Thursday 8 December 2016

Airports failed to come up with Plan B despite warnings

ANALYSIS

Published 25/08/2011 | 05:00

LIKE so many unexpected events in Irish life, this week's setback for two of the country's largest regional airports has been a long time coming and was well flagged as early as 2003.

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Michael O'Leary predicted the demise of six regional airports back in 2008 and consultants DKM published a scathing report on the nation's regional airports in 2003 which concluded that most would collapse in the absence of state-sponsored routes.

At the heart of DKM's concerns was the central role of state-sponsored Public Service Obligation (PSO) routes which are at the core of most regional airports' business models.

A further issue was the new EU rules that came into force three years ago and changed PSO guidelines by requiring member states to have "particular regard to other transport modes, especially where there are suitable train services with journey times of less than three hours".

Sligo, Knock and Galway are all less than three hours from Dublin.

Despite the overwhelming evidence that the old model was in trouble, little was done to prepare airports for these new commercial and regulatory realities.

Some airport managers admitted publicly that they didn't even have a Plan B if the PSO was abolished.

The first airport to shut, but almost certainly not the last, was Sligo Airport which finally closed its doors to commercial traffic last month although the air-sea rescue operation continues.

Back in 2003, DKM was already warning that Sligo was too dependent on its Aer Arann-operated PSO route.

"In the absence of some other form of subsidisation, Sligo Airport would close to commercial traffic (without the PSOs)," DKM concluded eight years ago.

Sadly, that prediction came true a few weeks ago after Transport Minister Leo Varadkar pulled the plug on the airport's PSO.

The decision means that it will be more difficult to attract foreign direct investment to the county and the north west, says the thoughtful Gerard Moore, president of the Sligo Chamber of Commerce and general manager of the thriving Sligo Park Hotel.

"We don't have that selling point anymore even though Sligo was designated a gateway city," says Mr Moore.

While the rail connection is good, there are still problems with the N4 road and planned improvements have been shelved to save money, he notes.

While this won't do too much to deter Irish people from travel it will deter business executives who enter the country through Dublin airport, Mr Moore adds.

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