The Minister for Transport, Tourism and Sport Leo Varadkar, has announced plans to develop the first ever civil aviation policy for Ireland at the Aviation Policy for Ireland conference in the Convention Centre, Dublin.
Over 400 delegates are today attending the Aviation Policy for Ireland conference organised by the Department of Transport, Tourism & Sport and the Irish Aviation Authority. (Later today Minister Varadkar and Minister Richard Bruton, and Ministers of State Jan O’Sullivan and Alan Kelly, will announce Government plans for Shannon Airport and Shannon Development.)
Speaking at the conference, Minister Varadkar said: ‘The aviation sector is critically important to a small open economy like Ireland. It provides direct employment for 20,000 people and indirect employment for many more’.
“As an island, air access is vital for our tourism industry, our exports, and our relationship with the rest of the world. Ireland has a very long and proud tradition in aviation with many of our companies recognised as world-leaders in their fields.”
The conference is being attended by representatives from all parts of the aviation sector and many associated industries and services in Ireland and by representatives from some international organisations including:
- Eamonn Brennan, CEO, Irish Aviation Authority;
- Sean Flannery, Executive Vice President GE Capital Aviation Services;
- Christoph Mueller, CEO Aer Lingus;
- Michael O’Leary, CEO Ryanair;
- Colm McCarthy, Economist UCD;
- Conor McCarthy, Executive Chairman, Dublin Aerospace;
- Peter O’Neill, President, American Chamber of Commerce Ireland;
- Jim Wolfe, General Manager of Air Traffic Policy, Department of Infrastructure & Transport, Australia;
- Brian Pearce, Chief Economist, International Air Transport Association;
- Olivier Jankovic, Director General, Airports Council International Europe.
The conference is the first stage in the development of a national aviation policy. This new policy will be designed to expand the Irish aviation industry, make it more competitive, and tackle barriers to growth.
“I want to ensure that overall Government policy supports the industry and promotes growth. That’s why I’m launching this process to develop a meaningful policy framework, supported by the industry, and which allows us to plan for the future of this vital industry,” Minister Varadkar said.
The Minister said consultations will take place with the industry throughout 2013 with the aim of publishing a policy framework in early 2014.
The business of aviation is the business of safety, said Eamonn Brennan, Chief Executive of the Irish Aviation Authority (IAA), sponsors of the joint conference.
“Safety is what underpins the aviation sector. There wouldn’t be an aviation industry without the highest levels of safety. The traveling public, the carriers, those who lease and invest in aircraft, they all need the assurance that the highest levels of safety are maintained. As the safety regulator, we are very proud that we are ranked third in the world in aviation safety by ICAO, the International Civil Aviation Organisation, above even such major players as the United States and most of Europe.”
Mr Brennan also highlighted the reputation that Ireland has in the aviation sector and the need to further capitalize on this reputation.
“We punch way above our weight in world aviation and we need to capitalize on that. Twenty five per cent of all aircraft leased in the world are leased out of Dublin. We are recognized innovators: we put together the first large aviation-leasing outfit in the world, GPA. We are home to the largest low-cost carrier in the world. We have driven some of the major innovations in engine technology, in maintenance, and in financing. We can capitalize further on the value of this vital sector.”
Department of Transport, Tourism and Sport: 01 6041090 / 01 6041087
Keynote address by Leo Varadkar, Minister for Transport, Tourism & Sport at the Conference on a Civil Aviation Policy for Ireland, Convention Centre Dublin, December 3rd
Speaking as Minister for Tourism as well as Minister for Transport & Sport, I want to offer a special welcome to those of you from overseas and I hope you have the chance to spend some time sampling what Dublin has to offer and traveling further afield.
Firstly I should like to thank Anne Nolan and her fellow Directors on the board of the IAA and the Chief Executive Eamonn Brennan and his team for sponsoring this event today and managing all the logistical arrangements. Their support in getting this process off the ground is very much appreciated.
I’m delighted to see such a large attendance and I want to thank you for taking the time out of your schedules to join in our discussions today. The purpose of today’s event is to start a debate about the future of civil aviation in Ireland and to take the first step in the development of a new national civil aviation policy.
What I hope to achieve over the next year or so – and all of you as stakeholders will have a role to play in this - is to put in place a new policy framework to guide decisionmaking for the sector over the next 20 years.
I am not interested in developing a policy statement for that sake of it, nor one that will gather dust on the shelves of my Department once it has been launched. I want to ensure that all stakeholders have an opportunity to have their say and that the policy we eventually adopt will be one that is supported by the industry and will provide them with the certainty and incentive to plan and invest for the future.
Outline of the process and timeframes
In designing the structure of today’s proceedings, we have attempted to hone in on a few key topics including access, competitiveness, the international and European context and innovation in the sector. We have a very distinguished line-up of speakers and panellists and I know that the debate today will provide us with plenty of food for thought. In particular, I want to welcome Jim Wolfe from the Australian Department of Infrastructure and Transport. Australia has gone through this process recently having adopted a new White Paper on Aviation Policy as recently as 2009. I am sure that we can learn from their experience as we set about the same task.
I want to emphasise though that today is simply the beginning of the process and the start of the debate. My intention is to go out to consultation in early January to seek all stakeholder views and then consult with the industry again in late 2013 before finalising and adopting our policy in early 2014. I hope that today’s conference will stimulate plenty of discussion and ideas that can be developed further over the course of next year.
Since coming into office, I have dealt with a large number of important aviation issues and I will speak about some of these in more detail later. But I am conscious that many important decisions on aviation taken by Government over the past few decades were made on an ad hoc basis without having an overall vision for aviation in Ireland. I am surprised to some extent that we haven’t ever gone down the route of devising a comprehensive aviation policy given the strong aviation tradition that we have in Ireland. That’s what I want to change.
Reflections on the past
I want to reflect for a few minutes on our long and proud aviation tradition and how the sector has developed in Ireland.
From the early days of air transport, Ireland has played a bigger part in aviation globally than our size and population would suggest. Ireland, and particularly Irish aviators, have been to the fore in shaping the course of global aviation. Just a few examples:
- 1919 – Alcock & Brown landed in Clifden having successfully completed the first ever non-stop transatlantic flight;
- 1928 - Colonel James Fitzmaurice from Dublin co-piloted the Bremen which made the first east to west crossing of the Atlantic, taking off from Baldonnel Aerodrome on 12 April 1928;
- 1930s and 1940s – Foynes played a critical role as the hub of aviation activity between Europe and the US during this period. You can still visit the original terminal and see one of the old sea-planes at the Flying Boat Museum;
- 1936 saw the establishment of Aer Lingus and the Customs Free Airport Act of 1947 made Shannon the first duty free airport in the world. This was followed by the establishment of the Shannon Free Airport Development Company in 1956 to develop industry around the airport;
- 1970s – the late Dr Tony Ryan established the ground breaking aircraft leasing company Guinness Peat Aviation and later Ryanair, now one of the biggest airlines in the world;
- 1980s – establishment of Aer Rianta International and it’s hugely successful role in the development of airport retail.
In short, for Ireland, aviation is in our DNA. But, enough with the history lesson. What about today?
Today, the aviation sector contributes €4.1 billion to our economy or 2.6% of our GDP. Foreign tourists, most of who come by plane, contribute more again. Aviation firms contribute almost €500 million in taxes. In 2011, over 23 million passengers used Ireland’s airports, more than 88 million passengers travelled on Irish licensed airlines and approximately 520,000 flights used Irish airspace including 200,000 international arrivals and departures, and 300,000 over-flights.
The sector provides direct employment for over 20,000 people in airports, airlines, the MRO sector, finance, leasing and regulation and many more jobs indirectly in related services. Given this scale of activity and the importance of the sector from an economic stand-point, it is clearly deserving of attention and, specifically, a clear policy framework to facilitate its continued growth.
Since my appointment of Minister, I have met a large number of international airlines and other international aviation companies and I’ve been struck by the large number of them who have Irish people on their team – people who had cut their teeth and learned their craft here in Ireland working for companies like Aer Lingus, Aer Rianta, Ryanair and GPA amongst others. Many of these people are in key positions of influence and as we all know, some are leading the world’s major airlines and aviation companies.
The term ‘punching above our weight’ is over-used but it is certainly true when it comes to Ireland’s role in the development of global aviation. The fantastic talent that exists in the sector is the driving force behind its growth and the leading global position that many of our companies have attained. The Government is keen to work with the industry to ensure that its full potential can be achieved both for the industry’s benefit and for the benefit of the Irish economy and society.
We are fortunate to have a very competitive airline industry with significant direct connectivity available, especially with the rest of Europe but also with the US and more recently with destinations to the East. Liberalisation of the European air transport market in the 1990s has been hugely beneficial for consumers and Irish airlines have been to the fore in capitalising on the opportunities it created and have made air travel accessible to more people than ever before.
There has been very significant investment in infrastructure in the three State-owned airports in recent years, culminating in the opening of T2 in Dublin just two years ago. Unfortunately, since 2008 we have witnessed a very serious fall off in passenger numbers.
We now have more significant infrastructure and capacity at all three State-owned airports than we currently need. We now need to make use of the capacity in any way we can.
The MRO sector has faced a number of challenges in recent years but the excellent reputation of Irish MROs is sustaining the sector and is a key attribute in attracting new business.
We have become one of the largest international hubs for the leasing industry and aircraft management activities with a substantial number of companies located in the IFSC in Dublin and Shannon. The industry faces growing competition from other jurisdictions both in leasing and associated aviation finance activity and the Government is committed to working with the industry to ensure that we take all possible steps to maintain Ireland’s leading global position in this area and we do not want to allow other countries to eat our lunch.
There are a number of important issues that have had to be addressed since I came into office.
One of the first issues I addressed was to rationalise and clarify the system of State support for regional airports recognising the dramatic impact of the completion of the major inter-urban motorway network. The Government has a settled policy in this regard. Since the start of 2012 funding under the Regional Airports Programme has been consolidated on Donegal, Ireland West at Knock, Kerry and Waterford airports. Furthermore I have also clarified the available funding for the Regional Airports Programme over the period 2012 – 2014 with €13 million available for capital expenditure and €29 million available for current expenditure over this period. The focus now is on regional airports working towards financial sustainability over the coming years and the Government will support them in achieving this.
Future of Shannon
There has been much media coverage in recent days about the future of Shannon Airport.
For those from further afield who may not be aware, the Government here made a decision in principle last May to separate Shannon Airport from the Dublin Airport Authority (DAA) and establish it as an independent airport in public ownership. It also decided to restructure a State-owned agency based in Shannon, Shannon Development, and merge that restructured entity with the airport to establish a new company (or NewCo) responsible both for the airport and the development of its land-bank for aviation-related and other industry.
The old model was broken with Shannon Airport in rapid decline and Shannon Development no longer able to fund itself from its property activities. There are risks in proceeding with this ambitious new project but the risks of doing nothing or persisting with the old model are much greater. And while there are risks, there are also enormous possibilities for aero-industry, new passenger services and additional military flights. To succeed, the business plan requires passenger numbers to recover to 2.5 million by 2021. This is very achievable when you consider that passenger numbers peaked at 3.6 million a few years ago.
That’s all I’ll say here this morning. I will announce more details at a press conference that has been arranged for 12 noon today here in the Convention Centre accompanied by Ministers Richard Bruton, Jan O’Sullivan and Alan Kelly.
I have also decided to rationalise the institutional arrangements for the regulation of the sector and I intend to bring together the economic regulatory functions currently carried out by the Commission for Aviation Regulation and the safety regulation functions of the IAA in one regulatory agency and establish the IAA’s air traffic service provider as a separate company. This is necessary to bring us in line with best international practice and to take account of emerging EU developments.
The Programme for Government commits us to working with the regulator and State companies to control airport and aviation charges which rose under the last government. The IAA’s terminal and en route charges were reduced in 2012 and will fall again next year. While DAA charges have not fallen, they have priced below the regulatory cap at Dublin in 2011 and 2012 and while they intend to price to the cap in 2013, the cap is estimated to go down. In a nutshell, IAA charges are going down and airport charges are flat or even falling a little in real terms. The Departure tax remains unchanged at €3 and is considerably lower than that in other countries and we remain ready to abolish it altogether should the conditions be right.
Indeed, I was interested to read the evidence given by the CEO of a major low cost carrier to the UK parliamentary committee on transport last month in which he lambasted British travel taxes, aviation policies and airport charges saying, and I quote:
‘It's now much easier for us to take someone from Ireland to Spain or to France or to Italy than it is to take them here to the UK’
and that the APD traffic tax imposed by the UK government played a role in the ‘huge collapse’ in travel between Britain and Ireland. I suspect, we may hear a different story later on this morning.
As you know, in a few weeks’ time, I will take up the presidency of the EU Council of Transport Ministers. It’s an exciting time with a lot of work being done on the Airports Package including issues such as noise, goundhandling and slot regulation. I also hope to get started on the new Passenger Rights Directive which should be fun.
I am pleased that the European Commission is adopting a pragmatic approach to the ETS by deferring its application in order to allow more time for an international solution to be developed. I support applying emissions trading to aviation given its impact on global warming but I do not think we should disadvantage ourselves as a continent or be so naïve to think that anyone looks to Europe for leadership at present given the condition of our currency, economy and political institutions.
In other areas, I would be interested in hearing your views on the relaxation of ownership rules with regard to airlines and whether you agree with the Government’s willingness to extend fifth freedom rights to non-EU airlines establishing new routes to Ireland.
The Gathering 2013
On the tourism front, you’ll all be aware of the Gathering 2013. It will begin with the New Year’s Eve celebrations here in Dublin city and will be a year-long celebration of Ireland, Irish people, culture, music, sport and food. Already, over 1,500 Gatherings have been pledged all over the country. Needless to say, Irish airlines and airports will have a key role to play in the success of that initiative.
I’ve had a very positive response from the industry with a number of airlines having recently announced plans to increase capacity on existing routes into Ireland and to introduce some new routes in 2013 and that’s very welcome. I greatly appreciate the industry’s support and I think there is a great mutual benefit in our working together to ensure the success of this initiative.
Looking to the future
My overall objective in launching the development of a comprehensive aviation policy is to provide the industry with the certainty and incentives to plan and invest for the long term, to improve competitiveness, to improve Ireland’s connectivity and to maintain and improve aviation safety and security. As I said earlier, many parts of the industry in Ireland are already regarded as world-class and we want to ensure that the policies we pursue help the industry to sustain that position and become the envy of the rest of the world.
So, let’s get down to work. I look forward to hearing the contributions today and to engaging with you in the coming months during the consultation process which my Department will commence at the beginning of January through our website.