Originally Posted by
Cyrano
My understanding is that the promised government funding is a grant rather than a loan. This idea that it will be "repaid" rests on a house of cards of (to say the least) shaky assumptions:
- Scheduled passenger flights will start, and the airport will operate at no cost to the state (i.e. the airport will become virtually the only one of its size in the world (and certainly the only one with Ryanair as a main carrier) to be able to break even)
- These passenger flights will bring new tourists to the Southeast most of whom would not have travelled otherwise, i.e. they wouldn't have used other airports such as Dublin or Cork (in other words, this will be mostly incremental demand rather than just displacement)
- These new (incremental) tourists will spend money in the Southeast on accommodation and food and car hire, which in turn will generate VAT, and perhaps create a few extra jobs in the hospitality sector in the region which will generate PRSI receipts for the State
- The passenger flights will of course also carry Irish people to the UK/Spain etc to spend money there rather than at home (meaning a loss of VAT/PRSI revenue in Ireland) but for the numbers to work we have to magically assume that most of these Irish people would have travelled anyway (via Cork/Dublin). In other words, the inbound demand (= extra VAT revenue) will be additional, but the outbound demand (= loss of VAT revenue) will only be displacement
If you are prepared to assume all of that, you may be able to make a case that there is a net annual gain of €1.25m to the State in terms of additional VAT and PRSI receipts (giving a 4-year "repayment") - but if you are prepared to assume all that, I can forward you the e-mail addresses of some Nigerian princes who would like to make you rich.
If there is a case for improved flight connectivity in the Southeast, it would surely have been better to put some funding towards subsidising a PSO flight to London with ATRs or Q400s or Embraers, to at least prove the market for a couple of years using the existing infrastructure, rather than putting the money into a runway extension which will simply leave the airport in need of continuing annual subsidy to stay open?
Pork Barrel funding at its finest in an unviable airport.