine

We made an application to the Department in June 2021, so it is a bit out of date.

Deputy Joe Carey

That is the PSO.

Ms Mary Considine

Yes.

Deputy Joe Carey

In a more global sense, if any airport authority were in a position where it got Exchequer money to land new deals with airlines to get that connectivity, that would be welcome. The regional airports programme confines airports to investing in security and other similar activities. Would more flexibility to use it for other purposes be welcome?

Ms Mary Considine

The most important ask we have today relates to the regional airports programme. That programme helps us with safety, security and capital expenditure. Obviously, the more-----

Acting Chairman (Senator Gerry Horkan)

It is more about the airport staying in the programme than it is about what can be spent on it.

Ms Mary Considine

Yes, and obviously, if it were expanded, that would be helpful to all of us.

Deputy James O'Connor

I welcome our guests. As a Cork man, that is naturally where I am going to end up with my questions.

Acting Chairman (Senator Gerry Horkan)

The Deputy will be talking about Donegal, I suppose.

Deputy James O'Connor

I will leave that to Deputy McHugh. I have heard Donegal is lovely, although I have not yet been. My first question relates to the ongoing work on the summer schedule. The traffic numbers have rebounded, which is great, and Cork Airport is in a position where it may grow over the next three or four years into a position where it will not be able to get direct state aid because of the EU state aid rules. What are the challenges for the airport in meeting that demand for the coming summer, and what are the medium-term challenges?

Mr. Niall MacCarthy

This year, we expect to serve between 2.4 million and 2.5 million passengers. There is a tight employment market. Ireland is at effectively full employment, but we are advertising extensively on social media, local radio and so on. It is all about getting summer seasonal staff in place and readying ourselves, from a security, retail and car-park point of view, for the busy summer ahead. We are a good employer and the airport is a nice place to work. Airports in general are good places to work. People are excited about being in an airport. I am pleased to say we are in good stead. We, our handlers and our airlines, despite it being a tight employment market, are ready for a busy summer ahead. We have just got our customer service statistics from Red C, which interviewed thousands of passengers. Anyone who has used Cork Airport will know it is a very good airport with very good passenger service levels. We have been rated 4.7 out of five. I am sure Deputy Crowe has used it plenty of times, but I urge him to broaden his perspective and use Cork Airport as well because we offer very good passenger service levels. We are ready for summer.

Deputy James O'Connor

That is good news. I commend the work being done on the recovery. I have been to Cork Airport a number of times and it is good to see.

One issue that probably applies to all our guests is that airlines are struggling to get aircraft to meet the demand in slots. Aer Lingus, for example, is awaiting new aircraft deliveries. Are there challenges in that regard that are outside the control of regional airports? In a Cork context, what is the story with getting new additional routes? As a Cork Deputy, people always tell me they want to fly locally but that they do not always feel there are enough routes or they think the timing of the routes may be wrong because there are not enough services on them. What challenges in that regard need to be highlighted for the public?

Mr. Niall MacCarthy

We have nine scheduled airlines and this summer, we will have 40-something scheduled routes with some charter routes. It is all about both the airport charges and the demand. Airlines will not put on a route that does not have core demand. They are there to make money, so it is about bums on seats. The second conversation relates to how much to charge. For small, regional airports on the periphery of Europe, which is where we are, they want low cost. All the growth we have seen in Ireland has been in the transatlantic sector and the low-cost sector. Aer Lingus, for its own reasons, is not growing in Ireland Inc. It is growing in transatlantic services but not in mainland Europe. As a regional airport, we have not raised our airport charges in 20 years, even though inflation and energy and labour costs have increased sharply in that period. We would shrink in growth terms if we were to raise our charges significantly. That is a challenge as a regional airport. Ours is a successful regional airport, but we are saying to the Government it should be careful.

There is an artificial limit of 1 million passengers per annum. The EU allows 3 million passengers per annum. The Government will want to invest in good business cases for growth in Ireland's regional airports, so I would say strongly to Government to align with the EU limit at 3 million passengers to enable us to continue to grow. We will have nine scheduled airlines and maybe 44 routes and we do have a lot of hub services. We have Amsterdam, Heathrow, Frankfurt and Paris with two airlines this summer, including Vueling. Regional airports are tricky to operate. There are a lot of moving parts, safety and security and then doing a deal with an airline to grow.

Deputy James O'Connor

On the security, Cork Airport invested significantly recently, as I believe Shannon Airport did. I understand there is an improved system for people who want to travel through with, say, liquids. How does that work?

Mr. Niall MacCarthy

We put in the whole baggage screening, which is the one for the bag a person checks in to the aircraft. That is at level 3 with us. We will put in the cabin baggage screening. We have not announced dates on that now. We will go to tender-----

Deputy James O'Connor

Can I have an approximate estimate? Mr. MacCarthy does not have to give us the-----

Mr. Niall MacCarthy

We will expand the floor plate of the mezzanine floor in Cork Airport to give ourselves more airside space, so there is a build in advance of putting it in. It will be early 2025.

Deputy James O'Connor

Excellent. What does that mean for the average person going through the airport and the experience they have coming through Cork Airport from a security point of view?

Mr. Niall MacCarthy

Once we have that advance, people will be able to leave liquids, laptops and iPads in their bags. It will speed up the processing time. I hasten to add that 94% of people went through security in less than 15 minutes, so we have a good airport, with speedy processing and good customer service, but we will make it better.

Deputy James O'Connor

That sounds great. I will raise one particular issue with the Shannon representatives. The Ryder Cup is a huge opportunity for traffic into the west. Has the airport considered doing anything with Fáilte Ireland on a promotional campaign? I am in the west a bit and it is a once in a generation chance to bring back some of the aircraft routes that have been lost. I remember flying to America from Shannon as a kid and seeing the likes of United and several other US airlines. It was busy at the time of the war in the Middle East as well and there were a lot of personnel at the airport. From the Ryder Cup point of view, does Ms Considine have any intention to capitalise on that with a strategy?

Ms Mary Considine

I thank Deputy O'Connor and that is a very good point. We see it as a huge opportunity for Shannon and for Ireland to leave, as was said earlier, a lasting legacy from this Ryder Cup. We are involved in a number of different forums. The local authorities in the region are looking at how we can have the region ready to maximise the opportunity for it. We are working very closely on a group Fáilte Ireland is involved in to promote the region. Within our own business we are looking at our facilities for general aviation traffic, corporate jets and the direct scheduled services that will bring in people. We had a very good trial run of it last year with the pro-am in Adare, and we saw first-hand the huge volume of corporate jets and the operational issues involved in handling those, such as working with Customs and Border Protection, CBP, to preclear some of those private aircraft. Thankfully, it all went well. There is a huge opportunity for the region and for Ireland, and it is all of us collectively working together. We are looking at our facilities and operations to make sure we are ready, and we are partnering with the local authorities and Fáilte Ireland in preparedness for the Ryder Cup.

Deputy James O'Connor

I thank Ms Considine.

Deputy Rose Conway-Walsh

I thank the witnesses for their contributions. I am particularly interested in Knock Airport. I am also interested in the collaboration between the airports so that we always have a regional choice, because sometimes in winter there is a substantial drop in routes available.

I thank Mr. Gilmore for laying all of this out and there are things we definitely support and have been mentioned. Extending the regional airports programme beyond 24 months makes absolute sense. Nobody in the room who would disagree with that and we have to ensure it happens. On extending the threshold to 3 million passengers from 1 million, this may be been answered in the previous question, but perhaps it could be explained why 3 million and not 2 million or 4 million. Where does that come from?

I am especially interested in the cap at 75%, the implications that has in terms of finding the 25% and within whose gift it is to address that so that the 25% gap on capital projects is not there. Is there flexibility from the EU around that? I know at different times there have been different opportunities for flexibility, but what do we need to do to make sure that is not there? If it continues, what is the opportunity cost of that? What are we not getting because that cap is there? Obviously. the multi-year investment programme has to be there, not just from a bureaucratic point of view but because it is impossible to plan if it is 12 months. You are almost certain but not quite certain, so that type of planning does not make sense at all.

Will someone explain the new route development scheme a bit more? I am delighted to see Knock airport connected with Heathrow Airport. That will be a huge success for all kinds of reasons and I look forward to using it. When we speak about the financial support to de-risk from years 1 to 3, what are the possibilities there? Have any preliminary discussions taken place with airlines, even in a domestic setting? I often wonder why there is not a flight from Knock to Belfast to connect the North and South. It is 25 years after the Good Friday Agreement. Perhaps someone could speak to that on the North-South collaboration.

As far as I am aware it is just Shannon that has the machines that can do security screening.

Ms Eilís Docherty

It is in Donegal.

Mr. John Mulhern

It is fully integrated in Kerry since 2020.

Deputy Rose Conway-Walsh

Has Knock been done?

Mr. Joe Gilmore

Not yet.

Deputy Rose Conway-Walsh

I look forward to that, taking out those bits. What was the cost of that, where did the funding come from, and how come we did not get the funding in Mayo to do that? Those are my questions and most of them are for Mr. Gilmore.

Mr. Joe Gilmore

I thank the Deputy. I will try to address as many of the issues as I can. In terms of collaboration with airports, it is fair to say, at least speaking from my perspective, there is a very positive relationship between all the airports - the DAA and all the regionals - in terms of collaboration, and certainly at operational, safety, security and air traffic control levels. Obviously, there are some tensions from time to time in terms of access and routes with airlines, which would be expected.

Acting Chairman (Senator Gerry Horkan)

A friendly rivalry.

Mr. Joe Gilmore

A friendly rivalry, but for the most part we have a very positive relationship and I do not think the committee has anything to be concerned about in terms of any economies of scale or any efficiencies being lost out.

It terms of the 1 million passenger cap, our proposal was for that to be reviewed in the context of regional airports of our scale, which we forecast is to be just over 800,000 passengers for the current year. The 3 million is permitted within the EU state aid guidelines. That is the next stage up. The current cap of 1 million is set, I understand, by the national Exchequer, by Government. In our case we had serious concerns that if the 1 million cap were not reviewed, we would reach a hard stop, and for airports of our scale, if we were to reach the 1 million passenger level, which we hope will be shortly, all funding would cease and that would have a very serious impact.

As for the intensity of the current funding, the current regional airports programme was put in place following a 2011 review of regional airports, which is quite a while ago now. Prior to that, funding was available to regional airports for both landside and airside developments, so airports like Knock under the previous programme were able to develop passenger handling, terminal facilities, traffic and car parking infrastructure and so forth on the landside as well as airside support.

The current programme was limited and focused primarily on safety, security and funding air traffic control costs in our case, which has been very much appreciated over the years. However, it has been somewhat restrictive and now, after the Covid pandemic in particular, the caps on level of intensity at 75% or 90% for large-scale capital projects are particularly challenging given the significant escalation in construction costs for large capital programmes. There is continued uncertainty over that, especially on a multi-annual programme. Trying to bring a major €10 million construction programme to tender and get some level of fixed pricing is very challenging for smaller airports. Given we are all small businesses with stressed balance sheets, we ask for that to be included in a review.

The development with Heathrow is very welcome. I acknowledge the confidence Aer Lingus has in putting a major lunchtime slot into the airport daily from 26 March. We are particularly excited with the onward connectivity it gives through British Airways, American Airlines, United Airlines, Iberia and the IAG network. We are also trying to get our heads around the inward impact. It opens up the west of Ireland through the whole global network going through Heathrow.

There have been some discussions with the Department over the years about having a new route development scheme. As I outlined earlier, regional airports are challenged when developing new routes, especially to major European centres. There is already a proven market to our existing ten UK destinations. They are based on diaspora, leisure and, to a lesser degree, business. However, developing European hubs for regional airports is a major challenge, as has been highlighted by others present at this meeting. All airlines want to fly to the capital city, which is very understandable. That is where the market is and that is where the least risk is.

Airlines considering Ireland West Airport and other regional airports identify high risk in the first one to three years. Airlines are commercial entities with very expensive mobile assets in their aircraft. If it does not work in the first year, they will generally terminate the service. We need a scheme that can support the first three years while the initial market development at both ends is being done. We have had initial discussions looking at other schemes across Europe. That could be included in the new national aviation policy. We need to take a serious look at what is permitted in state aid guidelines for funding new routes and supporting new access. In particular, Ms Considine and Mr. MacCarthy have highlighted the potential new hub services and European destinations can offer for the regions. It would be a game changer.

The Deputy mentioned security screening. Last year we made an application to Government for the updated security screening which avoids passengers having to take out their liquids and so forth. Unfortunately, we did not receive funding last year. We are hopeful we will receive funding this year. We will need two of the new systems at a cost of approximately €1.5 million.

Acting Chairman (Senator Gerry Horkan)

I am the only committee member who has not contributed, but as I am based in Dublin, I will give some flexibility and allow five minutes to the two Members who are not members of the committee and are not substituting. I will be fairly flexible on that.

Deputy Joe McHugh

I am overwhelmed by the Acting Chairman's generosity. He is doing a great job in the Chair.

Acting Chairman (Senator Gerry Horkan)

All recommendations for the permanent position are welcomed.

Deputy Joe McHugh

Guím fáilte roimh achan duine go dtí an cruinniú inniu, go háirithe Garry Martin, Stiofán Ó Cúláin, m’iar-chomhghleacaí agus iar-phríomhfheidhmeannach, agus Eilís Docherty, an bainisteoir. Cuirim fáilte roimh na daoine éagsúla ó na ceantair éagsúla fosta. Gabhaim buíochas le muintir Aerfort Dhún na nGall fá choinne plean fadtéarmach, plean atá fite fuaite idir an chomhairle contae, gnó idirnáisiúnta agus gnó turasóireachta. Tá an plean curtha le chéile le roinnt blianta anuas, ag féachaint ar an gceangal idir Meiriceá, agus an ceangal idir Baile Átha Cliath agus Dún na nGall fosta.

I will talk about Donegal Airport which is the one I know most about. Conor McCarthy and his team came in at a crucial time when we needed a service. Emerald Airlines has been providing an excellent service. I also acknowledge the role of Donegal County Council. Mr. Martin and his team are looking at tourism in the north west. With the heavy presence of directors and workers in international companies as well as our small and medium-sized enterprises, they are also looking at connectivity for them. Mr. Martin has the statistics. I am hearing that increasing numbers are using it. When I use the service to Dublin, I see more people using the service. It is continuing to grow.

I am sorry I missed Mr. Ó Cúláin's presentation earlier. What opportunities are emerging for future connections? Given the exchange rate with the dollar, we expect to get many Americans coming this summer, which presents opportunities. I am thinking in particular about golf tourism. My next door neighbours have a golf course which is number 80 in terms of links golf courses. There is quite a necklace of golf courses from Kerry right the way up. Golf courses in the north west including Ballyliffin, Portsalon, Rosapenna and Cruit Island are creating that critical mass. Donegal County Council is also promoting it strongly. It is a capacity issue. Are there further opportunities as Donegal Airport continues to grow? Any time I use it the increased numbers are visible. There is the added advantage of finding out many things over in the west of the county. The airport's very friendly staff are an important part of retaining customers. I can have conversations about Naomh Muire football club, Gweedore Celtic or Keadue Rovers with the staff there, who are making people feel very welcome. There is a wonderful family atmosphere there. I acknowledge Ms Docherty's leadership agus an fhoireann uilig san aerfort.

Mr. Stiofán Ó Cúláin

We also acknowledge all the support we got from the various representative bodies in Donegal when we were seeking to restore the service to Donegal after failing with Amapola. Getting Emerald Airlines back made a major difference to the county. We are very happy to have the Aer Lingus franchise. While we have a long way to go, we have potential to go to 60 per rotation and we are about 40% or 50% of the way there. One of our major strategic aims is to grow the numbers. We are back up to about 90% of where we were prior to the Covid pandemic. We have potential to grow again and add 40% to that. That would be one of our main strategic marketing objectives.

The other main strategic marketing objective for Donegal Airport would be to regain the Glasgow route. The Deputy will be aware of the enormous cultural connections between the two, with many people visiting friends and relatives. That route carried upwards of 10,000 people in the past. We are just beginning negotiations.

We are hopeful we will be able to start that service post Easter, maybe not daily but certainly on a monthly rotational basis per week.

We are in talks with Fáilte Ireland and Tourism Ireland to help us to grow their footprint on both sides and to help us with marketing. We are very happy with the response there. We are in talks with Donegal tourism. Mr. Martin is the chair or one of the directors of that. We see great potential in selling the great outdoors, the unspoilt beaches and the hills Donegal has to offer. We feel that Donegal has the same potential as Kerry. It is not realised at the moment, but we feel that the potential is there and we will drive that on. There is a great Gaelic tradition, the Gaeltacht, the language, the music and the great bands, including the likes of Clannad and Altan. We feel there is great potential to grow all that, and we hope to do that.

As for the US, there are great linkages happening with the strength of the dollar. I think onward links are in excess of 20% at the moment, and a lot of golf tourism has begun to come into Donegal, with even private planes coming in to play Ballyliffin, the great links up along the coast there, so we see great potential there as well.

Acting Chairman (Senator Gerry Horkan)

That is great. Thank you, Deputy McHugh. Our next contributor is Deputy Dillon.

Deputy Alan Dillon

I welcome all our guests joining us and acknowledge their dedication, hard work and resilience over the past 24 months, during Covid. To see such positive returns in our aviation sector and how it has responded in passenger number terms is a testament to each and every one of the witnesses' teams and their work on the ground across the country.

I also thank Mr. Gilmore for having facilitated a meeting with the Taoiseach last Friday. It was a very positive meeting about the future development of Knock airport, the importance of State support and an acknowledgement as to where we need to go as regards policy on national aviation and the regional airports programme.

We have heard various contributions. I will focus on three key areas, one being infrastructure and investment. As for future developments, Mr. Gilmore talked about capex projects on terminals, new aprons, etc., in the context of the difficulty it would pose for regional airports to look for that type of investment without State support. Maybe he can give us an update as to where policy should be directed in that regard.

As for the PSO support for new routes, incentivising airlines to support regional airports and how we can drive more passengers towards our regional airports by providing additional offerings, that is an important step the Government should look towards. We all understand that Dublin Airport is overheating, with millions of passengers going through it. We would like to see that activity spread across all our airports, be they in the west, the mid-west or the south.

My last question is about the innovation and technology coming on stream that would present opportunities around sustainability measures throughout our airports. There has been a lot of talk about the green airports programme. Where do we need to go to in respect of our commitment to action on climate change?

Mr. Joe Gilmore

I thank the Deputy for his positive comments. Yes, we had the Taoiseach last Friday for a visit to the airport with Deputy Dillon. It was a very positive, constructive meeting.

I will address the three points the Deputy has highlighted. As I outlined briefly, we have an infrastructural investment plan. There are two elements to it. One is ongoing maintenance of the existing infrastructure at the airport. All airports have a challenge with maintaining the asset and keeping it at a level that is required for the safe and secure transport of passengers and airline stakeholders in and out through the airport. That requires millions or euro in investment every year that the consumer does not see and the airports have to fund.

The second element to the plan is to try to improve the infrastructure both from a sustainability perspective and in terms of passenger handling and comfort. In our case we spend between €4 million and €5 million on average a year in capital expenditure terms. That is a combination of all those facets. Most of that we seek to get from the Exchequer because airports are relatively small businesses, as I outlined, and we do not generate multitudes of cash to be able to reinvest. We are therefore looking at a capital investment programme over the next five years of in the region of €25 million to €30 million. We are looking at a funding shortfall under the current regional airports programme of somewhere in the region of €10 million to €12 million, which has presented as a major challenge. Pre-Covid we were looking at a significantly smaller funding gap, but we have seen a significant escalation in construction costs on a number of projects, in particular a safety expansion on our main apron. We have seen an escalation in costs of somewhere in the region of 40% to 50% in the past three years. When we look at trying to fund even the 25% element of that type of project, it presents significant challenges for airports of our scale. We are therefore looking for more flexibility in respect of the review of the regional airports programme for airports of our scale in the hope that it could be considered and additional funding provided to allow us to carry out projects like that.

As for the PSOs and challenges in attracting new airlines, I think I have already outlined the challenges on that front. For all regionals, PSOs are permitted on an international basis. While they are an expensive channel to develop new routes with, I am of the view that even a short-term PSO for a two-year to three-year period over the initial market introduction phase for regional airports should be seriously considered. Alternatively, there could be some focused route development support, either-or or potentially both. That would be limited and short-term but very focused on getting new services up and running. I am convinced there is a market to open up the whole west coast of Ireland and the south west to new services right across Europe, but initial Government intervention is needed to take that initial step. It is not inexpensive, but in the medium term it will certainly reap significant dividends.

Finally, as for sustainability, I outlined earlier, just before Deputy Dillon joined, that Knock airport is part of the airport carbon accreditation programme. We recently achieved level 1 and will achieve level 2. That is part of the airport's commitment to achieve net zero by 2050 and a 51% reduction in carbon emissions by 2030. We are confident we will achieve that before then. I know that the other regional airports are also very focused in that regard. As part of the Department of Transport's recommendations, each of our regional airports has detailed sustainability master plans developed as part of our ongoing work in that whole area.

Acting Chairman (Senator Gerry Horkan)

I will bring in Deputy Griffin. I can give you five minutes, Deputy.

Deputy Brendan Griffin

Thank you, Chair.

Acting Chairman (Senator Gerry Horkan)

I am glad. Of the five regional airports, I think I have visited a lot of them but I have flown out of Kerry only and I was going to end up being the Kerry representative if you had not appeared, so it is good you are here now. You can-----

Deputy Brendan Griffin

It is clearly the best regional airport, without bias.

Acting Chairman (Senator Gerry Horkan)

I was going to a Fianna Fáil Ard-Fheis at the time.

Deputy Brendan Griffin

Not the best party.

I welcome all the witnesses here. I seriously acknowledge the work everyone does. From my time in the Department with responsibility for tourism, I got to see first-hand just how important all our airports, particularly the regional airports, are in bringing visitors, particularly visitors from overseas, to the regions, the huge economic spinoff from that connectivity and its connection to other, non-visitor-related economic activity. It is vitally important. Although I am not a member of this committee, I welcome the scheduling of this meeting because it is crucial we try to include as much as possible policies that are helpful to the aviation industry in our future plans. It is therefore good to hear from the witnesses directly today.

I acknowledge the huge work put in by all the witnesses individually and the work of their respective teams in their airports. I also mention Tourism Ireland. It deserves huge credit for the work it does. I have seen first-hand the level of work its representatives do in the various destinations served by the airports. Much of it goes under the radar - pardon the pun - but it is very important work. It supports the sustainability of routes and is vital to attract new routes in future as well. It gives great confidence to airlines when they see the national tourism marketing body rowing in behind the efforts. It gives them some reassurance when taking a punt on a new route as well, which is vital.

Overall, in terms of the sustainability projects for the future, I am interested in ideas about what airports can do to try to offset the impact of air travel and what can be done in individual airports. Do the witnesses have any novel ideas or plans for the future?

Rail connectivity will become more important in the future. My local airport in Kerry is the closest one in the country to a rail link. It is literally across a field from a rail link. Has there been any developments with Irish Rail to try to optimise that proximity in the future? Could more be done in that regard? It is a huge opportunity and a unique selling point. Kerry Airport is also going to be the closest airport to a greenway network before very long. I have a dream that some day people will be able to disembark from a flight at Kerry Airport, rent a bike and hop on a greenway. It is very doable. Is there buy-in from Transport Infrastructure Ireland, TII, and the other relevant agencies, including the local authority, to make that happen?

My next question is for everyone. The public service obligation, PSO, and the concept of an international model have worked extremely well for the regions. That includes Donegal and Kerry but also for other regions served by airports prior to that. It is a perfect model if it can be fine-tuned to serve international destinations through Schiphol and Heathrow airports and other major hubs. How realistic is that? I remember during my time in the Department, even though aviation was not my direct area, there were legal issues and questions about competition law and so on.

On the Kerry to Dublin PSO route, the Minister gave a commitment over a year ago to reinstate the PSO in the event of the commercial route failing or being withdrawn. I acknowledge the success, relatively speaking, of the Kerry to Dublin commercial route compared to 2019. That said, these things can change. Has the Department given any commitment of late to reinstate the route and the PSO in the event of the commercial route being withdrawn, failing or anything else?

In relation to-----

Acting Chairman (Senator Gerry Horkan)

The Deputy has managed to use his entire five minutes in his contribution but we will give the witnesses a little time to respond.

Deputy Brendan Griffin

I ask for a minute or two more, with the Chair's indulgence? Are the terms of CapEx too restrictive in terms of the airports' future plans? Could something be done to make it work better for everyone?

Mr. John Mulhern

I thank Deputy Griffin for his questions. He knows Kerry Airport better than most. We think of ourselves as being like the loss leader in a supermarket. It costs us millions each year to keep the airport running but its contribution to the economy in Kerry is multiples of what we pay. We are very proud of that. People visit Kerry all year around, particularly in the summer, and the airport contributes thousands of inward tourists to all sorts of businesses, hotels, restaurants and everything else in the Kerry region. The common theme from visitors is always that they wish they could fly direct to Kerry. We will have 38 flights each week from Frankfurt in Germany, London, Manchester and so forth this summer but the ask is always if we can have a connection through London Heathrow or Schiphol. The Deputy is right to refer to an opportunity in the future to support that.

We listen with envy to our friends in some of the larger airports for two reasons. First, they have a connection to a major international hub and, second, they talk about passengers in millions. The dream of having 1 million passengers, never mind 3 million, is a long way away for us, even though one quarter of all visitors to Ireland come to Kerry. They come for all the reasons the Deputy outlined. One of the most exciting ones is the building of the greenway. Kerry has always been an attractive place for people who like to climb, cycle, walk and run. I remember the Deputy speaking to me about the greenway connectivity about five years ago. He said it was a dream of his to connect the airport to all of the greenways so that he could cycle the whole of the county and return to Kerry Airport. That is our dream too. On that point, the Deputy has been a great friend to Kerry Airport over the years. When I met him four years ago, he was the first politician I had met and he is now the politician I meet most often and the one who keeps in touch. We know we will have a little more time in his company but, on my behalf and that of the airport, I will say his contribution to tourism and transport in Ireland, and in particular to our county, is enormous and we will miss that very much. Deputy Griffin is the absolute example of what a politician can do for people, for businesses and for the community. We will miss him.

Deputy Ruairí Ó Murchú

I would like that retracted from the record.

Acting Chairman (Senator Gerry Horkan)

I was just about to say that if Deputy Griffin had not announced he was not running in the next election, that contribution would be a party political broadcast but since he has, I will let it stand. I let the witness away with a lot there. That concludes Mr. Mulhern's contribution as otherwise the Deputy's head will not fit through the door. I do not doubt his contribution to Kerry tourism and aviation generally over many years.

Deputy Brendan Griffin

On the international element of the PSO and the model we have for domestic PSOs, do any of the witnesses have in mind any concrete avenue where that could work?

Acting Chairman (Senator Gerry Horkan)

I will try to cover that issue. I have not spoken yet as a full member and nor have another two full members. I am conscious of the time. I am based in Dublin but I visit all counties, including Donegal recently. I was thinking of flying and I will mention some of the barriers preventing me from doing so. I regretted not flying because I did not realise just how far Dungloe is on a Friday afternoon. For those living in Dublin, it takes time to get to Dublin Airport, whether taking the Aircoach service or are getting there in some other way. People arrive at security two hours in advance, board a plane, fly for half an hour to Kerry or for 50 minutes to Donegal and then we they arrive, they do not have a car at the other end. Is there anything we can do to make it easier for people to use the Kerry route? I was in Kerry in April and I drove because I wanted my car at the other end. Representatives of the car rental industry appeared people before the committee a few weeks ago. It is expensive to rent a car. People want to have a car at the other end. Kerry is a beautiful county but it is not the most well-served county by public transport for those trying to get to relatively inaccessible places. Those are the kind of barriers I see. I could drive from Dublin to Kerry in four hours. By the time, I plan to get to the airport, spend two hours there, fly to Farranfore and then travel to Killarney or wherever, I would have already reached my destination by car. In Alaska or Canada, the journey times are enormous. Donegal is probably the furthest or most difficult road journey in the country. The motorway programme has meant that the old days of flying to Shannon Airport are gone. I know people who worked in Shannon in the 1990s and they all flew up and down in the Aer Lingus jumbo jet all the time because the roads were so bad. Now the roads have improved. Galway Airport has certainly been a victim of that, as has Waterford Airport although probably to a lesser extent. I know it is not represented today. Obviously, Galway Airport is not represented because it no longer exists. What can the airports do to market their use for people in Dublin who want to go to these places? Clearly there is a huge population base in and around Dublin who go to Donegal. Two of my grandparents are from Mayo but I have never flown to Ireland West Airport Knock. I cannot fly to Knock from Dublin anyway. How do we improve the connectivity for tourists who fly into Dublin from Dubai or Abu Dhabi and want to fly direct to Kerry, which can be done?

Everyone does the parochial thing. I am not coming from the regional perspective. We visited Cork and Shannon and I was delighted with both of those visits. I said we should visit Ireland West Airport Knock, Kerry and Donegal in our work programme. Perhaps we should even fly into Donegal to visit the airport. It is probably the best way of getting there from here and seeing one of the most beautiful landings in the world. Sometimes there are barriers that are not within one's control, as such. Some airports have a different screening mechanism. I do not suggest that there would be no screening, but that there might be a fast-track for domestic travel. I saw it in Geneva, for example, for people going to France. If we go to Donegal, are we stuck in the queue with everybody else? Some airports have a separate tier for regional travel, so that people are not queuing in the same way as for long distance travel. I am throwing out a few thoughts because much of what needed to be covered has been covered.

Is Cork Airport forecasting approximately 2.24 million travellers this year? Shannon had 1.5 million last year. What is the forecast for this year? Is it about 1.6 million?

Ms Mary Considine

We are forecasting about 1.85 million.

Acting Chairman (Senator Gerry Horkan)

Okay. Is Knock about 850,000? Is Kerry about 400,000? What is the forecast for Donegal Airport?

Ms Eilís Docherty

In 2022 we had almost 37,000 and we are looking to grow by 5% over 2019 levels.

Acting Chairman (Senator Gerry Horkan)

There is a huge difference between the five airports. I am sure they all saw the Michael O'Leary contribution to the effect that they are all kind of competing with one another on the one side and then there is the big beast of Dublin on the other side. If the Minister for Transport, Deputy Eamon Ryan, was here or the Minister of State, Deputy Jack Chambers, who has responsibility for aviation, what is the one thing each of the witnesses want? I probably know but I ask the representatives to outline the one thing they want most.

Mr. Niall MacCarthy

It is dead easy. We just want the new regional airports programme to align the aid threshold with EU law.

Acting Chairman (Senator Gerry Horkan)

That is what I thought it would be.

Mr. Niall MacCarthy

If it is just one thing, I ask that the Minister would do that.

Ms Eilís Docherty

As the Acting Chair rightly mentioned, car hire was a big issue for us last year. It was quite an achievement for us to get to 90% of 2019 figures, given that there was very little car hire available. We have spoken to our local car hire company and it assured us that it has a much better supply of cars this year, so the cost of car hire has come down, which is very welcome.

Security going through Dublin Airport was also difficult last year. Those issues have resolved slightly but we are a bit concerned about the summer.

Acting Chairman (Senator Gerry Horkan)

Is there a possibility that there could be a domestic lane?

Ms Eilís Docherty

Absolutely, yes. Both ourselves and Emerald Airlines will seek that the DAA would look at doing that. We did have it previously, whereby passengers flying in from Donegal could fast-track through immigration. Unfortunately, at the moment our passengers have to join the queue, which can increase the time. Leaving Donegal, you can get from the car park in Donegal Airport and be on board the aircraft within 30 minutes. Unfortunately, it is not the same in reverse. Anything that could be done to ease the passage for domestic traffic through Dublin would be very welcome. We have the standard 3 explosive detection systems, EDS, baggage check. When Dublin gets that in place, it will obviously help queuing times in Dublin. Those are the three issues that we have.

Acting Chairman (Senator Gerry Horkan)

I thank Ms Docherty.

Mr. Joe Gilmore

The one request would be that the current programme would continue because we cannot take that for granted and that there is greater flexibility in terms of the funding criteria up to 1 million passengers and that the cap is reviewed beyond that in terms of an increase.

We would welcome the return of the PSO service from Dublin and for the committee to visit Achill at any time. Given its recent success-----

Acting Chairman (Senator Gerry Horkan)

There is a photo of me on a beach in Achill as a six-month old or one-year old on my first holiday. The photo remembers me, but I do not remember the photo.

Deputy Ruairí Ó Murchú

It will feature in the Oscars.

Acting Chairman (Senator Gerry Horkan)

Mr. Gilmore is looking for the PSO. I will hear from Mr. Mulhern first and then Ms Considine.

Mr. John Mulhern

Kerry wants to grow. It is very important to us to grow. We have had to change our business model completely because of things that have happened to us, like the loss of the PSO. We also know we have a responsibility to balance the books. In order to do that, we had to take almost €1 million off the payroll, so we had to make a lot of people redundant. We had to let them go and we had to stop recruiting. We had to limit our hours of operation. The majority of our passengers are in the summer season. Not only that, but we were one of the busiest airports in the State for private traffic. For example, a golf course where I live in south Kerry will bring 60 private jets this summer, between the end of April and mid-October, so we will have a significant increase in private traffic, but not on the commercial side. We need space. We cannot accommodate the number of passengers, so we need to grow very quickly, not next year or the year after but this year.

Acting Chairman (Senator Gerry Horkan)

That is in the opening statement. That is the big ask.

Mr. John Mulhern

Yes, and it is at an enormous cost. We would like to see that one-off expenditure happen. It is not a huge cost. It is approximately €6 million. If it was funded this year, we would build it this year. That is my one major ask.

Acting Chairman (Senator Gerry Horkan)

I thank Mr. Mulhern. Ms Considine said we did not need to build any extra capacity, that we would just use what we have. I can see that from her point of view because there is a lot of existing capacity, so it is a valid point from her perspective.

Ms Mary Considine

There are two key points. We have all talked about the regional airports programme and its importance. What we are asking specifically is that it would be aligned with EU state aid rules, which specifies a 3 million threshold.

Airports have a critical role in the regions in delivering Ireland's strategy for balanced development. It is not balanced today. It is about looking at the distribution of economic activity in the country, the role the airports outside of Dublin have to play in that, and the national balance.

Acting Chairman (Senator Gerry Horkan)

I will bring in Deputies Ó Murchú and O'Rourke in a moment. It is very important that we have the regional airports. They generate enormous amounts of activity, employment-wise, in areas that otherwise have greater levels of unemployment. Tourism has a seasonal nature and the airports mean that we are able to bring in large numbers of people. In America, people do not think twice about driving for three hours, but we need to have connectivity in the regions. The airports drive activity in those areas.

As somebody who does use Dublin Airport, I do not need 30 million people using Dublin Airport. If 10 million of them were dispersed to all of the other airports, that might be to Dublin's benefit, although it probably would not say that. It might make Dublin a more pleasant place for the people who are still there and give all the regional airports a shot in the arm as well.

I thank the witnesses for what they are doing. I thank those from Cork and Shannon airports for the day we had in their airport. I would welcome any invitations from the three other airports for the committee to visit the airports we have not visited to see what they are doing on the ground and what they would like to do. That might be something we could look at in our future work programme.

Deputy Darren O'Rourke

I thank the witnesses. I was happy to listen to all of the contributions and the debate over the past two and a half hours or however long we have been here. Understandably, there was interest from colleagues from the regions. As transport spokesperson for my party, it is important to have this opportunity. It is part of an extended series of meetings that we have done with a range of stakeholders. The post-Covid recovery seems to be going well in terms of numbers, but I believe this engagement was prompted by the sustainability of the airport network and the policy in that regard. The question is how we can address the dominance of Dublin and influence the distribution of capacity. We are coming towards the end of the series of meetings. It has not all been straightforward. We have had the airlines in before us. The witnesses know better than I do what is important to them. There is a challenge for whoever is in government to ensure the sustainability of the network.

I have a couple of questions which I have heard from the airlines in particular when we asked them about what influences their decision-making.

One of the issues they talked about was the offering or package and the readiness or quality of the package coming from airports. It seemed that it was almost a regional proposition. It was not just an airport; it was the tourism board, the local authorities and the regional authority. Are the witnesses satisfied that the environment is in place in their regions to present their proposals or is there room for improvement with regard to how they would go about making those propositions?

A number of speakers referred to a new route development scheme or proposition. I do not know which one it was but one of the big airlines gave the committee international examples where regions have come together and the state has been involved in providing support for three years. The responses and opening statements addressed those set pieces. I want to ask about realising the maximum potential within the system. My two questions are on the wider environment for presenting a proposition for the region and having a new route development scheme and attracting new routes into the airports.

Mr. Niall MacCarthy

I thank the Deputy. It was a great pleasure to welcome him to Cork. We were grateful for his recent visit. When we were engaging with Lufthansa for a Frankfurt route, we had to provide it with research about the companies based in the Munster region which were likely to use the route. We went to IDA Ireland and the chamber of commerce. We also had to engage with Tourism Ireland on the marketing of that route in Germany. It was very good. When we are approaching an airline about a new route we put together what we call a coalition of the willing. That would normally be Tourism Ireland and our local tourism body, Pure Cork. If it is a business route, IDA Ireland, the chamber of commerce and the city and county councils might be involved. We would offer them a scaled discount on airport charges for year one, with 80% off in year two. However, they would need a lot of marketing and research. I am trying to be brief because I know the other contributors wish to respond. That tends to work well. The ask will be different from different airports at different scales. The ask from a smaller airport in this group will be different. All we want is that we can avail of State supports in relation to capital and funding. We will do the hard work beyond that. There might be a different ask from smaller airports.

Deputy Darren O'Rourke

Is Mr. MacCarthy satisfied that those systems are in place and he can secure the capital support he has outlined?

Mr. Niall MacCarthy

Yes, I am 100% satisfied. If we could get that one ask, we would be happy with that.

Deputy Darren O'Rourke

Mr. Ó Cúláin touched on his relationship with Donegal County Council. I would like to hear about the wider tourism and business proposition and whether route development is under way or there is a need for specific new route development.

Mr. Stiofán Ó Cúláin

That is exactly where we need to go in Donegal. The main population base is on the east coast, while many of the tourist attractions are on the west coast. The Wild Atlantic Way has to be commended, as does the work done from Malin Head to Mizen Head by Tourism Ireland and Miriam Kennedy and her team. However, that has to be joined up with the airports as an integral part of the jigsaw. There is a lot of potential there.

Picking up on what Deputy Griffin asked, back in the 1930s and 1940s there was a rail link between Derry and Burtonport. Burtonport is very close to Donegal Airport. That is an old route and a large part of the rail line is still in place. A greenway could be developed there. I do not know what it would cost. Mr. Martin would know a lot more about that. I remember when we looked at it back in the 1980s we were talking about €25 million. A walking route and cycling route could be developed, linking North and South from Derry to Burtonport. It would be innovative and fantastic for the county of Donegal. It would attract a lot of people. In my opinion, it would be much more attractive than the Camino, much of which is on tarmac. It should be looked at as it could be done all along the west coast. There could be heritage trails throughout counties Mayo, Galway and Donegal. They are all there. They just need to be linked together, marketed and tied into the infrastructure that is there - the railheads.

What has happened in Donegal with the Local Link service is very important and should be retained and extended. It made a bit difference in Donegal to have a bus service in place for people coming into the airport. It is a huge county so we need to be able to bring people to the south or the north of the county. When Fáilte Ireland is asked what its surveys say about what attracts people to Ireland, it says that it is the great escapers and the culturally curious who want to come to Ireland. Those types of people can be attracted to the west coast. What we are looking for is to be able to get them there.

Mr. Joe Gilmore

Similar to other airports, we have to go to the airlines with a comprehensive package of information on the regional offering. We get good support from the councils, our regional chambers, particularly in Sligo and Galway, Fáilte Ireland, Tourism Ireland and so forth. We are in a good space. However, we are facing significant cost-competitive challenges with car hire and accommodation, given the current situation in the country. From a west coast perspective in particular, there are going to be significant challenges on that side as we face into the rest of 2023 and 2024.

The Deputy mentioned the new route development scheme. There is a body of work that needs to be commissioned there. We have raised potential areas that we think could be explored. However, we need to look at other peripheral regions across Europe, including the types of schemes that have been in place and are permitted under EU state aid support guidelines and so forth. I propose and recommend that a body of research be done to get up to date information on what would be permissible and what could be put in place to support connectivity into peripheral Europe, in particular, the west of Ireland.

Deputy Darren O'Rourke

The committee could certainly pick up that proposal. If the witnesses have anything to add after this meeting, it would be useful to provide it so that we could take to the Department.

Mr. John Mulhern

We are jealous of our neighbours. We think every airport in Ireland should have a connection to an international hub, whether that is supported by the State and whether it is to London Heathrow, Amsterdam Schiphol or similar. I spoke in my opening statement about routes. My colleague and I are flying to Tangiers on Monday where we will meet a number of airlines again. However, this time we are going well armed. I have published a 120-page book about Kerry. It is about our airport and how modern we have become through State support. We were quick to climb on the ladder to convert to a green industry. Our lighting systems on the runways and in the car parks have been converted to LED. Some 90% of our vehicles are now electric. Ironically, we have the first fully electric fuel bowser in Europe. We are pulling down the amount of carbon we produce, which is great, but when we speak to the airlines they say they cannot afford to risk a route to an airport like ours because we are in a small population centre. There are 155,000 people in Kerry, of whom maybe 30% fly regularly. Convincing an airline with an aircraft worth €60 million and has 200 seats to fly to Kerry is incredibly difficult. These 120 pages provide the statistics and facts, from the State, Fáilte Ireland, Tourism Ireland and others, to show that people want to come here. The State could remove the risk for the first two or three years and then turn off the tap. If that does not work, so be it, but in those first two years, we will convince that airline that these people want to come here.

We know that 25% of all tourists who visit Ireland come to Kerry. They want to come here. What they are doing is they are getting on a plane to Dublin and then getting on a train or a bus or hiring a car. When they fly to Kerry they can get on a train to the major cities and towns in our county. We have a bus service to all of the regions of Kerry. There are five car hire companies, all of which have lowered their prices substantially again. I spoke to a company this week that is willing to put on a fleet of electric cars. Like Click&Go, people would not have to deal with a car hire company. They would just pick up a vehicle in the car park, drive it around the country and then leave it back. We are probably the most connected airport in the State.

Acting Chairman (Senator Gerry Horkan)

I am going to have to cut off the Deputy. We have ten minutes left. Deputy Lowry is a full member who has a slot he is entitled to, and Senator Chambers and Deputy Ó Murchú have indicated as well.

Deputy Darren O'Rourke

I would like to hear from Ms Considine.

Acting Chairman (Senator Gerry Horkan)

If it is okay, Ms Considine might make contribution in response to Deputy Lowry's questions. I do not doubt he will have an interest in Shannon as well as everything else.

Deputy Michael Lowry

I am sorry I had to leave the meeting, but I had Dáil business to attend to. I heard all of the presentations and found them to be interesting and very informative. Obviously, with the review that we are conducting, from my perspective and for most of the committee members, we are very interested in supporting the regional airports in whatever way we can. Aviation is hugely important to the regions in terms of the distribution and support for industry, tourism and general economic activity. On a number of occasions I have stated that I find it difficult to understand why we are currently talking about the development and expansion of Dublin Airport when the likes of Shannon and Cork are underutilised. Obviously, the airlines have the slots and the connectivity. Representatives of Ryanair appeared before the committee and it is very supportive of the regions. I think three of the witnesses mentioned in their contributions how Ryanair is extremely important to their operations. Even Michael O'Leary has questioned the desirability of the distribution of passenger numbers from Dublin to Cork and Shannon in particular. However, I feel that it is important that there is a decentralisation of air traffic and that we should do whatever has to be done to incentivise it. Hopefully, we will include that in our report.

One of the witnesses mentioned the 75% cap in relation to capital projects, and the fact that the airports have to raise 25%. Obviously, for the small airports that is extremely difficult. That is something that we need to look at as well. The obvious issue is in relation to state aid. It is important that the threshold is increased to align us with the EU norm. I think that would be of benefit to all of the regional airports. I do not wish to hold proceedings up. I thank the witnesses for their presentations. We will be supportive of the airports.

Acting Chairman (Senator Gerry Horkan)

I thank the Deputy for his brevity because it means we can bring in Senator Chambers and anyone else who wants to come back in.

Senator Lisa Chambers

I am not a member of the committee. I appreciate the Acting Chair facilitating my contribution. Ireland West Airport Knock is my local airport. Mr. Gilmore and his team there have been doing a fantastic job. I commend and congratulate the team on securing the Heathrow route. There is great excitement about it. It opens up so many possibilities not just for Mayo but for the entire region to have that connection to an international hub. Credit to the team because it is a great win and a coup. The opportunities are endless. My question is in the same vein, around new routes. I know the witnesses have dealt with the issue previously. We have great connectivity to many of the key European countries that people in the west want to travel to on holiday and for work, but we are missing a French connection. I would love to see a connection from Knock into France. Shannon added routes to Marseilles and Paris in the past year. That is great for the region, but I think there is an opportunity for a route going to somewhere in the Normandy area. That is the gap in connectivity for the region. My question is on route development and how we can help advance that for the airport in Knock.

On supporting services, car hire has been mentioned. What do we need to advance public transport connectivity in the next five to ten years? The airport is quite a distance from some of the main towns and I think the witnesses will agree that the bus service could be better. What else can we do on that front?

In terms of working with other airports, obviously Shannon is a big driver. We have seen the catastrophe that Dublin Airport has been over the last few years in terms of service to passengers - or lack thereof - and queues, etc.. Many people started to look at alternative ways of travelling. Sometimes we can get a bit lazy and just search for flights from Dublin to wherever, but I think the problems have shone a light on how well some of the regional airports are working and the ease of travel through them. I flew through Shannon a couple of times last year. I will always look to Knock first, because it is my closest airport. Travelling through Knock or Shannon is a different experience to Dublin in terms of the ease of getting through the airport. When you get to Dublin Airport you are almost anxious and nervous about trying to get through the place. The gate is often ten miles down the road, you are trying to carry bags and it can be a nightmare, whereas with Shannon and Knock you are nearly parking at the gate. It is a pleasure to travel through the airports. There is too much air traffic going through Dublin. We need to re-balance that out to our regional airports. What can we do in terms of aviation policy to try to assist that happening? Is it just about launching a campaign to highlight the routes that are already there, or do we need to more than that?

Mr. Joe Gilmore

I am aware of time, so I will be brief. In terms of France and Benelux, we previously had routes to Paris Beauvais and Eindhoven a number of years ago. Unfortunately, they did not work after the initial short period that they ran. It re-emphasised the need for some type of initial route support scheme over the first two to three years. The reality is that generally routes do not work in the first 12 months, and they lose money. They start to make money in years 2 and 3 and then become sustainable. For example, we have had a Cologne service for the last three to four years and we have had a Milan service for the last ten years. They were very marginal for the first two or three years. To the credit of the airlines, they stuck with them. It is about getting new routes over that initial hump. We are competing with 400 airports across Europe for services.

In terms of transportation, we are a rural airport. We rely heavily on public transport and in fairness, Bus Éireann does provide good services. However, we are seeking to increase frequency there. We need more sustainable transport, as all the regional airports do, moving into the medium term. We are taking some light from the soundings we are hearing from the strategic rail review. We would be an advocate of rail travel. We would love to see the western rail corridor open up all the way to Claremorris and Sligo, with a spur going into the airport. We do not think that is crazy. I lived in the Netherlands for a number of years in the 1990s. I am of the view that if we build it, they will come. We have to put in the infrastructure along the western corridor, the Wild Atlantic Way and the Atlantic economic corridor to rebalance development. The Government has to be brave and put in the infrastructure and invest. If it does, people will repopulate the regions. People and companies will have confidence to relocate. That is my view.

Deputy Ruairí Ó Murchú

I have kept up with most of the meeting in the office or in between, but I apologise if I go over ground that has been covered. It would be a first if I did not. In fairness, the witnesses have been fairly straightforward in the sense of what is needed in the regional airport programme and state aid rules. They are aware that the state aid rules need to be revisited for a number of issues. Indeed, the EU has looked at some of it. The State has not necessarily been great at pushing back over the years, whereas the France and Germany definitely did. We might need something more - almost arguments, for want of a better word - from the airports almost in the context of the €1 million and €3 million. Perhaps that is something that can be proffered, and eventually somebody can have a conversation with the European Commission in respect of it.

I suppose the whole issue is around sustainability and in fairness, Deputy O'Rourke dealt with some of it. There is the domestic piece and the PSO levy. Beyond that, there is the product. Most of the witnesses apart from Ms Considine got to go through the ins and outs of it. When I stop talking, which will happen as the witnesses will be glad to hear, we will start with her in respect of that matter. Is it about putting that together?

Mr. Michael O'Leary and Mr. Willie Walsh were in here, and I refer to what they said straightaway in relation to regional airports. Mr. O'Leary was probably a lot more ruthless in what he said. He said some would survive and some would not. Sometimes politicians, probably, do not always help this. They will be happy enough to sell a tune that will sell all right as a press release but no regional airport is going to do okay on the basis of displacement from Dublin. We all know Dublin had its own chaos. You would like to think we are through that but Dublin would say it competes with Amsterdam or Frankfurt. As much as people ask whether people could go to other airports, that is probably not completely doable. We also accept that we need the connectivity. Then it is about how you sell yourself on an international basis, and that is probably not necessarily connecting to a hub. That is part of that wider question of selling that product.

I am not saying I am in complete agreement with Mr. Michael O'Leary, Mr. Willie Walsh or anyone else, but they have put it fairly clearly. I am asking the witnesses to defend their place and to say two things. What is sustainable aviation-----

Acting Chairman (Senator Gerry Horkan)

I might stop you, not just because it is 4.30 p.m. To be fair - the Deputy was not here for all of the debate - they did a very good job defending all of their existences, and I do not think they have time to do it.

Deputy Ruairí Ó Murchú

No, and I am not looking for that. On that product piece, we need that from them in relation to the state aid piece. Beyond that, I am looking for a synopsis on, or answer to, some of what Mr. Michael O'Leary in particular said.

Acting Chairman (Senator Gerry Horkan)

You should be conscious that we are over time. This room is needed again later in the evening.

Deputy Ruairí Ó Murchú

It is later on in the evening. That sounds like there is a wee bit of flexibility, Chair.

Acting Chairman (Senator Gerry Horkan)

I am being flexible. That is why I did not shut you up 20 minutes ago. I want to bring Ms Considine back in to conclude on the remarks made before I brought in Deputy Lowry. You have all done an excellent job advocating for your own airports and your own regions, in pointing out the necessity of and how valuable airports are to the regions they serve and how much activity, innovation and ingenuity they bring. I have sung the praises of Shannon before, when we had the Shannon Airport Group and the chairpersons in, as I have with Cork and all the airports. Airports drive economic activity, tourism and people visiting friends and relatives. Equally, looking at the route maps, you see with our new, increased population - 50% up in 25 years - all the routes you have to places like Poland. When Monsignor Horan was building the runway back in 1986, I do not think he would have thought he would have had so many routes going to Poland or other parts of eastern Europe. It is a reflection of how our society and economy is changing, and you are all doing a great job. We asked at one stage what was the one thing each wanted to do if they could do one thing each, and a lot of it was around the regional aid programme and the artificial €1 million limit that we had kind of applied, versus the EU actual limit of €3 million, which itself might need to be looked at. I want to bring Ms Considine back in, or if anyone has a brief point to conclude on-----

Deputy Ruairí Ó Murchú

The Minister for Transport, Deputy Eamon Ryan, was here last week and we were talking about sustainable aviation fuel. He was talking about pilot programmes, and he specifically mentioned Shannon. I wonder if Ms Considine has any information, or if any conversations have happened about that.

Acting Chairman (Senator Gerry Horkan)

It was referenced earlier, but go ahead.

Ms Mary Considine

Regarding Deputy Ó Murchú's latter point, what I mentioned earlier on is that there is a unique opportunity not just for Shannon, but for Ireland, with the abundance of floating offshore wind on the Atlantic. As an estuary task force, we are looking at that, and how that could be enabled on the Shannon Estuary. If you bring that offshore wind onshore, then you are producing hydrogen and ammonia, but hydrogen in particular can be used for sustainable aviation fuels. As a country, we need to deal with the planning and the consenting as the first step. Thereafter, we could become a net exporter, and that is where there is this huge excitement and opportunity for growth.

On the point around the distribution of economic growth, aviation policy has a key role to play there. That is where we would look to this committee and the Government in the formulation of that policy, because air routes and aviation support economic activity in the regions. The Project Ireland 2040 plan is for a balanced, developed economy, as I mentioned earlier, and that is why connectivity into the regions is crucial.

In response to Deputy O'Rourke's point in relation to the offering, airlines are purely commercial and want a really strong demand case, so the more we partner with local stakeholders, including chambers of commerce, industry leaders, stakeholders across the region and, if it is a tourism route, Tourism Ireland which has been really supportive of routes in those earlier years, the better.

When we talk about connectivity into central or key hubs, there might be something to look at there. Tourism Ireland supports tourism routes. There is no mechanism to date to support those vital industrial links. If you look at our catchment area and the significant cluster of companies in the region, particularly foreign direct investment, they need to get their people and goods in and out to market. First and foremost, it is about keeping what we have, and then in enabling them to grow. That connectivity will be very important.

Looking to state aid rules, public service obligations, PSOs, are provided for. We tend to look at them domestically. There is a mechanism in Europe, and there are examples where there are PSOs between member states. It is really for that purpose, that is, for key economic routes to support economic development. There are opportunities there to look at things.

Acting Chairman (Senator Gerry Horkan)

I am going to bring the meeting to a conclusion. Again, I thank you all for all you are doing in your regions for domestic consumers, for tourists who come into your areas, for the businesses in your areas and for the people who live here now but who visit friends and relatives back home where they have come from and for bringing people to Ireland for all kinds of reasons. I look forward to visiting the airports we have not yet visited. I thank you all for your comprehensive opening statements and your very detailed engagement with so many different members.

The joint committee adjourned at 4.37 p.m. until 1.30 p.m. on Wednesday, 22 February 2023.