At today’s Joint Oireachtas Committee on Transport Liam Scollan, Board Director and Group MD, and Robert Grealis, CEO, Ireland West Airport Knock, urged the Government to address and amend a number of aviation policies which are adversely affecting growth at the international airport and which are conferring unfair competitive advantages to other airports in Ireland. The Airport was invited by the Committee, Chaired by Mr. Frank Fahey T.D., to present its views on issues affecting regional airports including the imbalance of access provided outside of Dublin Airport and how it can best plan for developing access to its region including long haul routes.
Liam Scollan, Board Director and Group MD, Ireland West Airport Knock comments: “Firstly, we acknowledge the capital investment by the Government in the expanding the Airport and note that we are making rapid progress in completing the terminal extension, safety and other enhancements required. However, we continue to have serious concerns over several anomalies in the aviation industry in Ireland which are distorting competition and adversely affecting our Airport and the region served by the Airport – the West and North West of Ireland.”
“The new Air Tax imposition is one of a number of current aviation policies which are having, and will have, an extremely negative impact on Ireland West Airport Knock. Earlier this year the Commission for Aviation Regulation (CAR) has sought a levy of €62,000 per year on our Airport despite the fact that the CAR has no direct remit for Ireland West Knock like it has for the Dublin Airport Authority (DAA).. This levy on our Airport effectively means Ireland West Knock is now subsidising CAR’s services to the DAA. Furthermore larger State airports enjoy free Air Traffic Control (ATC) services while regional airports like Ireland West Knock fund their own.”
Mr Scollan highlighted another deficiency in that some regional airports competing for the same business as Ireland West Knock receive substantial annual operational subsidies in excess of €500,000 per year. These subsidies encourage loss making at the expense of trying to run an efficient profitable business which has long term sustainability.
“Contrary to some perceptions, Ireland West Knock provides low cost aviation charges and is a profitable and independent airport receiving no operational subsidy with 97% of traffic stemming from international connections to 28 destinations,” said Mr. Scollan. “Subsidies that we are aware of are worth over €1m per year and distort the commercial market. This is something which the Airport can no longer afford to ignore.“
“Ireland West Airport Knock is responsible for contributing circa €75 million in tourism spend, supporting over 1 million bed nights and almost 1,000 jobs in our region. We want to ensure that the air access which we have invested so heavily in, and worked hard to achieve, over the last number of years in particular, is not threatened but supported for the benefit of the West and the national economy as a whole. In fact, instead of discouraging tourism growth with air taxes, there is much more to be gained by encouraging tourism spend into the region through more focused marketing of the 450,000+ low fares air seats made available for inbound tourists from the UK through Ireland West Knock.”
Mr. Scollan and Mr. Grealis raised a number of issues at the meeting which included:-
i) New Air Travel Tax: While Ireland West Knock acknowledges the right of Government to impose taxes, there are some major flaws in the Air Tax: It amounts to a tax on the regions because Dublin Airport passengers will be charged €8 less to major UK destinations; imposing such a major administrative burden on small regional airports could have a catastrophic impact; the task of communicating and collecting the tax should fall to a body like the Commission for Aviation Regulation (CAR) and the Revenue Commissioners who are best placed to deal with aviation tax and levy collections; more will be lost in tourism spend than gained in tax revenue.
ii) Commission for Aviation Regulation (CAR) Levy: The central levy placed by CAR on Ireland West Knock in pursuit of legal costs associated with its regulation of the DAA is totally unjust and unacceptable. This piece of legislation is anti-competitive and unfairly burdens Ireland West Airport for actions which it has no act or part in and has no place in the governance, support or maintenance of the Airport.
iii) Equitable Supports for Sustainable Airports: Airports provide a range of core public services (i.e. security, fire and ATC) at their own cost. In its current format, the Core Airport Operational Expenditure Scheme for regional airports only appears to subsidise loss making airports therefore rewards inefficiencies and does not recognise success. In addition, the State owned airports receive supports which Ireland West Airport Knock must provide for itself. The Airport is calling for a fundamental review and revision of this situation.
iv)US Customs and Immigration Facilities at International Airports: Ireland West Knock has succeeded in servicing and delivering scheduled flight services to the US in 2007 overcoming the then very significant legal obstacles which were not yet addressed through the Open Skies agreement. In aiming to re-instate US flight services and regain US tourism traffic to the West/North West region, the Airport must be provided with equitable marketing supports and facilities to be on a competitive parity with other international airports in Ireland. The Airport is seeking to be included in any future tourism marketing supports and planned public investment in immigration pre-clearance and CBP (Custom & Border Post) facilities to support its own drive to win back transatlantic routes.
Liam Scollan concluded: “We urge the Government to think more carefully about the air travel tax and the other instruments for aviation industry intervention. IWA Knock is governed by a Trust which has as its main objective simply to serve the people of the west of Ireland and its economy. Air travel has powerful impacts on tourism and international trading and plans made without due diligence and consideration of an overall national and regional strategy for aviation will only do more damage than good. We thank the Transport Committee for this consultation and for the opportunity to openly express and debate our views and in that spirit we will continue to grow and develop this Airport in the best interests of those we serve.”