Speech by Minister for Transport, Tourism & Sport, Paschal Donohoe TD, to CAPA Conference

Airlines in Transition – A CEO Gathering

INTRODUCTION

Good morning everybody. At the outset, I would like to thank CAPA for choosing to host its Airlines in Transition Conference here in this beautiful venue once again this year.

I am Minister for Tourism as well as Transport and am always delighted to welcome international conferences to Ireland. I hope that in addition to the very interesting work you will be undertaking over the coming days, that you also have the opportunity to enjoy your surroundings here in County Wicklow; known for good reason as ‘the Garden of Ireland’.

I was very glad to be invited to say a few words to you this morning. It is great to see so many important airline industry leaders coming together here in Ireland to discuss the many issues confronting the industry.

NATIONAL AVIATION POLICY

Ireland has always played an important role in the development of the aviation sector. We are very proud of the role Irish aviators have played and continue to play in the development of the industry both here in Ireland and abroad. 

As a small island nation we are far more dependent on aviation than our larger continental neighbours and trading partners. In addition, Ireland is among the most open economies in the world and this would not be possible without the connectivity provided by our air links with the rest of the world.

The importance of the sector for the nation as a whole is well recognised by the Government. Aviation is a key driver of economic growth and job creation. And I’m glad to say that in line with our very healthy economic recovery, the aviation sector in Ireland is also growing strongly. Last year 25.5 million passengers used Ireland’s airports – up 7% on 2013 and total flights in Irish airspace grew by 2.7%.

The sustained growth in Irish air traffic in recent years is very welcome.  It is encouraging to see this recovery in the industry taking hold after a challenging few years. Overall industry profitability is well up in 2014 with IATA forecasting further improvements in 2015. Lower oil prices are certainly one factor, but evolving business models are also contributing to profitability. And in addition this is all benefiting air travellers in terms of lower fares.

The Irish Government recognises the importance of having a clear policy framework in place that will create the right conditions for a growing industry. Such a framework will facilitate continued development and optimise the contribution the sector can make to the Irish economy.

Following an extensive consultation process over the last two years, the drafting of a new National Aviation Policy for Ireland is at an advanced stage and it will be published in the near future. The new aviation policy will contain a comprehensive list of actions and measures concerning safety, connectivity, airport infrastructure and the leasing and MRO sectors. It will also outline measures to improve the regulatory and governance arrangements in the sector.

The new National Aviation Policy will be designed to facilitate the expansion of the industry, help make it more competitive, tackle barriers to growth and facilitate the development of new air transport links. It will provide a basis for us to plan for the future.

MAINTAINING CONNECTIVITY

A key objective of the new policy will be to help ensure Ireland’s existing levels of connectivity are maintained and to encourage new routes into the future.

Future connectivity is of course among the issues that the Government is examining in the context of the current potential offer for Aer Lingus from IAG and the potential sale of the Government’s minority shareholding.

It wouldn’t, of course, be appropriate for me to go into the details here but I will say that Ireland has benefited greatly from the high levels of competition and connectivity currently provided in the market for air services in and out of the country and maintaining these benefits is a key issue for the Government in relation to the future of the State’s shareholding in Aer Lingus.

The Government also considers an open and competitive aviation sector to be the best mechanism to meet the challenges inherent in the aviation industry and strongly supports the maintenance of an open aviation market.

CONFERENCE THEMES

I can see that evolving airline business models and the impact of emerging trends around the globe are at the core of the panel discussions at the Conference. The debate will certainly be helped by the very interesting mix of speakers from around the globe and from different airline models.

Ireland has a lot of experience of different airline business models. Whatever about the pros and cons of these different models, what I can tell you is that Ireland’s experience of liberalisation of aviation markets and our policy of encouraging innovation in the industry has been of huge benefit to both the sector and its customers.

Compared to a few decades ago airlines now have a lot more freedom to operate and consumers enjoy more choice, lower fares and more opportunities to travel.

Obviously like all international trade, there needs to be checks and balances in place to ensure business is conducted fairly. However, given the benefits that have ensued from liberalisation, it is difficult to see how attempts to reverse such policies would help address the competitive realities of today international market.

The EU’s internal ‘Open Skies’ policy has been a huge success since 1992 and Ireland continues to strongly support the extension of these policies to key third country markets and at a global level.

CONCLUSION

I recognise that there are strong views on these issues and there is significant debate at present both in the context of the EU internal market, and in the US, in particular.  In recent days the EU Commission has launched a public consultation process on a new aviation package to improve the competitiveness of European aviation.  This is very welcome as we are at an important juncture for the future development of aviation in the EU and globally. 

This annual event is recognised as being a very important contributor to the global debate on aviation. Unfortunately my schedule doesn’t allow me to stay to hear your views in person but I look forward to hearing about the discourse over the coming days and I wish you all a very successful and enjoyable Conference.

ENDS

Date of Speech: 
Wednesday, 25 March 2015