Vol. 433 No. 3
19 Mr. Cox asked the Minister for Transport, Energy and Communications the exact age of the three Boeing 747 aircraft at present leased to Aer Lingus; and if his Department has satisfied itself that these aircraft have not exceeded the normal lifespan of safe operation for such an aircraft.
The three Boeing 747 aircraft operated by Aer Lingus were constructed in 1970. Aircraft do not have a fixed or alloted lifespan. The operation of all three Aer Lingus aircraft is in accordance with their certificates of airworthiness which are issued annually by my Department following major inspection.
I am satisfied that these aircraft can continue to operate subject to them meeting the requirements of the normal ongoing maintenance and overhaul programmes as specified by the manufacturers. These programmes are agreed with my Department. The operation of the aircraft is monitored on a continuous basis by the relevant airworthiness experts in the Air Navigation Services Office.
Would the Minister agree that 23 years of age for aircraft like these is very unusual in the case of operators either in Europe or in North America? Would he agree that it is usually in more remote parts of the world that aircraft of that type and age continue to be operated and that other airlines in Western Europe, for example, would tend to dispose of aircraft like these after ten or 12 years?
I might make the point to the Deputy that, regardless of the age of the aircraft, very stringent safety standards apply to the airworthiness certification process of the Air Navigation Services office, I might also point out the excellent safety record of Aer Lingus. Despite the age of such aircraft, it would not be correct to suggest that they were in some way substandard, because that is not the case. Quite clearly, should the cost reduction programme and survival strategy of the company be implemented, thereby generating extra revenue and greater profitability, the ability to replace aircraft in the future will be greatly enhanced. That is provided for in the survival strategy planned to begin in 1995-96, but in the first instance one must generate the type of revenue that will allow that to happen. Quite clearly, one need not examine outright purchase, as in the case of the European fleet, which got the company into severe difficulty but rather the type of very competitive leasing arrangements now available, given the present state of the aerospace industry worldwide. It is within that context that one would examine this overall area.
I must re-emphasise Aer Lingus' excellent safety record, comparable with any other airline worldwide, of which they are proud and the very high safety standards applied by the Air Navigation Services office. In no way are any of these aircraft substandard. Their replacement would be greatly enhanced in the future through this company achieving the type of cost reductions necessary to generate the requisite revenues for that purpose.
(Limerick East): The Minister will be aware that the Cahill plan envisages replacement of the present Boeing 747s in two or three years' time by more modern but still secondhand 747s and that the suggestion has been advanced that they be bought from British Airways. Can the Minister give the House an indication of the comparative cost of the purchase of secondhand aircraft of this type as against leasing newer aircraft and in particular can he inform us of the annual cost of leasing the Boeing 767s which were acquired by Aer Lingus to fly to the west coast of America?
The Deputy would appear to be seeking additional information, whereas the question relates to the vintage and safety aspects of these aircraft.
(Limerick East): Yes, but the Minister very kindly adverted to the Cahill plan, so now I am asking about his reply.
In the first instance the question of their replacement arises only within the context of the company's viability plans being implemented. At present one cannot so presume. Basic commercial decisions are day-to-day matters for management — for example, whether one should deploy more fuel-efficient 747-200s or 747-300s to replace the present 747-100s being used, or whether one should acquire newer, more technologically advanced aircraft. The commercial decision as to whether they should be new or secondhand is something that should be decided at that stage. The ability of the aircraft to fulfil their function is not based on their age. Their certification of airworthiness is done annually and very high and stringent standards are set for them. As we know, great advances have been made in the overhaul and maintenance of aircraft, including in this country. That type of line maintenance and general overhaul is a very important factor in the longevity and usefulness of these aircraft. On the separate question of the Boeing 767 aircraft, as I do not wish to give an inaccurate answer I will convey the information to the Deputy.
As the B767 aircraft are referred to in Question No. 30 in the name of Deputy Cox I presume the Minister has the information available but may I remind him that Aer Lingus does not own any of the five aircraft that we are talking about here — the three B747 aircraft and the two B767 aircraft? It did own them at one stage but it sold them and then leased them. In view of what the Minister said about the B747 aircraft and the fact that the B767 aircraft have a higher unit cost of operation than larger long haul aircraft does he think that Aer Lingus might do better if it retained the new B767 aircraft rather than the elderly B747 aircraft given that the B767 aircraft are only about one year old and are regarded throughout the world as being excellent and cost efficient aircraft?
If it is in order I will try to respond to Question No. 30 now——
Time is against us, Minister.
It is a commercial matter for the company in the first instance to decide on the configuration of the Aer Lingus-Aerlinte fleet. On 7 September 1989 the board of Aer Lingus endorsed a management recommendation to lease two Boeing 767-300ER aircraft for operation on the North Atlantic and sought Government approval to proceed with the leases. The Government approved the proposals subject to the condition that there would be no recourse to the State for either equity or State guarantees of borrowing in relation to the aircraft. At that time, Aer Lingus planned to operate the services to Los Angeles but, for commercial reasons, the company subsequently decided not to proceed with these plans. In its recent review of strategy Aer Lingus decided that in relation to its North Atlantic operations services would be confined to New York and Boston. Aer Lingus is of the view that these points are best served by the B747 aircraft as the B767 aircraft have higher seat-mile cost than the B747 and lower aircraft mile costs making them suitable for long range thin routes but relatively unsuitable for shorter routes with heavy traffic flows and low seat rates. As the B767 aircraft are surplus to Aer Lingus requirements, the company proposes to dispose of them as soon as possible. To respond to Deputy Noonan, two B767 aircraft were leased in 1991 and the rental is of the order of $750,000 per month.
The Minister referred to the certificate of airworthiness regulations. Do maintenance costs increase appreciably as aircraft get older and, if so, to what extent?
Like old machinery, aircraft maintenance costs would presumably be higher in respect of older aircraft. What is at issue here is the inability of the company to make provision for the replacement of the Transatlantic fleet. There is a need to address this problem. This forms part of the proposed strategy. I have outlined the technical reasons the B747 aircraft are regarded as more appropriate than the B767 aircraft. Because of the breaks in the lease we have been able to get rid of the B767 aircraft and lease them even if the rates do not match what Aer Lingus is paying for them. The company is in a tight financial position at present and it will have to try to replace the fleet during the period of the plan.
That concludes questions for today.
