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Dáil Éireann debate -
Wednesday, 16 Nov 1988

Vol. 384 No. 3

Written Answers. - Air Fares.

45.

asked the Minister for Tourism and Transport if he will outline the criteria which he uses in approving or disapproving the air fares charged on various routes.

In considering whether to approve air fares, I am obliged under Article 3 (3) of the Air Transport Act, 1986 to have regard to

(i) the reasonable interest of other air carriers;

(ii) the reasonable interests of users;

(iii) the contribution to the economy by the tourist industry;

(iv) the necessity to maintain an adequate range of year round services, having regard to the public interest;

(v) any representation or objection made to me regarding the tariff;

(vi) any air transport or other international agreements in force at the time, to which the State is a party.

In relation to (vi) there are a number of international agreements to which I am required to have regard, viz:—

(a) in the case of fares between Ireland the the EC Community members states generally, I am obliged, under the EEC Council Direction of 14 December 1987 on fares for scheduled air services between member states, to take into consideration a wide range of criteria, including the costs of the applicant airline, the needs of consumers, the need for a satisfactory return on capital, the competitive market situation, including the fares of other airlines operating on the route and the need to prevent dumping. However, and here I quote directly from the relevant EC Directive: "the fact that a proposed air fare is lower than that offered by another carrier on the same route shall not be sufficient reason for withholding approval". The Directive also provides for automatic approval of promotional fare proposals conforming to certain specified parameters.

(b) In the case of Ireland-UK fares, the Memorandum of Understanding dated 11 March 1988 between the UK and Ireland refers. This is generally more liberal in its provisions than the EC fares Directive which I have just mentioned. It provides for a double disapproval fares regime which essentially means that all fares are deemed approved, unless disapproved by both Authorities. There is, however, scope for consultation where one side considers a particular fare filed by a carrier of the other side either excessive or that its application would constitute anti-competitive behaviour, likely to cause serious damage to another airline or airlines. Either side may unilaterally disapprove fares of its own airlines, if they are considered to be excessive or anti-competitive.

(c) In the case of Ireland-US fares, the Memorandum of Understanding on North Atlantic pricing, made between the European Civil Aviation Conference (ECAC), of which Ireland is a Member, and the US provides for the automatic approval of fares conforming to certain specified parameters. Otherwise the provisions of the Air Transport Act, 1986 apply.

I should add, finally, that the fares offered by any airline on any of its routes is primarily a matter for that airline to determine by reference to its own costs, the demands of the market and the general competitive environment, within the parameters laid down by the legislation or international agreements to which I have already referred.

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