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25/07/2021

Study recommends introduction of State fee per passenger at Shannon Airport

Study recommends introduction of State fee per passenger at Shannon Airport

Traffic levels through Shannon Airport have collapsed during the Covid-19 pandemic

A NEW study by regional business groups has recommended the State pays a fee for each passenger using Shannon Airport to grow traffic once aviation can fully resume.

Limerick Chamber has teamed up with its counterparts in Shannon, Ennis and Galway, plus the Irish Hotels Federation (IHF) to prepare the business case to help regional airports – which have seen traffic levels collapse during the pandemic – recover.

One of these recommendations is that government pay a fixed euro amount per passenger.

The group argues that the State must directly provide airports outside Dublin with a common fixed sum per passenger to enable the airports to stimulate traffic by reducing airport charges for airlines.

“This scheme should apply for the duration of the aviation sector’s recovery from the pandemic,” the report recommends.

Traffic through Shannon Airport is down almost 90% year-on-year, with commercial services out of the base grinding to a halt. No scheduled route has operated since early January from Limerick's local airport.

The grouping also want to see government provide multi-year Capex funding, which they feel will be required to enable the likes of Shannon navigate their way out of the current crisis.

A regional route marketing fund has also been recommended and allocated to Tourism Ireland, with a similar request already made by the aviation task force.

Making the case for a multi-annual funding plan, the representative grouping say that regional airports will require this type of sustained financial support if they are to compete globally and win back business.

“Ireland must adopt this approach, given that global governments have given €173 billion to their airlines since the onset of Covid-19, up to December 2020. The aviation sector will be a competitive marketplace once travel restrictions lift, with airlines favouring airports with lower airport charges and route support, facilitating fare reductions to attract and reignite passenger numbers’ growth. Ireland’s regional airports simply have to be enabled to compete,” they state.

The International Air Transport Association (IATA) has already flagged the types of measures that financially viable airlines will be seeking.

These include temporary waivers or suspensions of government charges, taxes, and fees to reduce flight costs and lower travel costs for passengers; route subsidies for flights to local and regional destinations to support connectivity for rural communities and business; financial incentives in the form of rewards for operating flights, or seats flown, which can support airlines while load factors or yields are too low; advance ticket purchases that governments can use for future trips or distribute to the traveling public in the form of vouchers to support travel and tourism and; passenger travel subsidies in the form of vouchers for passengers or as a percentage cash-back on overall travel costs.

Presenting their case, the grouping said that the collapse in international travel, through effectively halting aviation in Ireland, has the potential to cause further severe and long-term damage to a critical driver of our economy, if not given adequate long-term support.

“The aviation sector contributes an estimated €8.9 billion to Ireland’s GDP, with foreign tourists making a further €8.7 billion GDP contribution, it supports 140,000 jobs and attracts 8.8 million overseas tourists, arriving by air. That’s why we need a meaningful plan to restore connectivity to this island.

“In Shannon’s case for example, we need to restore the 40 flights a week from London to Shannon and the 45 transatlantic summer services that the airport had at peak schedule; the 16,000 North American and the 1,600 UK room sales that the airport delivers to Dromoland Castle Hotel annually; the 9,500 North American and the 1,500 UK room sales to the Shannon Springs Hotel; the 15,000 North American and the 3,000 UK room sales to the Great National South Court Hotel, Limerick; the 3,291 room sales that airline crews deliver to the Clayton Hotel, Limerick in addition to the 7,873 overseas leisure tour room sales and the 4,456 room sales delivered by Corporate groups with an average seven-day stay; the chauffeur services provided by Pat Keogh Chauffer Services to 20,000 overseas visitors arriving by air and the 3,723 air crew transfers provided by the company on an annual basis.

“Shannon and other regional airports must provide direct access to source markets, supply chains and key destinations for tourism, international business and leisure.

“Shannon will need year-round scheduled services to at least one hub in the UK, Europe and North America, peak season services to multiple destinations, a sustainable mix of long and short-haul services with a focus on quality of routes and markets served rather than volume,” the grouping states.

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