JOE GILL: Irish aviation sector can soar if the Government is willing

Other Irish industries could learn a thing or two from watching this airline competition play out, writes Joe Gill

Aviation took centre stage in Irish business last week and revealed the scale of opportunity in this fast-growing industry.

At the beginning of the week, aviation leaders came together, under the auspices of the Department of Transport, to debate the challenges in the sector.

The level of engagement by chief executives of various elements of the aviation market, including airports, airlines, lessors and regulators, was high. These parties have a genuine interest in supporting the development of aviation in Ireland, on the condition that policymakers and politicians respond with equal enthusiasm.

It may be hard to expect the political system to provide full-throated support, while Government is in a period of volatility, but, hopefully, there are forward-looking civil servants who can assess the potential and tap into a well of goodwill in the private sector at an appropriate time. If that is not seized upon, I would worry that industry leaders will lose interest as their commercial agendas take precedence.

How aviation can impact the real economy was illustrated late last week, when Norwegian Air Shuttle unveiled a range of transatlantic air services from Cork, Shannon, Dublin, and Belfast. This boost to tourism and competition is provided by a challenger airline, which has defied convention by deploying all new aircraft for both short- and long-haul services across Europe.

Two airlines that Norwegian competes against — IAG (Aer Lingus, British Airways, Iberia, and Vueling) and Ryanair — were vocal supporters of Norwegian’s application for flying rights between Ireland and the US. It says something about the culture in both carriers that they would endorse a new competitor’s right to compete, as a matter of principle, even though that implies intense competition.

Other Irish industries could learn a thing or two from watching this airline competition play out. It illustrates how free-market competition helps consumer choice and ultimately drives efficiency.

Instead of lazily opting for high levels of regulation and restricted competition, it is often better to liberalise individual sectors and allow the market to pick the winners.

Norwegian’s growth — and the inevitable reaction from competitors — will create jobs in tourism and airports, and among service sectors, including aircraft leasing, as it develops. We must encourage other airlines to follow suit and, by so doing, promote economic activity at all Irish airports, where possible.

Other parts of the aviation complex also offer potential for Ireland. The head of safety at Ryanair said at the Dublin conference that Ireland should aim to be a centre of excellence worldwide for pilot training. Given the vast growth forecast for aircraft demand in the next 20 years, there is a huge need for pilots. Ireland already has some success in this area, but it could turbo-charge that with the right political support. A number of Irish airports — including Kerry, Waterford, Knock, and Cork — have spare capacity. Weather conditions here are ideal for tough training regimes and third-level colleges have the ability to provide technical support to such schools.

Plenty of other opportunities — such as drone technology, enhanced leasing services, and maintenance support — can be exploited, if the political will exists to take risks in the interests of growth and jobs. Norwegian’s decision to bet millions on aircraft assets, running services from Ireland, deserves an equal-risk appetite from our government.

Joe Gill is director of corporate broking with Goodbody Stockbrokers.


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