The aviation sector in Ireland cannot recover by itself. Airports such as Shannon need long-term financial support, over a five-year timeframe…DG of EUROCONTROL tells Shannon Chamber webinar
The stark reality of COVID-19’s impact on every part of the global aviation value chain was outlined by Eamonn Brennan, the Director General of EUROCONTOL, the organisation that manages the European Air Traffic Network, when he addressed a Shannon Chamber webinar to share his views on the path ahead for the sector.
While aviation is a very resilient sector, having recovered from 9/11 in 18 months, and from the global financial crisis in 8 years, Mr Brennan said this slowdown, caused by a health crisis, is very different.
“COVID-19’s impact on aviation is global; flight movements throughout the globe are now at 52% of their 2019 figure,” he stated.
“Seat capacity (2020 vs 2019) on all continents has been reduced, with Europe the hardest hit. Europe has witnessed a 55% reduction in flights; 51% of its aircraft are parked; passenger movement is down by 1.7 billion; 191,000 permanent aviation jobs have been lost in areas such as ground handling, car parking, fuel supply, catering and back-end jobs that make up the sector’s eco-system, and traffic management charges have declined by 59%,” he stated.
Commenting on the devastating impact this air traffic plunge has had on Irish airports, Brennan said that the average daily movements at Irish airports for the week 18-24 January 2021, versus the levels for the same week in 2019, showed an 81% reduction at Dublin, 75% at Cork and 71% at Shannon, with cargo accounting for a percentage of current movements.
Advising attendees not to expect any form of return to short-haul air travel until earliest summer 2021, he said that this will be dependent on the speedy and effective roll-out of the vaccine. Long-haul will take longer to recover, maybe not until 2024, with vaccination becoming a necessity for international flights.
Turning his attention to key industry shifts that will result from COVID-19, Brennan pointed to a reduction in business class travel, linked to business being trained into a new way of communicating; flights remaining at 50% lower, or worse, than previous levels; increasing competition distortion linked to some government’s providing funding to airlines while other countries, such as Ireland, do not, and a focus on sustainability.
Cautioning that regional connectivity cannot be impacted by the focus on sustainability, Brennan said that air travel is the only viable connectivity option for an island nation such as Ireland, further adding that Shannon is a really important hub for regional connectivity.
Focusing on Ireland, and specifically how Irish airports, including Shannon, can regain passenger movements once air travel is permitted again, Brennan said that just as governments in other EU countries are responding with cash support for the sector (Germany and Lufthansa, France and Air France and Italy and Alitalia), the Government must have a clear long-term plan and provide support now to seed the recovery of the sector.
“The aviation sector in Ireland cannot recover by itself. Airports such as Shannon need long-term financial support, over a five-year timeframe, to fund reduction in, or elimination of, airport charges and the marketing funds that will be required to reinstate UK and EU routes, particularly connections to major hubs.
“A reduction in airlines is inevitable in the shake-up that the pandemic will cause and it will be even more important for Shannon to have the funding to attract airlines. Every airport in the world will want traffic once people return to the air and we are already seeing air traffic charges being dropped and passenger charges being waivered in some deals being made by airports. Shannon must be able to make the same kind of deals to attract airlines,” he added.
Given that cash incentives will be necessary to secure carriers on some routes, Brennan suggested that now is not the time to hide behind fiscal and State Aid rules and that extraordinary times call for clear, decisive action.
With regard to the long-haul potential of Irish airports, particularly post-Brexit, Brennan concluded that while Dublin could become a secondary hub to IAG’s UK passengers for long-haul connectivity, Shannon should be provided with the cash support needed to win back the transatlantic services that feed tourists directly to the Wild Atlantic Way and to internationally traded businesses across the Atlantic Economic Corridor.
“Shannon’s strategy of building transatlantic routes based on single-aisle fuel-efficient aircraft (United, American, Air Canada, Aer Lingus, Norwegian) has proved to be successful for the West of Ireland while being complementary to Dublin’s focus on larger twin-aisle services,” Brennan added.
Commenting on the value of a webinar of this nature at this point in the pandemic, Shannon Chamber chief executive Helen Downes said that it provided a most valuable and informative insight into the current state of the sector.
“As director general of EUROCONTROL, Eamonn Brennan has his finger on the pulse of where the sector is going, how it might recover, and in what timeline. As a Chamber of Commerce representing so many businesses in the aviation, tourism, and hospitality sectors, we know and have spoken about how critical Shannon Airport is to the economy of the entire west of Ireland.
“This webinar has reinforced our message of the essentiality of Government backing for Shannon Airport to enable it to win back these services for the tourism and hospitality sectors that have been devasted by their absence.
“We will be asking Government to pledge funding to support airlines and airports as not doing so will have a significant impact on a sector that has been of massive economic impact.
“The aviation sector has created so much employment. We heard from Eamonn Brennan that 191,000 jobs have been lost permanently in the sector at a European level so we cannot afford to underestimate the impact that not supporting the sector will have on our economy.
“Now is the time to pro-actively support an industry that has invested so much in Ireland Inc.”, added Ms Downes.