NEW domestic airline took flight yesterday at Dublin airport, but Government intervention on fares means the taxpayer will pay a high price for its success.
Mr Ruadhan Neeson and his father Eoin - former head of the Government Information Services - are the shareholders in Ireland Airways.
The airline's inaugural flight between Dublin and Carrickfin in Donegal took place yesterday. The return air fare is £70, a price set by the Government to encourage the development of regional airports.
This laudable objective cones at a price. Mr Neeson is a businessman and is not going to send his Shorts 330 to Donegal at a loss. So, he calculates, the Government will pay £40 per passenger carried.
Also, Aer Rianta will give him a 90 per cent rebate on landing charges for the first year of operation. Mr Neeson is not kidding when he says his is a low cost operation.
A qualified pilot, Mr Neeson and his father set up El Air Exports in the mid 1980s. He could not get bank finance.
"Avair had just gone into liquidation and the Bank of Ireland, in particular, had lost its shirt. Aviation was not the flavour of the month," he says. Instead, he was introduced to two Lebanese businessmen who backed the venture.
They began with the ultimate in niche markets: fish. The one man airline flew live shellfish - lobsters, crab and crayfish to the markets of France and Spain.
Mr Neeson says: I did everything from securing the business to the administration and then flying the aircraft - a Piper Navajo. At least I had total control over the quality of service!"
The business developed as a charter airline servicing major freight companies. He also got into the corporate air charter business.
Mr Neeson does not see himself as a competitor to Aer Lingus. "It would be mad for us to contemplate competing against a major carrier."
Instead, Mr Neeson sees himself feeding in business from provincial airports to Aer Lingus international services.
How much business can Mr Neeson generate out of Carrickfin?
Not a great deal, obviously, but he has his sights on a juicier target: Sligo. The Dublin Sligo route is currently served by Aer Lingus. Mr Neeson says Aer Lingus has capacity difficulties serving this particular route and Ireland Airways expects to be flying to Sligo in the near future.
El Air Exports had a turnover of £3.5 million in the year to June 30th, 1996. Mr Neeson expects that the addition of the scheduled passenger services will bring turnover up to £5 million in the present financial year.
His business, philosophy is "steady, steady". Certainly, the venture to Donegal sounds a reasonable business proposition with the taxpayer funding a large chunk of the risk.
