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Ireland's airport funding: the future of regional airports

Regional airports have a role to play in most countries but they are often undervalued. Ireland has more of those airports than most, for its small population, but they consistently live in the shadow of Dublin Airport, which punches well over its weight.

The government has offered support to four small regional airports, one of which, Waterford, has no commercial services and was in real danger of closing down.

The question is why European banks such as the EIB and EBRD are not playing their part, while one of those organisations is granting loan money at Dublin Airport which, comparatively speaking, is not in such great need of it.

Summary

  • Four small Irish airports will receive government funding.
  • The biggest winner is Waterford Airport, which could have been the latest to be confined to history.
  • The question is: why Europe is not contributing more.

Dublin dominates Irish aviation but Ireland’s regions need their airports

Four of Ireland’s small regional airports – Ireland West, Kerry, Donegal and Waterford – will receive government funding, three of them under the government’s regional airports programme, while Waterford Airport is set to be ‘saved’ by exchequer funding to assist with the extension of its runway.

For a country with a population of less than five million, Ireland is full of airports, despite some commercial service closures in the last decade, such as at Sligo. Ten of those airports have IATA and ICAO codes.

Mathematically, that means that they each serve a 500,000-person catchment area, but in reality Dublin dominates, and not only the republic Eire but also the island of Ireland. Greater Dublin has one third of the entire population of Eire and Dublin Airport’s 31.5 million passenger total in 2018 was 13 times greater than second-placed Cork Airport.

With improved surface transport Dublin is more easily accessible now than it ever has been from throughout the island, and there have been voices raised in the past in support of closing down regional airports and focusing wholly on Dublin.

But that would mean the potential loss of industry and commerce throughout the island. The area around Shannon Airport in the west, for example, has benefitted from an influx of modern hi-tech industries. More importantly for the smallest airports, tourist visitors could also be lost.

There is already arguably an overconcentration on Dublin, and without regional airports accessible by direct flights most leisure visitors could head to Dublin and remain there (as is often the case in other countries with a dominant capital city attraction). And then there is the loss of, or reduction in, VFR (visiting friends and relatives) traffic, which makes up a sizeable proportion of Irish air passengers.

The island of Ireland’s main airports

Waterford wins its battle for recognition and funding

At Waterford Airport the local council and business interests fought a long battle to secure its future.

Situated 180km (110 miles) south of Dublin, the airport hasn’t serviced a commercial flight since Jun-2016, when the airline VLM folded. In that year there were just 13,500 passengers. Local supporters have always considered that there is sufficient commercial and leisure attraction in the locality, together with VFR traffic, to justify a select number of routes, mainly to and from the UK. The problem has mainly been its short runway, 1430m, which restricts operations. The other problem is that the government could have withdrawn support altogether and recommended its closure.

Judging from comments made by the City’s Chief Executive, tourism is at the forefront of the survival plan. In Oct-2018 he said an extended runway would provide "direct access for international visitors", which would "bring greater economic spend and benefit" to the region and "be a significant help in what is a growth story in tourism".

Waterford appears to have won the first battle, if not yet the war.

The Irish Minister for Transport said on 11-Jun-2019 that the Government would allocate EUR5 million of Exchequer funding to the airport to assist with plans to extend its runway from 1433m to 2280m, thus enabling it to accommodate larger aircraft. He added that the remaining cost of the project would be covered by private investor and local authority interests that have committed to funding for an equity shareholding in the airport.

News reports suggest this amounts to EUR7 million. The funding will be subject to the runway being confirmed ready by the Irish Aviation Authority, as well as the airport's completion of upgrade works.

Route selection needs to be highly focused on genuine potential

Assuming those confirmations and completions are made, the next job is to identify routes that are likely to bear fruit in the short term and to focus laser-like on them. London (ideally Luton), Manchester and Birmingham are the first to come to mind as those cities are where the bulk of the Irish diaspora in the UK are located and which have been successfully previously.

After that, to identify potential business and leisure routes (preferably both together) in mainland Europe. There have previously been charters to places such as Málaga, Faro and Bordeaux.

Realistically, the airport can forget about latching on to what is now a disappearing trend towards long haul trans Atlantic low cost travel, with established routes at other regional Irish airports being reduced or cancelled altogether.

Then there is the question of whether or not to attempt to attract Ryanair, which did operate at Waterford, but a long time ago – in 1985 – when it was a different kind of airline altogether, and when the airport terminal was a portable cabin. Having Ryanair onboard a fledgling new commercial airport offers both advantages and disadvantages.

Separately, the Transport Minister has allocated funding to three other airports under its regional airports' programme. Ireland West Knock (the site of a significant religious shrine and a privately developed airport which is the country’s fourth busiest) will receive EUR5.7 million.

Kerry Airport will receive EUR2.2 million and Donegal Airport EUR884,912. The funding will go towards investment in safety and security and will be distributed under two schemes: one to fund running costs and the other to cover capital spending.

The EU has painted itself as a friend of Ireland, but the European seem absent

So, the government seems to be coming down on the side of the regional airports but at the same time there must be conjecture about why more support is not coming from Europe, especially in the light of the perceived problems for Ireland that could arise from the UK leaving the European Union on 31-Oct-2019 with ‘no deal’.

The European Investment Bank, whose mission is to make a difference to the future of Europe by supporting sound investments that further EU policy goals, and which is concerned with infrastructure and SMEs, has made no known recent contribution to these airports, nor the European Bank for Reconstruction and Development, which works with the public and private sectors and tends to focus more on Eastern Europe and other continents.

And yet the EIB just announced it will provide a 20-year loan of EUR350 million to daa (the Dublin Airport Authority) toward upgrades at Dublin Airport, which it operates; the bank's largest ever transport related investment in Ireland.

Perhaps the time has come for these institutions to review their policies?

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