Dáil Éireann debate -
Tuesday, 18 Oct 1994

Vol. 445 No. 9

Written Answers. - State Investment in Airlines.

Richard Bruton

Question:

215 Mr. R. Bruton asked the Minister for Transport, Energy and Communications if his attention has been drawn to the fact that the European Union has approved State investments in the airlines of France, Greece and Portugal on a more substantial scale than envisaged in Ireland and in circumstances where regional services are still being protected; and his views on whether this is an approach open to the Irish Government. [1493/94]

Minister for Transport, Energy and Communications (Mr. Cowen)

I am aware of the fact that the European Commission has approved State investments in the airlines of France, Greece and Portugal. The scale of the investments approved and the investments approved and the conditions attaching to such investments vary from country to country.

In so far as regional services are concerned, the European Commission has informed me that its decision of March 1993 in relation to TAP referred to compensation for losses made since 1978 by TAP for carrying out public service obligations on the routes to the Atlantic islands of Azores and Madeira. The Portuguese Azores are at present excluded from the scope of Council Regulation (EEC) No. 2408/92 of 23 July 1992, and on the routes to Madeira, TAP has an exclusive concession which will expire in 1995. The European Commission has advised me that the Portugese Government agreed to apply the Third Phase of Liberalisation and Licensing of Air Carriers (the "Third Package") rules to the Atlantic islands as of 1 January 1996 despite the fact that the islands are formally excluded from the Package.

With regard to the Greek Government's investment in Olympic Airways, the European Commission has informed me that this is partly aimed at compensating losses made by Olympic Airways in carrying out public service obligations on behalf of the State. The European Commission has indicated that the Greek islands are, for the time being, excluded from the application of the Third Package. The Commission has also informed me that the Greek Government has accepted that the abrogation for the Greek islands currently included in the Third Package shall end on 30 June 1996.

In relation to Air France, the Commission has advised me that it cannot use the State aid rules to open up domestic French routes to competition because this would be a misuse of power.

In so far as regional services in Ireland are concerned, an Essential Air Services Programme for the regional airports is being introduced by the Government in accordance with the provisions of Article 4 of Council Regulation 2408/92.

Tenders have been received from a number of air carriers to operate routes between the regional airports and Dublin Airport. The tenders are being considered in consultation with the European Commission and it is expected that a decision on award of contracts to operate the routes will be made shortly.

The Essential Air Service Programme is unconnected to the Government's equity investment in Aer Lingus.