Sunday, 29th February 2004

NEW AIR AGREEMENT TO INCREASE US VISITORS BY OVER 1 MILLION

The Irish Hotels Federation (IHF) today called on the Government to immediately commence re-negotiation of the Ireland/US bi-lateral air agreement, in order to remove the current constraints on US route access to and from Ireland and to facilitate additional access for the coming tourist season.

The Federation suggests that a new agreement allowing increased air routes from the US would add up to almost 100,000 additional new US visitors to Ireland each year generating some ˆ64m in revenue to the Irish economy. Currently 15% of all overseas visitors to Ireland are from the USA, and this could increase to nearer 20%, generating an extra 1 million visitors per annum within the next five years.

The IHF also called on the Government to assist in efforts to give the go-ahead to the development of an independent competing second terminal at Dublin Airport facilitating quick turn-arounds for low cost air carriers.

Speaking on the eve of the Federation’s 66th Annual Conference in Killarney, Co Kerry, Mr John Power, Chief Executive, IHF stated that availability and ease of air access to Ireland is a massive influence in encouraging overseas visitors to choose Ireland as a destination. He argued that it is imperative that new air routes and new tourism markets for Ireland are targeted if the national objective to increase the number of overseas visitors from 6 million to 10 million by 2012 is to be achieved.

“The current situation whereby there is restricted access for airlines to fly into and from the US, and the lack of a second terminal at Dublin airport has constrained the potential for growth. The opportunity for US visitor market growth is critically reliant on increased air access. There is a huge need for a more ‘open’ air transport agreement between Ireland and the USA. There are immense opportunities to create new routes to Ireland from a range of US cities but the current arrangements create barriers to the creation of such routes,” he said

“Areas like Dallas, Orlando and San Francisco that have large untapped populations that would have an interest in visiting Ireland cannot easily access direct air travel. We need the Irish Government to commence the re-negotiation of the air agreement now. The American market is vitally important to the Irish tourism industry, accounting for some 890,000 overseas visitors last year who contributed ˆ750million in revenue into Ireland. We swiftly need action in this area to grow this high value market,” continued Mr Power.

Between 1989 and 2002, over half (54%) of all US visitors flew directly to Ireland while 46% came via the UK and mainland Europe. The trend for direct flights being selected by US visitors has grown steadily since 1995 and indicates a high potential for further development as there is a definite correlation between increased demand and direct air access availability to Ireland. Between 1994 and 2000 US visitors increased by 114% and a key factor here was direct air access.

“We know that American travellers are high spend individuals with the average US visitor spending ˆ840 in 2002 compared to ˆ470 for all other overseas visitors. We also know that that they travel extensively throughout the country when here, so the benefit of their spend penetrates all regions,” said Mr Power.

“The Federation and its members are always willing to support and partner product development and marketing initiatives designed to encourage growth in tourism in the west of Ireland to ensure that the gains from additional US air access would be evenly dispersed through the country” Mr Power continued.

Mr Power acknowledged that Shannon Airport would need to adjust to the outcome of such renegotiations, as the compulsory Shannon stopover would most likely be removed. He recognised that Shannon would need time to adjust to the new arrangements and receive support to introduce new traffic development incentives. However, overall he said that a higher number of flights coming to Ireland from new North American destinations would have a major positive impact on the regions as it was anticipated an increase in US visitor numbers would be spread throughout the country.

A report produced for the European Commission in 2002 by the Brattle Group concurs with the IHF’s view as it suggests that Ireland would gain a 10% increase in transatlantic traffic demand arising from an Open Area Aviation Agreement secured with the US.

In calling for the construction of a second terminal at Dublin Airport, the Federation maintains there can be no excuse for the slow process to develop what is an absolutely essential addition to the country’s national access infrastructure. A second terminal would ease current capacity constrictions and create much needed competition, which will further encourage the opening up of new air routes into the country, the Federation maintains.

The IHF has long since suggested that the key to the success of Irish tourism is through increasing access to our island destination, combined with competition in the market to ensure low cost access.

“Competition is needed at Dublin Airport and as it appears private enterprise could be willing to fund it, there should be no outlay to the exchequer and no more delays. The deregulation and encouragement of competition among airlines has been one of the principal drivers in the growth of Irish tourism over the past 10 years. Competition brings efficiencies. The days are long past of protecting State monopolies, particularly where private enterprise is willing to compete. This terminal has been in the offing for over six years now and it is incredulous that we still have not seen any actual plans or specific deadlines for completion,” Mr Power concluded

FOR FURTHER INFORMATION:
Siobhan Molloy/Niamh Boylan Tel: (01) 676 01 68
Weber Shandwick FCC (086) 817 50 66 or (086) 3809191