Ireland’s aviation sector may require more State pandemic supports next year after receiving €521 million in such supports since Covid-19 struck, as traffic levels are unlikely to recover until 2025, Government officials have forecast in a spending review.
An assessment of aviation supports was one of a series of reviews published on Friday by the Department of Public Expenditure.
It says sustained growth in the aviation sector in the years prior to the pandemic came to an abrupt end when the coronavirus response shut down travel in March of last year, with passenger traffic levels at the main Irish airports falling 78 per cent and 94 per cent below 2019 levels in 2020 and this year respectively.
“To date, €254 million has been provided to the aviation sector in the form of sector-specific supports, while the sector has also benefited from an estimated €267 million in ‘horizontal’ or non-sector-specific business supports to [the] end [of] June, including wage subsidy schemes,” the review said.
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The officials raised the prospect of a “twin-track” recovery in the sector, with Dublin Airport recovering strongly and regional airports less strongly.
“In the short term to continue to support the sector, it may be necessary for access to horizontal business supports to continue in 2022 and may also require additional future funding under the regional airports programme, particularly for Cork and Shannon [airports],” they said.
Under Budget 2022, regional airport programme funding has increased from €21 million to €36 million to facilitate the temporary inclusion of both Cork and Shannon airports in the programme.
Grants
Since the pandemic started the airports at Cork, Shannon, Dublin, Knock, Kerry and Donegal received four grants totalling €64 million. Aer Lingus, the former State airline which is now part of International Airlines Group, received a €150 million debt facility, while €40 million was provided to the State-owned airport operator DAA in a bond issue.
"The majority of countries have granted favourable loans with low interest rates and/or state guarantees. In contrast, Ireland has afforded aviation enterprises a considerable number of non-reimbursable supports in the form of grants," the review says.
In a separate review, officials called for the rationale for the cycle to work tax scheme to be re-examined and found that no records were centrally available on its operation.
“There are no official figures indicating the scheme costs or uptake, and estimates for both vary significantly,” the authors of this review said. “While an examination of census data indicates an increase in cycle-commuters since the introduction of the scheme, the increase is modest considering the reported estimates of scheme uptake.”
A third review found that total spending on disability and special education supports rose by €2.4 billion, or 51 per cent, in the 10 years to last year to €7.1 billion. The number of people accessing social protection income supports in that period increased by 44 per cent to 279,757.
The review said future government policy should enable greater co-ordination of disability supports for service users. “This would enable supports to be more targeted, flexible and have the right mix of activation.”
