Aer Arann Express and Loganair have been awarded contracts for six regional air routes valued at £32 million over the next three years.
The State-supported services will link Dublin with six centres, including new Knock and Derry routes, and will include extra capacity/flights to and from Kerry and Galway.
Donegal and Sligo are also provided for under the Public Service Obligation (PSO) contracts, which have received EU approval.
Aer Lingus was one of two unsuccessful bidders for the routes, having tendered for Kerry only. Aer Arann Express has received the lion's share, taking over the Galway and Kerry routes from the national airline. It aims to provide extra capacity on both of these routes with 50seater ATR 42 aircraft. It has also been awarded the links to Sligo, Knock in Co Mayo, and Donegal.
Loganair, the Scottish equivalent of Aer Arann, will fly the new Derry-Dublin schedule. The Minister for Public Enterprise, Ms O'Rourke, who announced the details yesterday, said she was "particularly pleased" to welcome Loganair on the PSO network.
It will provide two daily return flights between Dublin and Derry, using a Shorts 360 aircraft.
State funding for the six routes has risen threefold, from £9.8 million in the 1998-2000 period to £32.2 million.
The Minister said the Loganair service should facilitate an increase in traffic to the Border region, which had "suffered from remoteness and a lack of a secure, fast transport infrastructure".
She also said the new service to Knock, using a Shorts 360 aircraft, would provide a "major boost for tourism and business interests", and would assist further economic development of the west.
There have been no scheduled air services on this route since 1995.
The Galway/Dublin route will have four daily return flights, while the Kerry/Dublin flight will have three. Aer Arann will add a fourth in the peak summer period. New specifications for the Sligo/Dublin PSO route require two daily return flights year round, compared to the existing requirement of two in summer and one in winter.
Mr Padraig O Ceidigh, managing director of Aer Arann Express, said he was delighted with the contracts.
"This is very much in line with the aggressive growth strategy which the company has adopted in the past 18 months," he said. His airline is negotiating with Aer Lingus to dovetail regional services with international flights from Dublin.
Aer Arann has been serving the Aran islands since the 1970s. In 1998 it introduced scheduled services from Dublin airport, where it now has a base. It expanded into Britain last month, with new routes between Dublin and the Isle of Man and Sheffield.
Its annual passenger figures have grown from 12,000 in 1999 to 70,000 this year, and are projected by the company to increase to 250,000 next year.
Reaction in Kerry to the announcement has been mixed, with open disappointment at losing the Aer Lingus brand name and jet service. But the decision to add a fourth Kerry/ Dublin flight during the summer was broadly welcomed.
Mr Jackie Healy-Rae, South Kerry TD, said he was "extremely disappointed" with the withdrawal of Aer Lingus and the fact there won't be a jet service on the route.
He is to seek an urgent meeting with the Minister, Ms O'Rourke, and Aer Arann to provide a jet service.
Tourism chiefs in Killarney said Aer Arann's invitation to set up a range of holiday packages with Kerry tourism interests will be good for business.
