Examination of Witnesses (Questions 180
- 199)
TUESDAY 30 NOVEMBER 2004
MR JOHN
DEVINE AND
CLLR JOHN
KERR
Q180 Mr Bailey: Basically your answer
is that they approach you?
Mr Devine: It is a mix of them
approaching us and us approaching them, it depends on the particular
route that we are talking about.
Q181 Mr Bailey: What incentives have
Ryanair offered, such as landing costs, advertising, maintenance?
Has that been part and parcel of the discussions that you have
had?
Mr Devine: No. We offer a commercial
arrangement to Ryanair and to other carriers on an equal basis.
We are always mindful of the recent Charleroi decisions as a good
indication as to what will be the future and what will be allowed
in the future.
Q182 Mr Bailey: So you are satisfied
that the deal, if you like, does not contravene any EU regulations?
Mr Devine: As the deals were put
in place then they certainly did not contravene any regulations.
That was prior to Mme de Placio's deliberations. What we are seeking
to do with all airport charges and all deals that we have with
current airlines is to ensure that, depending on the outcome of
the appeal from Charleroi, our deals will not contravene any European
legislation, but we will have to wait and see what the outcome
of the appeal is.
Q183 Mr Bailey: That is very interesting.
Could it have profound consequences?
Mr Devine: It could have consequences,
I do not know that they would be profound. In the arrangements
that we have with Ryanair and with other carriers we are streamlining
in light of the first attempt at the Charleroi decision to make
sure that our charges are fair, equal, open and available to all,
and as to timescales. Timescale is the only issue we would have
had with any of our charges but as Europe has given an indication
as to what they believe is a reasonable timescale, ie five years,
that is the element we will make sure they are in line with.
Q184 Mr Bailey: If Ryanair decides
not to expand its operations here, as seems to be expected in
the PWC report, what plans do management have to replace their
expected growth?
Mr Devine: There are two elements
to the runway and one is the safety improvements, the other one
is the development of the runway. Without the safety improvements
to the runway, there is no possibility of Ryanair or similar types
of operators developing any route from the airport, in fact what
we will see is the withdrawal of a certain number of routes. As
you have already heard, we have lost our business day return service
to London, our morning and evening service, and we are now left
with more of a leisure type route in the evening. Obviously that
cannot be sustained because the region needs to be able to access
London for business traffic. Currently we are in discussion with
a number of other carriers. There are a number of other low cost
carriers out there that could provide a service. I go back to
what I said earlier, that the types of aircraft the low cost carriers
are currently operating but, more importantly, will operate in
the future in terms of fuel efficiency will be what dictate runway
lines and the safety overrun areas.
Q185 Mr Hepburn: Following on a point
on job creation, the Chamber of Commerce suggested earlier on
that future job creation in the region depended on expansion of
the airport, yet in the PricewaterhouseCoopers' report the future
routes mentioned were not key business centres. Can you reconcile
that?
Mr Devine: I think PWC focused
on the main low cost carrier that was at the airport then, and
currently here, operating into secondary airports. I suppose if
you consider Paris Charles de Gaulle as the main airport that
would be considered viable for business passengers to Paris then
Ryanair operates to the second airport, such as Paris Beauvais.
If you look at how Ryanair have developed into those secondary
airports, they have developed them as much for business as for
leisure. We do not see that development to secondary airports
being any great hindrance to the development of business traffic
on those routes.
Q186 Mr Hepburn: Just on the London
flight, can you give a breakdown of how many business travellers
are going to and coming from? How many originate in London and
how many originate in Derry going to London to do business?
Mr Devine: The airlines keep that
as a fairly guarded piece of information because of the competitive
nature between them and other low cost carriers. The last information
we had about a year ago when the route was operating morning and
evening was that 64% of the route was originating in London at
that time.
Q187 Mark Tami: In your evidence
you indicated that "up to a third of runway length for both
landing and takeoff is not usable due to the presence of houses
and obstructions immediately beyond the airport boundary".
Could you perhaps elaborate and give us a bit of technical detail
on that?
Mr Devine: It has been said, and
it was said in evidence earlier, that the runway is longer than
a number of other runways. There is quite a marked difference
between the physical length of a piece of tarmac and the amount
of tarmac that is usable. The Civil Aviation Authority and the
International Civil Aviation Organisation—ICAO—lay
down regulations for aircraft performance and published runway
lines across the world. This particular runway, because of these
obstacles on the approach, some of the houses out there and chimneys
out on the approach, require aircraft to fly much higher than
that approach and, therefore, are not able to touch down at the
beginning of the runway but have to overfly a portion of the runway
before landing.
Q188 Mark Tami: Obviously there are
the houses that we have talked about but what else is there?
Mr Devine: On the safety overrun
areas, ICAO and the UK Civil Aviation Authority are bringing in
new regulations across all UK licensed airfields which require
safety areas at the ends of runways to be put in place. That is
just an area where an aircraft can run off at the end of the runway
and not be damaged by hedges, ditches, fences or whatever and
allows the fire vehicles to get to the aircraft. Those are the
types of things that have to go in at the ends of runways.
Q189 Mark Tami: Can I try to pin
you down on the obstacles apart from the houses. Physically, what
are they?
Mr Devine: The majority of them
are houses which have been built in the last 15 to 20 years.
Q190 Mark Tami: It is the houses,
not anything else?
Mr Devine: The majority of them
is the houses but there is one large chimney out there as well.
Q191 Mark Tami: To take up Mr O'Brien's
point which he made earlier, about the fact that there are other
airports, Belfast City and Aberdeen, that have shorter runways
and yet can carry on, is that purely because they do not have
houses?
Mr Devine: Because they can use
all of their runway. I have to say that our runway is not longer
than those other airfields because it is not operational and you
should perhaps discount it and compare like with like, compare
Belfast City's operational runway with our operational runway,
Aberdeen's and Lübeck's with our operational runway, and
you will find that we are not longer, we are shorter. They have
the safety overrun areas in place that exist at the ends of their
runways as well as the clear approach areas.
Q192 Mark Tami: I just want to be
clear on this point. Are you saying that there is not the overrun
that end because you end up in the sea, or are you saying there
is not a safety overrun that way because you end up in the houses?
Mr Devine: There is a safety run
almost complete at the eastern end of the runway on to the foreshore
of Loch Foyle. Some 50 metres of a 90 metre overrun area is already
in place at that end of the airfield. At the other end of the
airfield, the current 90 metres is contained within the airfield
boundary and a portion of the runway was sacrificed to allow that
to be there. What the Civil Aviation Authority is bringing in
this year is a much increased overrun area. Worldwide statistics
show that over the past 15 years the majority of accidents in
the landing or takeoff phase have been overruns where an aircraft
touches down on the runway, cannot stop and goes off the end of
the runway. We have this box of 90 metres which the aircraft could
stop on but it has been shown by all the accidents that have occurred
that they have not stopped within this 90 metre box, they have
carried on through the hedge. You will remember the one that came
on to the M25 at Northolt because they had this notional box at
the end of the runway that the aircraft should notionally have
stopped in but did not. They are providing much larger overrun
areas.
Q193 Mark Tami: Do you think these
will be issues for Belfast City and Aberdeen?
Mr Devine: They are issues for
all the airports. At Belfast City's main runway where the majority
of airliners are, they have an area of some 600-700 metres at
the end of the runway which an aircraft can run on to, but we
do not.
Q194 Chairman: A few questions on
the Route Development Fund and the PSO. You have got the two new
routes started recently to Manchester and Birmingham with support
from the Route Development Fund, although the Fund's original
intention was to develop air links particularly with Europe. At
the same time there were two other routes to Alicante and Malaga
that were rejected by the Fund. Even though the Fund was set up
to support the development of European routes, the two that have
been successful are domestic flights. Do you think that the current
tests that apply in the Fund are correct or not given that there
seems to be a discrepancy in how the Fund is being used and what
the intention was?
Mr Devine: Yes, there are discrepancies
between the intent and how it is currently being used. I suppose
from a Northern Ireland sense, what is the difference between
a passenger coming into Northern Ireland from Manchester or Birmingham
and spending a few hundred pounds here and a passenger coming
in from another part of Europe and spending a few hundred pounds
here? I suppose they have reinterpreted the rules. A passenger
is a passenger and if they are spending money I suppose that was
what the Fund was really set up for, to bring visitors into the
region and they are all equally welcome. If the Fund only applied
to a particular European region then you might have all sorts
of European issues coming in if you discriminate against one part
of Europe as opposed to another. Perhaps that is why they are
allowing other areas to develop.
Q195 Chairman: Earlier on we mentioned
the Dublin route and I understand that is supported by a PSO.
That is correct, is it not?
Mr Devine: Yes. That is a true
PSO as opposed to the Route Development Fund. The Route Development
Fund supports the reduction in airport charges and does not pay
the airline. It gives up to an equal percentage in terms of reduced
airport charges direct to the airport, whereas a PSO goes out
on a contract basis to European airlines and invites European
airlines to bid for a particular route and operate that route,
probably at the lowest cost to the government, and the Irish Government
currently operates six PSO routes from Dublin, this being one
of the six routes.
Q196 Chairman: That was my next question
in terms of is it the Government in the Republic that is paying
for that PSO?
Mr Devine: Currently the Irish
Government pays Loganair to operate that route on their behalf
and Air Arran, who operate the other five. We believe on the six
routes they pay somewhere in the region of
20 million per year directly to the airlines to operate
those routes. The Government does benefit from that in that for
every passenger who departs from this airport on the Dublin route,
the UK Government earn £5 in airport departure tax straight
to the Exchequer.
Q197 Chairman: Are there any other
routes where a similar case could be made?
Mr Devine: Europe is opposed to
funding airlines now. You will have seen government funding being
withdrawn from the former flight carriers across Europe. There
are still a few that they manage to persuade Europe to provide
funding for. The French and the Spanish have a number of PSO routes
that they operate directly, some of them cross-border between
France and Spain. I would not entirely support the argument that
PSO routes are the way to go. I suppose I would support the way
in which the Route Development Fund operates. The Route Development
Fund is for a fixed three year period, it is an incentive-type
fund to get the airline over the hurdle of starting a new route.
It should never be seen as long-term or medium-term viability,
it should be seen simply as a pump priming exercise to allow the
route to operate. That is probably where you will see the Irish
Government take the PSO routes, in that rather than simply pay
the airline to operate a route, regardless of whether it performs
well or otherwise, you will probably see them moving towards a
system of pump priming, giving them the incentive and reducing
that incentive and encouraging the airline to build the business
to a point of viability.
Q198 Mr Pound: In evidence earlier
on we heard about members of the Diaspora, returning visitors,
people coming back. I live in a part of West London which is utterly
dominated socially, culturally, theologically, politically and
economically by the Donegal Association who absolutely run my
part of the world, and yet all the Donegal families I know still
fly Heathrow-Belfast and then drive, whereas people I know from
the Midlands will fly from Stansted to Derry. Have you done any
sort of analysis on the amount of passengers through Derry who
then make the further journey to Ireland?
Mr Devine: Not specifically on
how many people actually come into this region.
Q199 Mr Pound: And then go to Donegal
basically.
Mr Devine: We can give you statistics
for the route at Stansted. 42% of people who travel on the London
Stansted route who originated in the London area were travelling
in to Donegal.
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