Shannon group warns on 'open skies'

Shannon Development yesterday warned the EU that there will be a shift in investment and jobs from the west of Ireland to the eastern seaboard if an open-skies policy for airlines is introduced and the Shannon stopover is abolished.

In a strongly worded submission, the regional development agency said that with open skies "the potential economic damage to the west of Ireland could be considerable and lasting in its impact".

Last week an advisory group established by the Minister for Tourism, Mr O'Donoghue, recommended an early renegotiation of the Ireland-US bilateral air agreement, which contains the Shannon stopover provision that requires that half of all flights to the US must depart from Shannon.

The National Tourism Review Group (NTRG) said the renegotiation of the agreement was necessary to achieve additional air services and enhanced visitor flows from north America.

It said delay would lead to missed opportunities.

In tandem with the workings of the review group, which is expected to deliver its final report in the summer, the EU is currently receiving submissions in relation to open skies.

If introduced, open skies would give the European Commission a mandate to negotiate aviation rights with the United States on behalf of the EU as a whole which would spell the end of the Shannon stopover.

According to Shannon Development the most likely outcome of an open-skies regime in the US-Ireland aviation market would be a shift in investment and jobs from the west of Ireland to the eastern seaboard.

The result would be slower economic growth in the west compared with the Dublin region in the absence of countervailing measures to offset the negative impact.

"It is important that policy-makers are clear on this point and recognise that the spatial impact of open skies will not be neutral: some regions will be affected negatively as a result of the new regime while others will gain disproportionately," the NTRG report says.

In March the Minister for Transport, Mr Brennan, said it was "almost inevitable" that open skies would come about.

However, he also indicated at that time that he would accept a promise of more EU aid for the Shannon region in return for the lifting of Ireland's objection to the plan.