February 17, 2011
By Staff Reporter
The stopover rule has long been under threat from the general move towards liberalization of air routes through so-called ‘Open Skies’ agreements.
Negotiations between Ireland and the U.S. have been ongoing for years on the Shannon issue, but this week will mark a watershed. Ireland’s Transport Minister Martin Cullen arrived in the U.S. yesterday, and will meet with his American counterpart Norman Mineta today. A final agreement to scrap the Shannon stopover is expected to emerge from the meeting.
The Irish government initially opposed open skies. It reversed that position after it became convinced that liberalization could have a beneficial effect, possibly resulting in the introduction of new air routes between the two nations and also boosting the fortunes of Aer Lingus.
Now, the only obstacle to a deal seems to be a disagreement over a transitional period that would enable Shannon Airport to ease its way into the new arrangement.
“The U.S. position has hardened very substantially in recent months,” Minister Cullen told the Irish Times on Monday night. “They want full open skies straight off…without any transitional period. That is unacceptable from my perspective.”
Even though moves towards ending the stopover appear to be accelerating rapidly, some groups remain adamant that the regulation should remain in place.
SIGNAL represents workers at Shannon airport. It believes the loss of the stopover rule could have a massive and detrimental effect on a region that has struggled to keep pace with the surge towards prosperity along Ireland’s east coast.
“Transatlantic flights have been the backbone of the development of business and tourism in the west of Ireland,” SIGNAL’s spokesman, Joe Buckley, told the Echo. “Here, we have a sparse population and there are not many employment opportunities. There are a huge number of people depending on Shannon Airport.”
The airport has, in recent years, attracted more carriers offering routes to Britain and mainland Europe. It will set a new record for passenger numbers this year – 2.5m travelers used Shannon in the first nine months of 2005, and the total by December 31 is expected to comfortably exceed 3m.
However, these changes will probably not insulate it from the effects of a loss of the stopover rule. Ireland’s airport authority has suggested that transatlantic passenger numbers at Shannon are likely to fall between 40 percent and 50 percent under an open skies arrangement.
SIGNAL claims that the effects of abandoning the stopover would not be limited to job losses at the airport itself. Buckley contends that regular flights between Shannon and the U.S. have played a pivotal role in encouraging inward investment in the western region of Ireland. He notes that there are around 130 corporations with a presence in the Shannon region, including a large Limerick-based facility operated by computer giant Dell.
“U.S. companies need Shannon Airport – they need to move product and they need to get executives in and out,” he said. “If those links go or become more infrequent, U.S. companies would be more reluctant to expand, and Ireland as a whole would lose.”
Buckley also fears the effects of any change on tourism in the region. He argues that Shannon serves as a gateway to the entire western seaboard of Ireland, thus delivering an economic boost to areas from Donegal to Kerry that still rely heavily on American visitors.
In all, he believes that up to 40,000 jobs could ultimately be dependent upon Shannon Airport.
The contrary argument, of course, is that the free market will ultimately deliver greater dividends – and a more efficient service – than government regulation. So far as there is a demand from tourists and business travelers to fly between Shannon and the U.S. then, presumably, airlines might be expected to supply a service to meet that need.
Similarly, supporters of open skies can point to a favorable bigger picture. A report earlier this year suggested that an open skies arrangement could increase the rate of economic growth in Ireland by 10 percent.
Buckley, however, believes the downside has been considerably underestimated, and he is skeptical of the idea that free market economics will solve all problems:
“If the free market works, then why do we have government regulators in all sorts of areas? A free market would only work in a situation like ours if you had five million people on one side of Ireland and five million on the other. But it’s not like that. Ireland is becoming one of the most centralized countries in Europe. And the only bright light of regional infrastructure is Shannon Airport. People don’t realize its importance.”
Buckley believes that an economic impact study must be carried out before any decision to abandon the stopover is made. While he accepts that open skies agreements will inevitably replace older, more restrictive arrangements in time, he also argues that the Irish government, in partnership with the EU and the U.S., could negotiate an exception for Shannon. The exemption would be based on the airport’s unusual degree of importance to the economic wellbeing of its surrounding area.
As the moves towards open skies continue, however, the chances of a Shannon exemption seem to be small and getting smaller.