Arguments favouring Heathrow service 'weak'

Shannon:Arguments favouring Government intervention to retain the Shannon-Heathrow service are "weak", as is the suggestion that Aer Lingus should be ordered to operate the route, according to a special report produced by economist Sean Barrett for the ESRI.

Lobby groups in the west of Ireland have called for the Government to force Aer Lingus to reverse its decision to axe the Shannon-Heathrow route from January 14th to aid regional development and tourism.

However, Mr Barrett said these arguments were not persuasive. "Airline deregulation has been a major success in the Irish economy, and alternatives to the Shannon-Heathrow services are already attracting consumer support. "The market failure arguments for Government intervention do no apply. Successful deregulation requires the removal of both barriers to entry and barriers to exit."

Mr Barrett's report was produced as a special article to accompany the ESRI's quarterly economic commentary. In the report, Mr Barrett highlights the fact that just 38 per cent of the 856,000 passengers who flew from Shannon to London in 2006 went to Heathrow. The balance used services to Stansted, Gatwick and Luton.

Over a 10-year period to 2006, the numbers flying from Shannon to Heathrow declined by 4 per cent, while the volume of passengers travelling between the airport and London actually rose by 156 per cent. The report also notes that services to London are also available from five regional airports on the island, Derry, Galway, Kerry, Knock and Waterford.

According to Mr Barrett's report, slot pairs at Heathrow operated by Aer Lingus and BMI to Irish airports are valued at €400 million.