Ceisteanna—Questions. Oral Answers. - Airport Passenger and Cargo Handling.

3.

asked the Minister for Tourism and Transport whether the recent three year agreement between Aer Rianta and Aer Lingus giving them exclusive passenger handling rights for third parties is in the best interests of the travelling Irish public since it rules out competition in this area.

26.

asked the Minister for Tourism and Transport if he will outline his policy in relation to (a) passenger handling and (b) cargo handling at the State airports; whether the time is right to open up competition in passenger handling; and if he will make a statement on the matter.

I propose to answer Questions Nos. 3 and 26 together.

Aer Rianta as my agent are responsible for the management of the State airports, and passenger and cargo handling at the State airports is carried out by companies appointed for that purpose by Aer Rianta. The policy in relation to passenger and cargo handling is to provide services for all carriers using the State airports which are efficient and reasonably priced and which facilitate the continuation of the extremely high operational and safety standards which exist at the airports.

With regard to passenger handling at Dublin Airport a detailed and comprehensive review of passenger handling arrangments at the airport was carried out by my Department in conjunction with Aer Rianta in 1987. As a result of this review new passenger handling arrangements were introduced at Dublin Airport in January 1988.

The main features of the new arrangements involve:

(i) a formal agreement between Aer Rianta and Aer Lingus under which the latter have been granted sole rights to engage in passenger handling for third party carriers for a period of three years;

(ii) a substantial reduction ranging to over 30 per cent depending on aircraft type on the published charges for passenger handling which previously applied;

(iii) a formal mechanism under which carriers who are unhappy with the standard or cost of the service offered or provided by Aer Lingus can appeal to Aer Rianta. The responsibility of Aer Rianta in this regard is to ensure that the Aer Lingus service is efficient and reasonably priced and their findings on any appeal are binding on Aer Lingus;

(iv) continuation of the right of any carrier to engage in handling its own aircraft;

(v) permission for a carrier already engaged in self handling to handle for any carrier for whom he acts as general sales agent;

(vi) carriers engaged in self handling may be allowed by Aer Rianta to co-operate in relation to the sharing of equipment, etc.

Many of the features of the revised arrangements at Dublin Airport are entirely new and I am satisfied that they represent a significant improvement on the situation which existed previously.

In the case of Shannon and Cork Airports a comprehensive examination of passenger handling arrangements is now being carried out by Aer Rianta, following an earlier request from me to the company that the position at these airports should also be reviewed. I am advised by Aer Rianta that this examination is now well advanced and that the company expect to be in a position to submit recommendations to me on this matter in the near future. When I receive these recommendations they will be examined as a matter of urgency by my Department.

With regard to cargo handling at the State airports significant advances in this area have been achieved in the last two years. A detailed review of the cargo handling arrangements and facilities at the airports was finalised by Aer Rianta with the assistance of a firm of consultants last year. Arising from this review specific steps have now been taken by the company to upgrade and improve the cargo handling facilities at the State airports. These steps include:

(a) changes in work practices and upgrading of facilities to facilitate speedier and more efficient processing and clearance of freight;

(b) the provision of a 24-hour customs service for cargo clearance at Dublin Airport;

(c) construction of a new fast freight terminal at Dublin Airport which was opened in March of this year;

(d) the appointment of second cargo handlers at both Dublin and Shannon Airports;

(e) plans for the construction of new cargo warehouses at Dublin and Shannon Airports, work on which is expected to commence shortly;

(f) plans for the appointment of a second cargo handler at Cork Airport.

I thank the Minister for a comprehensive reply. Will he agree that the 30 per cent reduction for passenger handling services only came about because Ryanair were on the scene looking for the opportunity to do the passenger handling which has now been given to Aer Lingus? Will the Minister undertake when the three-year period expires in two years' time that Ryanair and any other carrier will have a full and fair chance of getting that concessioin from Aer Rianta? Competition should be strengthened and not weakened. Will the Minister agree that the reduction was caused by Ryanair's coming in? These regulations never existed until there was competition. Will the Minister undertake that Ryanair and any other airline will get a fair opportunity to tender for this service?

Let us try to avoid repetition.

With regard to the first part of the supplementary, I am fully conscious of the importance of competition. On reflection, that could answer the second part as well.

This deal behind closed doors stinks to high heaven. Does the Minister condone this deal? As Deputy Hussey has pointed out, Aer Lingus were able to reduce their charges by 30 per cent when there was a mention of competition. One can only imagine what profits they were making when they were getting the full whack. Why does the Minister not terminate this agreement immediately and see to it that people are allowed to tender for ths lucrative contract? Surely all airlines, particularly Irish airlines, are entitled to compete. Would the Minister not agree that there is obvious discrimination in this case?

I would not agree that this agreement should be terminated. Ryanair and Club Air applied to my Department for permission to engage in third party handling and they were given that permission. Neither one nor the other would have been able to take on the full complement of passenger handling at Dublin Airport. I am committed to an even playing field in competition for all airlines using Dublin Airport and for fair and open competition for such things as passenger handling by companies who are capable of carrying out the task.

Is the Minister saying that Ryanair would have been incapable of providing the service at Dublin Airport?

That was the result of the study which was made.

Can we have an assurance that when the three-year period expires the Minister will allow open competition?

Neither Ryanair nor Club Air was in a position to provide a full passenger handling service. It would be my intention to open competition to all people who could do the job. Of course I have a preference for Irish companies.