Shannon and Cork want changes to State aid rules for airports

Airports want threshold for funding support raised from 1m to 3m passengers

The Shannon Airport Group will tell the committee it should also be included in the programme supporting regional airports and 'therefore a policy change is required'.

Cork and Shannon airports have urged the Government to revise State aid rules, as Cork Airport warned its future growth was facing a “very challenging financial situation”.

Kerry Airport, meanwhile, is calling for a “one-time only” show of support to help fund its plans to grow the airport as it hopes to expand connections to London Heathrow and Amsterdam Schiphol.

Representatives from Ireland’s regional airports will on Wednesday address the Oireachtas transport committee on Ireland’s national aviation policy.

Cork Airport managing director Niall McCarthy will tell the committee the airport was not eligible for funding under the Regional Airports Programme prior to the pandemic.

Under the programme as it currently exists, it provides funding to support airports with fewer than 1m passengers a year. While Cork and Shannon became eligible for this during Covid-19, the rebound in passengers would mean they cannot in future.

In his comments, Mr McCarthy will say his “primary ask” is that the Irish State could now change this policy post-Covid under EU rules as continued investment by the State in Cork Airport would yield results both for the local economy and tax revenues.

While Cork Airport expects to welcome 2.4m passengers this year, it hopes to reach 3m per annum in the coming years and then move beyond that.

“We are incredibly grateful for the supports received from the Department of Transport over the last three years and it is testament to that support that Cork Airport has rebounded extremely well from the effects of the pandemic,” he will say.

“We would now ask that the eligibility threshold for State aid in regional airports in Ireland is aligned with the EU norm, that is, providing access to the programmes funding for all airports in the State that cater for less than 3m passengers annually.” 

Allowing this parity would allow Cork Airport to continue its “strong growth trajectory”. Furthermore, capital investments funded by the scheme would be “focused on the key area of sustainability and addressing the global climate challenge”, Mr McCarthy will say.

The Shannon Airport Group will tell the committee it should also be included in the programme supporting regional airports and “therefore a policy change is required”.

“The work we did with this funding [during the pandemic] demonstrates how important it is for Shannon to remain in the programme,” it will say. 

“Accessing this funding will ensure that Shannon Airport can continue to invest in safety and security projects, decarbonise its operations and ultimately continue to grow connectivity to deliver economic benefits for Ireland."

Addressing the committee previously, Junior Transport Minister Hildegarde Naughton said the Government would have to consider the exchequer implications of such a move.

“Currently, Cork Airport is outside the threshold for [2022] and [2023] because it is doing so well,” she said.

“Shannon Airport is doing very well; it is almost at 1m passengers. We have to look at the exchequer implications if we increase the threshold to 3m passengers in addition to the impact it would have on other airports throughout Ireland.” 

Kerry Airport chief executive John Mulhern, meanwhile, will call for a “modest decentralisation” of air traffic to help support Kerry’s growth, which could be limited to a supported connection to Heathrow or Schiphol.

“A new route will typically result in, even on a twice weekly rotation, 1,200 additional tourist bed nights per week during the summer season,” he will say. 

“One can see how positive that is on all areas of a rural economy including for employment and local SMEs.

"To accommodate this growth, Kerry must expand but expansion is costly. I would ask the committee on a one-time-only basis, as I believe was done in the past for others, to consider supporting this expansion and enable us to grow and increase support to our local economy.” 

Mr Mulhern will also say that, if Ryanair’s position regarding the Dublin-Kerry route were to change, that re-establishing the route on a public service obligation basis be part of any future Department of Transport aviation policy.