INTRODUCTION
Good afternoon ladies and gentlemen.
It is a pleasure to be in such magnificent surroundings here in Dromoland Castle, the ancestral home of the O’Briens and direct descendants of Brian Boru, High King of Ireland.
It’s not often that I get the opportunity to dine in a Castle, especially in one as splendid as Dromoland, so thank you for inviting me to be your guest here today.
The subject I want to speak about – aviation – also has historic links with the Shannon region.
While those linkages don’t go back quite as far as the eleventh century, they are none the less extremely important to Shannon and to the island of Ireland.
But before I do so, as I am addressing an audience of business leaders, I want to mark the important milestone that we collectively reached last week, in reducing unemployment below 9 per cent.
While we have much work to do to reach full employment, that goal is now firmly in our sights.
And with it, so too is the goal of an end to the forced emigration of Irish people abroad.
I hope you too share the joy I feel in saying that 2016 will, it seems, be the first year since the economic crisis began that we will see more people coming here to live, work and study than our leaving.
And what more fitting tribute to this great country, in the anniversary year of 1916, could there be than that.
The perception of this country is also changing. This will be of particular interest to Shannon, given that it is of itself crucial to how many visitors to our country perceive us.
It might interest you all to know that the Economist magazine, which previously dubbed Ireland as “Reykjavik on the Liffey” because of the banking implosion we experienced, described us as “The Celtic Phoenix”.
Notably, it pointed out that that the recovery we are now experiencing is not an action replay of the “disastrous overheating of the economy of ten years ago” but rather one based on multinational investment, continued export growth and sustainable growth in domestic consumer demand.
This is all good news.
THE IMPORTANCE OF THE AVIATION SECTOR TO THE ECONOMY
Turning to aviation, I am deeply aware of how steeped in the industry this part of Ireland is.
Shannon is, after all, the location of the world’s first duty free store, opened in 1947 as just a kiosk, but which went on to be a model for airports the world over in the decades that have come since then.
The aviation sector is important for the nation as a whole, contributing over €4bn to Ireland’s GDP. The sector supports 26,000 jobs directly and a further 16,000 jobs indirectly.
It’s important that we not only maintain and sustain these jobs but that we maximise the opportunities for growth and more job creation in the future.
But its importance to the economy goes well beyond the sector itself.
Our tourism industry – which also falls under my portfolio (and about which I will say a few words later) – is critically reliant on the aviation sector.
Tourism supports an estimated 205,000 jobs – which we plan to grow to 250,000 – and generated €3.6bn in overseas visitor revenue in 2014.
All areas of the economy, in one way or another, depend on good air transport links that are safe and cost effective.
THE NATIONAL AVIATION POLICY
In a nutshell, the National Aviation Policy which I published in August aims to maximise the sector’s contribution to overall economic growth into the future and support job creation.
There was a strong level of stakeholder input into the formulation of the new national policy and I would like to take this opportunity to thank you, Shannon Chamber, for your contributions to the development of the Policy.
The Policy contains a comprehensive list of actions which are designed to ensure that the right conditions exist for a flourishing aviation sector into the future.
I believe that these will secure and enhance Ireland’s air connectivity by ensuring safe, secure and competitive air access, which is responsive to the needs of business, tourism and consumers.
The Policy pulls together all the main strands that need to be worked on and developed in order to ensure that our aviation sector is properly equipped to meet the challenges and opportunities that lie ahead.
Some of the main features of the new Policy include:
- the maintenance of aviation safety as the number one priority;
- an increase in connectivity, especially with emerging markets;
- the achievement of a high level of competition between airlines operating in the Irish market;
- the retention of Dublin, Cork and Shannon Airports in State ownership;
- the promotion of Dublin Airport as a secondary hub, with the necessary infrastructure to meet projected traffic growth, and supporting the roles of Cork and Shannon airports as tourism and business gateways in their respective regions;
- support for the regional airports in line with my Department’s Regional Airports Programme 2015 to 2019, which was approved by the EU Commission in August;
- a commitment to maintaining Ireland’s attractiveness as a base for aircraft leasing;
- the undertaking of an independent review of the regulatory regime for airport charges this year and finalisation of future policy in this area by the middle of next year;
- the establishment of a National Aviation Development Forum in order to consult with the industry on the development of the international regulatory agenda for aviation and to coordinate the promotion of Irish aviation.
My Department is now focussed on implementation of the new Policy and on an appropriate structure for the National Aviation Development Forum which I hope to establish shortly.
Implementation of the Policy will facilitate the expansion of the aviation sector in this country.
It will help make it more competitive and tackle barriers to growth.
It will facilitate the development of new air transport links
And it will help to maintain Ireland’s leading global position in the aircraft leasing and aviation finance sectors.
Last year 25.5 million passengers used Ireland’s airports – up 7% on 2013 – and growth has remained strong again this year.
By 2020, it is expected that our airports will handle in the region of 33 million passengers.
The medium and long-term trends for global air travel points in only one direction – upwards.
While such growth will of course lead to extra job creation within the aviation sector itself, its greater potential lies in facilitating growth across all sectors of the economy.
SHANNON AIRPORT AND THE SHANNON REGION
The aviation sector is also, of course, one of the key drivers of the local economy here in the Shannon region and in the mid-West generally.
Following the Government’s decision to separate Shannon Airport Authority from the daa in December 2012, it has come as no surprise to anyone familiar with the history of Shannon airport to see how positively the Company has responded to that initiative.
As we approach the third anniversary of autonomy for the airport, I am delighted to see that passenger traffic continues to recover.
Many of you will be only too well aware that Shannon Airport lost two-thirds of its passengers in the five years prior to separation.
But that decline was halted in 2013.
And it was reversed last year when the airport recorded an increase of 17% in passengers.
Shannon Airport continues to perform strongly and growth for the current year is expected to be in the region of 3% – 4%.
I already mentioned some of the main features of the National Aviation Policy but the importance of Shannon airport is also specifically recognised in the Policy:
- it confirms that the Airport is of strategic importance for connectivity to the mid-West region;
- it serves as a ‘gateway’ to the Wild Atlantic Way; and
- it recognises the Airport’s importance for connecting traffic which is facilitated by the convenience of Shannon’s single-terminal transfer capacity and the availability of full US Preclearance.
These attributes and facilities, together with having the longest runway in Ireland capable of handling all aircraft types, support the airport’s ambitions to further expand existing operations and to develop new routes.
SALE OF AER LINGUS TO IAG
I would say also that Shannon Airport was uppermost in my mind during the recent sale of the Government’s share of Aer Lingus in May.
It was absolutely vital to me and the Government that we got assurances- like the commitment to maintaining the existing schedule for seven years, like the expected strengthening of the Shannon transatlantic flights on the IAG network- if a deal was to be struck.
ESTABLISHMENT OF SHANNON GROUP PLC
Of course the separation of Shannon Airport was only one part of the significant reorganisation of State agencies in the Shannon region.
Shannon Development was also fundamentally restructured and we established a new State-owned commercial entity, Shannon Group plc.
Shannon Group is now the parent company for Shannon Airport Authority and the restructured Shannon Development and it brings a unification of purpose to the two separate companies.
This is providing a catalyst for the development and expansion of sectoral opportunities, particularly in the area of aviation services including niche opportunities in aeronautical and aerospace engineering.
This will be greatly facilitated by the fact that the Shannon Free Zone lands are adjacent to the airport itself. However, Shannon Group can now capitalise on this advantage of physical proximity by providing a new dynamism to carry-through on the full potential of the Shannon ‘campus’.
Aside from the on-going recovery of passenger traffic through the airport, I am very pleased to see the progress that is being made by Shannon Group.
Shannon Commercial Properties, which manages the property portfolio of the former Shannon Development, is addressing a long period of underinvestment in its property assets.
The Group recently announced a first-phase €21 million redevelopment programme at the Shannon Free Zone that will significantly strengthen the hand of development agencies in attracting new investment and job creation in the region.
Apart from the airport and the property portfolio, Shannon Group has two other important business units, Shannon Heritage and the International Aviation Services Centre.
I very much welcome the fact that last year Shannon Heritage recorded its best year since 2007. Over 637,000 people attended their visitor attractions and evening entertainments, up 11% on the previous year.
With the anniversary of 1916 approaching, I am also very glad to hear that Shannon Heritage has won the contract from An Post to operate and manage a €7m interpretative centre in the GPO which will open in March.
And the role of the International Aviation Services Centre is to build on the existing network of aviation related services in Shannon in order to grow a globally recognised, and internationally competitive, aviation industry cluster with the airport at its core. The aim is to generate additional business for the Group and, most importantly, more job opportunities in the Shannon/Limerick area.
TOURISM
I would also like to take this opportunity to say a few words about our tourism sector.
Last March, the Taoiseach and I launched a new Tourism Policy Statement – “People Place and Policy” – which sets ambitious targets for the tourism sector over the course of the next decade.
The Statement builds on the complementary strengths of our tourism offering including our uniquely friendly and welcoming people; the beauty and historic heritage of our places; and the support and commitment of Government.
It addresses issues such as:
- a switch of focus from visitor numbers to visitor revenue;
- the sustainable development of our tourism infrastructure;
- the development of increased community engagement with tourism; and
- it has policy objectives to ensure that the tourism sector has the appropriate skills to meet the needs of future visitors.
The overall aim of Government is that, by 2025, revenue from overseas visitors, excluding carrier receipts, will increase to €5 billion and employment in the sector will rise to 250,000.
This will be underpinned by a rise in overseas visits from 7.6 million in 2014 to ten million in 2025.
Tourism is performing very well this year and indeed we may set a new record for overseas visits to Ireland, surpassing the previous peak which was set in 2007.
This recovery is primarily due to the inherent quality of Ireland’s tourism offering, coupled with the supportive policies of the Government since 2011.
Those polices include the special reduced 9% VAT rate, the setting of the Air Travel Tax to zero, innovations in visa policy, and initiatives such as The Gathering in 2013.
TOURISM IN THE MID-WEST REGION
The importance of tourism to the economy here in the mid-West was highlighted again most recently in the Mid-West Action Plan for Jobs that was launched by the Government last month.
The Region attracted 956,000 overseas visitors in 2013, generating €248m in revenues. The new Action Plan for Jobs aims to grow overseas tourist numbers in the mid-West to 1.26 million by 2025, to increase revenues from this source to €375m and to grow employment in the sector by 25% over that period.
Crucial, of course, to our work in getting visitors to this part of the country is the Wild Atlantic Way initiative.
This magnificent tourist trail stretches longer than the Garden route in South Africa and runs along the entire west coast of our country.
Our support for the Wild Atlantic Way will result in increased visitors to the town and villages peppered all along its two and a half thousand kilometres.
These towns and villages, remote from Dublin, often remote from other centres of population, industry or employment will directly feel the benefit of our investment.
With the strong national tourism performance of recent years, some capacity issues around visitor accommodation have developed in Dublin during the peak summer season.
This could have the potential to limit growth in other regions since so many overseas visitors use Dublin as a ‘gateway’ to the country.
For this reason, I decided to make a fund of €1 million available to Tourism Ireland to support co-operative marketing that will encourage overseas visits directly to points of entry outside of Dublin.
As well as the €1m being provided by my Department, it is expected that local authorities and tourism interests in the regions will also add to the funding for routes serving their particular access points. The total will then be matched by carriers and overseas partners for maximum benefit.
Tourism Ireland will support those proposals from the regions which are judged to provide the highest incremental impact in terms of additional overseas visits to Ireland.
SECURING THE RECOVERY
Looking again to the national picture, you will be aware that I and my colleagues in the Dail will have a job interview with the people in the Spring.
As tough as that might be for us, I know it is not nearly as tough as the difficulties business people like you faced in recent years. You, along with the rest of the Irish people, have made huge sacrifices during the recession – sacrifices that I am glad to say are now resulting in economic progress.
We have 135,000 more people at work. More people in work, of course, means less tax for working people and more revenue to invest in better services.
But we cannot take for granted that stability and recovery will continue.
That is why keeping the recovery going means having a plan to create more jobs and keep the economy strong.
That is why we made responsible decisions in Budget 2016, like reducing the tax on working families.
And that is why the next election, I believe, will be a choice about who will keep the recovery going, based on stability and progress because the Irish people have worked too hard to get to where we are and we cannot go back.
CONCLUSION
Before I finish, I want to congratulate Shannon Airport on recently celebrating its 70th anniversary of the commencement of passenger transatlantic flights.
I also wish the new Shannon Group, and its constituent business units, continued success in the years ahead. Thanks to the Board, headed by Rose Hynes, and the dedicated management and staff, Shannon Group is starting to realise the ambitious targets which were set for it.
The objectives of the National Aviation Policy have huge relevance for Shannon.
The Shannon aviation ‘campus’, incorporating the airport and the International Aviation Services Centre, is a microcosm of the Irish aviation sector.
All the main elements of the aviation industry value chain are contained here and, as we set about implementation, I expect to see the overall benefits that will flow from the new Policy to be demonstrated here in the Shannon region also.
I believe that our aviation sector, and indeed our tourism sector, is in good hands.
Those working in these sectors should be confident that the valuable contribution their businesses make to this country and to our economy is appreciated and supported by Government.
I would also like to again thank you, Shannon Chamber, for engaging in the National Aviation Policy consultation process and for giving me the opportunity to address your annual lunch today.
As we approach year-end, I wish all of you and your families the very best for the festive season ahead and a prosperous New Year.
ENDS