Formulating a plan to get airport flying again

The chief executive of EMC, the large IT employer based in Cork, is critical of his local airport.

He argues that a greater number of services are needed to help support existing industry and help stimulate further economic investment.

This is a thorny issue. Airports are pieces of infrastructure that can provide critical gateways to a regional economy. They are a classic example of multiplier economics, as large numbers of passenger and cargo volume help generate ancillary jobs in local transport, eateries, and accommodation, among more sectors.

This multiplier effect has been in reverse at Cork since the economic collapse of 2008. The combination of a contracting economy and the completion of a large new terminal, funded primarily by borrowing, has left Cork with oodles of capacity but a heavy burden of debt too.

The Dublin Airport Authority recently appointed a new chief executive from the private sector, and his challenge is to ensure the State airport finances are nursed to better health, while simultaneously attracting airlines to expand. Balancing these priorities will require deft decisions.

The Government can help this process. It must give the DAA a clear direction about what its strategic role is in the Irish economy. Should it own and manage assets outside of the State (which proved successful in the past) or should all of its focus rest on making the Irish airports super-competitive, with very low amounts of debt attached?

If the latter is chosen as a core purpose, then it may help clarify how the airport, the taxpayer via the Government, and the airlines could behave.

The Government could make a decision its the next budget to eliminate the €3 tax per departing passenger. Such a move would create clear blue water between Ireland and the UK.

The latter is imposing a succession of tax increases on air travel, all of which inhibit demand.

The elimination of that tax at Irish airports would make them more attractive to airlines, not only those servicing other European destinations but also destinations in the US.

We have unique pre-clearance facilities in Ireland that help passengers avoid the long delays at US airport customs facilities. Zero departure taxes and lower debt in the DAA (potentially via disposals of non-Irish assets and through improved trading) could produce a formula that stimulates short- and long-haul carriers.

For Cork, the growth agenda should focus on:

* Bringing weekly direct long-haul flights to and from the US by targeting services from existing Boeing 757 operators while future planning for Airbus A321 NEO and Boeing 787 equipment.

These aircraft are all capable of operating on the Atlantic from Cork’s main runway;

* Assessing the benefits of a strip taxiway that can remove the inefficiency of aircraft backtracking on the main runway;

* Targeting a twice daily service between Cork and Dublin that connects with transatlantic travel. This would be assisted by eliminating the air travel tax but must primarily target business travellers and support of industry in the Cork region.

Delivering a series of incremental service additions at Cork Airport could help both the airport and the local economy.

It requires a combined effort from private and public bodies.