That Dáil Éireann hereby confirms the Transport Act, 1950 (Additional Powers) Order, 1969.
The purpose of this motion is to confirm the Transport Act, 1950 (Additional Powers) Order, 1969 which was made by me with the consent of the Minister for Finance under section 14 of the Transport Act, 1950. The order will enable CIE to operate a subsidiary company in New York to handle its coach tour promotional activities in North America. The objects of the proposed company which will be known as "C.I.E. Tours International Inc." will be principally to promote, sell or act as agent for CIE in promoting and selling, contracts for rail, sea, air or coach tours provided by CIE either alone or in conjunction with other transport companies.
CIE opened a coach tours office in New York in 1966 and another in Los Angeles in 1968. An office was opened this year in Chicago and there is a sales office in Toronto. CIE experience has shown that the availability to the tourist trade of on-the-spot booking facilities, with consequential saving of time to travel agents, brings an immediate increase in business and the opening of these offices has resulted in rapid development of this side of the company's activities.
The offices promote and sell the full range of CIE coach tour holidays and the 1970 programme was backed by 1,000,000 brochures. Limousine and self-drive tours are also sold, there is a hotel reservation service and an information service for individual customers.
CIE estimate that gross income from North American activities increased from £800,000 in 1966-67 to £2.2 million in 1969-70, a level which, despite current difficulties, they hope will be equalled this year as a result of a special sales campaign initiated in April. The board has a target of £4 million a year in gross income by the mid-seventies. Between 1967 and 1968 passengers from America on CIE tours and tours handled by CIE increased by about 1,700 to 51,000 but the bednights sold rose from 162,000 to 201,000. Last year's figures were up again: 55,000 passengers and 227,000 bed-nights. With the intensive additional campaign begun in April of this year the 1969 results should be at least equalled.
The establishment of a separate subsidiary would strengthen CIE's trading identity in relation to the travel trade abroad and present a new image of its activity as well as offering incidental advantages such as facilitating the employment of locally recruited staff. The board have assured me that the objective of developing coach tour business originating in North America cannot be achived other than by the establishment of a subsidiary company there.
The setting up of a more effective CIE operation in North American will be in line with the growing importance of the North American market for Irish tourism. The indications are that last year over 218,000 visitors came here from North America and their estimated spending at £19.7 million was about three times the 1960 level. Tourist traffic from North America is not as highly peaked as that from some other areas and consequently it has a particular value in the campaign for the extension of the season which is now a major objective of tourist policy. In recent years, this country has made a significant breakthrough into the off-season North American market and this is attributable, among other things, to the availability of extended coach tours.
The new subsidiary will be established under the business corporation law of the State of New York but its powers will not be any wider than the powers already being exercised by CIE in relation to coach tour business. The new company will be subject to official control in the same way as the two other CIE subsidiaries, the establishment of which also had to be ratified by Motions of each House of the Oireachtas, namely Óstlanna Iompair Éireann, the hotels subsidiary set up in 1961 and Aerlód Teoranta, the air freight subsidiary set up in 1964.
Section 17 of the Transport Act, 1963, applies, to Óstlanna Iompair Éireann, the provisions of sections 16 and 34 of the 1950 Act which, respectively, deal with the furnishing of information to me and the preparation, audit and presentation to the Oireachtas of the accounts of CIE. The Transport Act, 1963, also prevents alteration in the memorandum or Articles of Association of OIE without my approval. I propose to apply these provisions to Aerlód Teoranta and, subject to the approval of this Motion, to regulate similarly the affairs of the new American subsidiary in a Transport Bill which I shall be introducing to deal with the proposed takeover by CIE of the County Donegal Railways Joint Committee and other miscellaneous matters. Apart from these statutory controls, the original Memorandum and Articles of Association, the appointment and remuneration of directors and borrowing by the company will be subject to my approval in consultation with my colleague the Minister for Finance.
The share capital of the new company will be little more than nominal in character, that is to say 200 shares all of which will be taken up by CIE at $100 each. The members of the board will be whole-time senior executives of CIE. The directors, including the chairman, will not be paid any extra remuneration for their services by the subsidiary. The salaries of all other officers and agents of the subsidiary will be fixed by the board of directors.
A total of 17 staff are employed full-time in the American offices and this figure is supplemented during the high season by the employment of temporary staff. Any CIE staff working in North America will remain in the employment of the parent company, retaining any rights to which they are entitled by virtue of that employment, so that establishment of the new subsidiary will not cause any displacement or redundancy among CIE staff. Staff locally recruited by the subsidiary company will, of course, be governed by social security regulations in force in the US.
I am convinced of the necessity for and of the advantages of creating this new subsidiary and I strongly recommend that the House should give its approval to the motion confirming this order.