asked the Minister for Tourism and Transport if he will outline the latest position regarding proposals for fleet replacement of Aer Lingus.
Ceisteanna—Questions. Oral Answers. - Aer Lingus Fleet Replacement.
5.
As a first step in the replacement of its European fleet, Aer Lingus took delivery of the first of two Boeing 737-300 aircraft for the Ireland-London routes on 30 October last. The second is due for delivery later this month. The cost of the two aircraft — $72 million — is being met from the company's own resources and no Exchequer equity or State guarantee of borrowing by the airline is involved.
The Government have also approved a proposal by Aer Lingus to acquire, again without recourse to the Exchequer, four new Boeing 737-500 aircraft, for delivery in late 1990, for their Continental European routes.
The question of fleet replacement generally by Aer Lingus in the period up to the mid-nineties is currently under review by an interdepartmental review group who will be assessing the company's overall investment strategy and financing. The group are expected to complete their work within the next few months.
I thank the Minister for the very heartening information he has given to us about the capacity of Aer Lingus to do the job. Can I take it that in view of the fact that specific steps have now been undertaken for the fleet replacement, the Minister's interdepartmental review committee that he told us about in March of this year and again in June have now reported to him and that the decision to acquire now and in the future has been taken at Cabinet level?
I did not catch the latter part of that question.
Has the Minister now received a specific report from the interdepartmental review body that he told us of and would he tell us of the recommendations of that body with regard to the future replacement of the fleet?
With regard to the purchases already approved the interdepartmental committee advised me and the Government took their decisions in the light of that advice. We are expecting the final report early in the New Year.
This is the report that the Minister said in March this year would be ready in May or June.
Are you not satisfied with the work of the committee up to now?
I am more than satisfied with it but I am concerned to see that there will be a definitive report and that this House will be advised because of the varying — no doubt we will hear shortly from Deputy Deasy — views of this House as to how Aer Lingus should be truncated and decimated in order to try to meet the political ideologies rather than to achieve better management.
The Deputy is making a statement rather than asking a question.
When is the definitive report on fleet replacement, as promised in March of this year, to be made available to this House for consideration?
I have replied to the Deputy that part of the work in progress has already been seen to result in the purchase of the aircraft I have already mentioned. It is expected that the group's final report will be submitted in the New Year.
Is that early in the New Year?
Deputy Deasy.
I would inform Deputy McCartan that his mind reading qualities may not be as accurate as he thinks. Our ideologies——
(Interruptions.)
——are not as predictable as are those of The Workers' Party. We will allow a little bit of latitude.
I am going to set up as an amateur psychologist.
Let us deal with the question before us.
The Minister in his reply referred to the funding of the replacement fleet and he merely referred to the replacement of the European fleet. What about overall funding? The Minister referred to a sum of $72 million for aircraft already delivered and spoke about five about to be delivered also for the European routes. Who will fund the overall replacement of the Aer Lingus fleet? Can the Minister give an approximation of the total cost and will Aer Lingus be in a position to fund all of that replacement, whether on European routes or on North Atlantic routes?
I would need to be a prophet, because some of these purchases will be made in the mid nineties. The final report of the interdepartmental committee which will be submitted early in the New Year will address itself to the further down the line purchases, but these purchases are well down the line into the nineties. I gave the figure of $72 million and then there are four new Boeing 727-500 aircraft at a cost of $108.5 million.
Will there be a taxpayer involvement——
No.
——in the overall replacement even for the North Atlantic routes?
I cannot see down to the 747 Jumbo replacements. As of now I am very pleased to say that Aer Lingus are out of their own resources, funding two B737-300s and four B737-500s.
May I ask a supplementary?
A Cheann Comhairle——
I will be glad to entertain Deputy Cullen and Deputy Higgins but can I ask them to be very brief as I want to make some progress on other questions.
Would the Minister agree that since they were founded in 1936 and given their total expenditure from the State of £76 million that Aer Lingus, having provided 6,000 well paid jobs, are a model for State industry?
I would be in almost total agreement with the Deputy. Aer Rianta are also a model and I do not know which of the two models I would choose if I had to make a choice.
What about Ryanair?
I want to congratulate Aer Lingus on the arrival of the St. Laurence O'Toole. It is very important in the interests of Irish tourism that their fleet is being rejuvenated. I want to ask the Minister two questions.
The Minister said that the first two aircraft, the one that has arrived and the one that is due to arrive at the end of next month, cost $72 million and that the four bigger planes due to arrive will cost $105 million. There seems to be a great difference between those two figures and I would like the Minister to explain how two planes are costing $72 million when we can get four for $105 million. Maybe I misunderstood the Minister.
You understood me correctly.
Do the review group who are to report back to the Minister as to how the fleet should be replaced recommend seeking funds from the private sector? Do the group encompass those terms of reference?
I will take the latter part of the question first. I will study whatever advice comes to me. With regard to the other part of the question, I think the Deputy was fooled by the terminology. The Boeing 737-500 is a smaller plane than the Boeing 737-300.