Adjournment Debate. Regional Airports.

Kerry Airport has proved to be a major success and is now playing a very significant and vital role in the economic and social life of Kerry. Its board of directors includes representatives of all the main corporate and public bodies in the county under the leadership and direction of Kerry Group. There was serious concern over the summer months in Kerry regarding the future viability of Kerry Airport following statements from Aer Lingus that it was considering withdrawing its service from Kerry Airport to Dublin. This concern resulted in a widespread public campaign which included the three local authorities of Tralee, Killarney, Listowel, as well as the Tralee and Killarney Chambers of Commerce and the Kerry branch of the Irish Hotels Feder ation. The campaign included a meeting with the Minister on 12 September, at which five Kerry Dáil Deputies, a Senator, representatives of the three local authorities, business and tourism interests in the county were present. At that meeting it was forcibly pointed out that any downgrading of the air service to Kerry would have serious consequences in terms of attracting investment and tourists into the county. It would lead to a general perception of Kerry as an isolated, inaccessible and difficult location in which to do business, as it would greatly increase the time and cost of travel within the EU for potential customers, specialist maintenance and other critical staff.

In addition, it was pointed out to the Minister that many people who use the service are receiving medical treatment in Dublin. If the present level of service is not retained and improved, it will be an infliction of further discomfort and suffering on those people who will have to make a five-hour journey to Dublin by train or road.

Today – I hope it was not a coincidence but if it was I welcome it – Aer Lingus announced that it is now tendering for the service of the Kerry-Dublin route. This follows an internal study by Aer Lingus which demonstrated that the Kerry-Dublin route had a commercial basis and would give a commercial return. The revised public service obligation for the Dublin-Kerry route, published recently, provides for a welcome expansion of the service. The service must be operated at the rate of at least three return trips per day, seven days per week. A minimum of 150 seats per day each way to and from Kerry to Dublin, that is, a minimum of 300 seats in both directions must be provided seven days per week. The flight schedules must include an early morning flight from Kerry to Dublin and a late evening flight from Dublin to Kerry to enable passengers on business trips to make a round trip within the day. A range of fares may be applied subject to at least 60 seats per day each way to and from Kerry to Dublin being available at a return fare of £87 or 110 or lower and a minimum return fare of £97 or 123 in respect of a maximum of 60 seats per day each way to and from Kerry to Dublin. This is very welcome.

The scenario as outlined in the communication will result in the provision of three flights from Kerry and a £1.05 million subsidy from 2001. At present 78,000 passengers use the service. With three flights, this should increase over 18 months to 110,000. This should prove very attractive to Aer Lingus, and if they can reduce their overnight cost and other overheads then the route from Dublin to Kerry should become very profitable.

The development of Kerry Airport is critical for the future prosperity of County Kerry. It is the most peripheral county in Ireland, with inferior access roads, such as the N69. It has a most inconsistent rail service because of the quality of the line from Mallow to Tralee. Admittedly, this will now be improved somewhat because of recent upgrading. We have no sea port to bring in ferry traffic, except for the Tarbert-Killimer ferry which brings people from Kerry to Clare and back. The continuation and improvement of our airport service is critical for the entire region. I appreciate that there is a commitment to providing financial support for regional airports in the national development plan. This commitment must be delivered on if Kerry Airport is to compete for passengers and other business with the Aer Rianta supported airports of Shannon and Cork. I appeal to the Minister to do everything possible to make the tender very attractive to Aer Lingus and also to plough further money into Kerry Airport to improve the facilities at the airport.

I am pleased to have this opportunity to address the House on the subject of the air service between Kerry and Dublin. I compliment Deputy Deenihan on raising this important issue of Kerry Airport.

The Kerry-Dublin air service is operated under a public service obligation, known as a PSO, in accordance with EU Regulation 2408/92. It will assist the debate if I explain briefly the background to the operation of the PSO regime.

The aviation market in Europe is now fully liberalised, and it is a matter for airlines to decide which routes they will operate. However, this liberalisation was accompanied by a right for member states to impose a public service obligation when it considers that a particular route, which is not considered commercially viable by the airlines, is vital for the economic development of a region. The member state may specify minimum standards to be met on the PSO route, for example, in relation to the number of seats offered, frequencies and fares. The choice of PSO routes and the standards imposed are subject to the control of the EU Commission. Because PSOs are an exception to the rules governing the liberalised aviation market, Regulation 2408/92 sets down procedures which must be followed in the selection, operation and administration of PSO routes, and these procedures are supervised by the Commission.

In summary, if no carrier is willing to provide a service to the standards specified in a PSO on a commercial basis, access to that route is confined to a single carrier for three years and that carrier must be selected following a tendering procedure involving all interested airlines. The route must be re-tendered at the end of each three-year period.

In the case of the Kerry-Dublin route, two daily flights from Kerry to Dublin are currently operated by Aer Lingus under a PSO. Aer Lingus won the competition on this route when it was last put out to tender in 1997 and its contract expires in January 2001. The terms of that contract were for two flights daily with a minimum of 200 seats per day offered on the route – 100 in each direction – and the PSO standards specified that a pressurised aircraft must be used on the route.

The Department of Public Enterprise is now engaged on the obligatory re-tendering process for an air carrier on the Kerry-Dublin route. This followed a period of consultation with the EU Commission during which Departmental officials were able to satisfy the Commission of the continuing need for the Kerry-Dublin PSO. However, because of the success of the Kerry-Dublin PSO and the clear benefits for tourism and business interests in the Kerry region, the Minister for Public Enterprise decided that the standards governing this route should be increased compared to the current operation. She was also able to secure Commission approval for this. The improved standards will see three daily return flights on the Kerry-Dublin route and the minimum seat capacity will be increased by 50% to 300 seats. As is the case at present, there is nothing to prevent the air carrier providing capacity above the minimum requirement if circumstances warrant such increases. In addition, we are maintaining the requirement for a pressurised aircraft to be used on the route.

Deputies will see, therefore, that the Minister for Public Enterprise has been successful in ensuring a much improved air service between Kerry and Dublin.

The new PSO standards were published by the Commission in the EU Official Journal on 15 September, while the invitation to airlines to tender for the Kerry-Dublin route was published on 16 September. Interested air carriers have until 17 October to submit their bids to the Department and it is open to all airlines to participate in this process. In accordance with Regulation 2408/92, copies of the tender submission must be sent to the EU Commission and a period of two months must elapse before any selection is made.

Among other measures which this Government is pursuing to assist the regional airports, including Kerry Airport, is that over the past four years, the Minister for Public Enterprise allocated £300,000 per annum to assist Kerry Airport's marketing and promotional efforts, and this was increased by 50% to £450,000 in the current year. In addition, a sum of £3 million is included in the national development plan for the two regional airports, Kerry and Waterford, in the south and east regions. These funds will be devoted to providing assistance for incremental infrastructural improvement works and upgrades in facilities to maintain continued safe and viable operation of these airports.

The Minister for Public Enterprise is deeply conscious of the importance of a high standard scheduled air service to Dublin for the Kerry region and this has guided her in her decision to increase substantially the level of service on the route. We are confident that significant benefits, both for business and tourism interests in Kerry, will flow from the improved level of access that will pertain when the new service becomes established early in the new year.