Ireland's aviation policy has to date failed to create a level playing field for Ireland’s regional airports to flourish, a report on the economic impact of Shannon Airport on the Irish economy and the wider Mid West region has concluded.
Conducted by economic advisory firm Oxford Economics, the report warns that a policy of "excessive reliance" on a single airport can result in a concentration of economic growth in a defined region to the detriment of the wider economy.
The report makes a number of recommendations including promoting Shannon Airport as the gateway to the Wild Atlantic Way as well as widening state aid rules to include regional airports handling more than 1 million passengers.
Shannon Airport became temporarily eligible for the Regional Airports Programme in 2022 arising from a slump in passenger numbers through the airport during the pandemic.
However, it will not be eligible under the current scheme from next year as passenger numbers have recovered to pre-Covid levels, in excess of the annual 1 million passengers.
The Government recently indicated that it would look at expanding the scheme to include airports handling up to three million passengers a year.
"Given that airports can drive regional growth, and that Project Ireland 2040 aims to rebalance growth across Ireland, there is a strong argument for providing state aid to Shannon Airport," Neil McCullough from Oxford Economics and one of the report’s authors said.
"There is strong evidence that airports can have a positive impact on local and regional economies and Governments are recognising the benefits of having a balanced aviation sector. If a country has an excessive reliance on a single airport, it can concentrate economic growth and any disruptions could cause a significant impact on the tourism sector, as well as the economy as a whole," he explained in the report.
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The economic assessment concludes that The Shannon Airport Group - which owns and operates the airport as well as a commercial property business - delivers a contribution of almost €4 billion to GDP, supports over 20,300 jobs, and contributes €643m in tax revenues.
11,300 of the jobs are linked directly to the activities of the airport and the businesses across the group's business parks, with the remainder accounted for by the supply chain as well as the spillover effect of wages being spent in the regional economy.
The analysis reflects the direct, indirect, and induced contribution that the group makes through its own activities, and the activities of firms operating in the Shannon Campus and the group's other business parks in the Mid-West and South-West of Ireland.
The report recommends that the Government should update the Irish Aviation Policy published in 2015 to help it achieve the long-term growth targets set out in Project Ireland 2040.
Promoting the airport as the gateway to the Wild Atlantic Way, it concludes, would help to differentiate Shannon's offer to prospective visitors from that of Dublin, 'which is more prone to congestion'.
"Shannon has a key role to play in rebalancing Ireland's aviation landscape, alleviating the congestion at Dublin Airport and delivering balanced regional development for our country. This report is a very useful reminder of the contribution which The Shannon Airport Group is making in terms of jobs and investment and its recommendations give us a lot to consider," Minister of State at the Department of Transport, Jack Chambers said.
