Regional air contracts awarded

Aer Arann and the Scottish carrier Loganair have been awarded contracts to provide regional air services between Donegal and Kerry to Dublin.

The new Public Service Obligation (PSO) contracts run for three years commencing in November.

The PSO subsidy is given to airlines for regional routes which are not considered commercially viable but are considered vital for regional economic development..

The contract provides a subsidy for two return flights each day on both routes and will cost the State €7.6 million per annum.

Loganair will run the Donegal to Dublin service while Aer Arann will operate the Kerry to Dublin route.

Announcing the new contracts Minister for Transport and Tourism Leo Varadkar said Donegal and Kerry were the most remote of the regional airports from Dublin.

“These links will contribute towards balanced regional development in terms of business and tourism. People in Donegal or Kerry will be able to conduct commercial or personal business in Dublin and to return home the same day. It will also support the tourism industry in Donegal and Kerry, as tourists on relatively short breaks can reach their holiday destinations quickly through onward connections between Dublin and Donegal or Kerry," he said.

“I am confident that the two operators will provide a quality service on the routes which will meet the needs of the public. I am also pleased that there was a good level of interest in the tender process with four airlines submitting tenders providing a variety of offerings on the two routes.”

Ryanair yesterday announced it was to end Dublin flights Kerry at the end of October. The airline blamed the imposition” of a subsidised operation on the Kerry route as the primary reason why it was halting services there.

The airline had operated the only flight to Dublin out of Kerry, having pulled out of the PSO contract late last year. Ryanair admitted yesterday that it had tendered for the PSO subsidary this time round.

Aer Arann welcomed the awarding of the Kerry route subsidy today and admitted it had also tendered for the Donegal contract.

"We are delighted to have been awarded the contract to operate the Kerry-Dublin route and we look forward to once again providing vital services for both tourism and business and to further promote economic development in Kerry and its surrounding regions," said the airline's chief executive Paul Schutz.

"We are disappointed that we have not been successful in our tender to continue to operate the Donegal-Dublin route. We have worked very closely with the team at Donegal airport for many years to grow passenger numbers and we regret that the Donegal services will no longer form a part of our network. Aer Arann remains committed to serving the regions of Ireland and we will continue to assess opportunities for additional route development," he added.

Earlier this year Mr Varadkar announced that the Government would only be able to support a small number of regional airports from next year meaning that airports including Galway and Sligo will be without State funding from the beginning of 2012.