asked the Minister for Communications if he will make a statement on the progress in EC discussion with the liberalisation of air transport, and on the implications for Irish airlines of proposals being discussed.
Written Answers. - Air Transport Liberalisation.
15.
The EC Transport Council is currently considering measures to introduce greater flexibility in the areas of fares, market access and capacity with a view to increasing competition in air transport, as part of an agreement for the period 1987 to 1990. This is regarded as an initial step towards achieving the completion of the internal market in air transport by 1992.
I am dissatisfied with the market access proposals before the Council and have found it necessary to table additional proposals designed to create opportunities for Irish carriers to extend existing routes or open new routes. The first, providing for a combination of points, proposes that airlines be permitted to operate to two foreign points on the one service without exercising traffic rights between the foreign points. The second and more significant proposal envisages the exercise by airlines of fifth freedom rights within the Community, that is the right to carry traffic between two other member states. These proposals are still the subject of discussion at Council of Ministers level.
On air fares, some progress has been made in developing a more flexible scheme for air fares approval. Under this scheme, airlines would be permitted to seek approval for their fares proposals from Governments without any obligation to agree them in advance with their competitors; they would also qualify for automatic approval for promotional fares which comply with certain specified conditions provided the levels come within certain predetermined bands or zones. In so far as these proposals are directed towards stimulating greater competition between airlines, I welcome them as being beneficial for users.
An agreement is being developed which would represent a departure from the 50/50 capacity sharing scheme which certain States have previously imposed. Under the proposed agreement the airlines of one State would be automatically permitted to provide initially up to 55 per cent of total capacity on air services between that State and a second State. This would apply for two years, after which the 55 per cent could be expanded to 60 per cent subject to certain safeguards. My approach at the Council of Ministers is that the question of capacity should be left to the commercial judgment of the airlines concerned. Unfortunately, quite a number of member states have a much more restrictive approach and I am endeavouring to ensure that Community agreement on the capacity issue will represent a genuine increase in competition and will not enable States to effect cutbacks in airline capacity on existing routes.
The foregoing issues are expected to be discussed at a meeting of the Council of Ministers which is to be held on 15/16 December 1986.