Aviation exit from Ireland looks increasingly long term
Sector helped us out of last recession, but this time may be different
Dublin Airport: Almost 10 million tourists came here in 2019, while our airports hosted around 38.12 million passengers. Photograph: Cathal McNaughton/Reuters
Seen from the rest of the world, the Republic sits on a tiny island in the north Atlantic with fewer than five million people and one big-ish city. At first sight, if you’re not from here, you’ve little reason to come. Only we’re good at giving people reasons to come here, nice scenery – despite apparently incessant rain – educated workers, low taxes. Other places with nicer weather have these things in abundance, but we seem to have a better sales pitch.
We’ve made getting here easy too. Last summer, direct flights to the Republic could bring people from as far away as Hong Kong and Los Angeles. In between you could fly from the Arabian Gulf, most of the EU, key US cities and a growing number of places in Canada. Almost 10 million tourists came here in 2019, while our airports hosted around 38.12 million passengers.
Airlines, expanding on cheap fuel and cheap credit, helped bring this about. So did a government decision in 2013 to cut travel tax to zero, a move that prompted some carriers to add extra flights and others to establish bases here, drawing more tourists and business travellers.
Aviation arguably helped pull us out of the last recession, but it may not be around to do the same with the next.
The last five months have almost wiped the industry out. Passenger traffic through our airports is around 90 per cent lower than this time last year. Aer Lingus is looking at moving aircraft used for transatlantic journeys from Shannon to Britain. Ryanair is cutting what was an already limited schedule for September and October.
DAA, the State company responsible for Cork and Dublin airports, told politicians in July that it was proving difficult to attract overseas airlines here. Increasingly, the departures look long-term.
In contrast, the rest of the EU is getting airborne more quickly. Air navigation figures show that 16,804 flights took off in the bloc on Wednesday, August 26th, 47 per cent of what it was a year earlier. They are doing this largely using guidelines set by the European Centre for Disease Control (ECDC) and the EU Aviation Safety Agency (EASA).
Our much tougher travel restrictions have left us trailing our trading partners. The Government acknowledged the challenge these restrictions pose in the recently published report of the aviation task force.
The report warned that they could hinder our ability to attract further investment from multinationals that already provide 250,000 jobs in the Republic. According to IDA Ireland, the agency responsible for attracting overseas companies here, another 150,000 workers depend indirectly on those companies for their livelihood.
As some of these businesses close or cut back on operations here, the State needs to keep attracting new investment to maintain and grow employment.
Martin Shanahan, the IDA’s chief executive, calculated in July that Ireland is competing for a worldwide pool of foreign investment that coronavirus has shrunk by 40 per cent. He also noted that flying potential investors in to show them suitable sites had helped convince them to spend their shareholders’ money in the Republic rather than elsewhere.
Also in its report, the Government confirmed that aviation companies were planning to cut one-quarter of their jobs. The industry supports 40,000 jobs directly and 100,000 indirectly. The next obvious casualty is tourism, which employs 190,000, a figure that grows to 385,000 when you count the broader hospitality industry.
All told, that’s more than one million jobs tied in some way to our links with the outside world. And that is before you start counting the impact on Irish companies that export their products.
Jobs already face the axe as a result of the pandemic and associated travel restrictions. Decisions made now are likely to influence the final numbers. This is a risk to workers and their families, not just to an abstract concept called “the economy”. Any notion that only one side of this crisis involves a human cost ignores the danger of other issues, such as long-term unemployment, our main cause of poverty.
Ironically, the Government whose report acknowledges this threat is sticking with the very travel restrictions they highlight as a key issue. These require anyone arriving from countries not on a limited green list to self-isolate for 14 days. The list does not include key trading partners, Britain and Germany, or most of the EU.
Opening up to those jurisdictions may not prompt a rush of flights back here, but it will mitigate the current situation, particularly for Irish carriers such as Aer Lingus, which could cut up to 500 jobs, and Ryanair. Between them, they are responsible for around two out of every three passengers travelling here, including most of those from Europe.
Airlines are looking now at where they will fly next year. According to the International Air Transport Association, global carriers will lose $84.3 billion this year. Following a drubbing like that, few will be willing to continue flying near-empty aircraft to a small island.
The time to act is now. If the Government is going to rely heavily on the National Public Health Emergency Team (NPHET) and other officials to set policy, it needs to ask them how we can, as quickly as possible, bring air travel here in line with the rest of Europe to start forging again the links on which so many jobs depend.
If the answer is “you can’t”, then the Government needs to look elsewhere for guidance. It could start with the ECDC and the EASA, whose advice has helped get the EU partly flying again.
Whatever it does, the Government needs to act quickly. Otherwise when those planes do return, it might not be to fly people in, but to fly them out ... for good.