Amendment No. 1 in the name of Deputy O'Malley. Amendments Nos. 28, 32 and 50 are related. Amendments Nos. 1, 28, 32 and 50 may be discussed together by agreement.
Air Transport Bill, 1984: Committee Stage.
SECTION 1.
I move amendment No. 1:
In page 2, line 27, before "fares" to insert "maximum".
The purpose of this amendment is to empower the Minister to fix maximum fares rather than simply to fix fares, rates or other charges. It is important and goes to the root of the widespread opposition to this Bill, that this amendment should be made because it will get over some of the more obvious difficulties that the Bill is otherwise likely to create.
At this stage I should mention some of the history of this Bill. Eleven months have passed since this Bill was read a Second Time in this House. On 27 June last we were informed there was a dire emergency, that there would be appalling consequences if the Bill, which was introduced at very short notice, was not passed within a matter of days. We were told that it would have a disastrous effect on Aer Lingus particularly, and that all sorts of improper operations would take place if the Bill were not passed in a matter of days. Happily those dire forebodings have not come to pass. Here we are, 11 months later, beginning Committee Stage of this Bill which was so urgent last June that it was moved by a Minister of State in the absence in Japan of the Minister himself. We are entitled to ask what was that so-called emergency? What was the serious loophole, as it was described, that the Bill had to plug and that if it were not plugged within a matter of days appalling things would happen? It is clear there was no such emergency, that there was no need for that legislation. I thought that after an interval of nearly 11 months the Government had got sense and had abandoned the Bill. They have a number of amendments put down——
May I direct the Deputy's attention to the fact that we are on Committee Stage and he appears to be making a Second Stage speech. We are on amendment No. 1 and related amendments.
Amendment No. 1 is one of the more fundamental amendments of the large number which are down to this Bill. If the House were to accept that the Minister had power to fix maximum fares that would be perfectly satisfactory, in so far as this Bill can be satisfactory, because it would not prevent people charging less than the maximum. The Minister for Communications would then be in the same position as, for example, the Minister for Industry, Trade, Commerce and Tourism who fixes maximum prices for a number of commodities but gives every encouragement to retailers and others to charge less than the maximum if they so desire.
It is proposed in this Bill if this amendment is not accepted, to make it a crime to charge less than the maximum, the whole point being to keep prices up rather than get them down. If the Minister is appointed personal honours and feels he has to go on with this rather foolish Bill, he would get over many of the difficulties he is creating and the foolishness associated with this Bill if he accepts this very simple amendment and accepts, as the prices legislation generally accepts, and as the Minister for Industry, Trade, Commerce and Tourism accepts, that when certain prices are fixed they are maximum prices, not minimum prices or obligatory prices, we have the normal competition which is so essential, and which is recognised in virtually every field as being essential, but which is anathema to this Government, to the Department of Communications and to Aer Lingus. Increasingly it is becoming obvious to everyone connected with aviation in Europe that this element of competition will have to be encouraged to a much greater extent.
There have been developments since the last debate on this Bill in June 1984. At that time I mentioned the element of competition which had been brought in by the Anglo-Dutch agreement which reduced the ordinary return fare between London and Amsterdam to £49 sterling. I had a long argument in the House with the Minister of State who told me that was the one way fare. He subsequently had the good grace to write to me privately telling me he was wrong and I was right, which might as well be put on the record now. In addition to the Anglo-Dutch agreement, in terms of fixing maximum fares, we had the Anglo-German agreement which had the effect of very drastically reducing air fares between those two countries and the Anglo-Luxembourg agreement which had the same effect and has greatly reduced air fares between Britain and Luxembourg.
Last autumn the Minister gave a press conference on air fares. One of the things he said was that he looked forward to an Anglo-Irish free trade area agreement in relation to air fares and that he would like to see free trade on cross-channel routes between Britain and Ireland. When I read that, I said, "Amen. I would love to see that". I would like to take this opportunity of inquiring when that will happen. I would like to ask the Minister why he is proceeding with this Bill if it is his intention to try to bring about an Anglo-Irish free trade bi-lateral agreement to introduce full competition into cross-channel air fares. The truth is not what the Minister said publicly, that was only said for the benefit of the press and the consumers; the truth is very different. We have to look at what has happened in relation to the fixing of fares on cross-channel routes since the beginning of this year.
Early this year a well known and large independent airline, Dan-Air, proposed to introduce, and had the support of the British authorities, a return fare between Gatwick and Dublin of £80 sterling, roughly £95 Irish, and they proposed a similar fare on the route between Gatwick and Cork, where it received a considerable amount of encouragement because of the difficulties Cork is suffering in terms of access from Britain at the moment. Negotiations started last January. Towards the end of March Dan-Air informed the people in the trade that their proposal to introduce this ordinary £80 sterling return fare was going to be dropped. The reason given was that they had been threatened by Aer Lingus that they would be taken out of the booking computer if they persisted in trying to establish that fare on cross-Channel routes. Aer Lingus control the pooled computer in respect of British-Irish bookings. Aer Lingus also threatened, if Dan-Air were to persist in their proposal, to refuse them all ground handling at Irish airports, which they also control. This is a matter of some concern and I have a later amendment down on this.
The result is that Dan-Air have withdrawn their proposals and they retain simply their ordinary one flight per day between Gatwick and Dublin, for which they have to charge the cartel price of £204. The cartel consists of Aer Lingus and British Airways and anybody else who wants to operate on the routes can only do so providing the rules of the cartel are observed. We must ask how many more tens of thousands of people would be coming by air to Dublin and Cork or Shannon if Dan-Air were allowed to do what they and the British Government want to do — to charge a reasonable cost-related fare rather than an exorbitant cartel-supported fare. The purpose of this amendment is to allow people to do this if they wish.
It cannot be suggested that the British Government in any way interfered with this proposal. They gave it every encouragement and the public proof is that they have negotiated similar bilateral deals with Belgium, Germany, Holland and Luxembourg. They are more than anxious to do so with Ireland, which has a fair amount of air traffic with Britain but not a great amount. The significant point as the British see it, and as we should see it, is that the Irish air market is one of the few markets out of Britain that is not growing. While there was 9 per cent growth overall last year in air traffic out of Britain, there was 18 per cent growth on the Amsterdam route because of the attractive fares introduced.
It is interesting for those who cannot see beyond the end of their nose in their desires for protectionism to look at the CSO figures for traffic between Ireland and Britain and compare 1976 and 1983. One finds that in 1976 the airlines had 47 per cent of the traffic into and out of Ireland and Britain while sea transport had the remainder; in 1983 the airlines had only 38 per cent of the traffic and the sea services, which many people might think are no great shakes, had the remainder. I wonder if people are cutting off their nose to spite their face. Perhaps they will come to realise it.
During the debate last June on the question of the establishing of fares and the preventing of people charging lower fares, much centred around the fare which Transamerica wanted to charge between New York and Shannon, to which exception was taken by the Minister, the Department and Aer Lingus because it was below the fixed fare established by IATA for the North Atlantic out of Shannon. I said that the purpose of the Bill seemed to be to screw Transamerica to the greatest possible extent and forecast that there was a possibility that Transamerica would depart the scene and that the Irish national interest could only lose if that were to happen. What has happened because of these provisions in regard to minimum fares? Transamerica have left. It is not surprising. We will be told on behalf of Aer Lingus and the Minister that they were fly-by-nights and that they could not be relied upon. They left because they were not allowed to charge the competitive fares which they would wish to charge. Where are they now operating their scheduled service? They are operating a scheduled service out of Belfast airport where nobody places any restrictions on them. As far as the Belfast, Northern Ireland and British authorities are concerned, the lower the fares they charge the better because they are generating more business for Belfast. More power to Belfast that they have people with common sense. Not alone do the Belfast people seek to facilitate Transamerica in every way they can but they seek to facilitate passengers from the Republic of Ireland since the Belfast airport authority are providing free buses to Dublin and any other parts of the Republic where there is demand for these services. One can connect free with a Transamerica flight from Belfast. That is an ordinary, sensible marketing ploy. I congratulate the Belfast people on being sensible enough to do it.
Look at the loss to this part of the country. What have we gained by allowing this to happen and by sticking our heads in the sand, trying to pretend that this is not 1985 but 30 or 40 years ago and that IATA and cartels rule the world? They no longer do and the whole question of maximum fares, competition and so on is exercising the minds of many people throughout Europe, with effect in every country in Europe other than this country which has a greater need than any other in the European Community to have easy and cheap access to it because of its geographical location.
I would refer to an article in this week's issue of The Economist which refers to the efforts being made——
The Deputy seems to be making a Second Stage speech.
I was about to refer very briefly to the efforts of the Competition Commissioner, Mr. Peter Sutherland, to introduce competition and to reduce fares in Europe on the lines reflected in amendment No. 1 in my name.
As long as the Deputy relates his speech to the amendment in his name and refrains from attacking the Bill in principle. The Bill has been accepted in principle on Second Stage.
With one honourable dissenter.
A fairly comfortable majority.
It is surprising that this Bill should go forward in its present form without the type of amendment I have suggested here when we are waiting for the decision of the European Court in Luxembourg on five French cases which have been referred to it on this point of charging less than the maximum fare fixed by the French authorities. Five cases were decided in Paris last March and lodged by direction of the judge in Paris in the European Court last August. I understand from my conversation with the Commission yesterday that there is unlikely to be an oral hearing until June, a decicion coming in autumn. The cases are on all fours with the kind of situation we have here. This is because a number of reputable airlines and reputable travel agencies in France charged less than the cartel price for certain journeys and were prosecuted by the public prosecutor in France for a breach of the French civil code.
The defence made by the various defendants, who included people like Air France, KLM and British Airways, was that the particular provisions of the French civil code were in conflict with the provisions of Articles 85 and 86 of the Treaty establishing freedom of competition within the Common Market. The French judge held that so far as he was concerned that was the case but he said he was not competent to give a decision on the validity of the particular provisions of the French civil code. He said that the incompatability of these provisions with Articles 85 and 86 of the Treaty would have to be decided by the European Court and he referred the case to the court for that purpose. The European Court is hearing the case and I am advised that they will give a decision in the autumn. If the decision of the French court is upheld the whole point that this amendment is seeking to establish will be made clear and, therefore, to go ahead with this Bill without this amendment will be a futile exercise because if the primacy of Articles 85 and 86 in relation to the regulation of civil aviation is upheld the legislation will fall.
Since the five cases are precisely important one is entitled to inquire from the Minister as to what attitude he takes in the circumstances. In particular one is entitled to inquire why the Irish Government did not avail of the opportunity presented to them in December last to appear as a party in these proceedings and to argue their case. Are the Government of the opinion that they cannot sustain their case? They received notice of the existence of the cases and were invited to join themselves as a party in the proceedings and argue the case if they so wished on the grounds that, one way or the other, they would be bound by the decision. We will be bound willy nilly by the decision of the European Court and that is why the decision is entirely relevant to the whole question underlining this legislation and which in particular is encapsulated in the point I am trying to make by way of this amendment.
Deputy O'Malley has made a wide ranging speech on this amendment. As you said, it was really a Second Stage speech but I do not propose to deal with what he has said in a Second Stage speech manner. Suffice it to say that much of what Deputy O'Malley says is incorrect or slanted or is a misinterpretation of the facts. His opinion would not be shared by the vast majority who know anything about air transport. For instance, the Deputy referred to some Dan-Air fare of £80. I assure him that there was never any question of a Dan-Air fare of £80 being proposed to me. However, I can tell the Deputy that when the British authorities, of whom he has been fulsome in his praise, approved increases in air fares between Dublin and London, I, as the civil aviation authority here, was the one who refused the increase and forced them to introduce a lesser increase, a sub inflation increase. That is merely one example of the persistent policy that has been pursued by me since becoming Minister. Overall we have succeeded in the past few years in keeping increases in air fares below the inflation rate. That, too, was the fairly consistent policy of my predecessors.
Fundamentally this question is about whether we as a State should have the same regulatory powers as every other civil aviation authority have. All we are seeking to do is to maintain powers we always understood we had but which were brought into question because of a case in the courts elsewhere and which the courts decided not to determine for the time being. In order to remove any doubt we introduced this Bill in June last. The fact of the Bill being tabled had the desired effect; but, if tomorrow we should decide not to go ahead with the Bill, all the dangers that have been outlined by me and by others in the past number of months would be realised. Therefore, it is of vital national importance that we proceed with the legislation.
In his contributions on this legislation in recent months Deputy O'Malley has created the impression also that all other countries, particularly Britain, Holland and America, have abandoned their national interest and that we should follow their example and abandon our national interest. Nothing could be further from the truth. All these countries and many more have retained the same enabling powers as the powers we are seeking here. The question that is important is the way in which those powers are exercised. Deputy Wilson and all my other predecessors have used these powers in the national interest and I have followed those policies too, that is, a down pressure on air fares in so far as that is consistent with continuity of service.
Deputy O'Malley did not refer once to that factor, which is vital to this country's national interest. I refer to a continuity of air service from our airports to major points east and west of the country. That is what the Bill is all about. One can argue as much as one wishes about air fares but the exercise would be futile if we had no air service. There have been many fly-by-night operators in the airline industry. Many have been allowed use routes after promising to provide a much cheaper service but they have collapsed leaving behind a lot of debris. I can think offhand of Air National, Air Florida, Laker Airways and so on. There were cheap flights into Belfast but some time ago the airline concerned collapsed with the result that Aer Lingus had to move to rescue many of the stranded passengers. I know that is not what Deputy O'Malley is advocating, but it would be the result of what he is advocating. His purpose is to keep air fares as low as possible. All of us would concur with that but I fear that the Deputy has fallen for a lot of propaganda. No other country has abandoned the kind of controls we are seeking in this legislation. No other country has abandoned its national interest and I have no intention of doing so either.
Acceptance of the amendment and the associated amendments would be tantamount to introducing a de-regulation of fares. In other words, to accept the amendments would render it illegal to sell fares at prices higher than the approved levels. There would be no controls on the levels at which fares were sold. There would not be any protection against predatory prices and we all know that in the airline industry down through the years there have been predators, fly-by-nights who claimed to have been able to provide the service at cheaper rates but who within a short time of beginning operations hiked up the fares and in many cases collapsed or withdrew from business. That is what has happened to some extent in the case of Transamerica. They have withdrawn. We could never depend on the Transamericas, the Pan-Ams, the TWAs or British Airways to service this country in all circumstances. They will go wherever suits them best and Transamerica have since left this country. To some extent, Deputy O'Malley blames this Bill for their departure. I will quote what Susan Hamilton said in Business and Finance on 21 February 1985:
After five years, the service has been terminated because Transamerica could not generate sufficient business out of Ireland due to the strength of the dollar. We were going only for 20 per cent of the business to originate in Ireland but our forecasts said that we would not make it. We were getting $200 a seat less from Irish travellers than from the Americans.
She denied categorically that the pullout decision had anything to do with the Irish Government's hostility expressed in the controversial Air Transport Bill.
Transamerica were allowed by me to charge fares significantly lower than those charged by Aer Lingus and by Northwest Orient. There was no question of them being forced to charge Aer Lingus fares, they had a competitive edge as they were allowed to charge less and yet they withdrew. The strongest advocates of change in Europe — I include the British and Dutch governments — are not seeking the kind of change which Deputy O'Malley proposes in this amendment. Similarly, the EC Commission, in its memorandum No. 2, accept that deregulation, US style, is not suitable for Europe. None of the proposals tabled by the Commission goes anywhere near as far as Deputy O'Malley's amendment seeks to do.
I am as much an advocate of strong competition as anyone else in the House but I have no intention of contemplating a regulatory regime which might on the surface have attractions, especially from the consumer point of view, but which would mean abandoning all controls with the dangers which I have already mentioned. I do not believe that such an approach would be in the best national interests.
Aviation is regulated by means of various multilateral and bilateral treaties. A regime along the lines proposed by Deputy O'Malley would breach Ireland's treaty obligations with other countries and could not be introduced unilaterally. Deputy O'Malley obviously ignored this point in tabling this and other amendments. He quoted me as saying at a press conference which I gave some months ago that I was in favour of an Anglo-Irish free trade area. What I proposed and put to the British Secretary of State for Transport is the concept of a free air zone incorporating the two islands. I mentioned that to Mr. Ridley on a couple of occasions and we intend pursuing that concept with the British. However, when it comes to opening up the airways, the British, no more than any other country, will not act against their national interests. For example, Aer Lingus used to have fifth freedom rights out of Manchester when nobody else was serving these routes and they spent a lot of money in developing the routes to Amsterdam, Copenhagen and so on. When these routes became profitable Aer Lingus were not allowed to operate them any more. Similarly, when Aer Lingus had fifth freedom rights from Lourdes to Rome they developed the route at enormous expense, but as soon as they had done so the French would not let them operate it. The same happened with the Italians and the Swiss on the Geneva-Milan route.
I urge Deputy O'Malley to take into account that there is an awful lot of propaganda regarding airlines. Take the £49 fare from London to Amsterdam, which he rightly said is a return fare and about which there was a mistake made by the Minister of State in the Second Stage debate. That fare is very restricted. There is also a fare of £60 on the Dublin-London route which is also very restricted and which, on a per mile basis is cheaper than the London-Amsterdam fare, but we do not hear anything about that. Of course, Aer Lingus and the other airlines involved did not put out much propaganda about it compared to the ballyhoo surrounding the £49 affair between London and Amsterdam. I should like to ask Deputy O'Malley if it is a fact that the Dublin-London restricted fare is cheaper on a per mile basis than the London-Amsterdam restricted fare. It is important that we have these powers which are, in essence, reserve powers and that we use them in the interests of the country overall, taking into account the air traveller, the needs of tourism, the need for industrial and economic development and, above all, the need to ensure continuity of air services. I oppose the amendment.
It is a pity that we did what we did on 27 June, which I remember very well because it was domestically a traumatic day for me, because if the court case had been allowed to continue they could not possibly have delayed for 11 months in giving a final and substantive decision on what the Minister put before it. One of the factors that must be taken into account is the huge amount of propaganda launched and Aer Lingus suffered as a result. The biggest file I ever amalgamated in any Department was on this matter and it was obvious that the propaganda was well funded. I read it all looking in the granary of self-interest for a grain which would be in the public interest. Nevertheless, one's view on various amendments would be coloured by the reference to Dan-Air. Deputy O'Malley made one statement, the Minister made another and I should like the matter to be fully clarified for the House because so many other amendments are connected with the truth of the matter. One statement was made and another categorically denied it and it must be clarified before we go any further.
I do not think there is any conflict. We certainly did not receive any such proposal from Dan-Air as suggested by Deputy O'Malley.
I should like to clarify the situation for the benefit of Deputy Wilson and others. The Minister said here today that he did not receive such a proposal from Dan-Air and I believe that is true. It never got as far as the Minister because Aer Lingus clobbered it beforehand. They told Dan-Air that if they formally submitted such a proposal they would be taken out of the computer and deprived of ground services here. That has been well known for the past month or more in the trade and among people who deal with these matters. It was also known to various State bodies who were heartened to hear of this proposal from Dan-Air and who are now naturally bitterly disappointed that it is not coming to fruition. Anything that the Minister said has not conflicted with what I said. He simply said he did not get a formal proposal to that effect and I accept that he did not. I have no doubt that he is telling the truth in that respect. It never got to the stage of a formal proposal. It was clobbered through the means I have described before it got to that stage.
I shall not reply to some of the selective points the Minister made in response to what I said in moving the amendment. I spoke about many things but the Minister did not reply to them for one reason or another. I made some notes on what he said. He said that the introduction of this Bill has had the desired effect. He did not say what the desired effect was but it is fairly clear from the circumstances surrounding the introduction of the Bill, immediately after he had failed in court cases against Transamerica, that the desired effect of the Bill was to get Transamerica out of this country.
That is not so.
He did not specify what the desired effect was but said that the desired effect had happened. That is the major single event which is relevant to this Bill which has happened since the Bill was introduced on 27 June.
The Minister said that Transamerica made a statement to the effect that they were getting out of here because they were not able to generate sufficient business. If that is the case why are they going to Belfast where clearly they will generate substantially less business than they would have from the Republic? It does not seem to gel. The public statements made from time do not always accord with the underlying truth but sometimes they have to be said for the sake of keeping the lines of communication open and so on. The underlying truth about this matter is that the regime in Northern Ireland so far as air transport and civil aviation is concerned is far more open and liberal and far less restrictive than it is here. Their prospects of generating business are much less——
I should like to ask the Deputy ——
I did not interrupt the Minister so perhaps he would allow me to reply to some of the points he made.
He told the House that as well as not disapproving of the £80 sterling fare proposed by Dan-Air he reduced the fare proposed by the cartel on the cross-channel route, the British Airways-Aer Lingus cartel.
And Dan-Air.
He reduced it from £208 to £204. I suppose we should thank him for that. It would be far more useful if he created a climate here which would ensure that companies like Dan-Air and others who want to offer realistic cost-related fares were free to do so and were not pushed away by the means which were used to push them away.
The Minister said that I fell for propaganda. It is remarkable that no legislation has ever generated such a highpowered and expensive public relations campaign for support to get it through as this Bill did for several weeks. It was not just a once off effort but for three or four consecutive weeks there was open house in Buswells Hotel with lunches and chats with senior people from Aer Lingus for every Member of this House and presumably also for every Senator. Needless to say there was the best of food and wine, and hang the expense, in order to get their point across. When the Minister talks about propaganda he should look at where it came from. People who object to this country being dragged down and kept out of the mainstream of movement in air transport are accused of falling for propaganda. The facts are otherwise. Apart from the lavish entertainment put on for several weeks in Buswells Hotel the amount of material sent out by Aer Lingus was quite remarkable. They employed a public relations firm specifically for the purpose of generating a climate of public opinion in support of the Bill. That is very unusual. One would like to know what it will all cost. Estimates have been made that it cost tens of thousands of pounds. I do not know.
The Minister asked me whether I would say if the £49 sterling return fare between London and Amsterdam was dearer per mile than what he described as the IR£69 return fare between Dublin and London. I will give him the answer and also demonstrate to him how foolish he is to get into these figures and how easily one can mislead people by making these comparisons. Almost certainly on a per mile basis the £69 fare between Dublin and London is cheaper than the £49 sterling fare between London and Amsterdam. The Minister described them both as restrictive fares. He is correct. They are both restrictive fares but let us look at the degree of restriction. The only restriction on the London-Amsterdam fare or any British-Dutch fare — I believe there are cheaper fares between Gatwick and Maastricht — is that one has to buy the ticket the day before. One can travel any day one wants and come back any day one wants but one must buy the ticket the day before from the airline and not from a travel agent. That is the only restriction. The result has been that a huge proportion of traffic between Britain and Holland use that fare. That is why there has been such a huge increase in traffic between Holland and Britain. Both sides are delighted and their national interests are served by it because each country has many more tourists.
The Minister knows he is not comparing like with like. The Minister gave a lecture in his infamous Ferenka speech when he devoted all nine pages of his text at a transport dinner in Limerick last October to abusing me and told us we should compare like with like.
Let us look at what is described as the restrictive fare between Dublin and London. Up to recently Aer Lingus did not even bother to advertise it. It is so restrictive that virtually no one uses it. It is available only in winter and only on a Saturday. One would have to go out on a Saturday and either come back on the same day or the following day. One cannot wait until the following Saturday or come back on any day of the following week. You can only go out on a Saturday. As a result hardly anybody uses it. The only person who would use it is somebody who had to go to a dinner, or a show, or something like that in London on a Saturday night and wanted to come home the following day. Very few people who want to go to London for social purposes want to come back the following day.
It is absolutely useless to businessmen because you cannot do any business on a Saturday night or a Sunday morning and that is the only available time to you. Nothing is open except theatres, restaurants, and so on. I inquired from Aer Lingus what proportion of their passengers on that route use it and the answer was 1 per cent. On the other hand, the proportion of passengers between Holland and Britain using the £49 fare has grown to something like 25 per cent and perhaps it is up to 30 per cent now. It will probably be 50 per cent in the course of 1985.
There is no way that the £69 fare, the Saturday night fare, the Saturday night special, or whatever one wants to call it, will ever go above 1 per cent because hardly anybody wants to use it. Therefore, the short answer to the Minister's question is that it is probably cheaper per mile if you can get the £69 fare, but who wants to fly on it? It is pointless to make an argument based on something like that which, in practical terms, is quite useless. If Aer Lingus were to introduce a £69 fare on the same basis and with the same restrictions as operate between London and Amsterdam, I am sure the British would agree to it. If they agree to it to Amsterdam, there is no reason why they would not agree to it to Dublin, to Cork, or to Shannon. We would love to see it. Instead of falling air traffic numbers across the Irish Sea, we would have increased numbers at long last. We would love to see an increase. Everywhere else in Europe is having an increase. This country is not and its airports are not. It must be pretty frustrating for Aer Lingus.
The Minister talks about the national interest not being served if this amendment were accepted. All this amendment does is to say that the Minister shall fix the maximum fares the same as the Minister for Industry, Trade, Commerce and Tourism fixes maximum prices of various things. Happily it has been found, as a result of competition in recent years, that it has been possible to decontrol some prices. People were prepared to compete. I remember I used to fix the maximum price of bread. It was put to me that supermarkets and shopkeepers were operating genuine competition in regard to the price of bread and it was suggested to me in 1982, I think, that I should decontrol the price of bread and not fix a maximum price.
I did that. We did not fix the price of bread and anybody could charge anything they liked for bread. The price of bread dropped significantly in real terms since. The present Minister has been able to do that in respect of a few other commodities. Where there is not sufficient competition and where he retains the power to fix prices, he fixes maximum prices. What is wrong with fixing maximum prices for airline tickets? Every other country does it. Why do we not do it? Our Department of Communications are writing letters to people saying they cannot approve of their fares because they are too low and they should increase them.
What other countries fix maximum prices? What one country fixes maximum prices? The Deputy does not know what he is talking about. It is not true. The Deputy made the statement that every other country fixes maximum prices. Will he name one?
Britain and Holland.
They fix actual prices.
Yes, £49.
That illustrates the fact that the Deputy does not know what he is talking about.
Britain and Holland, £49.
I will deal with his other inaccuracy about £25 per cent in a moment. I do not say it is deliberate, but the Deputy has fallen for propaganda.
I am inviting the Minister by means of this amendment to introduce into this company the same kind of situation vis-á-vis Britain, America and any other country he wants to name, as the British have introduced between their country and several others: Holland, Belgium, Germany, Luxembourg; and they are having discussions with Italy and some other countries with a view to arriving at similar arrangements. The Minister will not get out of it by using the kind of tactics to which he is now reducing himself.
I want to take this opportunity, if I may, to try to put an end to the nonsense which it suggests that, if you do not deal with certain types of airlines and keep your fares up to the maximum, you will not have continuity of service and certain people will pull out, and so on. I inquired at Shannon Airport recently as to what was the factor of difference between their February business and their August business. The factor of difference is 11. They have 11 times more traffic in August than in February.
The Minister's fatuous suggestion about continuity is that we should have people who are prepared to be there all the year round. If he understood the commercial aspects of the operation he would realise that those who are willing to stay there all the year round are very glad that the others get off, because there is no business in the winter. There is enough for one only. Otherwise one airline would be forced into a position where they would have to provide all the equipment for peak demand in months like July and August. They do not have to do that because others are there who take part of that peak demand. This helps the main airline involved because they are able to avoid a situation in which they would otherwise have to provide and maintain over a 12 month period equipment which would not be used at all for six, seven or eight months. This argument which is constantly trotted out about continuity and that everyone has to have continuity does not stand up in economic or commercial operations.
I will deal with the last point first. This illustrates the absurdity of Mr. O'Malley's position. He is a Deputy for Limerick who should have a vital interest in Shannon Airport, as we all have. He has made the absurd point that of course you should not expect commercial interests to provide an all-year-round service because business is not there in the off peak months. That is the very point. It is vital to our national interest and to industrial development that we should have an all-year-round service. Aer Lingus have to provide that service and they have to charge fares which average out over the year.
The Minister does not understand what I am talking about.
The Deputy does not understand the argument. There has to be a fare which takes into account the fact that there is such low demand in the winter and that there are such small numbers. It is easy for an airline to come in for the three peak months of the year and say they can charge a fare 100 dollars cheaper than Aer Lingus. Aer Lingus have to carry the can for the other nine months. At that price Aer Lingus are losing a fortune on the Atlantic, as are almost all national carriers on the Atlantic. I should also say that the fares into Shannon from the New York and Boston gateways compared with London on average are about 100 dollars cheaper.
I am sorry if I appear hard on Deputy O'Malley but we cannot afford nationally to have services in the peak months of the summer only and no continuity of service during the winter. How would Deputy O'Malley have managed as Minister for Industry, which he was for many years, if there had not been this vital connection during the winter months? Who would pay for it? We hear all this criticism of Aer Lingus. Has the Deputy ever thought about the burden Aer Lingus have carried in providing a national service which is totally uncommercial? Deputy O'Malley has made the astounding assertion that many other countries allow what he is proposing in these amendments — the fixing of maximum fares. I asked him to name one country and he has not so done. There is none.
I said almost every country. The United States is one.
That is not so.
Britain.
That is not so with regard to Britain. Deputy O'Malley has illustrated his lack of knowledge in this area. Every country retains precisely the powers which we are seeking in this Bill. What matters is how we use these powers, which other countries use. Deputy Wilson was Minister for eight or nine months and there were other Fianna Fáil predecessors in that office. All Ministers of all Governments have used these powers, powers they always thought we had with regard to previous legislation, in the national interest, as far as possible keeping down the pressure on air fares.
Deputy O'Malley has said enough about his amendments. He has illustrated that he does not know what he is talking about. I defy him to name one country which does what he is proposing here.
What is the normal procedure for an air company which want to fly in and have tariffs or fares approved? Is that application made through Aer Lingus? This is in reference to what has been said here about Dan-Air. It is not my purpose to raise any matter in order to fatten the dividends for the directors and owners of Dan-Air, particularly because of what happened with regard to this country and the fifth freedom rights. How could Dan-Air, if they were seriously thinking about a service, process it through Aer Lingus? Surely the protocol would be to make application direct to the Department? That is as I read it and I am totally puzzled by this.
I know what has been done with regard to the fifth freedom and markets developed by Aer Lingus. I have no ambition to fatten the cheques for the owners of Dan-Air or the newly privatised British Airways or anyone else at the expense of Aer Lingus or of this country. What is the protocol if you want to have a fare established? Is it done through Aer Lingus or through the Minister?
The answer is that every airline is free to go direct to the Department. However, there are circumstances when they can deal with Aer Lingus and vice versa. That depends entirely on themselves. Deputy O'Malley talked about the £49 return fare London to Amsterdam. I was sure that he was wrong but before I said anything I checked and I have an official statement. He talked about that £49 London-Amsterdam fare being available on 20 and 25 per cent of the traffic and soon to be on 50 per cent. As part of the agreement between the two carriers, this is restricted to 5 per cent. I ask the Deputy please to stop making non-factual assertions.
How did they increase the traffic by 18 per cent?
The total traffic into Shannon increased by 18 per cent last year. That is not so dramatic. The Deputy should not be quoting matters which are not facts and out of their context. He is wrong again.
I am opposed to Deputy O'Malley's amendment because it is trying to bring into this small country of ours — an island nation off an island off the mainland of Europe — a set of regulations which does not appear in any other country in the world. This whole proposal, I regret to say, appears to be a vindictive attack on Aer Lingus. Having listened to the Deputy's contribution here today I am confirmed in that view. I regret to say that because Deputy O'Malley is a man for whose ability I have considerable personal regard, having served with and under him in the Department for approximately three years. The level of his feeling against Aer Lingus was portrayed when he spoke in a scathing manner of the attempt by Aer Lingus to inform the Members of this House, through a legitimate lobbying exercise during the course of this debate, about exactly what was involved.
That was a much belated attempt by Aer Lingus to try to correct the propaganda exercise that had been engaged in by Transamerica and others of their ilk and some of their cohorts in this country. Massive sums of money had been spent on a misinformation campaign by Transamerica and some of their agents here to try to hoodwink the Members of the House about what exactly was involved in this Bill and by the fallacious arguments which we have heard in regard to the £49 fare and other items. Aer Lingus rightly responded by informing the Members of this House — and not by a propaganda exercise. They gave the Members a forum at which they could ask at the highest level, chief executive level, any question they wished of the management of Aer Lingus about their operations and fares. I was present at one of those sessions in which all sorts of questions were asked about the fares between Dublin-London, London-Amsterdam, Belfast-London, fares across the Atlantic, New York-Buffalo fares. All these questions were answered in a reasonable and balanced way, showing the relevant exact per mile fares. They also gave comparisons city by city per mile. A slur has been cast on this legitimate and correct attempt by Aer Lingus, our national airline. It should be the duty of the Members of this House as far as possible to protect our own national interest. Our airline had to inform the Members of this House in an open, fair, free question and answer session about the misinformation which had been pumped into the system by Transamerica and some of their allies here to damage our national interest.
This is a nice, seductive argument which can be made and sounds smooth with regard to the consumer interests, that we should have fares of £40 or £50 from here to London and so forth. I would like that and so would everybody else. I am sure that the Minister would be delighted if we could have such airfares on every plane leaving Dublin for London.
I would, of course.
The reality is that you cannot have that. There must be some regulatory powers which will give the Minister of the day the pressure to promote downward prices but without affecting the continuity of service which is so essential in the commercial and national interests of this country.
We have heard much of the Dan-Airs and Transamericas and all that they were going to do for Ireland. We were told that the arguments on behalf of our national airlines were from Neanderthal men who were talking 30 or 40 years back in air transport. They talked about freedom of the air for the Dan-Airs who pose as the liberal, consumer interest protectors. Let us look back on the record. The same arguments were made 20 and 30 years ago — that if we could only have TWA and Pan-Am flying direct into Dublin there would be no difficulty, we would have millions of American tourists visiting here. This was a propaganda exercise which went on for a number of years. These companies were eventually let in and within a couple of years they were gone again, having done the damage which they did to our own national airline. They did not bring in millions of people. Aer Lingus carry out the hard slog for 12 months of the year across the Atlantic and on the European routes. They are doing the job and the others cannot compete or compare with them.
We heard the same seductive arguments 25 years ago and now we are hearing them again. We heard them about Air Florida, but they went bust, and this time last year we heard all about Transamerica, but they pulled out. At the moment Transamerica are doing charters into Belfast but they are not involved in scheduled services. They are also doing charters into Shannon. What happens to the ordinary day-by-day standard regulation flight out of Dublin or Shannon if we accept this nice seductive argument about the consumers? Certainly it makes good copy and it reads well to bash another semi-State body, but that is not what this Parliament should be about. We should not be bowing our knee to every damn breeze that passes by. We should stand up and protect our own national interest. That is the function of this House.
I refuse to accept the argument that if we put in the word "maximum" that will mean that the hands of the Minister will be tied in such a way that the consumer will win. That looks nice but we must realise the consumer wins in two ways; he wins on prices and on services. It was said that thankfully we have seen the end of IATA as a cartel. IATA were not just about prices. That organisation were set up to deal with the safety provided for passengers. They were established to ensure that we would not have two-bit airlines flying the world with no controls, safety regulations or standards. They were set up to protect the safety interests of passengers as well as to bring some reason and organisation into air fares. We heard about air fares across the Atlantic. In the past ten years since Laker came and went we have had nothing short of a blood bath, with none of the airlines making money. This Government, in order to maintain a national airline throughout the winter, had to provide a financial allowance to Aer Lingus. When we were in Government we introduced the measure, it was implemented by the Coalition and it continued for the past few years.
There has been enough bashing of Aer Lingus. We have had enough of the seductive arguments on behalf of multinationals. They will come and go when it suits them, with no responsibility towards or respect for our national interests. The argument reads well and makes good copy. It is popular with certain elements of the media, but our national interest would be severely damaged if we were depending for our communications with the outside world on airlines such as Transamerica, Dan-Air and many of the other fly-by-nights that come and go.
I find myself in agreement with many of the comments of my North County Dublin colleague. Deputy O'Malley may be an expert in a number of areas and he told the Minister to compare like with like. I say to the Deputy he must practise what he preaches. He made great play of the fact that Transamerica have pulled out of the South but, as Deputy Burke rightly pointed out, they are still operating charters here. Deputy O'Malley emphasised that they find it lucrative to operate out of Belfast. What they are operating in Belfast is an 11-weeks service from 11 July to 22 September. That is just too bad if I want to travel from Belfast on 9 July or 24 September. Deputy O'Malley is falling into his own trap when he implied that Transamerica have gone to the North to run a scheduled service because of the fact that there are much more desirable market forces there.
To anyone flying in and out of the country Deputy O'Malley's argument is, on the surface seductive. Obviously it is a pro-consumer argument but I think it is very lopsided. Of course it would be a great help to consumers if we could keep air fares down to a certain level but we also have an obligation to the carriers and to the people running the service. We must ensure that the fares charged are economical and that they will allow them to continue to operate.
On 31 December 1984 there was an article in The Irish Times by a Melvin Brenner, an aviation industry consultant based in Wall Street. He gives a fair assessment of what deregulation has done in the United States. He made the following comment:
From the distance of 3,500 miles, the public perception in Ireland is probably that deregulation has meant a low fare bonanza for the US consumer of air travel. That perception is understandable since there have, in fact, been some spectacular bargains these past few years...
However, he spells out clearly that deregulation is a two-edged sword. In his amendment Deputy O'Malley is taking just one edge of the sword and forgetting that there is a second edge. The Deputy is implying that if the Minister fixes maximum prices everything will be rosy, but that would bring about chaos such as we have seen on previous occasions, with travel agents going to the wall leaving the Government with the responsibility of bringing people home, with the help of Aer Lingus. Deputy O'Malley's argument is one-sided, but he is far too experienced a Deputy not to realise there is another side. Perhaps he does not want to put that side today.
We must protect the services. There is no point in having a service that costs £40 if it does not suit people, particularly business people who may have to fly at certain times. Business people need to have a regular service, even if they have to pay more for it. If carriers come in and develop a service people will get dependent on it. Then, when it transpires that the prices are too low to be economical the passengers find themselves left high and dry.
Deputy O'Malley attacked Aer Lingus on their efforts to inform Deputies. I am not going to get into an argument about the rights or wrongs of any group who wish to inform Deputies. However, I must point out that we were also inundated with forms signed by supposedly thousands of consumers. A lot of money was spent by the other side also in trying to tell people why the Bill should not be passed. We should play fair and put both sides of the argument. I do not know how many forms I got from people whom I am quite sure never read the Bill and had not the vaguest idea of what it was about. These people went to their travel agents to buy tickets for Majorca or elsewhere and this kind of form was shoved under their noses. They were told to sign it and send it back to their TD or to their local representative. I do not regard that as a proper exercise in public relations; I would much prefer the Aer Lingus method. Many banks and private companies now realise that it is their job to inform public representatives so that they can make relevant contributions to debate here. Therefore, I oppose this amendment.
I should like an opportunity of replying briefly to some of the things that have been said, to reply, unhappily, not so much to what was actually said but to its tone. It is terribly unfortunate that any debate on a topic like this, it appears to me, reduces itself very rapidly into personal terms. One is not allowed debate the merits or demerits of a more liberal or more restrictive air transport policy here, or more liberal access or restrictive access to the country. The whole thing is immediately painted in terms of whether one is for Aer Lingus or against them. One is then accused of waging a personal vendetta and in Deputy Raphael Burke's words, of being "vindictive", of being contrary to the national interest, because Deputy Burke and some other people make the serious error of thinking that the national interest equals the Aer Lingus interest. I have sought to preach that that is not so. The national interest is some delicate balance whereby a whole lot of factors must be taken into account. It is not as black and white or as simplistic as Deputy Burke and some others would have us believe — that if things are right from Aer Lingus's point of view, therefore things are right from Ireland's point of view and, if one is attacking Aer Lingus, therefore one is attacking Ireland.
We should look at a couple of figures that are relevant to the national interest. What is the national interest? The national interest is the good of as many people in this country as possible, of every county, not just of a small group of people living on the north side of County Dublin or wherever. That is not the national interest. In this context the primary thing in which the national interest consists is the number of tourists brought in here. Tourism is of enormous benefit to us and is dependent on access, transport, a lot of which in practice is dependent on air transport. I want to quote some figures — which are not Aer Lingus figures, Transamerican figures, Dan-Air figures or anybody's else's — but published in the Irish Statistical Bulletin, by the Central Statistics Office, showing the number of overseas tourists who came here from Britain by air for the years 1975 to 1983 inclusive. The 1984 figures, as I understand it, are not yet available from the CSO. These figures are for genuine tourists, not for business types, not for residents coming back or people going to visit close relatives and so on. For the year 1975 the figure was 147,000, in 1976, 104,000, for 1977, 126,000, for 1978, 139,000, 1979, 126,000, 1980, 105,000, 1981, 81,000, 1982, 77,000 and for 1983, 76,000. The 1983 figure of tourists coming to this country from Britain by air is just about half that of what it was in 1975. That is a very serious matter. The best way by far to counteract that trend, there are other things one can do too, but the most important single one is to make it attractive to fly here and have competitive fares.
It is tragic that the number of tourists travelling by air from Britain to Ireland, according to the CSO, has halved in that eight year period. That is tragic and the national interest is losing out. Indeed, every bit of Ireland loses by that because these people would spread out all over the country when they come here and they cannot spread out if they do not come. That is the kind of situation in which the national interest is concerned. It is not these localised, specialised pleadings we hear and which are turned into personalised attacks on individual Deputies or other people because they take a certain point of view. I know what this is from June last because it was reported to me many times what individual people were saying about me, that I was "interfering with", "anti-Aer Lingus", and so on. That is one of the penalties one has to pay if one tries to stand up and analyse the thing from the broadest point of view as to what is in this country's interest.
I am usually accused of making a special pleading for Shannon. I will leave Shannon out of it for the moment. At present in Cork severe difficulties are being encountered. I invite any Cork Deputies who may be listening to contemplate the severe difficulties that arise, apart from industrial closures and everything else, on the tourist side, because of the close down or abandonment of a ferry from Britain to Cork ——
Deputy, please, this is a restricted debate. You are now moving out onto the sea. We are dealing with an amendment on section 1 and I would ask you to confine yourself to that matter.
I cannot quibble with your ruling, Sir. Unfortunately I am endeavouring to reply to remarks made that perhaps were not terribly confined to amendment No. 1 either.
They were dealing with air services, not with sea services.
In terms of air services to Cork I will explain the background of some of the difficulties. There was a possibility earlier this year of an attractive air fare to Cork. At present it is extremely expensive. Without going into detail on things that might not be directly relevant here, that has not come about. We are told by the Minister, by Deputy Raphael Burke and others that the national interest has thereby been protected because fly-by-nights, as they are called, have been kept out of this country, horrible, commercial people who have the temerity to be in business, to make money and support themselves, horrible commercial people like that who try to be efficient. Those horrible fly-by-nights have been kept out of this country and therefore the national interest has been served. I query that and I am entitled to query it. Would the national interest not be at least equally well served if there were another 50,000 tourists in west Cork and south Kerry this year? Does that matter at all? Does the fact that hotels are closing down all over the place matter at all? Do they not count in terms of the national interest?
One would think we were in an enormous growth market. I have figures here for passenger movements from Irish airports which show there has been no growth at all over the past six or seven years. The figures are almost the same, hardly any difference. We are about the only country in Europe that is not showing any growth. British growth last year was 9 per cent overall. As far as I can remember in some continental countries it was somewhat higher. Give or take we have had in or about the same figure every year for the last six or seven years. Our national interest is not served by the fact that we are not increasing the number of people coming into the country, our national interest is losing. We must look after Aer Lingus, certainly, but we must realise that there is more to Ireland and Ireland's national interest than Aer Lingus.
One would think I was the only person in this country who questioned this. Although I have a lot of papers with me I cannot find a particular cutting which I cut out at the time. It must be in another file. There was an interview reported in The Irish Times business page on a Tuesday in September last with Mr. Martin Dully, the chief executive of Aer Rianta. I have no doubt the Minister has read that interview. Members of the House generally should read it and see what he had to say because it is somewhat of a revelation. He worked for Aer Lingus for, I think, a quarter of a century. Aer Lingus are today his biggest customer in his position as chief executive to Aer Rianta. I will not repeat some of what he said but it is worth reading that article; it is worth reading his views on what he believes to be the mistaken approach in relation to air transport and the regulation of civil aviation here, and his views as to huge increases that could be brought about if we got ourselves more into line in our thinking with what is happening on the ground throughout Europe, if we were less protectionist in our attitude and if we had a broader and more real definition of the national interest. Some of the words he used are far stronger than anything I have said. His experience is far greater than mine or than anyone else's in this House and far greater than any civil servant in the Department of Communications. He knows where the national interest lies and he is very distressed by the air transport policies that have evolved. It is obvious, although he does not mention this Bill by name, that he is very critical of the trend which this Bill epitomises and that he is very disturbed by it. If this Bill is persisted with we will be out on a limb to an even greater extent.
The success of Mr. Peter Sutherland as Commissioner for Competition, since his appointment a short time ago has been very heartening. He has given a lot of his time to looking at the question of competition or the lack of it in European air transport. An article in this week's Economist is very pertinent to this whole question and Deputies would do well to read it. Mr. Sutherland is not setting out to damage the Irish national interest or any other national interest; he is trying to develop Europe, to get Europe into the real world and to stop the nonsense that has been part and parcel of air transport to Europe up to very recently.
Deputies might also read an article in Community Report which is the Irish EC magazine, the issue of October/November 1984, on page 14. The article is by Mr. F. Sorensen, head of the air transport division of the European Commission. That article is most revealing and it demonstrates pretty clearly the European air fares generally are very substantially higher than they are in other parts of the world, particularly in the US. It also demonstrates that between 1978 and 1983 the rate of increase in European air fares is out of all proportion to increases anywhere else and out of all proportion to the increases in the consumer price index in the various European countries during that time. Why is it that of 90 given routes between the capitals of Europe prices increased by less than the consumer price index in only four and increased by more than the consumer price index and in many cases more than double the consumer price index on the other 86 routes?
Mr. Sutherland, Mr. Sorensen and others whom I have mentioned are people whose business it is to deal with these matters. They, no more than I, do not have a vindictive attitude towards anyone. They are prepared to put forward reasoned arguments in relation to this. People like Commissioner Sutherland and Mr. Sorensen say that what is happening in Europe cannot be allowed to continue, that it is grossly unfair to Europeans generally and that of all Europeans it is most unfair to us, because we are suffering most. But, we are doing it by our own hand. The European Court are considering this French judgment now which says that French legislation of this time is invalid because it conflicts with Articles 85 and 86 of the Treaty of Rome. At the very time when the European Court are hearing the case, we are trying to copperfasten the very thing that everyone else in Europe is sweeping aside.
Would not the national interest be served if our national airline were to do the kind of things that, for example, among others Mr. Martin Dully suggested they do, if they were not to look inward all the time and if they did not take up this constant protectionist attitude, but went out to get more and more people in? When I was speaking on this before I gave an example which unhappily remains perfectly valid now. It is very much bound up with the national interest that I am accused of damaging. I gave an example of an aeroplane flying to Ireland with a capacity of 200 seats and the only Irish airline would prefer to sell 100 of these seats at $200 per seat rather than sell the 200 seats at $100 per seat. The revenue is the same, but look at the difference it would make to this country if empty seats were filled, even if half the empty seats coming in here were filled up.
Can we not broaden our view to see that the national interest is more than just one company? A company has not the right to assert, as they have done and as has been done here through Deputies contributions, that its incorporate welfare is the only thing that matters and that that is the same thing as the national interest. It clearly is not. Will we grow up enough in this House and outside of it to realise that when someone genuinely argues these matters and tries to underline the national interest, we can react to it in a somewhat more adult fashion than simply describing him as anti-Aer Lingus and personalising matters in a way that is utterly unhelpful and only brings arguments of this kind to a useless conclusion.
I congratulate Deputy O'Malley on using the Legislature properly in fulfilling his role as a TD and on helping the rest of us to fulfil our roles as TDs. All legislation should be properly examined going through the House. The Bill would not have got that examination were it not for the interventions of Deputy O'Malley. All Deputies, when considering legislation here, should listen to rational arguments and reasoned discussion rather than curling themselves up in shells and hurling abuse at each other. I do not think any of us have anything to fear. It is the public interest that we should be concerned about.
I did not hear Deputy O'Malley's entire contribution but I should like to point out that the Aer Lingus briefing, attended by me, was a good and useful exercise. Aer Lingus were as entitled as anybody else to hold such a briefing. I would like to see some type of consumer body in every area of monopoly, in areas such as communal television and so on, where the consumer does not have an opportunity to go to another competitive source. I would like to see consumers given the same right of approach to Members and having an organised input into this type of legislation. In my view that is the kind of thinking that will come about.
That should be the end of the passing reference.
I have finished that passing reference. The only point I wish to make in regard to the legislation is one I referred to at the Aer Lingus briefing. No matter what arguments are put forward — it is very difficult for me since my brother happens to be Minister for Communications and it is very difficult for him since I happen to be a Government backbencher——
Is there an argument for promotion there?
Replacement rather than promotion.
——it is very difficult, in my honest view, to justify the rates charged on the London-Dublin and Dublin-London routes. I raised this matter with Aer Lingus and I cannot for the world understand why it is and why it continues to be so high. It is not simply a case of carrying 100 people at £200 per ticket or 200 people at £100 per ticket but a case of people from the South not using the service at all. I understand from a politician north of the Border that if one drives into Aldergrove Airport one will find it full of Southern registered cars. People within a reasonable distance of Northern Ireland cross the Border and fly on the shuttle service from Belfast to London which is about one quarter or one-third of the normal Aer Lingus cost.
It is losing money heavily.
The distance is the same. The argument being used is that they do not have to pay international landing fees and so on but it does not make sense. It is as easy for people who live in Donegal, Cavan, Monaghan or Sligo to drive to Aldergrove as it is for them to drive to Dublin and while the price remains one-quarter or one-third of the Aer Lingus fare it will be difficult for us to explain the price level. I raised the matter with Aer Lingus and I have not got a satisfactory reply. Business people and tourists must find the position impossible.
Special weekend rates, Apex fares and so on have been introduced but one finds that if one wants to go at any sort of reasonable time one cannot avail of those offers because hotel accommodation in London is not available. The cost of the normal week-day flights are extraordinarily high. I say that as a Member who is not anti-Aer Lingus. In fact, I am well disposed towards Aer Lingus. It is an excellent company, one of our better public companies. I cannot see how the company can justify the Dublin-London fare. As legislators it is not our job to justify Department or State company briefs but to do what is generally in the public interest. If there are difficulties in Departments, local authorities or in the courts it is our job to iron them out. The bottleneck in terms of the price level on the Dublin-London route is discouraging tourism and the development of business. That route should come under greater examination.
I should like to refer to the comment by Deputy O'Malley about Aer Lingus. The Deputy will note that I have not in any of my contributions sought to take the part of Aer Lingus. That is a different matter from the national interest. In regard to the point raised by Deputy Gay Mitchell about the Dublin-London route I should like to point out that the British Civil Aviation authority who possess all types of statisticians and economists approved a higher increase in the charge for tickets on that route in the last 12 months than I would allow. I forced the fare down. Earlier Deputy O'Malley scoffed at that move remarking that it was only a £4 reduction. It was a reduction of 2 per cent. The fact is that we forced the fare down as we have forced fares down persistently since I became Minister. It must be remembered that two British airlines operate on that route and they charge the same fare.
If one compares the Dublin-London route on a per mile basis with comparable routes, one will find that it is no more expensive. In fact, it may be slightly less expensive. We should get our facts straight about this matter.
Deputy O'Malley, quoting from a Community report, said that air fares in Europe over a period of years have gone up in some cases by as much as twice the rate of inflation. Has the Deputy the statistics in regard to air fares to and from Ireland since I became Minister? If he has he will see that air fares have increased by less than the rate of inflation since I became Minister. That was as a result of my policy on air fares, a policy I intend to continue. We have had a long debate on this matter and, perhaps, Deputies would agree to take the question soon.
I would go a long way with Deputy O'Malley with regard to the consumer and tourism aspects of air travel and the cost. The interests of Aer Lingus and Bord Fáilte are not mutually exclusive. There is an obligation on Aer Lingus to fill their own planes and after that to encourage other people to fill their planes coming to Ireland. I have a consumer-orientated amendment for consideration at a later stage in the debate. I may be a little sorry that I missed the Lucullan feasts in Buswells Hotel — it made my mouth water when I heard all the talk about it — but I must point out that Aer Lingus were late in the field with their propaganda. When I met Susan Hamilton in the company of a consumer group, legal experts and a travel agency, there was never any indication to me that there was a danger that a scheduled service by Transamerica would be withdrawn from this country. I must say that I was fooled in that regard.
Deputy O'Malley lacks logic in one thing he said. He quoted statistics from the Irish statistical bulletin. In logic one cannot say that because the statistics show that the numbers are going down, air companies, their tarrifs and fares are at fault. In that period the recession was biting very deeply and holidaymakers generally, particularly from the UK had dropped. I was in an area in southern England where people from the industrial north used go camping and there was a 25 per cent take-up in 1980-81. The number of unemployed had increased and there was less money available for holidaying.
We will want to keep our feet on the ground in regard to this but I go along with Deputy O'Malley in saying that our tourism industry is very important and that the idea of enticing tourists here should not be hampered by any policy. I do not believe it is. I remember very well an example of what tourism can do for the economy of a country and we need it here and Aer Lingus should contribute to it. The first time I went on a course to Spain 600,000 people visited Spain in that year; last year 40 million people went there. On the first occasion that I am quoting the per capita earnings in Spain were much lower than in Ireland; today the per capita earnings in Spain are much higher than they are here. Therefore, we have an obligation in considering legislation such as this to take tourism heavily into account, but I part company with Deputy O'Malley in his belief that if the numbers are decreasing it is necessarily because of the tariffs of Aer Lingus or that the wellbeing of Aer Lingus is in some way involved in keeping tourism out of this country. I do not believe that that is so and I cannot see any logic in that.
I do not want to delay this debate. We have had a full discussion but I want to clarify a few points and to comment on some of the contributions. I have great admiration for the views and operations of Deputy O'Malley, having worked with him. However, I refuse to accept that I should not voice some protection of the stand of Aer Lingus. Deputy O'Malley in an earlier contribution referred in a dismissive, derisory and quite insulting manner to the lobbying and information process that Aer Lingus involved themselves in in Buswell's Hotel. That was done in a manner to suggest that something improper had been undertaken. I refute that argument on my own behalf as I was a Deputy present at the briefing and I feel that the airline are entitled to have their point of view raised in this House with regard to that briefing. As Deputy Wilson has just said, they were late into the field in trying to repair and correct much of the misinformation that had been churned out by Transamerica and some of their allies in this country.
I agree fully that Aer Lingus should encourage tourism and the development of tourism in this country, and I believe that they have done that consistently down the years of their operations. Through their promotion work in America and on the Continent in the sums of money that they spend in their budget on promotion they are not just promoting Aer Lingus as such but are also promoting Ireland as a base for holidays and have been quite successful in that. I would like to see greater use of charter tours into Ireland from right around Europe, the Ruhr Valley, Britain and continental Europe outside the Ruhr. We should be bringing more tourists in here but that is not what we are talking about in this Bill. Here we are talking about the whole area of the standard regulatory powers dealing with the ordinary day-to-day operations, the scheduled services of the airlines.
Deputy O'Malley attempts to suggest that because scheduled fares are at the rate that they are, the tourist trade by air has dropped to the figures he has suggested. That is to disregard totally the international recessions and the Irish recession. It is to disregard totally further Government decisions which have sent the pricing of a holiday in Ireland through the roof with regard to drink prices, food prices, holiday accommodation prices, transport within the country and so on. I agree that tourism has a major role to play in the recovery of our economy in the years ahead, but that is to look at it in a national way for all Government Departments and for the Government to tackle the pricings within when the tourists arrive here. To suggest that the lack of tourists in the country is a result of the special fares of Aer Lingus is twisting the facts to an extent that they do not stand up. I would like to see the 50,000 tourists in west Cork that Deputy O'Malley spoke about and an extra 50,000 in every county in Ireland. I would like to see more in my own north county Dublin. To suggest that it is only as a result of scheduled air fares or the pricing policy of Aer Lingus is to twist the truth.
I did not suggest that.
I make no apologies to this House or to anybody for standing up to speak on behalf of our national airline. They have served this country well and continue to serve it well, and they deserve as much assistance and protection as we as a Chamber can provide for them. That is not to say that they should be featherbedded but they should be protected against unfair competition. Much is made of the commercial operators. Aer Lingus are operating in a commercial world. Of their total assets at the moment they received only one-third of that funding from the State and through the efforts of their management and workers they developed their asset. They developed the money that was given to them to the extent of 3:1 ratio. They deserve any assistance we can give them. To say that they are not operating on a commercial basis is incorrect. They are doing so, and last year's profits were good and I am informed reliably that this year's profits will be equal to if not better than that. Basically they are providing a national service for industrial and other purposes to keep us in touch with the rest of Europe and with America. The commercial operators whom Deputy O'Malley lauded so much are companies such as Transamerica, Florida and many others who come and go. There is a list the length of your arm of those who have come and gone from America and the UK. They have come to try to cream off business that Aer Lingus developed and then have gone, but where would this nation have been without Aer Lingus continuing to fly the routes? I make no apologies to this House or to anybody outside for standing up and saying that the national interest and the health and prosperity of Aer Lingus are one and the same thing.
As somebody very much involved in Shannon airport as a trade union official and who worked there for many years looking after the workers in Aer Lingus and throughout the airport generally, I am very much in favour of the Aer Lingus position. While I appreciate the points made by Deputy O'Malley about not giving to anybody a monopoly that might be to the detriment of the national interest, nevertheless we must examine the situation. We are really speaking here about the flag carrier of this nation. I was involved in Labour Court submissions dealing with foreign companies such as TWA and Pan Am as far back as 1973. We made the point successfully to the Labour Court then that any of these companies coming into the country should be made to compete on the same——
I appeal to you to keep to a passing reference because we are dealing with an amendment on section 1.
I am coming to that.
Come back to it.
I am directing my remarks to that and I am making the point that the flag carrier of this country should not be made to operate at terms less favourable than those applying to other companies coming in here. To suggest that we should bend matters to provide for that is to allow all sorts of people to come in here. These companies come here only when it suits them to do so. They will not care about this country. It is like arguing against CIE having the transport monopoly. Certain coach operators pick lucrative sections of the market but leave CIE to carry the unprofitable social elements of the service.
Aer Lingus provide a service all the year round. Except for Aeroflot, the Russian airline, using Shannon in the winter, we would not even have seagulls there were it not for Aer Lingus. This is why I say their position should be protected by this House. That is not to say that I am in favour of a monopoly or a cartel. I want to make that clear. I know, as well as anybody else, the kind of uisce faoi thalamh that goes on albeit with an apparent official imprimatur which operates between the European national flag carriers. They have a nice cosy arrangement among themselves. Three different passengers on the one plane can fly to South Africa having paid three different fares, all apparently legitimate.
We should not do anything which would be detrimental to our national flag carrier, Aer Lingus. I take the point Deputy O'Malley is making about trying to encourage as many tourists as possible to visit Ireland. This might underpin the need for this Government, and all Irish governments, getting their act together and co-ordinating the agencies concerned more effectively. I am saying this as chairman of the committee on State-sponsored bodies. We discovered four State agencies had different hotels within their responsibility when they should have been co-ordinating their operations.
Last summer Shannon Airport had the best season since 1946. The pattern has been established, no matter what we do to entice foreign airlines to use our airports. We gave TWA the right to overfly Shannon and come to Dublin, but despite all the concessions they got, the pattern has been so well established that eight out of every ten American tourists decided to land first at Shannon. This country is different from other European countries. There the trend is to go to Vienna, Brussels, Paris and so on, the capital cities, but here, tourists go to the west and then go to Dublin or London.
That has nothing to do with amendment No. 1.
I am not happy with some of the things Aer Lingus have done at Shannon Airport. They are overflying the runways apparently at the drop of a hat. I wrote to Aer Lingus protesting about this on behalf of the workers, because 30 minutes later BOAC and other airlines can fly in with the same head winds, and land at Shannon. I am not altogether happy about Aer Lingus and what they might do if they were given carte blanche, but at the same time their position has to be protected against unfair outside competition.
I was very interested to hear what difference the insertion of the word "maximum" would make. I have been listening to a lot of invective for the past two hours which had nothing to do with this amendment. I do not see any reason why the word "maximum" should be inserted. The Minister will have power to determine the fare. This amendment seems to be a vehicle for a general discussion.
As the Deputy has difficulty in understanding this amendment, I will explain it to him. If the word "maximum" is inserted, it means that the Minister fixes the maximum fare beyond which no airline on a particular route can charge. It is a maximum fare, not an obligatory fare. If one or more airlines on a particular route want to charge less, they are free to do so. That is the difference the word "maximum" makes. The Minister does not want to let them charge less. He wants all airlines to charge the same. He wants to retain the cartel. My forecast is that all this will be swept aside in Europe. We had better live in the real world rather than try to retain things which might have worked well for us in some respects in the past but which are no longer relevant.
I appeal to the Minister to accept the word "maximum" to allow competition. He should not have everybody charging the same. Dan-Air, I understand, hold a licence from the Minister for Gatwick to Shannon, but they have never used it because their licence makes it obligatory on them to charge the cartel fare. They cannot charge less. They say the fare is so high that this route will not be attractive and they will not draw customers. If the change I am suggesting is made all routes of that kind will be opened up because people will not have to remain part of a cartel against their wishes. The members of most cartels are in it voluntarily and want to stay there. Cartels have to be broken up by Government action under the Restrictive Practices Acts, but here we are giving statutory underpinning to a cartel. While Irish law is underpinning it by legislation, European law is going to sweep it away and if they do not do it this year, they will certainly do it next year or the year after. There is a commissioner who is committed to that, the court is committed to it and the treaty seems fairly clear.
The Minister should leave all these emotional arguments aside and insert the word "maximum". If some people want to charge less, let them do so. What awful crime is that? Under this Bill it will be a crime if you charge less than the cartel arranged fare. No longer will the jail sentence be imposed, but a £50,000 fine will be imposed; in the original proposal, it was £100,000 and two years in jail.
Why not insert the word "maximum" in this Bill, as it is in all the prices Acts, and allow people to charge less than the maximum if they want to? At present, if the word "maximum" is not included they all have to charge the same fare. There can be no competition. I just want ordinary competition. It is going to come anyway. Why we should be legislating into the teeth of the wind I do not know.
In his contribution Deputy O'Malley has persisted in making many errors. For instance, he said Dan-Air cannot operate to Shannon. The fact is they did not file for Shannon. If they file a lower price than Aer Lingus or anybody else they will be considered. He also said people had to operate within a cartel, that there was only one fare. That is contrary to the facts. As the Deputy must know, I have allowed Transamerica and Northwest Orient to charge different fares from Aer Lingus, all substantially cheaper.
Deputy O'Malley is a respected Member of this House and has made so many serious errors in facts as to amaze me. I think we should put the question.
Would the Minister like to hear a letter from an official in the Department of Transport, admittedly before the Minister's time?
Is it relevant to the amendment?
I think it is, because it is on the question of fares. A letter was written and signed by an official in the Department — his name is not relevant but his signature is here — informing an airline that they could not operate a particular route from Shannon at the fare they proposed and that they would have to increase it substantially. If they did not do so they were to stop operating. That is the reality; that is life. It is not what the Minister says. That is why we do not have the volume of air traffic we should have. I will read the letter if the Minister wishes. It was not written during his time in office but just before. The policy has never changed. I was a member of Government for over eight years and I do not remember these matters ever being discussed at a Government meeting. It is ministerial rather than Government policy. In effect that means departmental policy. Here is a letter from the Department telling an airline that they cannot operate on the Shannon-Amsterdam route because they are not charging enough and that they will have to increase their rates by 12 per cent or stop operating. That is wrong. If anybody wants to operate on the Shannon-Amsterdam route at a lower rate, let them do so if they will generate business.
The policy outlined in this letter is the type of thing I am trying to overcome. It will be overcome, not by this House but by being swept aside by the European Commission and the European Court. I cannot forecast how long it will take but it will happen, probably within the next two or three years. It is quite mad that we are going in the opposite direction. That letter would be laughed out of court in Luxembourg. I cannot imagine a similar letter being written in 1985 by any other civil aviation administration.
I understand the Deputy is referring to a decision by my predecessor to allow rights to Transamerica which no other country will allow us. We will allow them to stop at Shannon, pick up passengers and go on to Amsterdam but only at a rate which is not a predatory fare compared to other routes to Amsterdam. It highlights the liberality of our regime compared to other countries.
It worries me and those who are closely interested in the workers that the trans-Atlantic route is not making money. I would be very worried if any position were brought about or subscribed to by this House which would undermine further the capacity of Aer Lingus to fight off unfair competition from outside carriers. They are the national flag carrier and I would be very concerned about the impact on Shannon if we were to weaken the position of Aer Lingus vis-á-vis that of other large airlines, especially from America. I have no great love for Aer Lingus per se. I do not imagine that they are boiling over with love for Shannon Airport. I would be worried about a trans-Atlantic runway in Dublin. I am concerned with safeguarding the position of Shannon Airport as our primary international airport.
Deputy O'Malley, are you pressing the amendment?
Yes.
Amendment put and declared lost.
Amendments Nos. 2, 26, 29, 33 and 36 are related and may be discussed together, by agreement.
I move amendment No. 2:
In page 2, line 31, to delete "mail or other cargo".
The purpose of this amendment is to remove the question of charges for cargo and mail from the new controls proposed in this Bill. I do not know why the Minister should have any function in specifying minimum charges for cargo and mail. It is none of his business. It is a matter for An Post to negotiate their own agreements on charges. I do not know why the Minister includes mail in these provisions.
Why should the Minister wish to regulate the charges made for cargo? Is it any of his business? Are we going bureaucratically mad to the extent that Government and administration have to interfere in everything? The question of cargo cannot be arranged by walking into a travel agency and buying a ticket. Those who ship cargo usually deal in considerable quantities and are able to negotiate from a strong position. If they have sufficient cargo they may be able to go to different carriers. Cargo charges are very high and the service is not entirely satisfactory. Some aspects give rise to complaints and difficulties but I can also understand the difficulties of those who provide the service. It is quite inappropriate that the Minister should be trying to set minimum terms for cargo. Cargo is not one homogeneous commodity. It cannot simply be charged by weight — volume, size and shape must also be considered, as well as factors such as whether it can be palletised.
Why does the Minister wants these controls? Is it suggested that Aer Lingus or any other airline flying in here are under-charging in respect of cargo? Certainly I have never heard that suggestion. This seems totally different from the area of air passenger transport. Is there a danger that we will be beset by Flying Tigers or one of the other cargo lines? I do not think there is any danger of it. Flying Tigers come here two or three times a week, as well as Seaboard and some of the other cargo people. Why should their minimum charges be fixed? Is it suspected that they will undercut somebody else? It is not appropriate that this kind of bureaucratic regulation of minimum charges should be part of our legislation.
The position here is exactly the same as in regard to air fares. We have this power in the Air Navigation Act, 1965, and we are putting it beyond doubt in this legislation. As a matter of practice we do not use it. Deputy O'Malley has said that cargo charges in and out of this country are quite high. They are unregulated. I do not envisage using these powers but it is necessary to have reserve powers in relation to cargo and mail in the event of predatory pricing by operators.
If the Minister says he does not use the powers and will not do so, what is the point in having them? He refers to the possibility of predatory pricing in relation to cargo. Is it likely? Does he think that Flying Tigers or Seaboard are going to come in here for the little bit of cargo that is floating around, charging predatory rates in order to push somebody out of business? It is nonsense. This is not so much a reflection of the ministerial mind.
Progress reported; Committee to sit again.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.