asked the Minister for Transport and Power whether this country's representatives at the International Air Transport Association's meeting on fares to be held on 29th June next will seek cheaper fares on the Atlantic route; and whether he has had any discussion with Aer Lingus on this matter.
Ceisteanna — Questions. Oral Answers. - Atlantic Air Fares.
26.
The meeting of the International Air Transport Association commencing on 29th June will consider North Atlantic air fares for next year. Aer Lingus will be represented at the meeting. Aer Lingus will be seeking a fare structure which will help in the development of air traffic to and from this country and which will at the same time take account of the problem of steeply rising costs with which the airline industry has to contend. Aer Lingus are at present discussing their proposals with my Department.
Mr. O'Donnell
Is it not a fact that Aer Lingus have publicly expressed deep concern about this move towards cheaper fares on the Atlantic? Could the Minister explain the grounds for this concern? Is it not likely that if fares were reduced it would lead to a greater volume of traffic on the Atlantic and we would have a better chance of keeping the jumbos and the other aircraft filled. Why are Aer Lingus so worried about the reduction in fares?
This is a complex development which has taken place in recent months arising out of the surplus of aircraft because of the run down of the Vietnam war. This surplus of aircraft, particularly in the United States, is in the hands of all sorts of non-scheduled carriers which are carrying various types of charter operations. If the national scheduled carriers, such as Aer Lingus, allow this to get out of hand it could have very serious financial repercussions for the national scheduled carriers who are maintaining a service right through the year, giving steady employment to their employees and it could jeopardise all the investment which has taken place in these national airlines. It is a very finely balanced matter and there is a special meeting of IATA inside the next few weeks and at the moment my officials and Aer Lingus are discussing what attitudes we will adopt at this IATA meeting.
Will Aer Lingus be pressing for cheaper fares on this route? Has the Minister had any discussions with Aer Lingus to this effect already.
These discussions are currently taking place.
Are the Minister's officials having discussions with Aer Lingus before they leave for this meeting?
We have been having discussions this week and we are going to decide on a line of action. I shall be in on any final decision that will be made.
Are we solidly on the side of cheaper fares?
This is a point which has to be balanced because if this is pushed too hard and too far there is a very grave danger of jeopardising the financial structure, the existence and the employment in national scheduled carrier airlines such as Aer Lingus. Aer Lingus have very real interests in preserving their own financial integrity.
From what I know of this it appears that much of the pressure for higher fares is coming from the major companies operating in this area.
In this case because of the very stiff competition which has emerged in recent months from these non-scheduled operators, due to a surplus of aircraft in America, the major companies like PanAm and TWA are now seeking to compete with these non-scheduled operators by pulling down fares and the smaller national airlines, such as Aer Lingus, have a very real fear that this may go too far and put them in jeopardy. Somewhere between the two there is a balance.
Mr. O'Donnell
Is it not a fact——
Question No. 27. We have a tremendous number of questions to deal with.
Mr. O'Donnell
Is it not a fact that IATA regulations have now been found to be too restrictive in the light of modern developments towards larger aircraft and so forth and that, in fact, one or two larger carrier companies are getting away from IATA altogether?
The scene has changed. The pressure for cheapening rapidly is now coming from the big carriers which used not to be the case. BOAC, PanAm and TWA are now getting afraid of the non-scheduled operators. In the sort of war that could start between the big scheduled carriers and the non-scheduled carriers a small national airline like Aer Lingus could be jeopardised.