asked the Minister for Tourism and Transport if he considers that further reductions in air access fares from continental Europe will be a major factor in ensuring that the targets for tourism set out in the Programme for National Recovery will be attained; the action he is taking at EC level in that regard; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Air Fares.
8.
Air fares from continental Europe to Ireland have been reduced significantly in the last two years. For example, the lowest fare from Paris in summer 1988 was 20 per cent lower than that in 1987 and from Frankfurt a similar comparison shows a reduction of 30 per cent.
These reductions have been brought about as a result of the more competitive air transport policy which I have pursued since taking up office, aided by the EC air transport liberalisation package implemented from January 1988 — on foot of decisions taken in December 1987 — and by bilateral arrangements negotiated by my Department with foreign administrations including an extremely liberal agreement with the United Kingdom. As a result of these initiatives, traffic from continental Europe increased by approximately 14 per cent in the first eight months of 1988, compared with the same period in 1987.
I believe there is ample scope for further reductions in air fares to Ireland from Europe. However, such reductions require the agreement of the other States concerned and this is often not readily forthcoming. I understand that the European Commission will be producing, during 1989, proposals for the next phase of air transport liberalisation in the Community. The second phase of liberalisation is due to come into effect on 1 July 1990. I expect that the terms will be finalised during the Irish Presidency in the first half of that year. In this context, I shall be seeking a much less restrictive fares régime, as well as more flexible capacity-sharing arrangements and increased opportunities for market access for Irish carriers.
Generally, I can assure the Deputy that I shall continue to avail of every opportunity to press vigorously, in the interests of tourism development, for further reductions in air fares to Ireland from continental Europe.
The Minister has indicated that there is ample room for further reductions. What type of figure is the Minister talking about? Has he been in contact with his counterparts in other countries in this respect? Has he been endeavouring to get an agreement on a specific package of reductions he believes possible? If so, what have been the results of that endeavour?
That is a rather long supplementary. With regard to the United Kingdom, the country with the highest percentage volume of traffic into this country, I should say that I signed, with Lord Brabazon, last year a liberal agreement, one which I have said in the Council of Ministers in Europe would act as an exemplar for a similar agreement at European level. Within that agreement, both with regard to fares and capacity, there is the most liberal régime possible. For example, one country only can decide on a fare; the two countries do not have to agree to it unless it is a predatory fare. With regard to France — where there is a new government — we had been negotiating strongly with the previous French Government for reductions in fares and a more liberal capacity service to France. As I indicated in the course of my reply, we made some headway in that direction. In addition we achieved a certain capacity agreement under which Ryanair could operate as well as Aer Lingus. As I have said, we have achieved a reduction in fares of 30 per cent from West Germany into this country. I should like to emphasise something I said in my reply, which is that, when the chips are down, individual countries, even members of the EC, hold out very hard for their self-interests. I suppose one cannot blame them for doing so.
Would the Minister agree that a 14 per cent increase is pathetic particularly when the number of tourists coming here from continental Europe is so low? Furthermore, would he agree that air fares will not continue to reduce forever? What plans has the Minister, in tandem with reduced air fares, which will attract a larger number of tourists from Europe about which we have all been speaking for the past few years? What else is taking place?
I reject the Deputy's suggestion that an increase of 14 per cent is not significant in this context; it is a very significant increase. I might add that it is one that applies across the board to France, Germany and, in particular, Italy.
The second point I might make has to do with the Deputy's question as to what, other than fare reductions, we are doing about achieving an improved number of tourists from continental Europe. We are mounting a very strong and targeted marketing campaign for which the Government provided £5 million at the end of this year and which the industry — again I must say to their credit — matched with another £5 million. We are targeting the markets with that money in order to increase the numbers of tourists coming here.