One of the better-performing sectors in the Irish economy in recent decades has been the aviation business. Ireland now has two successful airlines: Aer Lingus, a financial basket case in the early 1990s, and Ryanair, now Europe’s dominant low-fare carrier but a small start-up just 30 years ago.

Some of the world’s biggest aircraft-leasing companies operate out of Ireland and Aer Lingus is an established competitor for connecting traffic, linking British and continental cities to the US and Canada.

The initiatives which eventually yielded both Ryanair and the leasing business are the legacy of private sector investments by Tony Ryan and his colleagues. The recent success of Aer Lingus owes nothing to State policy either and you never hear the Department of Transport or the Government’s industrial promotion agencies boasting about these success stories. There is a reason.

Until the 1990s, most European countries had a single monopoly State airline, nearly all subsequently privatised

Whatever has been achieved was delivered despite official indifference or sometimes outright opposition – there was never a coherent State-led policy to promote the aviation industry, it just happened.

Until the 1990s, most European countries had a single monopoly State airline, nearly all subsequently privatised. The monopoly model was abandoned and the former State carriers required to compete with one another and with new private sector airlines, a market structure encouraged by the European Union.

Aer Lingus historically combined high fares with recurring losses and had to be bailed out by the Exchequer to the tune of £175m in 1993.

In his review, Preventing the Future, Gill and Macmillan 2004, of Ireland’s economic policy failures prior to the Lemass reforms of the 1960s, the late Tom Garvin recounts the following episode: in 1943, the Fianna Fáil government was urged by Seán Lemass to commit to transatlantic service by Aer Lingus whenever the war ended.

It did, five Lockheed Constellation aircraft were purchased, landing rights in the US secured, staff trained with service planned to commence in 1948. The aircraft were scarce at the time but Fianna Fáil lost the February 1948 election, the incoming coalition cancelled the plan and sold the five aircraft to the UK’s national carrier BOAC, predecessor of today’s British Airways.

Garvin recounts the role played by the Labour party in the cancellation: air travel was the preserve of the rich and the State airline not a priority for State investment. Staff already trained by Aer Lingus were dismissed.

The compulsory Shannon stopover required that all service from Dublin would have to stop at the airport near Limerick, a stipulation applied to all carriers

When Aer Lingus was finally permitted to commence transatlantic service in 1958, American and European carriers had expanded operations dramatically and the Irish politicians helped them once again. The compulsory Shannon stopover required that all service from Dublin would have to stop at the airport near Limerick, a stipulation applied to all carriers. The main American airlines at the time, Pan Am and TWA, had bigger fish to fry and offered limited Irish connections. The compulsory stopover survived for 50 years, relaxed in half-hearted fashion in the 1990s and finally abandoned only in 2008.

There was no scope to develop transfer traffic at Dublin and Aer Lingus was unable to develop a significant long-haul business.

Shannon lost traffic to Dublin with the end of the compulsory stopover and traffic volumes have yet to recover to their historic peak levels. Cork has more passengers but not enough to break even on operations. Annual losses at Shannon Airport enjoy the status of a State secret – they are aggregated into a State entity called the Shannon Group, which buries them alongside surpluses earned on the rental income from legacy property assets of the former Shannon Free Airport Development Company (SFADCo). This orphaned rent roll was gifted to the loss-making airport, along with the entertainment business of Bunratty, to form an unlikely conglomerate able to announce aggregate annual profits while concealing the divisional breakdown, the brainchild of Limerick politician and finance minister Michael Noonan.

The tradition has been maintained by DAA, which still owns Cork but refuses to reveal the operating losses there

Shannon had previously belonged to the State-owned Aer Rianta, now the Dublin Airport Authority (DAA), which never revealed the losses at Shannon or Cork, hidden by the surplus at Dublin. The tradition has been maintained by DAA, which still owns Cork but refuses to reveal the operating losses there.

Politicians have not lost their fascination with subsidising regional airports. In addition to Dublin, Cork and Shannon – of which only Dublin has ever been busy enough to pay the bills – the total airport count rose to nine at peak.

The airlines withdrew service at Galway and Sligo, both now closed, and from 2016 at Waterford, still open and where apparently a new private owner plans to pay for an extended runway. None of the three regional airports still operating (Carrickfinn, Knock and Kerry) are busy enough to justify the State investment, never mind the operating subsidies. Ireland’s airport count has expanded because Irish politicians, not market demand, found a new outlet for regional subsidies.