national aviation policy ireland

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A National Aviation Policy For Ireland

A National AviationPolicy For Ireland

August 2015


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Contents


MINISTERS FOREWORD 4INTRODUCTION 6

1. THE INTERNATIONAL CONTEXT 9

2. SAFETY, SECURITY AND SUSTAINABILITY 13

2.1 Aviation Safety 14 2.2 Aviation Security 18 2.3 Sustainability, Climate Change and the Environment 20

3. CONNECTIVITY AND AVIATION SERVICES 23

3.1 Access to the Air Transport Market 24 3.2 Irish Airlines 27 3.3 Air Cargo Services 28 3.4 US Preclearance Service 31 3.5 Air Trafc Management (ATM) 33

4. AIRPORTS 35

4.1 The Irish Airport Network 36 4.2 Regional Airports 39 4.3 State Airports 42 4.4 Ownership and Operation of State Airports 45 4.5 The Future Capacity Needs of the State Airports 46 4.6 Passenger Facilitation 50 4.7 Visas 52

5. REGULATION AND GOVERNANCE 55 5.1 Economic Regulation 56

5.2 Aviation Regulatory Bodies 58 5.3 Corporate Governance 60 5.4 Evolving Business and Employment Models in Aviation 62

6. AIRCRAFT LEASING, FINANCING AND MRO 65

Taxation 67 Aviation Finance 68 Ireland as an Aviation Transitioning Centre 68 Aviation Business Development - International Aviation Services Centre (IASC) 68

Article 83 bis Arrangements 69 7. GENERAL AVIATION, EDUCATION AND TRAINING 71

7.1 Corporate Aviation 72 7.2 Flight Training and Third Level Education 73 7.3 Maintenance Licensing 75 7.4 Pilot Licensing 76 7.5 Recreational and Sport Flying 77

8. STATISTICS 79

9. CONSULTATION 83

Appendix 1 88 Appendix 2 92 Appendix 3 94


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Ministers Foreword

As an island nation, aviation plays a crucial role in Irelands economy.We are far more dependent on aviation than many of our continentalneighbours and trading partners. We depend on aviation for our links withthe rest of the world both socially and economically so the Governmentconsiders it important to provide an appropriate policy framework withinwhich the sector can continue to develop and grow to underpin economicrecovery and development.

It is more than two decades since a formal statement of Governmentobjectives for Irish aviation was published. There have been majordevelopments in global aviation since then. Signicant marketliberalisation has taken place with access being opened up in manyregions of the world and many airlines and airports have moved outof State ownership. There have been signicant engineering andtechnological developments which have contributed to an expansion ofaviation activity at a global level. The industry in Ireland has played itspart in those developments and can continue to play a signicant partin the development of global aviation in the future with an appropriatenational policy framework in place to facilitate this.

The process of developing a National Aviation Policy was launchedin December 2012 with a stakeholder conference in the ConventionCentre Dublin. More than 400 participants attended from the aviationindustry and from many other associated sectors. Taking account ofthe views expressed by participants at the conference, my Departmentpublished an Issues Paper in February 2013 and invited comments onthe main themes and questions covered in the paper. A total of 74

submissions were received. These were analysed and a draft NationalAviation Policy was published in May 2014 for further comment. Againmore than 70 submissions were received and these were taken intoaccount in nalising this policy document.

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At the time the process was launched, the aviation industry globallywas suffering from the crippling effects of the economic downturn. Theresilience of the sector has once again proven itself as evidence ofrecovery across all segments of the industry began to emerge in 2013.This positive trend has continued through 2014 and to date in 2015.

The extensive input received from stakeholders, including experiencesin the industry over these past few difcult years, has helped to shapewhat I believe to be a robust Policy that will provide a positive pathwayfor the development and growth of the aviation sector in Ireland, creating jobs both directly and indirectly. It will also create an environment thatwill encourage the industry to increase connectivity to and from Irelandfor the benet of the travelling public, Irish tourism and Irish business.

I look forward to working with the industry and all stakeholders to deliveron the actions set out in this National Aviation Policy.

Paschal Donohoe T.D.Minister for Transport, Tourism and Sport


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Introduction

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The aviation sector is a major contributor to Irelands economy. As an island economy,it is essential for our tourism industry, for our trading relationships and for connectingIreland with the rest of the world. It contributes 4.1bn directly to our GDP comprising 1.9bn directly from aviation, 1.3bn through the supply chain and 0.9bn fromassociated spending by people employed in aviation. It supports 26,000 jobsdirectly and a further 16,000 in the supply chain. Irelands tourism industry, whichis heavily dependent on aviation, accounts for a further 5.3bn contribution to GDPand 180,000 jobs.

The Government recognises the importance of aviation to Ireland and is committedto creating an environment in which the industry can maximise its potential for thebenet of the wider economy. Recent measures that demonstrate the Governmentscommitment to the sector include the suspension of the air travel tax in 2013 andthe decision to separate Shannon Airport from the daa group to increase competitionamong airports in Ireland.

The global economic downturn had a signicant impact on aviation across theworld and the industry in Ireland has not been immune. Aviation is a particularlycyclical industry and remains susceptible to shocks. The industry in Europe wasparticularly badly hit by the global downturn with airline and airport protability badlyaffected. Irish airlines weathered the downturn well and indeed some grew theirbusiness signicantly during this period. Passenger numbers returned to growthat most Irish airports in 2014. The International Air Transport Association reportedthat global passenger trafc in 2014 showed an increase in demand (measured inRevenue Passenger Kilometres) of 5.9% compared to 2013 and this positive trend iscontinuing in 2015. However, the European industry will continue to face signicantchallenges as the centre of gravity in global aviation shifts eastwards and southwardswith future forecast demand and growth centred in Asia.

Ireland has a very strong tradition and reputation in aviation and this global picturepresents as many opportunities as challenges for Irish aviation. The policies andactions set out in this National Aviation Policy plot a pathway to enable the Irishaviation industry to build on its existing strong reputation to compete effectively in

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this growing global market place. They also aim to create the conditions to encourageincreased services to and from Ireland to support Irish tourism and business.

Specically, the principal goals of this National Aviation Policy are:

l To enhance Irelands connectivity by ensuring safe, secure and competitiveaccess responsive to the needs of business, tourism and consumers;

l To foster the growth of aviation enterprise in Ireland to support job creationand position Ireland as a recognised global leader in aviation; and

l To maximise the contribution of the aviation sector to Irelands economicgrowth and development.

In particular, the National Aviation Policy commits to:

l Maintaining safety as the number one priority in Irish aviation and ensuringthat safety regulation is robust, effective and efcient;

l Creating conditions to encourage the development of new routes andservices, particularly to new and emerging markets;

l Ensuring a high level of competition among airlines operating in the Irishmarket;

l Optimising the operation of the Irish airport network to ensure maximumconnectivity to the rest of the world;

l Ensuring that the regulatory framework for aviation reects best internationalpractice and that economic regulation facilitates continued investment inaviation infrastructure at Irish airports to support trafc growth;

l Supporting the aircraft leasing and aviation nance sectors to maintainIrelands leading global position in these spheres; and

l Maintaining a safe and innovative general aviation sector to support Irelandsbroader aviation industry.

Appendix 1 contains a composite list of the actions to be taken under this NationalAviation Policy as set out in the following Chapters.



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CHAPTER ONE

THEI N T E R N AT I O N A L C O N T E X T


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The International Context

BACKGROUND

Aviation is an inherently international sectorso aviation policy and regulation is to a largeextent determined in an international contextalthough States do still have competence todetermine national policy priorities withinthis overarching international context. Thesystem of rules governing the operation ofinternational air transport dates back to the1940s when the Convention on InternationalCivil Aviation (commonly referred to as theChicago Convention) was adopted. TheConvention and its nineteen detailed annexesremain the rule-book for international airtransport. The International Civil AviationOrganisation (ICAO) was established underthe Convention.

The European Union (EU) also hascompetence in relation to air transport andthe evolving EU regulatory agenda nowextends to all areas of aviation.

Other EU and international organisationsalso have an important role to play in thedevelopment of the EU and international

regulatory agendas in aviation. TheEuropean Aviation Safety Agency (EASA),established in 2004, is now at the heartof the EU aviation safety system withresponsibility for proposing and monitoringthe implementation of EU safety rules andregulations. EUROCONTROL also plays animportant role in the development of the

Single European Sky (SES), particularly inits role as Network Manager. It also hasseveral other important roles includingsupport for the implementation of SES atpan-European level, addressing civil-militaryinterfacing aspects of SES, as well asdealing with other specic aspects suchas the collection of route charges. Irelandis a member of the European Civil AviationConference (ECAC) which promotesunderstanding of policy among its memberStates and other regions in the world withinthe global ICAO framework.

Given this global context, many of thedecisions that affect aviation in Ireland arenot wholly within national control. However,it emphasises the need for Ireland toparticipate actively in the development ofpolicy and regulation at an international level.Ireland is a signicant player in internationalaviation. We have a strategically importantrole in air trafc management on the NorthAtlantic. We are the pre-eminent globalcentre for aircraft leasing with almost4,000 of the 22,000 aircraft currently inoperation around the world owned by Irish

based lessors. We are the licensing State ofthe largest intra-community carrier, Ryanair.It is therefore critical that Ireland inuencesdevelopments at EU level and in ICAO toensure that Irish aviation interests aredefended and advanced in the developmentof the international and EU regulatoryframeworks.


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ISSUES

As a member State of the EU, Ireland isa member of the Council of the EuropeanUnion and inputs to all decisions andlegislation adopted at EU level in relationto aviation. EU legislation on aviation issubject to co-decision, i.e. it is jointlydecided by the Council and the EuropeanParliament. We can, therefore, also exertinuence through our representatives inthe European Parliament and by activeengagement with the European Commissionat the preparatory stages of the legislativeprocess. It is in this latter process that thereis scope for improving how we engage andinuence the development of the regulatoryagenda.

The European Commission has recentlyannounced its intention to develop anEU Aviation Package to improve thecompetitiveness of the EU aviation sectorand it will be important for Ireland to inputto the development of this Strategy at anearly stage to ensure that the interests ofIrish aviation are promoted and protected.

In Chapter 9, Consultation, the Departmentoutlines its plans for the establishment ofa National Aviation Development Forumto provide an opportunity for engagementwith industry and to coordinate the effortsof all Departments and State agencies inthe development of policy and legislation

affecting aviation at national, EU andinternational levels. The intention is that theNational Aviation Development Forum willconsider important EU legislative proposalsand identify the most appropriate means ofproviding feedback to the EU Commissionon relevant stakeholder consultationprocesses.

In ICAO, the governing body, the ICAOCouncil has 36 seats while there are morethan 190 contracting States. For thepurposes of securing representation on theICAO Council and its advisory committee,the Air Navigation Commission, Ireland joined with six other European States inthe mid - 1990s to form the ABIS Group.The members of the ABIS group rotate theopportunity for representation on the ICAOCouncil and Air Navigation Commission(ANC) amongst its members.

As part of this rotation process, Irelandsecured election to the ICAO Council forthe period 2001 to 2004 and we will againhave the opportunity to present a candidatefor election to the Council in 2016 for the

period 2016 to 2019. Ireland currently hasa representative on the ANC and previouslywe had a representative on the ANC duringthe period 1997 to 2000. These positionsprovide Ireland with an opportunity to shapethe international regulatory agenda and toraise the prole of Irish aviation on a globalstage.


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POLICY POSITIONIreland will participate actively in international fora to inuence developments in the aviationsector.

ACTIONS1.1 Ireland, as part of the ABIS Group, will seek nomination for election to the ICAO

Council for the period 2016-2019.1.2 The Department of Transport, Tourism and Sport will consult with the National

Aviation Development Forum (see Chapter 9) on the development of the internationallegislative and regulatory agendas.

1.3 Ireland will input to the proposed EU Aviation Package at an early stage to inuencethe development of proposed measures.


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CHAPTER TWO

S A F E T Y, S E C U R I T YA N D S U S T A I N A B I L I T Y


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Safety, Securityand Sustainability

2.1 Aviation Safety

BACKGROUND

Safety and public condence in the safety ofair travel underpin all other objectives in thissector. Maintaining the highest standards ofsafety in Irish aviation continues to be the

priority objective of Irish aviation policy.The Irish Aviation Authority (IAA) hasstatutory responsibility for regulating safetystandards in civil aviation in Ireland andthese functions are performed by its SafetyRegulation Division. In general, aviationsafety standards are set internationally bythe International Civil Aviation Organisation(ICAO) and, in a European context, by theEuropean Aviation Safety Agency (EASA),the European Union (EU), EUROCONTROL,the European Civil Aviation Conference(ECAC) and in the North Atlantic SystemsPlanning Group (NAT SPG). The SafetyRegulation Division (SRD) of the IAAoversees and regulates the implementationof these standards for the Irish civil aviationindustry and its oversight activities are in

turn subject to regular independent auditsby ICAO, EASA and EUROCONTROL.

In 2011, Ireland was ranked amongstthe best in the world for civil aviationsafety oversight following an intensiveinternational audit by ICAO. In July 2013,the EUROCONTROL Performance Review

Body (PRB) published its Annual MonitoringReport on safety which ranked Ireland rstout of 29 European States for Effectivenessof Safety Management (EoSM) - a key metricfor the quality of safety regulatory oversightof air navigation services.

A fundamental requirement of any aviationsafety oversight system is the obligationto report occurrences that may affectsafety. In that regard, Ireland has a verygood and effective Mandatory OccurrenceReporting System (MORs), established inaccordance with the requirements of EU lawand ICAO requirements, that is monitoredon an ongoing basis by both the IAA andthe Air Accident Investigation Unit (AAIU) anindependent Unit that reports directly to theMinister for Transport, Tourism and Sport.

It is the Governments objective that Irelandssafety record in aviation be maintainedand promoted and that Ireland participateactively in the development of the regulatoryframework at an international level.

While aviation is one of the safest modes of

transport, EU policy recognises that zerorisk does not exist in aviation as accidentsand serious incidents may happen fromtime to time, especially in light of the growthof commercial air transport. EU policy isto do everything possible to increase thesafety of air transport and mitigate the risksof accidents or serious incidents occurring.



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When accidents or serious incidents happen,it is necessary to launch investigationsinto their causes in order to learn safetylessons and prevent such occurrences fromhappening again.

International rules require the separation ofaccident investigation and safety regulationfunctions. In Ireland all such occurrencesare the subject of investigations by the AAIU.

In addition to the requirement to investigateaccidents and incidents that occur in theState, where foreign safety investigationauthorities conduct investigations intooccurrences on or involving Irish registeredand/or Irish operated aircraft abroad, theAAIU is required to appoint AccreditedRepresentatives to assist the foreign Statein the investigation. Furthermore, where aforeign State delegates an investigation tothe State of Registration, or where an Irishregistered aircraft suffers an occurrence ininternational waters, the AAIU is required toconduct the investigation.

The Irish registered commercial eet has

expanded signicantly in recent years, duein particular to the signicant expansionof Ryanairs eet which are all on the Irishaircraft register and the continued expansionin the number of leased aircraft being placedon the Irish Register. This has implicationsfor the IAA as the regulatory authority but italso has resource implications for the AAIU

as it may be required to conduct or assistin investigations of any incidents involvingaircraft on the Irish register. It is imperativethat the AAIU is adequately resourced tofull its investigative oversight obligationson the Irish registered eet both at homeand abroad. Ireland is committed to workingwith ICAO, the EU and other internationalagencies in the on-going development ofappropriate safety systems and processes,in supporting occurrence reporting andinvestigation and in ensuring all safetyregulations are implemented and enforced.

ISSUES

Ireland has an excellent aviation safetyrecord. Safety will remain the number onepriority of our National Aviation Policy.

The primary responsibility for aviation safetyrests with the operator; the States obligationis to ensure compliance through thelegislative and organisational arrangementsand structures it has established for thispurpose. The rapid and signicant changesand increasing complexity of the aviation

system requires the use of a risk-basedapproach to identify safety issues andassess residual safety risks that may existwithin a compliant system. A risk-basedapproach is an inherent part of a SafetyManagement System (SMS). SMS has beenadopted by ICAO as standard internationalpractice and is a mandatory requirement



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under ICAO Annex 19. The EU, throughEASA, is in the process of moving towards asystem to anticipate and focus on potentialsafety risks.

The ICAO Global Aviation Safety Plan andthe European Aviation Safety Programmerequire Ireland to achieve full implementationof a State Safety Plan (SSP) and SMS acrossthe civil aviation system to facilitate theproactive management of safety risks. Thereare a number of bodies with responsibilityfor elements of safety policy, including theDepartment, the IAA and the AAIU, andappropriate co-ordination arrangementswith regard to SSP requirements will bemaintained.

A focus on improved human factorsanalysis and management within the SMSis essential. By improving the quality anddepth of investigation to identify human andorganisation causal factors, appropriatemitigation actions can be formulated.

Data collection and exchange, includingoccurrence reporting, together withthe necessary analysis capability arefundamental to a risk-based approach. Afundamental requirement is that occurrencereports are accurately recorded in themandatory European Centrally CoordinatedAccident and Incident Reporting System(ECCAIRS), an EU database in which the IAAand AAIU participate.

A fast-growth area of interest in theaviation sector is the operation and use ofremotely piloted aircraft systems (RPAS),commonly known as drones. In Ireland,the IAA currently has a role concerningthe safety regulation of RPAS, dened forthis purpose as being of a mass less than150kg. As this Policy is being published,regulation of RPAS is being developed inthe EU, taking account of their benecialuses and associated public interest andprivacy concerns. Ireland will encourageand support the early development of anappropriate regulatory framework for RPASinternationally.


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POLICY POSITIONSafety will remain Irelands rst priority in the aviation sector.

ACTIONS2.1.1 Ireland, through the Department and the IAA, will play an active role in the development

of aviation safety regulations at an EU level and in ICAO.2.1.2 Ireland will continue to maintain an independent safety investigation authority for the

investigation of aviation occurrences.2.1.3 The Department and the IAA will coordinate the State Safety Programme, including

risk management.2.1.4 Ireland will continue to facilitate and promote occurrence reporting in accordance

with EU law and ICAO requirements and to meet the highest standards of independentaccident investigation.

2.1.5 The IAA will establish and monitor appropriate key aviation safety indicators basedon the EASA system.

2.1.6 The IAA and AAIU will monitor aviation safety trends through ECCAIRS analysis.2.1.7 Ireland will contribute to work at EU level to develop and implement an appropriate

EU-wide safety regulatory framework for the operation of Remotely Piloted Aviation

Systems in civilian airspace.


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2.2 Aviation Security

BACKGROUND

A high quality national aviation securitysystem requires not only sustainedcommitment and effort by the State butalso by all key players in the sector includingairports, airlines, and other regulated

entities in the supply chain.

As a contracting State to the ChicagoConvention, Ireland is committed toimplementing the security standards andrecommended practices developed by ICAOat a global level. As a member of the EU,Ireland implements EU legislation. Theserules shape the framework within which

all entities in the aviation security chainmust operate. The international regulatoryframework is also incorporated into IrelandsNational Civil Aviation Security Programme(NCASP) which is developed in consultationwith the industry and with which all entitiesmust comply.

The role of the State in aviation security isto ensure that current internationally setrules and regulations are adhered to. It alsorequires participation at international levelto ensure that the rules in place are justied,aligned with actual needs and proportionateto the level of risk.

In 2013, responsibility for monitoringcompliance by all entities in the Statewith EU and international aviation securityrequirements was allocated to the IAA. Thedevelopment of aviation security policy,including the development of the NCASP,and engagement at international levelcontinues to be led by the Department.

ISSUES

The global threat to aviation remains realand more complex. A global threat requiresa global response no one State can tacklethis threat on its own.

Ireland will continue to play its part at ICAOand in the EU in shaping the global responseto the threat and seek to ensure that thisglobal response takes appropriate accountof the impact of measures on the industry,passengers and businesses.

Our approach will continue to be one ofpartnership with industry and we will supportthe introduction of a Security ManagementSystem (SeMS) approach. Allowing industrygreater freedom in how precisely it complieswith security rules has the potential toleverage the innovative skills in the sectorand concentrate resources where the riskis highest.

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security in Ireland and encourage thegreater use of technological solutions.Our overall aim will be to deliver a moreeffective security outcome, with smarter,more efcient systems, that facilitates asmoother experience for both passengersand business.

The trusted traveller concept, which is

primarily a passenger facilitation measureaimed at business or frequent travellers,

could also have security benets. Anexample of such a programme is the USGlobal Entry program which allows forexpedited clearance for pre-approved, low-risk travellers at Preclearance facilities inIreland. Global Entry allows for quick, easyand efcient transit through airport controlfor travellers, and allows US Customs andBorder Patrol ofcers to focus on travellers

whose identity is unknown to them and whomay pose a higher risk.

POLICY POSITIONIreland is committed to ensuring that sustainable aviation security solutions are delivered,with due consideration for cost, efciency and the impact on passengers and air transport

operators. ACTIONS2.2.1 Ireland will allow greater exibility to industry through the introduction of an outcome-

focussed, risk-based approach to security regulation.2.2.2 Ireland will introduce a more targeted and comprehensive approach to compliance

monitoring and developing requirements for SeMS, similar to the successfulapproach already implemented in the eld of safety.

2.2.3 Ireland will place a risk-based approach to security at the heart of our thinking and ofour future research. As a rst step in this direction we will initiate a feasibility studyin 2015, in conjunction with other key stakeholders, on the concept of a TrustedTraveller Programme.

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2.3 Sustainability, ClimateChange and theEnvironmen t

BACKGROUND

Debate on aviation sustainability tendsto revolve around greenhouse gas (GHG)

emissions from aircraft and the impact onlocal communities of airport noise. In bothinstances, there have been considerabletechnological advances in recent years.New aircraft are 70% more fuel efcientthan forty years ago and 20% moreefcient than ten years ago. Although thecurrent contribution of aviation to overallgreenhouse gas emissions is relatively low

at less than 3%, emissions from aviationare among the fastest growing sources ofGHG. By 2020, global international aviationemissions are projected to be around 70%higher than in 2005.

New aircraft are also much quieter, by asmuch as 75%, compared to thirty yearsago. It is acknowledged that some ofthe advances in reducing emissions andmitigating noise impacts have been offsetby the increase in activity over the period.

However, within the overall context ofsustainability, we also need to consider thelong-term resilience and adaptive capacityof our airport infrastructure and aviationservices against the likely impacts ofclimate change. Greater understanding of

those impacts will have a signicant role toplay in protecting our assets and helpingto future proof the capacity of the aviationsector on a global basis.

ISSUES

EmissionsFollowing the decision by the EU in 2008 toinclude aircraft emissions in the EuropeanEmission Trading Scheme (EU-ETS), witheffect from 1 January 2012, EU carriers,including Irish carriers, are required torecord emissions (calculated on the basis ofmeasuring fuel consumed) and to surrendercerticates allocated to them. The numberof certicates is capped, requiring airlinesto either reduce their emissions or purchasecerticates on the market. When introducedin 2012, the EU-ETS applied to all ightslanding at or departing from an EU/EEAairport. However, following objectionsto this EU approach, EU ights to andfrom destinations outside the EU/EEA areexempt from the EU-ETS until 2016. Thistemporary measure is aimed at creating

the circumstances for the developmentof a global scheme and to build on themomentum established in ICAO.

Recent ICAO Assemblies have recognisedthe need for global action and at Assembly38 in September 2013, a decision wastaken to develop a global market basedmeasure (GMBM) to limit CO2 emissions.

The shaping of the GMBM scheme and the


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manner of its implementation by the agreeddate of 2020 will be a key issue for Irelandalongside its EU partners.

Ireland will play an active and constructiverole in the ICAO negotiations process.Contributing effectively to the ICAOnegotiations over the coming years willrequire a concerted and coordinated effortby all stakeholders and will be consideredby the National Aviation Development Forum(Chapter 9).

In addition to MBMs, other measures suchas technology improvements in aircraftand engine design will continue to playan important role in combatting aviationemissions. Incentivising cleaner aircraftthrough non-nancial instruments is apotential measure. Improving operationalprocedures driven by Functional AirspaceBlocks (FABs) and the setting of environmenttargets in the EU Performance Schemeunder the SES initiative are also expectedto make a contribution.

The relevance of research and development

has been highlighted in the consultationprocess. There are benets to be gainedfrom increased research capacity in areassuch as clean engine technologies andsustainable fuels. Building a national researchand development capability through, forexample, a greater uptake in available EUfunding streams (HORIZON 2020, Clean Sky2 and SESAR) will be encouraged.

NoiseNoise-related measures constrain capacityat an airport but also through the networkdue to knock-on effects. EU Regulation (EC)No. 598 of 2014 sets out the proceduresand processes to ensure effective noisemanagement. Its provisions are centred onthe ICAO Balanced Approach.

The Balanced Approach comprises fourprincipal elements:l making aeroplanes quieter, by setting

noise standards;l managing the land around airports in

a sustainable way;l adapting operational procedures to

reduce noise impact on the ground;and

l if required, introducing operatingrestrictions.

The proposal in the draft policy to supportand implement this Balanced Approach tonoise management at Irish airports waswelcomed in the consultation process.

Effective land-use planning has been andwill continue to be important. This needs tobalance the operational needs of airportsand those using the airports with protectionfor local residents and amenities.

AdaptationIn relation to the projected impacts of climatechange on Ireland, we can expect increasingaverage temperatures, more extremeweather conditions such as storms and


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rainfall events and an increased likelihoodof river and coastal ooding. These typesof events will have some adverse impact onthe operational performance of the aviationsector.

An overarching policy to build resilienceto the impacts of climate change is beingled by the EU Commission through an EUAdaptation Strategy. In Ireland, in anticipationof this Strategy, a National Climate ChangeAdaptation Framework was published bythe Department of Environment, Community

and Local Government in December 2012.The Framework brings a strategic policyfocus to climate change adaptation both atlocal and national level. Legislation is beingdeveloped to underpin this policy.

POLICY POSITIONIreland is committed to working with its EU and international partners to mitigate the impactsof aviation on the environment and facilitate the sustainable growth of the sector.

ACTIONS2.3.1 Ireland will work with European partners to achieve the development of global

international standards for market based measures on aircraft emissions.2.3.2 Ireland will develop its aviation emissions reporting capability in support of ICAOs

evolving environmental policies.2.3.3 Ireland will, in consultation with interested parties, update its National Action Plan

for Emissions Reductions in 2015 in line with the ICAO 2013 Resolution on ClimateChange.

2.3.4 Ireland will encourage research and development in Ireland of clean enginetechnologies and sustainable fuels.

2.3.5 Ireland will implement a Balanced Approach to noise management at Irish airportsin accordance with Regulation (EC) No.598 of 2014 on the establishment of rulesand procedures with regard to the introduction of noise-related operating restrictionsat Union airports.

2.3.6 Ireland will develop an Adaptation Plan for the Transport Sector, which will includeadaptation options for airports and aviation services in line with national legislativeobligations and the EU Adaptation Strategy.


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CHAPTER THREE

C O N N E C T I V I T Y &AV I AT I O N S E RV I C E S


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Connectivity & Aviation Services

3.1 Access to the AirTransport Market

BACKGROUND

The creation of the EU single market foraviation in the 1990s removed all commercialrestrictions on airlines ying within the EU.

Under the single market, all EU carriers canoperate services on any intra-EU route. Thesingle market has transformed air travelin Europe reducing prices while increasingconsumer choice and connectivity.

Outside the EU single market, access tothe air transport market is still heavilyregulated under the framework set downin the Chicago Convention. Under theChicago Convention, Ireland has negotiatedbilaterally with a wide range of Statesto agree market access rights for bothpassenger and cargo services. A list ofStates with which Ireland has a bilateralair transport agreement is available onthe Departments website www.dttas.ie.Following the Open Skies judgment inthe European Court of Justice in 2002, all

market access rights negotiated by eachof the EU member States in their bilateralagreements, must be equally available to allEU carriers.

Furthermore, under the EUs externalaviation policy, the European Commissionhas been mandated to negotiate airtransport agreements on behalf of the

EU and its member States with certain

third countries. Under this process, socalled Open Skies agreements havebeen negotiated, removing restrictions oncapacity, routing and other limits, creatinga free market for services between theparties to that agreement.

Most bilateral air transport agreementsrequire that substantial ownership andeffective control be maintained by nationalsof each party to the agreement. Within theEU, community airlines are required to beat least 50% owned by EU nationals (USlaw requires that US airlines are at least75% owned by US nationals). The EU hasindicated its willingness to negotiate thesecurrent ownership and control limitationswith States prepared to similarly waive therequirement on a reciprocal basis. However,progress on this matter has been slow.

The relaxation of current ownership andcontrol limitations would help to increaseaccess to capital markets for airlinesand to facilitate consolidation in the airtransport market. It is also likely to see thedevelopment of further services between

these like-minded States.

The Minister for Transport, Tourism and Sportis a member of the Export Trade Council(ETC), chaired by the Minister for ForeignAffairs and Trade, which is responsible forthe coordination of the Government Trade,Tourism and Investment Strategy. The ETCregularly discusses issues relating to air

market access.


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Through its network of 80 Embassies andmissions, the Department of Foreign Affairsand Trade, in close cooperation with otherDepartments and State agencies, activelypromotes an Irish aviation policy whichencourages greater connectivity and accessto our major trade partners, for the purposesof both business and tourism-related travel.The Embassy network in particular plays akey role in lobbying for greater air accessthrough developing and maintaining asupportive environment for enhancing airlinks. Direct routes between Ireland andinternational markets are centrally importantto the achievement of the numerical targetsset out in the Government Trade, Tourismand Investment Strategy, as reviewed inFebruary 2014. The Embassy network willplay a role in implementing this policy.

ISSUES

For countries with which Ireland continuesto negotiate on a bilateral basis, thegeneral policy will be guided by freemarket principles. One key issue in suchnegotiations is the extent to which Ireland

should grant fth freedom rights whichwould allow airlines pick up and drop offpassengers in Ireland, en route to otherdestinations (for instance an airline with aroute from east or south of Europe stoppingoff in Ireland en route to North America).Irish airlines do not tend to and have notsought to operate on any routes using fthfreedom rights although such rights are

available under some of Irelands bilateral

air transport agreements. However, non-EUcountries will often seek fth freedom rightsfor their airlines. On some long-haul routes, aircraft still needto make refuelling stops. The granting offth freedom rights on such routes will makeIreland a more attractive stop off point. Suchroutes will increase choice and connectivityfor travellers to and from Ireland andincrease the number of transit passengersusing Irish airports. Although fth freedomrights often feature in the market accessrights agreed between States in bilateral airtransport agreements, the exercise of suchrights is often limited and in the past theyhave tended to be exercised mainly on long-haul routes.

In the consultation process leading to thisNational Aviation Policy, strong views wereexpressed both for and against Irelandgranting such rights.

By allowing fth freedom rights at airportsin Ireland, it is argued that the State will:l become a more attractive

destination for air passengerservices with increased benetsfor the Irish economy;

l enable maximum access andassist route development;

l complement the preclearancefacilities already available at Dublinand Shannon; and

l assist the development of our

airports as hubs.


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Many stakeholders considered that becauseIreland is an island nation with a signicanttourism industry and a large number of high-value, time sensitive export industries whichdepend on these links, a liberal policy onfth freedom rights should be pursued.

On the other hand, it is argued that allowingfth freedom rights at Irish airports wouldhave signicant negative impacts including:l a potential reduction in the

existing high level of competitionin the market (in particular ontransatlantic routes);

l the threat to airlines alreadyoperating in this market; and

l potential negative effects forinbound tourism, employmentand on Irish and EU airlines andairports if signicant market sharewas lost to non-EU carriers.

Furthermore, airlines in other countriesmay operate in a different competitiveenvironment. For example, subsidies,unfair practices, inconsistent applicationof regulatory frameworks and lack of

transparency in nancial reporting, candistort competition. The issues raised byfair competition concerns are recognised atEU level.

The most liberal approach to granting fthfreedom rights is to grant full rights in thebilateral agreement itself. Alternatively, fthfreedom rights can be provided for under abilateral agreement, but with a subsequentcase-by-case approval required for anysuch services. Most of Irelands existingagreements fall into the latter category. Anadvantage of this approach is that it allowschanging circumstances to be taken intoaccount over time and allows any approvedfth freedom routes to be re-evaluatedshould concerns arise.

Ireland traditionally has a liberal aviationpolicy, and it remains positively disposedtowards approval of fth freedoms inbilateral agreements. It is recognisedthat within EU countries approval of fthfreedoms can take account of criteriaincluding, economic costs and benets andaspects of fair competition.


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POLICY POSITIONIrelands ultimate objective in bilateral negotiations will be to reach agreement on the basisof fth freedom rights on a reciprocal basis. In doing so, account will be taken of objectivecriteria, particularly any developed by the EU on fair competition. Initially such freedomswill be for routes where identied services are to be provided and will be subject to specicapproval by both States.

ACTIONS3.1.1 The Department will increase and extend Irelands bilateral agreements with other

States.3.1.2 Ireland will continue to actively support EU efforts to negotiate full Open Skies

agreements with third countries.

3.2 Irish Airlines

Ireland is well served by indigenous andinternational airlines. Since the 1980s,Irelands aviation policy has favouredcompetition by having at least two majorairlines competing in the Irish market. In2014, the two largest Irish airlines, AerLingus and Ryanair, provided over 80%of the seat capacity in the Irish market,making the competitive dynamic betweenthem particularly important.

Competition between Ryanair and AerLingus has been good for Irish consumersand connectivity. Most of the stakeholderswho commented on this issue duringconsultation on this Policy were in favour ofa continued policy that supported at leasttwo major airlines with bases in Ireland.

Competition has helped ensure theresilience of Irish airlines in the face ofvolatile industry conditions, in particularsince the downturn in 2008. Irish airlinesare in a better nancial position thanmany of their overseas counterparts andare competitively placed to contend withuctuating market challenges and demands.

Since the Aer Lingus Initial Public Offering(IPO) in 2006 Ryanair has made threetakeover bids for Aer Lingus. Successive

Governments have opposed these bidsprimarily on competition grounds. Thebids were also subject to approval by theEuropean Commission under the EU MergerRegulation. On two occasions, in 2007 and2013, the European Commission concludedthat a merger between the two airlineswould have harmed consumers because ofthe high level of competition between them

on a signicant number of routes to/fromIreland.


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The maintenance of effective competition inthe air transport market was an importantconsideration in the Governments recentdecision to support the offer made byInternational Consolidated Airlines Group(IAG) for Aer Lingus.

Among the guarantees that the Governmenthas secured from IAG in the context ofthis offer is a guarantee that Aer Linguswill maintain its head ofce in Ireland andthat it will continue to operate under theAer Lingus brand. Important guaranteeswere also secured in respect of Irelandsfuture connectivity, particularly to LondonHeathrow. IAG has set out ambitious growthplans for the company and the Governmentis condent that supporting IAGs offer forAer Lingus is the best way of ensuring acompetitive and vibrant air transport marketin Ireland for the benet of consumers.

POLICY POSITIONIreland will continue to pursue an airlinepolicy based on competition between at

least two airlines with signicant homebases in the Irish market and Ireland willfacilitate a market which is open to newentrants in order to maximise connectivityand competition.

3.3 Air Cargo Services

BACKGROUND

The global nancial crisis has impacted onthe growth of air-cargo in the short-termbut, as economic conditions improve, long-term global forecasts for international air-

cargo point to continued strong growthover the coming decades. While only 1% ofcargo tonnage is moved by air, it representsabout 35% of the value of all freight into andout of Ireland - mainly seasonal foodstuffs,pharmaceuticals, medical devices and ITcomponents. Approximately 84% of allIrish air-cargo and mail is handled at DublinAirport and the remaining 16% is handled atShannon Airport. Very limited volumes arecurrently handled at Cork Airport. Most ofIrelands international air-cargo is carried inthe hold of passenger aircraft. However,not all carriers provide a cargo service,which means that there is less choice interms of frequency and range of locationsserved for cargo services than is thecase for passenger services. Dedicatedair freighters are, therefore, an important

and growing part of the international cargobusiness.

ISSUES

What we export is changing (more lowvolume, high value products) and thedestination of Irish exports has becomemore diverse. Ireland is generally well-

served for air-cargo connectivity, with


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good access to world-wide destinationsprimarily through major hubs in the UK ormainland Europe. There is nonethelessconsiderable scope to enhance Irelandsexport competiveness through better air-cargo provision, shortening supply chainsand reducing time to market. Access to achoice of competitively priced and frequentair-cargo services to a range of short-hauland long-haul destinations in existing andemerging markets is important. In particular,there is potential to grow air-cargo to long-haul destinations. Open-cargo policies,improved facilities at airports and morecompetitive groundhandling operationsare important conditions for growth in thisregard.

Currently, signicant volumes of cargoare being transported by truck and shipto the UK or mainland European airportswhere they are loaded on to freighteraircraft. The development plans of the mainIrish ports of Dublin, Cork and Shannon-Foynes will increase the attractiveness oftransporting goods by truck and sea toa major hub airport. On the other hand,

capacity constraints for air-cargo at majorEuropean hubs may present opportunitiesfor selective expansion of air-cargo servicesat Irish airports, for example, by exploitingnew and expanded long-haul routes and byidentifying specic gaps in supply chainperformance relevant for Irish exporters.

In order to identify and exploit such

opportunities, it will be important to build

a more detailed and complete pictureof freight movements across all modesof transport in Ireland. In that context,an overall freight policy for Ireland to bedeveloped by the Department, with a viewto ensuring the continued competitivenessof the freight sector generally, will includeconsideration of the role of air cargo.

In parallel, the Department will also requestDublin and Shannon Airports, in partnershipwith the other players in the air-cargo industry(including airlines, industry representativebodies and some State agencies), todevelop and publish strategies on air-cargo. These strategies will examine thecosts and benets involved, and considerhow cargo can be facilitated in termsof infrastructure, services and chargingregimes. It is considered that ShannonAirport has the capacity to become an air-cargo hub between Europe (and beyond)and the US. The development of anInternational Aviation Services Centre (IASC)and other commercial developments at theairport campus in Shannon, as referencedin Chapter 6 of this Policy, will complement

the airports ambition to become a cargo-hub. While acknowledging the stringentrequirements inherent to the US customsand security regimes, as well as those ofthe US Food and Drugs Administration(FDA), it is recognised that the introductionof US cargo preclearance could enhanceShannon Airports potential as a recognisedcargo transhipment point.


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POLICY POSITIONIrelands export competitiveness should be enhanced through improved air-cargo provision toexisting and emerging markets.

ACTIONS3.3.1 An overall freight policy for Ireland, covering all modes, will be developed with

a view to ensuring the continued competitiveness of the freight sector, and willinclude consideration of the role of air-cargo.

3.3.2 The Department will seek to remove limits on all air-cargo capacity in Irelandsbilateral air transport agreements.

3.3.3 The Department will engage with the relevant stakeholders under the auspices ofthe National Facilitation Committee on air-cargo. (See Section 4.6).

3.3.4 Dublin and Shannon Airports, in partnership with the other players in the air-cargoindustry, will be mandated to develop and publish strategies on air-cargo.

3.3.5 The development of Shannon Airport as an air-cargo hub will be supported.3.3.6 The Department will continue to liaise with other Government bodies and the US

authorities on the regime for exports to the US in order to facilitate efcient freightoperations at airports.

Responses received in the consultationprocess suggested that the State shouldensure that air-cargo handling and customfacilities at Irish airports minimise delaysand facilitate efcient and timely freightmovements. The Department will engagewith the relevant stakeholders on theseissues under the auspices of the NationalFacilitation Committee (see Section 4.6).The individual airport strategies shouldinclude the introduction of arrangementsfor benchmarking the facilitation of freightthrough the airports, similar to thosewhich aid passenger facilitation. Insofar as

efcient facilitation must take account ofsecurity requirements, the principle of anoutcome-focussed, risk-based approachoutlined in Section 2.2 of this Policy will beapplied specically to the air-cargo sector inthe framework of the National Civil AviationSecurity Programme (NCASP).

Ireland will continue to pursue an open-cargo policy for dedicated air-cargoservices. In this regard, it will seek theremoval of limits on all cargo capacity in ourbilateral agreements to support our exportindustries which rely on air-cargo.


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3.4 US PreclearanceService

BACKGROUND

Ireland has an aviation preclearanceagreement with the US since November2008. Under the agreement, passengers

of all US bound ights from Dublin andShannon Airports are fully cleared for USimmigration, customs, agriculture andsecurity controls before leaving Ireland.This means that passengers travelling to theUS are treated as domestic passengers onarrival in the US and do not face any furtherUS entry controls. The preclearance processensures that passengers are screened,inspected and precleared for entry intothe US, in accordance with the relevant USstandards, within the designated, controlled-access areas for preclearance in Dublin andShannon Airports.

From the passengers perspective, thepreclearance process allows for moreefcient use of pre-boarding time at Dublinand Shannon Airports; their experience on

arrival in the US is greatly improved as itavoids a lengthy entry process and canallow transit passengers to remain airsidefor connecting ights. From the airlinesperspective, aircraft arriving from Irelandcan now terminate their ights at domesticairports or at domestic terminals ofinternational airports in the US. Preclearancefacilitates new route options, improved

aircraft utilisation at US airports as well

as the potential for lower groundhandlingand repatriation costs. Consequently, forairports offering preclearance facilities,there are clear advantages in terms ofattracting new air services and growingpassenger numbers.

The commercial and economic benetsof preclearance, from the passenger,airport and airline perspectives havealready been demonstrated in Ireland andit is recognised that preclearance is a keycontributing factor to the growth of USconnecting trafc at Dublin and Shannon inrecent years. Similarly, the US authoritieshave acknowledged that the process hassignicant benets for them.

ISSUES

US preclearance is an asset that has furtherpotential to contribute to developmentat Dublin and Shannon Airports. Thereis also potential to open up new routesto US domestic airports. An adequatelyresourced preclearance facility is criticalto Dublin Airports development as a

secondary hub. The Department will workwith the relevant US authorities and,in particular, the Customs and BorderProtection (CBP) and the TransportationSecurity Administration (TSA), to ensure theappropriate legal and framework conditionsfor preclearance facilities are maintainedin Ireland. It is essential, however, thatDublin and Shannon Airports commit to fully

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offer. The relevant enterprise, tourism andregional development agencies also have arole to play in growing existing markets anddeveloping new markets.

In addition to commercial aviation, the2008 Preclearance Agreement with the UScovers preclearance for general aviation/ private aircraft ights (GA) and this has beenavailable at Shannon since 2009. Giventhe high number of GA aircraft that landthere for refuelling en route to the US, it isdisappointing that a very low percentage ofbusiness jet operators avail of the facility.Shannon Airport should be encouraged toincrease the preclearance take-up rate byGA aircraft.

Because the preclearance service is notcurrently provided elsewhere in Europe,Dublin and Shannon Airports have asignicant advantage over other Europeanairports. However, the US has indicatedits intention to expand preclearanceoperations to new locations. In this context,Ireland will build on the experience gainedin preclearance since 2008, to ensurethe service offered has sufcient capacityto accommodate the projected growth indemand for transatlantic services. In thatcontext, potential to expand the operationalhours of the service, and to avail of newtechnology innovations in passengerprocessing and baggage handling, will beencouraged.

POLICY POSITIONUS preclearance is an asset that has further potential to contribute to the development ofDublin and Shannon Airports. The Departments objective is that all US bound ights fromDublin and Shannon wishing to do so can be precleared.

ACTIONS3.4.1 The Department will maintain close formal links with the US authorities to ensure

the continued delivery and development of US Preclearance facilities at Dublin and

Shannon Airports.3.4.2 The Department will encourage Dublin and Shannon Airports and airlines to maximisethe benets to Ireland of preclearance facilities and will promote the development ofthose airports as preclearance centres.

3.4.3 The Department will support Shannon Airport in seeking to increase the number ofGA aircraft utilising preclearance.


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3.5 Air Trafc Management(ATM)

BACKGROUND

Air Trafc Management (ATM) is a keycomponent underpinning the global airtransport market. In Ireland, the Irish Aviation

Authority (IAA) has statutory responsibility,under the Irish Aviation Authority Act 1993,to provide certain ATM services in relationto civil aviation. The IAA is a protable,commercial State-owned company withthree main functions: (i) the provision ofATM and related services in Irish controlledairspace and on the North Atlantic; (ii)the safety regulation of the civil aviationindustry in Ireland and (iii) the oversight ofcivil aviation security in Ireland (the lattertwo regulatory functions are consideredfurther in Chapters 2 and 5).

The commercial development andmodernisation of ATM is recognised asa priority at both the global level in ICAOand at the regional level in Europe where ithas inspired the Single European Sky (SES)

initiative. Irelands geographical locationgives it a strategic prominence in the NorthAtlantic in ATM terms. The IAA is highlyregarded domestically and internationally asan efcient air navigation service provider(ANSP) being responsible, inter alia, for thecontrol of a large tract of sovereign andassigned airspace and also terminal airportmovements at the three State-owned

airports.

The provision of high-quality air navigationservices and the maintenance of a modernaviation infrastructure on a sustainable on-going basis is a major challenge for Irelandand other EU member States under thelegislative provisions of the SES. The ultimateobjective of the SES is to increase the safety,economic, nancial and environmentalperformance of the provision of air navigationservices in Europe. Continuing progress willremain a signicant planning challenge forANSPs such as the IAA.

ISSUES

The longer-term plan for the IAA in the ATMeld is linked to the evolution of the SES. TheSES plan to integrate airspace managementacross Europe has implications for allexisting 28 EU ANSPs and the primaryguiding principles for the achievement offuture airspace management integrationmust be service quality and efciency.

Because of its geographical location,Ireland will continue to have strong interestsin North Atlantic ATM. Irelands geographic

position and interest in North Atlanticairspace is recognised by the delegationby ICAO of service delivery in this area toIreland and the UK jointly. The evolutionof new global, satellite-based surveillancetechnologies for ATM on the North Atlantic, inwhich the IAA has invested on a commercialbasis, has potential implications for currentarrangements there.


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New technology has enabled a space-basedair trafc surveillance system to trackights in emergency situations to be offeredfrom Ireland as a free, public service tothe global aviation community. Known asAircraft Locating and Emergency Response(ALERT), the system will allow rescueagencies around the globe to request thelocation and last ight track of any suitablyequipped aircraft ying in airspace currentlywithout surveillance.

The IAA is planning other ATM modernisationinvestments, on a similarly commercialbasis, to deliver necessary operationalenhancements in line with SES requirements.Other developments such as remotetower technology also offer potentialcost efciency improvements and greatercontingency to the smaller State airports aswell as regional airports.

As an ANSP, the IAA has built up a reservoirof experience and expertise that places

it among the most efcient of its peers.Retention of this position in the longer-termand thus underpinning Irelands long-termstrategic interests in the North Atlantic willbe challenging and will require sustainedmodernisation investment.

Functional Airspace Blocks (FABs) are akey part of the SES objective to reducethe current fragmentation of ANSPs acrossEurope. The UK-Ireland FAB was the rstin Europe. It is Europes North Atlanticgateway and is important in integratingairspace between North America andEurope. No other FAB or European ANSPhas a similar role on this scale. Thenecessity for increased co-operation acrossEurope will become stronger over the nextdecade. This evolution will require the IAAand NATS (the UK ANSP) to intensify theircurrent close level of cooperation. Thecase for pursuing operational synergies intechnology and training areas with otherFABs is likely to increase.

POLICY POSITIONIreland supports the continued development of the Single European Sky initiative, includingthe progressive achievement of airspace management integration throughout Europe inaccordance with performance quality and efciency principles and appropriate organisationof regulatory oversight.

ACTION3.5.1 Ireland will continue to encourage investments in modern, technologically advanced,

cost-efcient aviation infrastructure, including those that underpin Irelands interestin the North Atlantic and the future trafc growth at our airports.


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CHAPTER FOUR

A I R P O RT S


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Airports

4.1 The Irish AirportNetwork

BACKGROUND

As an island nation, with a peripherallocation, aviation access infrastructure is ofstrategic importance to Ireland. Over 80%

of all passenger movements into and out ofIreland are by air.

Ireland currently has twenty eight licensedaerodromes which include the threeState-owned airports at Cork, Dublin andShannon, twelve aerodromes licensed forpublic use and thirteen licensed for privateuse. A full list can be found in Appendix 2.These aerodromes provide different typesof services, ranging from leisure orientatedgeneral aviation to full internationalscheduled passenger and cargo services.This section of the Policy is focussed on theState and regional airports that underpineconomic activity in Ireland.

Despite our peripheral, island status, Irelandenjoys a strategic gateway geographic

position in relation to Europe and NorthAmerica. The designation of Dublin and Corkas core airports within the Trans-EuropeanNetwork, and specically on the North Sea Mediterranean Core Corridor, ensuresstrong legal and development frameworksat EU level. Connectivity potential of allour airports is enhanced by the expandingrange of bilateral Open Skies agreements

between the EU and third countries. Ireland

has a thriving tourist industry as well asgood framework conditions for multinationalbusiness and Foreign Direct Investment(FDI) with global export markets thesefactors are major contributors in drivingdemand at Irish airports and are reinforcedby a well-established preclearance facilitybenetting air passenger movements fromIreland to the US. All airports have accessto a well-developed network of regional andnational development bodies with mandatesto promote the development of the regions.The availability of land with investment/ development potential within and aroundour airports presents possibilities for thecreation of new business activities tounderpin the core airport business.

On the other hand, the airport networkis extensive for a small country with apopulation of less than 5 million, albeit witha relatively high propensity to travel by air,and this presents challenges for airportoperators. While regional airports retain arole in enabling international access, thedevelopment of the interurban road/railnetwork has reduced their importance for

connectivity within Ireland. As a small, openeconomy, vulnerable to global economicand political shocks, trafc at our airportsis prone to uctuations, and forecasts mustincorporate robust sensitivity analysis.Airports are also likely to be impacted byany measures that may be imposed onairlines in the context of initiatives aimedat reducing our overall level of transport

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Against this background, the Departmentis condent that the Irish airport networkis well placed to grow its share of globalpassenger trafc over the next decade.By 2020, the Department expects thatIrish airports will handle in the region of 33million passengers per annum, up from 25million passengers in 2013.

Trafc growth is critical to the aviationindustry and, given the well-establishedstrong positive relationship with GDPgrowth, the economic objectives ofairports and society are closely aligned. Inparticular, airports are incentivised to seekout high-value trafc enabling access to newdestinations and increasing connectivity toa region or country. New long-haul servicesare particularly valued by airport authoritiesand the markets they serve, as they openup new tourism and trade opportunitieswhile increasing aeronautical revenues andairport retail opportunities.

In the process of enabling growth inpassenger numbers and in high-value trafc,Irish airports will strive for excellence in the

delivery of services and value for passengersand airlines such that the Irish airportperformance and experience becomes aworld benchmark. The airports will make astrong contribution to the local economiesand communities they support, and theaviation connectivity needs of Ireland willbe secured for the next generation and forIrelands full participation in global society.

ISSUES

A number of responses received during theconsultation process questioned the needfor the high number of airports in Ireland,remarking on the competitive pressuresbrought to bear on individual airports,highlighting the commercial risks facedby smaller airports and challenging Statefunding for regional airports. Severalother submissions, reecting the interestsof individual airports, advocated exclusive- and sometimes conicting - designationsfor those airports, for example asgateways to particular regions. Some ofthose submissions expressed the concernthat developments in one airport wouldprejudice the interests of another. Withour low population base, and consideringthe improvements made to the surfacetransport network that have reduced traveltimes between our airports, as well asthe proximity of other airports in NorthernIreland, the Department recognises thechallenges for individual airports in a limitedmarket.

Outside the Greater Dublin Area, however,our population is very dispersed andour economy relies to a critical level oninbound tourism and on FDI business. Inthat context, the economic sustainability ofairports must be considered by referenceto high-level and regional-level economicand social policy goals and the needs of thehinterlands served by the airports.



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It is recognised that the regional airports, ascurrently supported by Exchequer funding,have an important role to play. The futureof these airports Donegal, Ireland WestAirport Knock (IWAK), Kerry and Waterford -will be impacted by EU Guidelines on StateAid to airports and airlines.

Recent restructuring of the State airportssector to which Exchequer funding isnot provided - under the State Airports(Shannon Group) Act 2014 provides for theestablishment of the three State airportson a sound footing with clear corporatestructures that allow for, at a minimum,sustainable operation of those airports inthe short to medium term.

It is a matter for all airports to identifyand to market opportunities for attractingnew business within their niche markets,in partnership with the relevant regional,tourism and industry bodies. As reectedin the Departments Tourism Policy (People,Place and Policy: Growing Tourism to2025), the State, using the resources of thetourism agencies, will promote increased

access to Ireland from high-potentialoverseas tourism markets. Inbound tourismand the export earnings and employmentit supports are profoundly dependent onthe volume, affordability and range of airaccess. Airports are core elements of thetourism infrastructure. In turn, tourismis an important source of trafc andcustomers for airports. In that context, thetourism policy focus on developing tourismexperiences of signicant scale, particularlythe Wild Atlantic Way and Irelands AncientEast, as well as the renewed focus ongrowing tourism in Dublin with the GrowDublin Tourism Alliance, provides signicantopportunities for airports, particularly thosewhich are positioned as gateways to thosepropositions. By working together withthe tourism industry, the tourism agenciesand carriers, airports can grow trafc andinbound tourism over the next decade.

The Department will continue to carefullymonitor the business development of allairports for evidence that the network isoperating efciently.

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POLICY POSITIONThe Department will encourage airports to attract new business, to achieve excellence inthe delivery of service and value for passengers and airlines, and to make a sustainablecontribution to their respective local economies and communities.

ACTIONS4.1.1 The Department will monitor the business development of all airports for evidence

that the prevailing network is operating at an optimum level. Monitoring will occurwithin the framework of developments under EU rules and the structural and capacityreviews referred to in Section 4.4.

4.1.2 The Department, the airports and the tourism agencies will continue to worktogether to increase access to Ireland from high-potential overseas tourismmarkets.

4.2 Regional Airports

BACKGROUND

Exchequer support relating to Irelandsregional airports (Donegal, Ireland WestAirport Knock (IWAK), Kerry and Waterford)is provided through a Regional AirportsProgramme. That nancial support isadministered by the Department throughthree separate schemes l A Regional Airports Capital

Expenditure Grant (CAPEX) Schemel A Core Airport Management

Operational Expenditure Subvention(OPEX) Scheme

l A Public Service Obligation (PSO) AirServices Scheme

All funding of regional airports by the Statemust comply with EU Guidelines on StateAid to airports and airlines.

Support under the CAPEX Scheme is onlypaid to the regional airports for essentialsafety and security work. OPEX subventionis paid to compensate the regional airportsfor costs incurred in providing core airportservices, insofar as these costs cannotbe fully met by prudent commercialmanagement and from any surplusesgenerated by non-core activities such ascar parking and catering. Two servicesoperate from regional airports under thePublic Service Obligation (PSO) Air ServicesScheme Kerry/Dublin and Donegal/Dublin.

ISSUES

Regional airports in Ireland were developed inthe 1980s to provide improved connectivityboth nationally and internationally andsignicant social and economic benets tothe regions that they served, particularly ata time when rail and road connections were

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However, as mentioned, improvementsto the surface transport network in theintervening period have impacted onregional airports role as regards domesticconnectivity. Today, regional airportscontinue to be important because of alevel of international connectivity that theybring to a region for tourism and business.Donegal, Waterford and Kerry airports areimportant to the area in which they arelocated. IWAK plays a more regional role interms of access than other airports given itslocation in the North West. These airportsshould be given the opportunity to grow toa viable, self-sustaining position, particularlyconsidering the contribution that they maketo their regional and local economies.

The 2014 EU Guidelines on State Aid toairports and airlines set out the criteriafor future CAPEX and OPEX supports, witha maximum intensity level of 75% beingprovided for CAPEX projects at airports withless than 1 million passengers per annum.On a case by case and exceptional basisthe 75% limit may be exceeded subject tospecic Commission approval.

The EU Guidelines specically exclude carparks, along with shops and restaurants,from the denition of airport infrastructureinvestments as such development is seenas outside core aeronautical activity. Inaddition, Ireland restricts Exchequer CAPEXfunding to safety and security relatedexpenditure which, in making best use of

limited Exchequer resources, continues

to be considered as the priority area forsupport. Extensions to capacity at regionalairports should only be undertaken if theycan be nanced commercially.

Under the 2014 EU Guidelines a distinctionmust be made between capital projectsat airports with an associated economicactivity (e.g. apron extensions, runwayoverlays, etc.) from those with noassociated economic activity (e.g. air trafccontrol, police, reghting etc.). Exchequersupports in respect of the latter fall withinthe category of Public Policy Remit and areoutside of the scope of State aid rules.

Similarly, core operational expenditurecosts at airports must also be distinguishedbetween those with an associated economicactivity and those with no associatedeconomic activity.

The 2014 Guidelines, in recognition ofprevailing market conditions, provide amaximum transitional period of 10 years forairports in receipt of State aid supports forcore operational costs (OPEX) to become

self-sufcient. Accordingly, clear businessplans will be required from the airportsdemonstrating that path towards viability.Ireland is required to submit annual progressreports to the EU Commission in respect ofairports in receipt of State aid.

There are many demands on the fundingavailable to the Department and maintaining

an attractive Regional Airports Programme

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will be challenging over the lifetime of thatProgramme, particularly with competingnancial requirements for public transportprovision and road maintenance. Irelandspolicy on nancial supports for the RegionalAirports Programme, in recognition of the2014 Guidelines, will continue in a downwardtrajectory over the lifetime of this NationalAviation Policy.

As the rst phase of this Policy, theRegional Airports Programme for 2015to 2019 reects the criteria set out in the2014 EU Guidelines on State Aid to airportsand airlines and represents IrelandsFramework for funding supports (CAPEX,

OPEX and PSO) to the regional airportsand airlines over that period. The allocationof any funding made available from 2015onwards will be critically examined with aparticular focus on maintaining and workingtowards improving necessary internationalconnectivity services. The need for regionaland local business investment will be a keyconsideration in this regard.

It will be essential that the regionalairports work together to develop greateroperational efciencies and to promote theoverall role of regional airports as accesspoints for both tourism and business.

POLICY POSITIONIreland recognises the important role that regional airports play in their areas and in regionaldevelopment.

ACTIONS4.2.1 Ireland will implement an EU approved Framework (Regional Airports Programme

2015 - 2019) of supports for regional airports.4.2.2 Exchequer support for operational expenditure at regional airports will be phased

out over a maximum period of 10 years, in accordance with EU Guidelines.

4.2.3 Exchequer support for capital expenditure will be limited to safety and securityrelated expenditure.4.2.4 Clear business plans will be required from the airports seeking supports. In

considering funding to regional airports, the Department will take account of thelevel of regional involvement, including investment by local authorities and/orbusiness.

4.2.5 From 2015, PSO contracts, for Donegal/Dublin and Kerry/Dublin air services willrun for two years initially and, subject to a satisfactory review after 18 months, maybe extended by a maximum of one year.

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4.3 State Airports

BACKGROUND

The State airports provide essential strategictransport infrastructure and services thatsupport the economic and social activities ofthe State. The ownership of these airports

and their management by commercial Statebodies is primarily designed to guaranteethe use of this strategic infrastructure forthe overall benet of the State. The threeState airports each have a critical role insupporting our citizens participation in anincreasingly global society, and in facilitatingeconomic development by enabling trade,tourism and inward investment. The daain respect of Cork and Dublin Airports,and Shannon Group in respect of ShannonAirport, operate on a commercial basisbut under a mandate from the Minister toensure that decisions take account of thewider national interest.

ISSUES

Each of the three State airports has distinct

geographic, demographic and infrastructurecharacteristics that differentiate theirrespective roles as well as the challengesand opportunities they face. Individuallyand collectively, they serve the connectivityneeds of their respective hinterlandpopulations but, as this is a relatively lowbase in aviation terms, their on-goingoperational viability is critically dependant

on their ability to attract inward air services

and passengers. For each of these airports,their potential as tourism and businessgateways for their respective regions willbe supported by the relevant tourism andtrade promotion bodies, at regional and atnational level.

Dublin Airport

The size and location of Dublin Airportdistinguishes it from the other State airports.Dublin Airport has seen a major increasein the numbers of transfer passengers inrecent years with signicant benets to thebroader economy.

An opportunity now exists to develop Dublinas a vibrant secondary hub, competingeffectively with the UK and other Europeanairports for the expanding global aviationservices market. A hub combines localpassengers with transfer passengersenabling airlines to operate services tomore destinations and more frequently thancould be supported by local demand alone.

This allows airport operators to utilise

airport assets more efciently, to exploiteconomies of scale and to drive down per-passenger airport charges to the benetof airport users and passengers. In thiscontext, the support and promotion of Dublinas a hub airport is an important means ofmaximising air access for the Irish economy.Dublin Airport is currently (summer 2015)ranked fth in Europe in terms of weekly

transatlantic seats, and is therefore well-

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placed for further development as a hub forglobal business.

Dublin Airport has a number of featureswhich makes it attractive to air carriers,including its geographic location on theNorth Atlantic Trans-Continental route, USPreclearance, single terminal transfers, andits location near the national capital citywith its signicant catchment area. Thesefeatures offer passengers who need tomake a connection a unique opportunity toavail of a transfer product that reduces theoverall elapsed journey time compared withother connecting opportunities.

The objective to develop Dublin Airport asa secondary hub will require support fromrelevant Government Departments and theState agencies involved in tourism marketingand trade development. The key nationalindustry development agencies supportedthe proposal in submissions to this Policyand the Department considers that thesebodies could make a useful contribution tothe secondary hub development throughtheir expertise and marketing activities. The

Department will work with daa and with allrelevant bodies to establish a framework toensure all relevant State agencies engagewith the secondary hub project. In addition,it will be important that Dublin Airport hassufcient capacity, including a second,parallel runway, to facilitate its developmentas a hub (see Section 4.5).

Cork Airport

Economic activity in the Cork region issecond only to that of Dublin and, asIrelands second largest city, the airport hasa strategic role in serving the connectivityneeds of the city and its hinterland. Theindustrial services sector is well developedand the region has benetted from FDIin life sciences, ICT and pharmaceuticalindustries. The wider region also offers avibrant leisure catchment. In submissionsto this Policy, further opportunities forCork were identied in association withthe development of the Cork ConventionCentre and with Filte Irelands emerginginitiatives (at that time) for South-Easttourism products. The British, French andGerman markets were also proposed fortargeted marketing strategies by tourismand enterprise agencies.

Indeed, Cork Airports unique position as agateway to each of the two ma

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