Airports’ futures in doubt amid subsidies cut

THE future of Galway, Derry, Sligo and Knock airports has been thrown into doubt as the Government announced it was scrapping subsidies for several regional air routes.

Transport Minister Noel Dempsey confirmed yesterday that services between Dublin and Derry, Galway, Sligo and Knock will no longer receive public money to help them operate.

However, there was some relief for Kerry and Donegal regional airports as the Government agreed to support the continuation of a PSO route between Donegal and Dublin and between Kerry and Dublin.

Mr Dempsey said improved rail and road services meant the Government was withdrawing the so-called public service obligation (PSO) contracts on the four routes from July.

The minister also claimed there was no justification for continuing a level of expenditure on the regional airports programme that was no longer sustainable.

“Alternatives to air services, specifically travel by rail and road, have greatly improved since the Regional Airports Programme began, particularly with Government investment under Transport 21 in recent years. It must also be borne in mind that there are many demands on the Department of Transport’s vote and trying to maintain a level of expenditure on the Regional Airports Programme, which is no longer sustainable, would impact negatively on other areas such as public transport provision and road maintenance,” he said.

The Government was acting on the recommendations of a value for money review on the use of state funding for regional airports.

Representatives of regional airports had previously warned that PSO cuts could force them to close down, costing hundreds of jobs and damaging regional developments.

The move will pose problems for Aer Arann which had €39 million worth of contracts to operate the routes between 2008 and 2011.

The Government was paying for €15m a year worth of PSO routes which operate in and out of regional airports and are provided mainly by state contracts with Aer Arann. Under the scheme, the state subsidises flights which would otherwise not be economically viable for airlines to operate.

Between them, Galway, Knock, Donegal and Sligo airports employ 253 people directly and 130 people indirectly in areas that are often considered economic black spots.

Earlier this month, it was announced that almost a third of the workforce at Kerry Airport is to be let go in a bid to safeguard the future of the regional hub.

A spokesperson for Aer Arann, which operates the four threatened routes, said the airline was not interested in continuing the services without subsidies as they were not profitable on a purely commercial basis.