Aer Arann offered to islanders for just €1

Galway Daily news Aer Arann four month contract extension

The owner of Aer Arann has offered to sell the airline to the island communities for just €1 amid an ongoing contract dispute.

The airline, and its main shareholder Pádraig Ó Céidigh have been in a long running dispute with the Department o Arts, Heritage, and the Gaeltacht over the service it provides to the Aran Islands.

Currently the airline receives €800,000 in its Public Service Obligation contract which requires it to run 3,500 flights per year to Inis Mór, Inis Meáin, and Inis Oírr.

During peak tourist season the airline runs 30 flights a day, dropping off to the minimum needed by islanders during the winter.

However the airline has been trying to renegotiate its current contract, saying that the current terms make it run at a loss.

The Irish Times reports that Tarlach de Blácam, owner of globally traded Inis Meáin knitwear said the island communities have received the sale offer and carried out their diligence.

They are willing to take over Aer Arann, he said, but would require that the state provide enough funding for the maintenance of its fleet of aircraft.

One of its three ‘Islander’ planes is in the hanger for maintenance already and another is due in January.

The service would also need to be modernised and have improved marketing to ensure it has a viable number of passengers.

Earlier this year Mr O Ceidigh said that he would be unable to run the airline past December 6 under the current contract terms as it was no longer viable.

The number of passenger using Aer Arann has declined dramatically from a peak of 40,000 down to just 30,000 last year.

The government has been looking at providing an alternative for some time, with the airport being a tricky problem.

The airport currently used,  Aerphort na Mine in Indreabhán, is also owned by the airline, and proposals to fly from Shannon have not been well received.

The county council have raised the prospect of using Galway Airport in Carnmore instead, but have not been approached by the government.

Islanders would like a guarantee that Aer Arann would continue to fly from Aerphort na Mine if they were to take over, Tarlach de Blácam said.

The difficulty with any surge in investment in Aer Arann is that since it is already under a PSO until 2020, any additional state funding could be regarded by the EU as State Aid.

Other options that have been explored for community owenership, but not sanctioned by the government, include receiving a loan form Udarás na Gaeltachta.

Minister of State and Galway West TD Seán Kyne has been working to ensure that the air travel to the Aran Islands is able to continue after December 6.