The Government should stop subsidising loss-making regional airports as it gives them an unfair advantage over the State-owned Cork, Dublin and Shannon gateways, according to the head of the National Centre for Tourism Policy Studies.
Last year the four regional airports – Donegal, Kerry, Knock and Waterford – received almost €5.7 million in State subsidies. More than €2.2 million was to cover losses at Kerry, Knock and Waterford, while €3.455 million was for capital spending.
University of Limerick economist and director of the National Centre for Tourism Policy Studies Jim Deegan argues that improvements in the Republic's road network have removed the justification for continuing to do this.
“We are subsidising far too many airports,” he said at the weekend.
Low-cost airlines
Mr Deegan said low-cost airlines operated on the basis of large numbers of people travelling. Subsidising regional airports discouraged this.
In a paper prepared for the Shannon Airport Marketing Consultative Committee, Mr Deegan says the subsidies received by regional airports may exacerbate their inefficiencies. He adds that the capital and operating cost grants received by these businesses confer "an unfair advantage on them relative to Shannon, Cork and Dublin airports".
The draft aviation policy document published this month by the Minister for Transport, Tourism and Sport, Leo Varadkar, says Exchequer support for regional airports will be phased out over an extended period, in line with EU guidelines.
Capital grants
It also says future capital grants will be limited to safety- and security-related spending while clear business plans will be required from the airports, which will have to provide at least 25 per cent of total costs from their own resources or from fresh investment.
Mr Deegan’s paper says that Shannon should be designated as the airport for the Wild Atlantic Way, the Government initiative aimed at boosting the number of visitors to the west coast.
He also says it should be the first airport in the Republic to get fifth freedom rights, which allow airlines to carry passengers between foreign countries.
He warns that the airport should not depend too heavily on domestic business.
