Over and above that, there is a large capital sum outstanding which represents over-investment in the Airport which has to be borne in mind when reviewing the operations of Aerlínte. What I want to emphasise particularly is that these figures I quoted have no reference at all to Aer Lingus which operates from Collinstown and has only the remotest association, if any, with Shannon Airport. I can never fully understand why those using the Airport at Shannon cannot be required at least to meet the operating costs of the Airport. I imagine a great deal of bluff goes on naturally, in which the large American and British operators threaten to overfly the Airport but I often wonder if to-morrow morning they were told we were going to close down Shannon Airport, how long the bluff would last.
Shannon Airport has operated to save the lives of thousands of passengers and the fate of many aircraft because it was available to serve as an emergency landing. It is much closer to the transatlantic routes than any other landing place with comparable facilities. I cannot believe that transatlantic operating companies could, with equanimity, contemplate the disappearance of Shannon as it would so very substantially add to the normal hazards of the services they operate. I am quite convinced they would be prepared to pay a very liberal premium to insure against its disappearance.
As I see the situation at present, we are providing capital investment of £13.798 millions and we are getting the advantage of that for our own three jet aircraft and we are getting the landing fees and the diminishing yield of catering and sales, but I feel we should be able to derive from the total volume of transatlantic traffic using that Airport sufficient to meet the total cost of its operation. It has always been a mystery to me why we cannot. Sooner or later, this House must face the facts about transatlantic traffic as operated by an Irish company and in a statement of this kind, it is a silly thing, for which I rebuke the Minister, to run away from the facts and to try to cloak them.
I now formally charge him with doing that. He tells us very properly in paragraph 8 of his statement:—
I think it would be well for me to give the House a brief outline of the results, financial and otherwise, achieved by the carrying Companies —Aer Lingus and Aerlínte—during the past two years. In the financial year ended 31st March, 1960, Aer Lingus had an operating surplus of about £170,000 and in the six months ended 30th September, 1960, the operating surplus was £310,000.
That is clear and comprehensive, but now read the next paragraph:—
The financial accounts of the Company for the year ended 31st March 1961, are not yet available but I understand that the airline as a whole—Aer Lingus and Aerlínte— taking both the transatlantic and European sectors together will have a modest surplus for that year.
That is an astonishing change. At a certain point we are told the results of Aer Lingus and Aerlínte, and while we are in that mood, having heard of the handsome surplus on the part of Aer Lingus, we come upon the Delphic phrase: "The financial accounts of the Company for the year ended 31st March, 1961, are not yet available" but the Minister understands "that the airline as a whole—Aer Lingus and Aerlínte—taking both the transatlantic and European sectors together —will have a modest surplus for that year." If the Minister had the information on which to base that judgement, presumably he had corresponding information with regard to Aer Lingus and Aerlínte.
Later in his statement, after giving the statistics of the number of passengers carried by Aer Lingus, the Minister said:—
In the year ended the 31st March, 1961, Aerlínte carried 35,176 passengers, an increase of 51 per cent. or 11,898 passengers on the 1959-60 figure. The total amount of cargo carried was 244 tons which was two and a half times more than the amount carried in 1959-60. The amount of mail carried was 49 tons, an increase of 11 per cent. on the 1959-60 figure. The Aerlínte financial results for the twelve months ended 31st March, 1960, showed that there was an operating loss of £589,080 for that year, compared with an operating loss of £788,599 for the eleven months ended 31st March, 1959. The accounts for the six months ended 30th September, 1960, showed an operating surplus of £143,000 compared with a deficit of £286,000 in the same period of 1959.
He then goes on to say:
In the last three months of the financial year 1960/61 the Company operated its own Boeing jet aircraft and it is the invariable experience that the Winter months are not as favourable as the Summer months.
That is the strangest non sequitur I ever read. He does not go on and tell us what he means by that, except to say: “Neverthless the prospects of the Company are bright” Oddly enough, having given us results up to the six months ending 30th September, he then jumps the three months between September to January, resumes the tale for January-March, 1961, and says that: 5,837 passengers as compared with 3,085, were carried comparing January-March, 1961, with January-March, 1960. “This trend is continuing and forward bookings are very promising,” he says.
I suggest to the Minister that if he has the information on which to forecast a modest surplus in the year for those two companies, he must have corresponding information which will enable him to tell us approximately the surplus for Aer Lingus and the deficit for Aerlínte. It would be much better to tell us that, than to give us that Delphic calculation. How can one know that A plus B equals 10 if one does not know the value of A or B? Can that make sense? To know that A plus B equals 10, you must know what A or B are, because if you know what either A or B is, then, if A is unascertainable, the answer is that A amounts to 10 minus B, or if B is unascertainable, B equals 10 minus A.
There is one thing certain: if the net result is a modest surplus or £10, you must have a corresponding loss-no more—in either one of the different constituent parts which have gone to make up the modest surplus. From that proposition there can be no escape. I suggest that it is self-deception for the Minister to pretend he does not know the value of A and B, if he can vouch to the House that the sum of them represents a modest surplus.
I should like to be reassured on certain important matters. Most of the airlines at present are throwing heavy emphasis on their ability, with modern jet aircraft, to travel direct from the begining of the journey to the end. Reading international advertisments for Pan-Am, T.W.A., Air France, the Dutch and the Scandinavian combines, it is noticeable that they state their ability to travel from Rome to New York, Paris to New York or London to New York in one stage. Great emphasis is laid upon that.
Are we in a position, with the equipment we now have, to give a corresponding unqualified guarantee in respect of the Shannon-New York and the New York-Shannon trip, that in all the circumstances our equipment can make the journey in one stage? I saw recently that President Kennedy, when returning on a military aircraft from Paris, stopped at Gander to ensure that before his arrival in Washington, he would get a night's sleep, before he embarked upon the dull grind of his presidential duties. I cannot imagine anyone going to Gander. I was there once and I could not rest until I got out of it because one manages to suffer from claustrophobia in one of the most exposed spots of the world, surrounded by forests and tundra. It is a most desolate spot. I should like to be reassured by the Minister that we are in the position, with the equipment we have acquired, to make the flight from Shannon to Boston or New York without the necessity for any intermediate stop arising, through the necessity for re-fuelling or activities of that kind.
There is no use in pretending, and I do not want to pretend, that I share the view that once you have taken a gamble, you are in it and cannot get out of it. I did not believe that our entry into the transatlantic air war was a wise or prudent enterprise. I still do not believe it was. I am quite certain that Aer Lingus was not only wise, but I never doubted our capacity to build up that service into something that would equal, or excel, any corresponding service in Europe. I think all our resources should be mustered and deployed to keep the service of Aer Lingus in the forefront of international aeronautics. We have the personnel to do that; we have the facilities, and there is no reason at all why we should fall behind in the race.
The situation in regard to transatlantic transport is quite another cup of tea. We are a small country with a population of under 3,000,000. As Deputy Russell pointed out, it is common knowledge that, in the course of the next decade, the type of aircraft necessary to operate up-to-date transatlantic services will change progressively and the capital burden will grow. We are already taking very heavy losses on this traffic. I doubt if we will ever break even on it. Mark you, the equipment we now have is as up-to-date as that of any airline in the world. I think the Boeing 707 we are operating is as up-to-date a machine as any airline in the world is in a position to put in the sky. In five years' time we will be in a radically different situation.
Goodness knows I am not an expert on transport problems but, if we are going to operate a transatlantic service, our minimum equipment must be three machines because we will have to keep two operating in order to maintain the schedule. In peak periods it may be requisite to operate three. One thing we have got to have is a standby because in modern circumstances, if people book jet aircraft depending on its time schedule and its amenity, one simply cannot offer an entirely different kind of transport in the event of one of our jet aircraft being temporarily withdrawn from service for normal servicing operations. Therefore we must face the fact that a minimum of three aircraft is requisite to maintain a transatlantic schedule. The capital cost of that will be gigantic and it seems to be true—though this is a matter again of technical detail—that as the capital cost of these aircraft grows, their passenger capacity must grow with it, because a very high occupancy is absolutely essential in order to attempt to break even with capital cost and the minimal provision for depreciation requisite for maintaining the service.
The situation as I see it is, therefore, that we have Aer Lingus growing, expanding profitably, justifying itself most comprehensively, providing a service which is in every respect excellent, financing the capital invested in it and generally doing an admirable job. With Aerlínte we have a service which, I understand, is quite excellent. We have a splendid personnel. At the moment we have excellent aircraft, but we are taking staggering losses. Now no one must find fault with that if that merely represents the initial stages of getting into the picture, blazing the trail. The problem is: are we not faced with a situation in which the evolution will be that the more irrevocably we are committed to that venture the heavier our capital costs will become and the more staggering will be our losses, to a point ultimately at which Aer Lingus would be quite unable to meet, as the Minister suggests it has met in the past year, the deficit of the sister company, Aerlínte?
I would far sooner see the profit of Aer Lingus ploughed back into Aer Lingus so that, as well as keeping abreast of what the others offer, we can be a step ahead of them. Mark you, I think we can be, but I do not think Parliament wants Aer Lingus to pay a profit to the Treasury. I think Oireachtas Éireann would cheerfully see Aer Lingus use its annual surpluses for servicing its capital and improving its facilities. We might as well face it: it is one of those awkward facts that, in respect of certain services, such as transport, power and light, State-operated enterprises, once they come off, can use their surpluses to improve their services. They have no dividends to pay. We are adopting the strange device here that, having developed this admirable service, we are now driven into the position in which the entire surplus, which might be used to keep Aer Lingus away in front of all competition, will be poured into Aerlínte, which may well be starting a race that it can never win.
Think on what Aerlínte means. We are now operating between New York, Boston and Ireland. T.W.A., Pan-Am., B.O.A.C. and Trans-Canada, all these lines, are operating not only from their capital to New York—that is only half their journey—but right across the United States. If they can tap Chicago, Salt Lake, San Francisco, and all the points in between, for traffic they have got an immense initial advantage over us. But nobody has corresponding advantages over us in regard to our Aer Lingus operations. We have been able to run services to any point in Britain or Europe where it suits us to do so. We have been able to try out routes to see if there is a demand and, when it proved there was not, to drop them without any crippling expenditure at all.
I rejoice to learn—I am astonished the Minister has not seen fit to mention it here today—that Aer Lingus is at present investigating the possibility of the acquisition of jet aircraft of medium size so that we can move over to provide jet services on the European lines. I think that is an admirable development. It is made possible by the splendid services that Aer Lingus is operating. That is the kind of progress and development I welcome. I should love to have it to tell that Aer Lingus was providing an all-jet service on these intermediate routes before any other air company in the world. I think the publicity value of that would be invaluable. I think that, if we were in a position to say in respect of services between Great Britain and every other country, Aer Lingus was one jump ahead, blazing the trail, the advantage would be incalculable from the point of view of attracting passengers who would prefer Aer Lingus services. They would be coming with their hats in their hands to a company like Aer Lingus which had acquired the reputation of always being in front of progress, so that they would have it to tell that Aer Lingus, which was notorious for investing a large amount of capital in its services, having surveyed the whole field, had chosen their aircraft. That is the kind of thing that is valuable publicity, not only from the point of view of attracting custom but also from the point of view of getting advantageous terms from the suppliers of aircraft.
I recognise that there may be force in the argument to which Deputy Russell referred. I believe he said he understood the Taoiseach was apprehensive that if we did not operate from Shannon other airlines would by-pass Shannon, that unless we operated this service others would not bother to call. Others are not bothering to call. When Shannon was first built, of course, every transatlantic service called at Shannon as the first point of call. It is notorious that the vast majority of the Continental services and services to London are by-passing Shannon every day but I very much doubt if any of them would face with equanimity the disappearance of Shannon, as I have already said. I believe it would be possible to keep Shannon operating without getting ourselves involved in this staggering cost which we are meeting and which Deputy Russell envisages may grow as our obligations to maintain larger and larger jet aircraft arise in the effort to maintain our place in the transatlantic travel field.
I was rather surprised also that in seeking further capital the Minister did not take the opportunity of dealing in greater detail with the prospects of freight traffic. I remember saying in this House 15 years ago, just after the war, that with the situation which was developing then, the long-term prospects of Shannon were extremely ambiguous because, with the capacity in aircraft to travel much greater distances non-stop, their tendency to come down at Shannon would grow less and less but that I recalled that the port of Hamburg and the port of Rotterdam had grown great on entrepót trade, especially the port of Hamburg, and that it appeared to me that in the new world to which we were moving it was not inconceivable that you could shove back entrepót trade from the west coast of Continental Europe to the west coast of Ireland. I also said that it seemed that it ought to be possible to bring bulk freight into Shannon and by providing adequate facilities there to persuade people to break the bulk there and to distribute to the Continent of Europe.
That proposal was then derided by the Minister for Industry and Commerce who is now the Taoiseach as being of relative insignificance, not important to the main purpose of maintaining Shannon Airport in being. I expressed the view then that it was the only hope in the long term of permanently maintaining Shannon as a viable airport.
I still believe that that prospect has never been adequately investigated. It is something on which it would be legitimate to take a formidable gamble. It would be a considerable gamble but at least it would have this quality about it that it would be a once-and-for-all gamble, with a limited cost which you would have to stake in the full knowledge that you might lose it but, if you lost it that would be the end of your loss because if you were going to make Shannon into an effective entrepót port you would have to examine the whole range of merchandise passing into the Continent of Europe from outside at the present time and provide a complete storage capacity for every variety of traffic that is passing through the ports of Hamburg and Rotterdam at the present time.
That would involve very heavy capital cost. Much of that capital cost would be in the provision of refrigeration and obscure forms of storage and accommodation which you would have to realise might never be used but, if you wanted to acquire for the port the kind of reputation that Hamburg and Rotterdam have, that is, that they can handle anything, whatever the complications may be, you would have to start right from the bottom up and provide all that kind of accommodation at Shannon on a scale adequate to cover any possible development of air transport of that character, say, for a period of ten years ahead.
If we did that, we would have something which, as I say, would be a limited risk and which would have some prospect of paying a magnificent dividend if it came off. If it came off, it would have the immense added advantage that it would become a self-supporting enterprise because its surpluses, which are to be measured, remember, by the phenomenal wealth of ports like Rotterdam and Hamburg, could be ploughed back into expanding the facilities and amenities at Shannon.
Let me be clear. I do not want to suggest for a moment that a bulk of goods comparable with that which passes through Hamburg or Rotterdam can ever in our lifetime be anticipated as passing through an airport because the range of goods for which air transport is suitable is very much more restricted than the range of goods being carried by sea to Hamburg and Rotterdam but Hamburg and Rotterdam have grown infinitely great as compared with all other European ports because they are in the entrepót trade and have acquired that reputation.
If you want to go into France a great majority of people will go in through Rotterdam rather than in through Marseilles because the distribution facilities are at Rotterdam. If you want to go into Continental Europe a great majority of people will go in through Hamburg rather than go on to Gdynia or some of the more accessible ports even further east because they have the facilities for redistribution.
There is another matter. They, of course, depend largely on their rail facilities in addition to the extraordinary docks system they have built up. The advantage of air transport is that there are not any rails associated with aeroplanes. They can fly direct to the distribution centre.
I do not deny that there is a risk in that but I believe the burden of that transhipment could be shared with Aer Lingus and might very conceivably provide very profitable occupation for certain surplus equipment that Aer Lingus must carry in order to meet the possibility of momentary breakdowns or servicing of aircraft. While at the present stage servicing equipment may be required to stand part of its time idle, if there were such a development at Shannon it could be mobilised to assist in the distribution of the broken cargoes that would originate from Shannon Airport. I still believe that is a possibility. I admit freely it is something that would have to be examined by experts. I doubt if it has ever got the consideration which is its due.
On this occasion when the Minister for Transport and Power is seeking to raise more capital, which I think is capital not only for Aer Lingus or Aerlínte but for Aer Rianta—and in fact Aer Rianta is, for the purpose of this Bill, the company—I am surprised he did not tell us something about the development of the factories at Shannon.