Friday, 9 August 2013

Irish Aviation Research Institute calls for competitiveness and structural change in Irish Aviation Policy Submission

                                                     
Courtsey: Paul Doyle 
This document was submitted to Department of Transport, Tourism and Sport on 24th July for the White Paper on Irish Aviation Policy.

Introduction:

The Irish Aviation Institute believes the opportunity presented by the formation of white policy on aviation is to further strengthen and enhance Ireland’s position in the aviation industry. In an increasingly competitive global industry the barriers need to be removed enabling airlines and companies compete to win new business and customers, creating new employment and growth opportunities.

The white paper represents a unique opportunity to break the status quo of the past in relation to aviation policy; the department itself has to take a lead role, creating the necessary structures and policies to enable the industry to adapt to ever changing needs in a very competitive environment.

The white paper must not become embedded policy but must be continuously adapted and bench marked against competitors. To ensure success consideration must be given to an industry steering board to ensure measures suggested by industry stakeholders that are adopted by the Department are rolled out in a timely manner maximizing employment and growth opportunities.

Airlines:

The Government should maintain and strengthen its two state airline policy as per Department of Transport to ensure healthy competition in the marketplace. The development of a competitive airport fees pricing structure at state run airports should encourage new entrants to the marketplace increasing customer choice and competition.

Air Travel Tax:

The current €3 Air Travel Tax funding of 'Marketing’ of routes needs to be re-invested to deliver real tangible benefits through the creation of a new route incentive fund in partnership with airports and Tourism Ireland. The route incentive scheme should be bench marked against successful incentives schemes in Northern Ireland and Scotland.

Ancillary Revenue:

In Europe airports are tourist attractions in their own right this is an avenue which needs to be pursued and developed by Irish Airports in conjunction with local county councils to generate profitable revenue for the airport and region. .

The success of viewing facilities at Frankfurt Main, Manchester and Zurich Airports are benchmarks for Irish Airports to create a new revenue streams and create additional employment opportunities in co-ordination with local stakeholders.

Aerospace, Maintenance, Repair and Overhaul:

To further increase the competitiveness of Ireland’s Aerospace, Maintenance, Repair and Overhaul industry an zero rate on hangar facilities needs to be adopted by local county councils to further enhance the sector, to reduce operating costs and create additional employment opportunities.  The high costs of rates are a serious impediment to growth of the sector and should be removed.

Zero parking rates for aircraft parking needs to be considered to further increase the competitive advantage of the MRO sector at state owned airports.

Consider R&D incentives to encourage MRO sector develop new product lines for Airbus A320NEO, A350 and Boeing 737 Max, 787 aircraft for provision of APU, Base Maintenance and Landing Gear services.

The Irish Aviation Authority services should be available to the MRO sector 24/7/365 to co-ordinate and facilitate the needs of its customers.

Create financial instruments to enable MRO’s and Aircraft leasing companies provide bundle leasing packages to the airline industry.

Aviation Education:

The development of a dedicated Aviation University at Dublin Airport needs to be developed as a matter of urgency to close the competitive gap the UK's Cranfield University.

Encourage collaboration between local airfields and the education sector to foster an interest in aviation at primary school level.

To encourage the development of aviation as a career path into the future provide integrated job bridge and aviation specific courses should be developed with education providers for those seeking a career in the industry, with full-time, part-time, flexible and online courses developed to meet industry needs.

Aviation Enthusiasts ID Scheme:

“It’s a win-win for both the airport and for spotters” Officer JoLynn Christianson, Minneapolis and St Paul airport police.

The UK Schemes recognizes the key part aviation enthusiasts have to play in keeping both airports safe and that they are a valued part of the airport community.

The Department of Transport and Irish Aviation Authority in conjunction with An Garda Síochána should consider rolling out an Aviation Enthusiasts ID Scheme at the earliest possible date following the success of similar schemes in America and UK.

An scheme for Ireland valid for all airports and airfields should be rolled out for a one-off registration fee of €10.

#Avgeeks: The new warriors on terror
http://edition.cnn.com/2013/06/04/travel/plane-spotters-versus-terrorists/index.html?hpt=hp_t3 

The Aviation Enthusiasts Security Scheme
http://www.taess.org.uk/

SO18 Aviation Security Aviation Enthusiast Scheme
http://www.met.police.uk/heathrow/aviation_enthusiast_scheme.htm

Airport to City Cycle Lanes:

The development of dedicated cycle lanes from airports to city centers and towns as part of roll out of national cycle network. This is essential as airports are first touch points for the majority of inbound tourists 80% +.

Cargo Facilities:

The government should pursue an Open Skies policy to encourage the development of the cargo business in Ireland leveraging the available capacity at airports in tandem develop US pre-cargo screening facilities in collaboration with US authorities.

The development Cargo designated ramps and associated warehousing and storage facilities at Irish Airports needs to be incentivised and developed to follow best practice of European Airports.  In Addition intermodal transport links need to formulate long-term planning particular at Dublin, Ireland West (WRC), and Shannon Airports to link into the national railway network as is common practice across Europe.

Frankfurt Hahn plans for the renovation of the Hunsrück railway providing the airport with a rail link to the Rhine-Main area . http://www.logistik.rlp.de/Logistics-Centre-Rhineland-Palatinate/Logistics-Region-Hahn-Airport/ as an example.

Ireland needs to plan in the long-term for inter-modal transport and update Rail Vision 2030 accordingly.

Commission for Aviation Regulation: 

The proposed plan to set-up a new body to regulate the planned merger of the Commission of Aviation Regulation and the Irish Aviation Authority needs to be scrapped. Alternatively activities of the merger entity should be monitored by the Competition Authority of Ireland.

The Competition Authority of Ireland should be given increased powers regarding airport charges pricing policy at state owned airports in the interest of the consumer.

The transfer of regulation of airports to The Competition Authority of Ireland should be interim solution as Irish aviation policy is set out in white paper.

Department of Transport:

The Department of Transport, Tourism and Sports needs to undertake fundamental restructuring of operations to focus on the needs of its customers whom operate in an increasingly competitive environment.

The consolidation of multiple facilities into a single out of town site to deliver an improved service and improve efficiencies needs to be considered to deliver further cost savings, in the context of budget 2014 and 2015.

To deliver increased focus to the aviation and related tourism sector the separation of functions of Maritime and Sports to other departments considered, to give greater focus on the development of the aviation and tourism industries, by narrowing the focus of the department to deliver a greater return.

The Department of Transport needs to develop and implement a digital marketing policy. Firstly the opening of a Twitter account would facilitate communications with stake-holders across the industry. Secondly the Department needs to pro-actively promote and support the industry through digital marketing campaigns, as Ireland needs to play catch up with competitors whom are very active in this digital marketing space.

The Department of Transport needs to fully integrate aviation and tourism policy going forward to compete on a global business in a growing tourism industry. Ireland needs to develop a long-term policy replacing a yearly planning to deliver long-term growth.

I include The Department of Tourism in Morocco set the Vision 2020 for tourism in Morocco as long-term strategic plan (http://www.oecd.org/regional/leed/46761560.pdf )as an example to be bench marked.

Therefore the Department of Transport Tourism unit should be integrated with Tourism Ireland removing duplication.

Dublin Airport DART Link:

In the current capital spending programme the proposed 7 km DART Spur line from Clongriffin to Dublin Airport should be prioritized as a matter of urgency, ahead of other capital projects. Dublin Airport handled 19 million passengers in 2012 and has 20,000 on-site employees is a significant market in its own right.

The railway line to the airport is a critical as airports play the major role in the customers first and last impressions of a country, particularly for business and foreign investors. Dublin Airport is disadvantaged without this piece of vital infrastructure vs. many primary and secondary airports across Europe.

There is ample railway capacity in the Dublin Area to accommodate the link as DASH Project will increase available paths through the city center from 10 to 20 per hour.  Plans for a rail link are already set out in EU-TENT 2030 Plan and Rail Vision 2030 policy documents. In addition to planned DART Interconnector and Phoenix Park Tunnel projects subject to NTA approval.

Fixed Base Operator (FBO) Facilities:

Fixed Base Operator- The DAA & Fingal County Council develop facilities for a new Fixed Base Operator to established at Dublin Airport utilizing land bank available to cater for significant growth in business jet traffic in recent years.

The development of Fixed Base Operator (FBO) at all Irish airports should formal an integral part of the white paper to deliver this critical infrastructure for FDI and to attract new business to Irish Airports.

Regional Airports:

The Government should integrate Regional airports with the planned HSE Hospitals centre of excellence in the regions. The regional airports are vital resource and should be integrated into planning of services by state agencies. Galway Airport’s close proximity to UCG is an example.

State owned Airports:

The Status quo of maintaining state ownership of Cork, Dublin and Shannon Airports cannot continue in light of ever-changing competitive landscape in the EU & Globally. In the UK BAA Airports Group has been broken-up and sold creating a competitive environment between London Gatwick, London Heathrow, London Luton and London City Airports.

In Poland a competitive airport policy as evident with the opening of Warsaw Modlin to compete against Warsaw Chopin, this trend will accelerate going forward across Europe.

The sale of certain airport assets and partial airport sale(s) should form part of consideration for budget 2014 or  2015,  as set out below in options one to five.  The proceeds from the sale(s) of airport assets could be used to aid reduction in budget deficit to 3.5%. The BAA successfully concluded the sale of both Edinburgh and London Stansted airports and Belfast International was successfully sold to new US owners.

The second runway at Dublin Airport should be removed from the master plan and alternatives including maximizing existing runway efficiency based on best practice of London Gatwick to increase movements per hour in peak time 0600-0800.

The proposed threshold of 23.5 million passengers is too low for the development of a second runway at Dublin Airport versus London Gatwick single runway operation with 40 million passengers and it is noted Dublin Airport at the peak of the boom in 2008 handled 23.5 million passengers.

From personal observation in 2008 primary pressure was on terminal facilities not on available runway capacity.

Reduce off-peak landing charges to stimulate demand and remove second runway from master plans, these measures will ensure Dublin Airport charges remain competitive versus competing airports across Europe.


Option 1:

Long-term 20 year concession lease of Dublin Airport Terminal 1 and Terminal 2 to different operators, this can be achieved through the transfer of the existing DAA land bank to Fingal County Council thus maintaining state ownership of the strategic asset while creating a competitive terminal competition based on the US airport business model.

Option 2:

Sale of Dublin Airport Terminal 2 to an private investor.

Option 3:

The Separation of Shannon Airport from Dublin Airport Authority is  a positive step. However to create a thoroughly competitive airport environment, the sale of 49% of Cork and Shannon Airports to private investors should be pursued following the highly successful Brussels South Charleroi Airport (BSCA) model which in  2011 handled over 6 million passengers and posted a net profit of €10 million. See Link: http://www.investinwallonia.be/2012/04/charleroi-airport-is-doing-well/?lang=en

Option 4:

State Infrastructure at Baldonnel Aerodrome is under-utilized and has significant potential to provide self-funding for the Irish Air Corps through the development of a joint civil-military dual-use of the facility. This is a trend at many airports across Europe.

This development can earn revenue for the Department of Defence through landing and parking fees utilizing existing fixed assets, and has the potential to create additional employment opportunities.

Option 5:

The sale of Dublin Airport Pier D to Ryanair to be operated by a third party.


Option 6: 

To stimulate traffic in the winter valley period landing charges at state run airports need to be discounted versus competing airports across Europe to make Ireland all year-round destination. This Winter Malta has waived landing fees from November to March to attract new business and make it a year-round destination.

Tourism Ireland:

To build on the success of Dublin Airport’s Terminal 2 Transatlantic connecting hub Tourism Ireland and the airlines in collaboration with the DAA should consider specific in-door and digital marketing campaigns and promotions to entice passengers to return to Ireland for a short-stay visit or holiday.

Tourism Ireland should negotiate with airlines to develop specific one-night stay packages for connecting passengers over Dublin.

Viewing Facilities:

Aircraft viewing facilities are retained at Dublin Airport Runway 28 car park and Northerly car park as part of Fingal County Council Area Master Plan.

Conclusion:

This is a time of significant change and opportunity in the aviation sector our geographic position means we are heavily dependent on the aviation industry, therefore we need to maximize the opportunities to develop it to full potential. The status quo of a lazy fair aviation policy needs to be broken and we need to continuously  benchmark against our competitors.

Irish Aviation Research Institute © 9th August 2013 All Rights Reserved.

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