State subsidies for ‘some’ international air a routes potential minefield

Reports that the Government is considering subsidies for “some” international air routes sounds heartening, but the plan opens a potential minefield. One question is whether it would comply with EU state aid rules. Other European governments have loaned airlines cash, guaranteed debts, or even taken equity, but not promised aid for specific routes.

Another is: what routes should the Government back? Tánaiste Leo Varadkar recently said he was more concerned about the future of some strategically important long-haul routes, but felt that many shorter services, particularly those between here and London, would recover more easily.

Varadkar is a former transport minister, so can claim some insight on air travel. If his view helps shape, or simply reflects, Government thinking, then that implies that aid could be selective. That sounds like an administration moving from advising people not to fly to telling airlines where it would like them to fly.

If the coalition were to limit aid to long-haul flights, then this would exclude Ryanair, which could well decide to challenge the proposal in the courts, creating a further headache for the Government.

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Ryanair is already is the most vociferous critic of current travel policy, which advises those arriving from most of the EU to quarantine for two weeks. The airline is threatening to close its Cork and Shannon airport bases for the winter if the Government does not adopt a new EU-wide travel framework, designed to limit such restrictions.

It is not threatening to do the same with Dublin Airport, which, pre-Covid at least, was its biggest and most profitable base in the Republic. That could prompt some to ask if Ryanair means what it says about Cork and Shannon, but the Government is unlikely to want to test this.

That brings us neatly to the most important concern of all: local interests. If any politician, particularly in the south and west, perceives that the aid spurns “their” airport, then the protests will be loud and long-lasting. So, in short, air travel aid will have to satisfy the EU, the industry and regional concerns. Expect any budget announcement on this to be short on specifics.