Ireland

Recovery in Irish aviation requires substantial Irish Government cash


Shortly after midnight on Saturday morning, Stobart Air workers received emails telling them of the airline’s closure. Its owner, British aviation and energy business, Esken, pulled the financial plug on the carrier after hopes of a sale were dashed when the buyer could not raise the cash needed.

“It was like a bereavement,” said one pilot, whose partner had to wake her to pass on the bad news. She was due to start work as usual just a few hours later that morning. She is one of 480 Stobart staff who lost their jobs when the airline folded. Most fear they face a long wait before working again.

“At least 12 months,” said another, who added that he “didn’t know of any airlines hiring pilots at the moment”. He warned that extra restrictions imposed by Government on non-vaccinated travellers from Britain this week was a further blow to the industry.

Pilots spend large sums of their own money training for their careers. None of those who lost their jobs at Stobart, which operated the Aer Lingus Regional franchise, ever expected to see their jobs disappear so suddenly.

Stobart’s closure pushed the number of jobs lost in Irish aviation due to tough Covid-19 travel restrictions well past 4,000. They include around 2,000 voluntary departures in DAA, the company responsible for Cork and Dublin airports and more than 1,000 in Aer Lingus.

Capt Evan Cullen, president of the Irish Airline Pilots’ Association (Ialpa), the union that represents pilots in the Republic, warned at a protest outside the Department of Health this week that 5,000 more could follow if both the Government and its public health advisers did not change their tough stance on travel.

The Ialpa protest, attended by hundreds of uniformed, masked, flight officers from across the industry, focused on the State’s ongoing opposition to rapid antigen testing for international travel. On the National Public Health Emergency Team’s (Nphet) advice, the Government continues to demand that incoming passengers prove their health with negative results from slower PCR screening.

And though such tests are free to incoming passengers five days after their arrival, most passengers have to pay for one of these more expensive tests before being allowed to board a flight into Ireland in the first place.

A row over either system’s applicability to travel has become a flashpoint in the wider debate about aviation’s future. Chief medical officer, Tony Holohan, and his Nphet colleagues, say they have no evidence to validate rapid antigen testing for international travel.

However, infectious disease expert and Harvard professor Michael Mina has dismissed Irish public health officials’ view of rapid testing as flawed. He argued before the Oireachtas Joint Committee on Transport and Communications last week that antigen screening was “a very powerful tool”, ideal for detecting potentially infectious passengers before they boarded aircraft.

Holohan and other Nphet figures held their line before the same Oireachtas committee this week, but dismissed claims that the group was opposed to the use of rapid testing in any situation, noting it had supported schemes to validate its use in other settings, such as meat processing factories.

Without delay

Cullen called on the Government this week to heed the science and add antigen testing to the Republic’s safeguards without any further delay. Ialpa argues that the Cabinet’s and Nphet’s views are costing its members jobs while endangering aviation as a whole, with obvious consequences for the prosperity of an island nation.

Demonstrators carried placards accusing the Government of sacrificing Stobart, betraying its workers and destroying aviation. It is clear that those hit hardest by travel restrictions blame the Cabinet, Holohan and Nphet for their misfortune.

Stobart pilots who joined the protest speculated that they might still have jobs had the Government adopted rapid testing, whose use the EU Commission endorsed last year, and softened its position on travel generally. “Who knows?” asked one of a group who showed up at the Department of Health on Baggot Street on Wednesday.

The union has invited Holohan to take part in a debate with Prof Mina that it plans to host on Monday. Cullen said that Ialpa had written several times to the chief medical officer, but had yet to get a reply.

However, Holohan’s own remarks to the transport committee could signal an early shift in the antigen testing debate when it comes to travel within Europe. Shortly after the pilots’ protest, he told TDs and senators that once progress on vaccinations continued here and in Europe, “we will see extensive resumption of airline travel in the late summer without the need for any form of testing”.

The chief medical officer went on to say that this was notwithstanding fears about Covid strains such as the delta variant that has slowed re-opening in Britain.

He added that Nphet favoured the introduction of the EU digital Covid certificate, which will allow anyone who has been vaccinated or recovered from the virus to travel “without the hurdle” of testing. Holohan maintained that this already covered a significant number of people.

Minister of State Ossian Smith told a conference last week that the Government was ready to issue more than a million digital certificates to people who had registered for vaccination through the Health Service Executive’s portal. In addition, it would soon be able to do the same for a further 1.3 million on the basis of data from GPs and about 250,000 who have recovered from the disease. So almost 2.6 million people already qualify for the certificates on the basis of inoculation or immunity.

Smith explained that there will be three types of certificate – for vaccination, recovery or confirming a negative test – adding that screening will continue to play a role in re-opening travel.

The Irish certificate system is ready as of last week and will plug into an EU-wide structure allowing all member states to validate each other’s certificates. The initiative, driven by the European Commission and backed by legislation as of this week, is meant to end the patchwork of conflicting virus travel curbs across the bloc.

MEPs including Billy Kelleher, who spoke at the same conference hosted by the European Commission Representation in Ireland and European Movement Ireland last week, reminded the audience that Covid-19 had ended citizens’ rights to travel throughout the EU.

Global fallout

That was a reminder that aviation’s woes are not restricted to the Republic. The industry across Europe and the wider world continues to grapple with the pandemic’s fallout. Early this week, a threat emerged to the future of 500 jobs at Lufthansa Technik in Shannon, whose German owner is reviewing the aircraft maintenance operation in light of Covid’s global depredations.

Lufthansa has discussed selling the Shannon business to local player, Atlantic Aviation Group, which has been on the hunt for acquisitions, so there is some hope that it can be rescued. However, doubts over its future remain until at least next month. Its closure would bring total job losses to around 5,000, roughly equivalent to the number employed by DAA before the pandemic struck.

Earlier in the year, the overall picture in Europe had been even bleaker. According to Bank of America’s Sky Tracker, bookings for flights within the continent were around 25 per cent of 2019 levels in the first quarter. But since then, and particularly from May, they have been accelerating.

In the seven days to June 6th, they improved to 44 per cent, according to the bank. Ironically, given ongoing tough restrictions here, the figures show that Ryanair is one of the airlines leading the way in European travel’s revival. It was operating at around 45 per cent of 2019 capacity that week.

The group itself is hoping to carry around four million passengers this month, positioning it to increase that to seven to nine million in July.

Eurocontrol, the organisation of air navigation authorities in Europe, says Ryanair has added 800 extra daily flights since June 1st. The Irish group had 1,010 flights on Wednesday, June 9th, making it Europe’s best performer.

Overall, Eurocontrol’s latest numbers show that, on that date, there were 15,580 flights on the continent, 44 per cent of 2019 levels which the industry now benchmark as “normal”. EU members including popular holiday destinations such as Spain, Greece and Italy all showed flight numbers growing by more than 30 per cent in the opening days of this month.

Different

The picture in the Republic is different. Eurocontrol’s latest briefing on the situation here, issued in the first week of June, shows that there were just 181 flights in and out of the State every day, 20 per cent of 2019 levels. The Republic has lost 282,000 individual flights since March 2020. Our recovery is likely to lag the rest of Europe, with 43 per cent of pre-Covid traffic returning by the end of the year, against around half for the rest of the EU.

Ryanair re-started flights from Shannon this week, but has said that it will not be moving any aircraft back to the Republic this year. Aer Lingus meanwhile is pressing ahead with plans to launch transatlantic services from Manchester, using Airbus jets originally earmarked for Irish airports.

The airline confirmed this week that it was postponing the launch of Manchester flights to New York JFK and Orlando in Florida from July to September, as ongoing restrictions continue to hamper transatlantic travel. However, flights from the English city to Barbados will begin as planned in October, it says.

Luring airlines back here will be a big challenge, assuming the State re-opens travel as promised on July 19th. The Department of Transport says that some of the €300 million in aid that the Government has pledged to the industry is meant to fund airport incentives to do just that, through discounts or rebates in passenger charges.

Kevin Thompstone, director of Shannon Chamber, points out airports in Denmark, Spain and Cyprus, are all offering such carrots to airlines. Speaking on the current Irish Times Business Podcast, he says the Government could support Irish airports in applying a version of the Spanish approach, which ties passenger charge rebates to the number of people that the carriers bring in, benchmarking that against 2019 totals.

“So let’s say, take July of 2021, if any airline in July is to hit, we put a threshold of 35 per cent of the traffic that it achieved in July 2019, then it gets back the same proportion of charges,” he explains. The threshold is dropped during the winter, to allow for lower demand, but increased to 50 per cent next year and progressively up to 70 per cent or 80 per cent of 2019 passengers in 2024.

The maximum cost of doing this for Shannon Airport would be €40 million over three years, Thompstone, a former chief executive of State company, Shannon Development, calculates. And he argues that is money the Government would get back in taxes on the business done by three hotels in the region.

DAA last year announced a similar approach, tying discounts in charges to the number of passengers that airlines flew in.

Shannon Chamber has put its plan to Minister for Transport Eamon Ryan and his department colleague, Hildegarde Naughton, both of whom have responded positively. A spokeswoman this week indicated that the Government’s view was that airports themselves were best-placed to determine how incentives should work.

Thompstone notes that EU officials have cleared Government plans to provide €32 million to Cork and Shannon airports for investment under state aid rules. He also points out that big European countries including France and Germany simply parked those regulations to pour billions into Air France KLM and Lufthansa.

Any recovery in aviation here is going to need substantial Irish Government cash. However, that will have come too late for the workers at Stobart Air.


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