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Dáil Éireann debate -
Friday, 23 Nov 2001

Vol. 544 No. 6

Air Navigation and Transport (Indemnities) Bill, 2001: Second Stage.

I move: "That the Bill be now read a Second Time."

I echo my colleague the Minister for Justice, Equality and Law Reform, Deputy O'Donoghue, in saying I regret that our colleagues from Fine Gael and the Labour Party are not here today for this important Bill.

The terrible events in New York, Washington and Philadelphia on 11 September, as we all know, had enormous repercussions for the aviation industry and for economies across the globe. This Bill is the Government's response to one aspect of those repercussions, the withdrawal of war risks insurance cover by the insurance industry.

It would help the House if I spend a few moments placing this Bill and the insurance problems in the wider context of the problems caused by 11 September. These fall into three different categories, insurance, security and economic. In the aftermath of the terrorist attacks, the most immediate need was to reassess security measures at airports and, in the first instance, the US authorities closed airspace and airports for four days. Before the airports reopened the US and other Governments had established requirements for much stricter security checks on passengers and luggage before boarding flights. These stricter security measures are continually being reassessed and enhanced, and look likely to be the normal way of doing business from now on.

In Ireland, the Garda and airport security authorities responded immediately on 11 September. The National Civil Aviation Security Committee, which normally meets about twice a year, convened a meeting on 12 September and held eight further meetings since. Extra security measures were implemented at all Irish airports which are under continual review by the committee. The precise details of the new security arrangements are not disclosed on security grounds. In general terms, however, they involve the deployment of extra gardaí, enhanced passenger and luggage screening, extra air-side and land-side patrols, and tighter controls on cockpit access. The procedures controlling access to the air-side of the airports has also been tightened up.

Prior to 11 September, many airlines were starting to feel the effects of one of the usual cyclic slowdowns in the aviation business. The terrorist attacks greatly accelerated this and imposed immediate costs arising from the lost US business on the days that the US airspace and airports were closed and the costs of additional security measures that were put in place. The impact on Aer Lingus has been disastrous. I have spoken before this House about Aer Lingus on a number of occasions recently and I do not propose to say any more on the matter now. Other Deputies may comment on the airline if they wish. Deputies will be aware of the intensive efforts being carried out by me and my Department to find a lasting solution to this difficult issue.

The terrorist attacks resulted in enormous costs in terms of human life, property and business. The reaction of the insurance industry, and its decision to withdraw cover for war and terrorist risks on giving seven days notice, must be seen in that context. The total cost of the US losses is expected to exceed the world's annual premium income for all types of aviation insurance. As well as reducing the war risks insurance cover to a fraction of previous levels, the insurance industry greatly increased the premium for the cover that remained. This is a further economic burden on the already hard pressed aviation industry.

Before to the withdrawal of cover, airlines generally enjoyed third party war risks insurance cover of up to US$1.5 billion per aircraft which, in general, was included as part of the overall insurance premium. This cover indemnifies the policy holder against claims by third parties, in other words, people on the ground, that suffer personal injury or material damage. It is important to note that the insurers have made no change to war risks cover for the passengers on aircraft, which remains fully in place. It is also important to note that there has been no change in insurance cover for accidents and events that have nothing to do with war or terrorism.

Having reviewed the new situation in which civil aircraft could be used as weapons – a new phenomenon – the insurers gave the minimum seven days notice required under the insurance contracts of their decision to unilaterally reduce that cover to US$50 million per airline with effect from 23.59 GMT on 24 September, 2001.

To fully understand the extent of the reduction in cover, this meant that an airline with 30 aircraft which previously had cover of US$45 billion was now reduced to US$50 million. Also, the insurers initiated a charge of US$1.50 per passenger for the new low level of cover. While this may not seem like a great deal, over a full year it would result in almost trebling an airline's total insurance bill even though the amount of cover is only a fraction of what it was. The withdrawal of cover also applied to airports, air traffic control and ground handling activities such as baggage handling, refuelling, maintenance and security. It would have resulted in airport closures and airlines' not flying.

Following the insurance industry's announcement of the reduction in war risks cover, it quickly became apparent that the net result would be a virtually complete cessation of civil aviation services. There are a variety of reasons for this, the most direct being that, in most countries, and certainly throughout the European Union, airlines must have adequate insurance cover to qualify for an operating licence. Regulatory authorities, in Ireland's case the Commission for Aviation Regulation, made it clear that they would not consider the very low level of available war risks insurance to be adequate. In addition, many airlines lease aircraft rather than buy them outright. The lessors of such aircraft include in the leasing contracts a requirement for high levels of insurance for each leased aircraft in order to minimise the lessors' risks. It was clear to the directors of the airlines that they would put the future of the entire business at risk if they continued operations without insurance cover.

Governments around the world were united in the view that the terrorists' attacks should not bring normal life to halt, which was what they wanted to achieve. The terrorists wanted to see airlines going to the wall in the aftermath, but we do not want to see that. Our Government, in common with other EU governments, agreed that arrangements should be put in place to allow airlines to continue flying after 24 September. In most cases, the Government took on in various ways the insurance burden which the insurers were no longer prepared to carry. In the UK, for example, appropriate legislation was in place dating from 1952. However, we do not have similar legislation.

Following extensive consultation with the Attorney General's office, the Department of Enterprise, Trade and Employment and the Department of Finance, it was concluded that the Government could not directly indemnify the airlines under existing legislation. In the circumstances, it was decided that the most that could be done in the short-term was to issue letters of comfort in which the Government undertook to introduce the legislation that is now before the House and, in the event that the Bill is enacted by the Oireachtas, to then issue indemnities to the firms that have received letters of comfort.

It is important to make the House aware of the EU dimension to this insurance matter. On 22 September, the matter was first considered at an informal ECOFIN Council at Liege and the following guidelines were issued: Government support will be limited to address a specific short-term failure in the commercial insurance market to ensure that third party cover for war and terrorism remain available; Governments will charge a reasonable premium which as far as possible reflects the risks involved for the schemes they introduce, although it is possible that this will be waived in the short-term; the schemes will be introduced for one month with work continuing on a sustainable solution and to encourage industry to return to the market as soon as possible.

There was a special Transport Council meeting on 14 September in the immediate aftermath of the terrorist attacks which I attended. The Transport Council had asked the Commission to set up an ad hoc group to examine aviation security issues and the ECOFIN Council asked the Commission to extend that work to include the insurance issues.

The Transport Council met again on 16 October and concluded that member states may continue to operate temporary Government schemes on a month by month basis up to 31 December 2001. At the same time the council called for a speedy and concerted return to commercial insurance arrangements in preference to the Government schemes.

A number of meetings of the ad hoc insurance group have now taken place. At the meeting on 23 October guidelines were issued in relation to appropriate levels of charging by Governments and these will form the basis for the charges to be imposed by our Department, in consultation with the Department of Finance when this Bill is enacted. In keeping with the Transport Council conclusions, the guidelines are intended to encourage the airlines and insurers to return to commercial insurance arrangements as quickly as possible.

It will be clear from my summary of the various EU interventions in this matter that policy has had to evolve at short notice to reflect the realities on the ground. Initially, at the time of the informal ECOFIN Council, it was assumed that intervention by Governments for one month would be sufficient. Indeed, at that meeting it was not yet appreciated that insurance cover was being withdrawn from airports and ground handlers. By 16 October it was still hoped that the insurance market would have returned to normal after two months, and certainly by the end of this year. It now seems that insurers continue to be cautious and the need for Government intervention may well extend into the early part of next year. The Government here, in common with our European partners, would like to see the return of normal commercial insurance arrangements as soon as possible and the Government schemes are very much an essential measure to fill a gap for the shortest time possible.

I will now turn to the specifics of the Bill and will start with a general overview. This is a short Bill designed to deal with the immediate insurance problems in a comprehensive manner. It does not deal with any other aviation issues. The House will easily appreciate that, while we have endeavoured to keep the Bill as short as possible, this is not trivial legislation due to the enormous sums of money involved.

Basically, the Bill will authorise the Minister to issue indemnities to airlines, airports, the Irish Aviation Authority and ground handlers to make up the gap between the insurance cover they actually have and what was available before the problem arose. In the present circumstances, that means the normal cover that was available prior to 24 September 2001. This means that many of the indemnities amount to US$1.5 billion per aircraft. The amounts of cover for the airports and the ground handlers were between US$100 million and US$500 million. This creates an enormous potential liability for the Exchequer when one realises that there are over 70 aircraft covered as well as nine airports and 15 ground handler firms. The potential liability is clearly beyond the capacity of a small country like Ireland so the aggregate maximum amount that may be paid out on foot of indemnities is limited by the Bill to 9 billion.

While there is the potential for enormous claims under these indemnities, the decision of the Government to give the letters of comfort reflected the low probability of claims arising and the charges to be made for the indemnities also take this into account. There will be no requirement for the Exchequer to make any payments unless there is a terrorist attack involving an Irish airline or an Irish airport. I know the House will excuse me when I say that with the help of God, that will not happen.

In recognition of the huge financial exposure, the Bill contains a number of important safeguards in addition to providing the legislative authority to issue indemnities. First, the underlying requirement before I can issue any indemnities is the need for the Government to decide that a problem exists and to make an order to that effect. Second, each Government order can only last for six months unless a continuing order is made. Third, each indemnity may only last for a maximum of 31 days, in other words, indemnities of this magnitude cannot be issued by a Minister without careful consideration and must be reviewed every month. The collective decision of Government must be revisited at least once every six months as long as the problem continues. Finally, the entire Act will become ineffective after 12 months unless its continuation is approved by this House and by the Seanad. This will provide elected representatives with an opportunity to consider whether they wish the Government to continue to have the authority to enter into this type of financial commitment.

I will deal briefly with the principal sections of the Bill. Sections 2 and 3 provide the powers necessary to issue indemnities. Sections 4 to 7, inclusive, 9, 10, 14, 15 and 19 provide a variety of safeguards for the Exchequer. The remaining sections are routine provisions that feature in most legislation covering such matters as definitions and the management of moneys.

While section 1, dealing with interpretation, is a routine section, I draw the attention of the House to the three categories of company that are identified and which may apply for indemnities. These are airlines licensed in the State, the Irish Aviation Authority, airports with scheduled services and other companies which provide ground handling services. These companies include baggage handling, maintenance, refuelling and security. The indemnities to airlines licensed by Ireland will also cover any services that they operate between non-Irish airports.

Section 2 gives the Government power to make an order to declare that a state of difficulty affecting the supply of insurance – relating to air navigation services – exists. The requirement for the Government order reflects the enormous levels of indemnity required to match insurance that was in place prior to 24 September. The maximum period for such an order is six months but a continuation order could be made after six months if necessary.

Section 3 empowers the Minister to give or renew indemnities during the period when an order under section 2 is in force. Under section 4 an indemnity may only be issued in a case where the undertaking requesting the indemnity had insurance immediately prior to the state of difficulty that gave rise to the order under section 2. This is to ensure that the indemnities are limited to cases where insurance cover has been withdrawn or reduced.

Section 5 allows the Minister to impose conditions when issuing an indemnity. The Minister may declare an indemnity void if the conditions are not complied with. The letters of comfort that have been issued already, including a requirement to comply with whatever conditions were in the original insurance policy, include a requirement to notify the Minister immediately an event arises that might give rise to a claim and an entitlement for the Minister to withdraw the indemnities if a terrorist attack should involve an Irish airline or airport.

Section 6 limits the State's liability to whatever limit previously existed under the original insurance cover. Furthermore, when all indemnities are taken together, the State's liability will be limited to 9 billion. This is the approximate euro equivalent of the aggregate limits on indemnities under the existing letters of comfort. The Bill provides that if the total claims from indemnified undertakings were to exceed 9 billion, then the payments from the Exchequer would be limited to a proportion of the claims made.

Section 7 limits the period of any one indemnity to 31 days. This is to protect the Exchequer by requiring renewals to be based on the most up-to-date information about the availability of and need for insurance. Indemnities may be renewed. Provision is also made to cover the retrospective period back to 24 September 2001.

While section 8, which allows the Minister to impose charges for indemnities is a routine provision, I would like the House to be aware that this is in line with the ECOFIN and Transport Council conclusions. In common with most member states it is not proposed to make any charges in respect of the first month of cover.

Under section 9 the Minister may issue indemnities only to Irish licensed airlines and to airports and service providers whose services are essential to support civil air services. The objective here is to limit the exposure of the Exchequer.

Section 10 is another important protection for the Exchequer. It gives the Minister all of the defences against claims that would have been available to the insurance company if the insurance cover had continued in place. Subsection (2) ensures that the issue of an indemnity by the Minister does not give any additional rights to a person compared to those they would have had if the insurance had continued in force.

Section 14 allows the Minister to terminate or suspend indemnities at any time. However, an indemnity in respect of an aircraft in flight will not terminate until it lands. If indemnities are terminated airlines must get their aircraft to land at the nearest airport, which may be the one from which they have just taken off, as soon as possible unless they get specific permission from the Minister to fly to another airport. This is, perhaps, the most important element in limiting the Exchequer's exposure.

Section 15 allows the Minister to re-insure all or part of the liabilities associated with the indemnities. No plans exist to do this immediately but it may be an appropriate way to reduce the risk to the Exchequer if an insurance difficulty were of long duration and if re-insurance is available.

Section 19 provides for the cessation of the operation of the Act 12 months from the date of its coming in to operation, unless extended by a resolution of the Oireachtas. This is another important part of the protections built into the Bill as it provides an opportunity for the Oireachtas to consider the matter on a regular basis.

This legislation is essential to keep Irish civil aviation in operation in these difficult times. I have no doubt that the House shares the Government's strong belief that terrorists should not be permitted to curtail our freedoms. The freedom to travel is an essential part of the modern economy. It is also an essential part of the freedoms we enjoy as citizens of the European Community, as part of our long-standing kinship with the United States and as part of the good will that Ireland and its people have earned throughout the world by our support for human rights.

I commend the Bill to the House.

It is sad that the Opposition parties are not taking part in the democratic process. Regardless of differences of opinion, they should have stayed in the House to debate this very important legislation.

The disaster of 11 September in the United States threw the airline industry into chaos, and the insurance companies reacted swiftly. Had the insurance companies been left to stand alone they would have effectively cleared the skies of planes. For Ireland, which depends so much on air transport, it would have had a cataclysmic effect not alone on the economy but on every other aspect of society. The Government realised this and swiftly took the necessary action to avert the disaster that would have ensued had we had to depend on the level of insurance the insurance companies are willing to grant to the airlines.

As a result of the happenings in the United States, the third party war risks cover, the part of insurance that covers persons and buildings on the ground affected by an aircraft crash as a result of war or hijacking, was reduced to a maximum of US$50 million. The average value of this cover, held by airlines prior to the change, was in the range of US$750 million to US$1.5 billion. Drop ping this to US$50 million would have caused severe problems. Airport and essential aviation support services also had this insurance cover reduced from the level they originally had. In the process of bringing in this legislation we must ask ourselves what that meant to all sectors of Irish aviation. It meant that Irish airlines, airports and other essential service providers were given seven days notice of the change and, from midnight on Monday 24 September, would not have had the amount of insurance necessary to continue operations. That, essentially, is what faced the Government on that night. It meant that all Aer Lingus planes would be grounded, and any other planes that came in under the aegis of the Government.

In the absence of a settlement between the aviation and insurance sectors, the Government took action to provide the insurance necessary to keep the planes in the air. This action took the form of the Government stepping in to underwrite the gap in the insurance between the insurance cover that was previously available to the airlines and what was now being offered. In common with most other European governments, and in line with the guiding principles agreed at ECOFIN, the Government agreed a scheme to cover the insurance of Irish airlines. The Government scheme also covers Irish airports, air traffic providers, essential aircraft maintenance companies, ground handlers and other airport-related services.

Legislation was needed to underpin the scheme but that could not be introduced on the hoof. A letter of comfort was, therefore, initially issued, and legislation is now being brought forward to underpin the decisions taken at that time. The letter involves a commitment by the Government to introduce legislation to indemnify the airlines in respect of insurance cover for liabilities to third parties arising from acts of war and allied perils, the level of this indemnity to be the difference between the level of insurance on and before 23 September and the reduced level of cover offered by insurers after midnight on 24 September.

The Government commitment is not an open-ended one but is subject to certain conditions. The indemnity offered was for a period of one month within which it was hoped that the insurance market would return to providing adequate cover. This indemnity has since been extended until 23 December. The liability of the State for any one incident will be determined by the terms of each company's insurance cover on 23 September. To limit the State's exposure, the indemnity will cease to be available for a certain period after an incident that might give rise to a claim; this period is 24 hours for airlines and four hours for all others. It is important that the State should not be obliged to deal with claims on an open-ended basis and the legislation ensures this will not happen.

The Bill also ensures the total amount for which the State could be liable is 9 billion. The legislation provides for charging a premium in respect of indemnities. That is important because it will ensure the State will not be left holding the baby on all occasions. When airlines return to profitable operation, they will be in a position to make a contribution towards the costs of the indemnification.

I welcome the timely action taken by the Minister and the Government which has ensured the State was not left without the services of the national carrier or without an aviation industry. A number of years ago, another provider of export and import services was allowed to sink and its ships were left stranded at ports in the Far East, the Middle East, the Pacific and elsewhere. The Minister of the day pulled the plug and the assets of the company, which were available to the State and could have been utilised if they had been in Irish waters at the time, were left in the hands of other interests throughout the world. The practical approach adopted by this Government has ensured Aer Lingus would not suffer the same fate as Irish Shipping.

I wish now to refer to Aer Rianta. Cork Airport, which opened in 1961, celebrated its 40th anniversary this year. In my opinion the airport was built in the wrong place and should have been located to the east of the city. Over the years, the people who contended this should have been the case have been proven correct. People from Cork can attest to the fact that on many occasions flights have been diverted to Shannon when fog has drifted in or a strong wind has come up in the area around the airport.

The situation has, however, improved on foot of investment from, as far as I can attest, Fianna Fáil Administrations. We have improved the runways, the lighting systems and put in place the technical requirements necessary to upgrade the airport. The Minister responsible for transport in the Government that held power from 1983 to 1987 stated that there was no way funding would be given to Cork Airport to allow the runway to be extended. However, following his appointment after the general election in 1987, the new Minister of State, Denis Lyons, announced that the new Government would ensure that Cork Airport would benefit from significant investment and this proved to be the case. When Fianna Fáil has been in Government since that time, there has been continued investment in the airport.

In recent days we have received telephone calls from members of the staff at Cork Airport. These people usually contact us when we are in Government. Certain individuals who tend to contact us on a regular basis are members of Opposition parties. We have been obliged to inform them, time and again, that we have always looked after Cork. I know the Minister will ensure Cork Airport will not be downgraded in any way. Any intelligent person knows it would not make economic, social or any other kind of sense to downgrade Cork Airport or any of the other airports that are vital to the development of the regions in which they are situated.

The current throughput of traffic at Cork Airport shows that it is economically viable. There is no doubt business at the airport will grow in the future, particularly in light of the fact that a new business park was recently opened nearby. The volume of traffic – both business and tourist – coming into the airport is increasing on a year on year basis and in my opinion this will continue to be the case.

Times have changed and we must consider the future of aviation in the European context. During the past 30 or 40 years each country had a flagship company but, in light of recent events, the position will have to be reconsidered in the immediate future. I do not believe countries will be in a position to run "Rolls Royce" operations anymore. There is no need for such companies to continue in operation, particularly in terms of the short haul market. Ryanair is proof that a business can be successful if people are provided with a service which allows them to travel from A to B as quickly as possible at a reasonable cost. I accept there is a need to operate a long haul service and Aer Lingus has a role to play in that regard. I do not believe we can deal with this matter on the basis of mutual exclusion; there is room for both companies. Adopting the view that there is only one way to move forward will not allow progress to be made.

I congratulate the Minister, who took a number of courageous and swift decisions during a difficult period. She has introduced a Bill which will ensure that Aer Lingus remains in operation and save our aviation industry, which is so important for this country.

I commend the Minister on the manner in which she dealt with the serious matter that arose after 11 September in the absence of enabling legislation. I congratulate the Government on making a difficult decision. As Deputy Michael Ahern stated, that decision was necessary in terms of ensuring that the aviation industry continued to function during a difficult period. Fortunately, the position has changed somewhat and the uncertain climate that arose after 11 September has been replaced by one of confidence. The latter has allowed people to look forward to progress being made in the future.

As the Minister stated, the Government agreed to issue letters of comfort regarding insurance in the absence of the legislative provision required. The EU set guidelines at the ECOFIN meeting on 22 September. This issue was discussed at the special meeting of the Transport Council, which the Minister attended, and the ad hoc group established at that stage considered means for dealing with what was, in effect, an absolute crisis which could have affected the future of aviation within the Union. It must be acknowledged that the EU, which is frequently accused of being overly bureaucratic and lacking in common sense, adopted a pragmatic approach and allowed the steps necessary to secure the future of the aviation industry to be taken.

The Commission has come under sustained attack because it allowed only losses that accrued over the four day period after 11 September to be taken into account and paid for out of state coffers. Many people have forgotten that the Union took swift action on this issue and allowed this and other Governments the latitude required to address it. In fairness to the Commission, it allowed the four day provision, although many of us would argue it should have allowed much more. It also allowed the insurance provision and is still examining the third issue of state aid. I hope that will be examined more closely when the survival plan is agreed in coming weeks.

The Minister referred to the question of airport security. Aer Rianta airports have stood up well to the test as have regional airports which have a substantial number of international flights and could have been under pressure in terms of security.

There is an ongoing difficulty in Shannon Airport regarding the status and position of the airport police officers and firemen and this is something which needs to be addressed urgently. I regret that, despite indications by letter to the Minister and to me from the chairman that the same conditions will be made available in Shannon as in Dublin and Cork, progress has not been made at the talks. The issue of security at airports has become more important than it was and is one which needs to be faced. If there is a requirement for additional Garda support at any of the airports, it should be examined closely by the group charged with responsibility in the area, which, in fairness, has met on a number of occasions since 11 September.

I commend the workers in all the airports on the manner in which they have dealt with security issues. I know it is difficult for them to impose on passengers the conditions they are required to impose now, but the reality of international terrorism and its attacks on aviation mean there is no option but to proceed in this manner. By and large, passengers have been reasonably co-operative.

There is also the additional question in Shannon, which I have raised previously, of cover on the estuary. If anything were to happen which would dilute or diminish the level of cover provided there, it would be extremely unhelpful in terms of security.

We have all had to examine EU provisions for state aid more closely in recent weeks. The issue raised its ugly head in 1993 and 1994 when a restructuring package was allowed. The two articles relevant in this case are Article 87, which allows limited intervention and requires a qualified majority of the Commission, and Article 88, which provides better cover but, unfortunately, requires unanimity of the Commission for whatever is proposed. As everyone is aware at this stage, it is the Commission's stated position that restructuring aid is allowed only once.

Much progress has been made since the early days of this debate. The airline's management has put in place the survival plan and the Minister has been to Brussels to present it. All elements, unions and management, are facing up to the reality that the restructuring plan is the way forward and that it must be worked on and successfully negotiated before any further progress can be made.

I attended the meeting of the Oireachtas Joint Committee on Public Enterprise and Transport when the Secretary General of the Minister's Department and some of her officials were present to report on the EU negotiations. They reported as professional civil servants independently of any political involvement or political parties. It was clear to anyone who took an objective view of what they said that the claims that the Minister and her officials have not pursued every avenue with Europe are unfounded. The officials laid that to rest. If one were to examine the evidence presented by them at the committee meeting, it would be seen that certain rumours took a hammering, for example, that conflicting briefings had emanated from officials in Brussels. When the opportunity was presented, there was no substantiation of any of the counter claims from Brussels about which we have heard. It was clear from the officials in the Department that every effort has been made by the Minister, the Taoiseach, other Ministers and all Irish officials under Articles 87 and 88 to secure EU approval for any aid package which may be required.

On each occasion we have discussed this issue I have reminded the Minister of the obligation to the former employees, to whose number 2,000 more will unfortunately be added when this issue is resolved, although it is better to have 2,000 than 6,000 extra in terms of the company's pension plan. The company has not faced up to that adequately and is probably in a worse position to do so now than previously. It would be a pity to miss this opportunity in the context of the restructuring to put the pension plan on a firmer footing and work towards having a proper pension plan for those already on pension and who are likely to be in coming months.

In that regard, I welcome the excellent work done in providing a redundancy plan. It might not be everything I would have wished for, but it goes a long way. That there is such a response in terms of interest from employees is encouraging and I hope the interest shown – there have been more than 1,600 inquiries to date – will transform into people opting for the voluntary option. It would make the entire process of restructuring much easier, effective and streamlined.

I also commend the Minister on the US-Ireland bilateral agreements. We know from previous experience of the difficulties in the aviation market, especially those which impinge on political difficulties in the United States, that there is likely to be a two year drop-off in the numbers of tourists from the US visiting Ireland. It will not be a complete collapse, but there will be a substantial fall in numbers. That was the experi ence during the Gulf War and previously. It is incumbent upon us to look eastwards more than we have done previously in terms of building up the numbers who avail of flights to all points of access in Ireland and in terms of ensuring tourism, which is rapidly becoming an important industry throughout the country, does not sustain losses arising from the current climate.

Unfortunately Shannon is hugely dependent on the transatlantic route with some 36% of its business on that route as against 7% for Dublin and no business on that route for the other airports. The developments and downturn arising from 11 September will have a greater negative impact on Shannon, the mid-west and the west in terms of Americans visiting than on other airports and their hinterlands. I do not accept it is a loss which cannot be made up in the short-term. It can, and the likely lost tourism in the west because of the lack of American visitors can be made up through the access points of all the airports in the west.

A number of services which have been lost at Shannon have caused considerable difficulty for business people and others. The loss of the morning and evening flights to Dublin probably causes the greatest difficulty at this stage. I am aware Shannon Marketing and Aer Rianta are in discussions with other carriers, that an encouraging number of people are in the wings examining the establishment of a Shannon operation and that there are possibilities in terms of the public service obligation which need to be examined. I commend the Minister on the fact that all these issues are being examined rationally. I especially welcome the fact that nothing is being swept under the carpet, that all options are out in the open and that it is up to people to assess them and make up their minds. There have been losses of services, including the one to Paris, which was foolish, but I understand we may have a positive announcement in that regard from another airline in coming days.

On the Bill, sections 2 and 3 provide for the Government by order to declare a state of difficulty and to provide the indemnities. That is the legislative requirement or support the Minister would have liked to have had early in September. Section 4 sensibly provides that the company which benefits in this regard must have had prior insurance. It effectively limits the effect of the legislation to cases where cover has been withdrawn. Section 10 is also very important in that it provides defences for the Minister and the taxpayer against certain claims and effectively ensures the Minister is in the same position in which the industry would have been had the insurance continued.

I welcome the fact that many have come together in the west to fight the perceived threat, and particularly the import of the initiatives of the Minister for the Marine and Natural Resources, Deputy Fahey, and the Minister for Tourism, Sport and Recreation, Deputy McDaid. It is important to note that there is spare capacity at Shannon and while there is a wonderful debate about additional piers and different elements at Dublin Airport, whatever happens in this regard will take time to complete. In the meantime it should be remembered that there is spare capacity which can be used immediately.

There is considerable worry in the west, among industries from as far apart as Waterford and Sligo. The level of access for freight, in terms of raw materials for industry and getting exports out, is a matter of particular concern, as is the need for businesses to have regular flights. The daily flight to New York is, undoubtedly, the single most important flight in the west in terms of business passengers and freight for many companies.

There has been an interesting minor debate in recent weeks, largely between two semi-State companies, as to how Shannon Airport might be run and who is best qualified to manage it. While many have said that this is an unwelcome development and that State agencies and boards should not attack each other, it is actually a healthy development. It has forced Shannon Development and Aer Rianta to put their cards on the table and state what they have and have not achieved in their time, and what they could do in the future.

The 1996 decision by the former Minister, Deputy Lowry, to remove Shannon Development from any involvement in the airport was a short-sighted and foolish one. However, I would not put the company in charge of the airport. There are substantial benefits, which outweigh other considerations, in Aer Rianta having a management role in Shannon, Cork and Dublin airports. There are benefits for the country in this, and obvious benefits for Dublin Airport. There are also benefits for Cork and Shannon airports which need to be weighed against the disadvantages. I favour a continuation of this situation. The role which SFADCo previously exercised was one which gave an element of flexibility that is no longer there, particularly in terms of marketing funds and directing marketing to incoming tourists. The mid-west does not have the population to sustain some of the services which are desirable. That debate is one that should be looked at with interest. Perhaps, while continuing with the present set-up, an input from the regional authority might be of benefit in terms of marketing and tourism.

I commend the Minister for bringing the Bill before the House, particularly for acting so expeditiously in mid-September when her actions ensured Irish aviation continued to thrive.

I thank the Leas-Cheann Comhairle for giving me the opportunity to speak in this debate, which is occurring in an eerie atmosphere due to the absence of Opposition speakers. For whatever reason the Opposition has decided not to attend this unique Friday sitting at a time when the public is asking that Members work harder and longer hours in the Dáil. Our absent friends from the Opposition are not prepared to debate and discuss issues because of a silly obsession with the lack of full apologies from Deputy Gildea. He has apologised twice. If the Opposition wants to pursue this matter further, it should bring it to the Committee on Procedure and Privileges.

There is no accounting, however, for the current Opposition and its desperation to make an impact. It clearly is not making an impact and feels it necessary to empty the Chamber to make it. It says a lot for the confidence of the Opposition in its contribution. It is making no dent in the Government. It is quite spectacular the extent to which Deputy Noonan, as the new leader of Fine Gael, is underwhelming all those inside and outside the House. It is also noticeable how Deputy Quinn is able to underwhelm when he appears on "The Late Late Show". Most viewers of that programme have come to the conclusion that Mr. Adams ran rings around him.

We are on Second Stage of the Air Navigation and Transport (Indemnities) Bill, 2001, from which the Deputy may have wandered a little.

I am like a large transport plane. It takes me a while to get off the ground. However, I am about to take off. If the Leas-Cheann Comhairle acts as an air traffic controller, I will soon take off and engage with the issues that face us in dealing with this legislation. I congratulate the Minister for Public Enterprise, Deputy O'Rourke, for her swift action in this regard. Other European countries are also bringing forward very necessary legislation that provides for a state-backed underwriting facility for the airline industry, particularly the Irish airline industry, because of the increased risks associated with the 11 September episode in New York. The legislation is necessary also because of the decision by the insurance industry at a global level to reduce the coverage that they give because of the risk of terrorist acts.

The Minister has moved fast and there are very good controls in the Bill to safeguard the Exchequer from potential losses. There is a £9 billion maximum claim that will be allowed should there be a terrorist incident in Ireland such as was seen in New York. That is an absolute limit. Cover is being renewed on a month to month basis which allows the taxpayer's interest to be patrolled regularly. There is also a 12 month limit on the Bill which will have to be reviewed or renewed by a vote of the Dáil and Seanad if it is to continue.

There is no question of the State acting in a reckless manner or the Government opening up the State to reckless insurance risks. There has been considerable debate in the House about alleged recklessness in relation to the provision of insurance, mainly in relation to the meat industry. However, the Bill is full of the controls that one would expect as a matter of course. It is important to emphasise that the State is not offer ing free cover. Airlines will pay a premium for the insurance cover provided and the State will not be at a loss unless there is an incident, although there will be, I hope, a small administrative cost connected with providing for the scheme.

An intriguing issue which emerges from the Bill and on which I am interested in hearing the Minister's view is that of claw-back in the long-term. This question might seem theoretical, but it is important that we explore the issue. If there was a claim, albeit minor, against the State under this scheme, is it the intention of the Government to seek a claw-back in the long run from the airline industry? I realise that we do not wish to tax the airline industry and its profits at a very difficult time. It will be difficult for the industry to recover from the crash in confidence as a result of the incidents in New York. However, I am interested in knowing the Government position on this issue in the event of a successful claim under the scheme. Will the State bail out an airline when a risk comes home?

It is an interesting issue because much public anger remains in relation to the ICI and AIB bail-outs. Huge losses were incurred by the AIB due to ICI's reckless trading on the London market. Many felt that the AIB was underwritten by the State and then proceeded to make massive profits in subsequent years without any claw-back for the State. In effect, the State bailed out a large banking institution and prevented its potential collapse, yet that bank did not make restitution to the State for the wonderful cover provided for its losses. The Minister should look at this issue, although it is rather theoretical in the sense that I do not anticipate any claims under the scheme. Thankfully, due to the good conduct of the war by the United States, we may be living through one of the shortest wars on record. I hope it will be brought to a swift conclusion with the victory of the Northern Alliance and the intervention by the United States in Afghanistan.

I come now to the issue of the Aer Lingus rescue package. This issue is on the mind of almost all Deputies, most of whom, particularly those representing Dublin constituencies, know workers who have been placed in a terrible position because of the lay-offs and the Aer Lingus management's threatened package. The package is before the Labour Relations Commission which is preparing its own recommendations on what should happen and what the work force should accept.

It is important, particularly for the Government side of this House, that we remind the Aer Lingus trade union leadership that this is a difficult time for the aviation industry. Much larger players than Aer Lingus have disappeared and gone bankrupt, not least Sabena and Swissair. Many would have regarded Swissair as perfect, as they do various aspects of Swiss life. However, the perfect airline is gone. It is bankrupt yet, arguably, it was a far stronger airline than Aer Lingus. The work force must be aware that there will not be a second chance as regards this package.

The package will, I hope, be recommended by the LRC and accepted by the work force because no delays, opposition or renegotiation will give any hope of protecting the airline. If this package is not accepted there is a real risk that, like Swissair, Aer Lingus may not survive and a larger number of jobs will be threatened. The Minister is being careful, and I am trying to be likewise. However, the work force must be conscious of this fact. We all wish Aer Lingus to continue in operation.

In the long-term Aer Lingus must consider making the journey into the private sector. I do not blame the Minister, but the State has been somewhat negligent in the manner in which it stewarded State companies over the past 20 years. We should have taken advice such as that offered by Dr. Michael Smurfit many years ago and sold Telecom Éireann, as it was then known, when he estimated it was worth £800 million. If this and previous Governments had prepared State companies for privatisation at an earlier stage we might not face the current difficulties in Aer Lingus and, to a lesser extent, Eircom.

We must look at other State companies and how they can be prepared for the journey into the private sector. There is a vigorous debate within the Government as to whether Aer Rianta should remain in State ownership or be privatised. I would opt for the middle position. I recognise the strategic view taken by some. The Minister for Finance, Deputy McCreevy, is often regarded as very right wing on economic and financial matters, yet he is not in favour of selling our airports. We should opt for the middle position and consider selling the operational franchise to run the airports while holding on to the airport assets. That is probably the most efficient way to move the situation forward.

I should mention a constituency interest. This may not be the correct time, but if she is still Minister after the next election, Deputy O'Rourke should consider the opening of Casement Aerodrome, Baldonnel, as a second airport in Dublin for commercial aviation. Such a development would require a significant upgrading of the runway and the acquisition of land around the facility. However, this would result in a significant saving for the State in terms of the maintenance of the runway. It would also provide a dual military and civilian facility which would benefit everyone.

The opening of a second airport may also help to relieve the almost nightmarish congestion at Dublin Airport which is not a good airport to travel to or from. I am not suggesting that the terminal is badly run but one sometimes has to travel for miles to park one's car. We will have to consider more private sector solutions while examining a competitive aspect to the provision of terminal facilities at Dublin Airport. The two are not incompatible. We can liberalise and allow competition in the provision of terminal facilities at Dublin Airport, while pushing ahead with the opening up of Baldonnel, initially on a limited basis, for executive jets and smaller aircraft.

Aer Rianta wishes to see many of the smaller aircraft parked at Dublin Airport moved off the tarmac as they are occupying valuable space at a very busy, and I hope, increasingly busy, airport. I urge the Minister to examine this issue after the election. It appears that such developments will have to wait until after the election as some of the Minister's senior colleagues who represent the constituency in which Baldonnel is located, while initially favourable towards this proposal, have now backed away from it with the onset of an election. That is a pity, but that is politics and there is not much that mere backbenchers can do about it. The Minister is not unfavourable to the idea of opening up Baldonnel but I urge her to place this proposal back on the agenda and ensure that, if she does not hold the same portfolio after the election, her successor will take up the cudgels in this regard.

We must be sensitive regarding the issue of state aid. One of the ironies of the crisis in Aer Lingus is that if it were an American registered company, there would be little difficulty in the US Federal Government providing a subsidy to bail out or support it. This reflects the great political and economic sovereignty which the US enjoys. The EU has moved to create a European economic entity which involves the pooling of sovereignty, the result of which is a more diluted sovereignty. The EU has a stronger competition policy than the US which does not allow state aid to be used to bolster ailing or failing businesses or airlines. This is an irony which points to the need for an even stronger political dimension to the EU.

If Lufthansa was about to collapse I wonder if the European Commissioner and the Commission would take a similar attitude to the one they are taking regarding Aer Lingus. I do not expect the Minister to answer this question.

They let Sabena go to the wall.

That is true. I welcome the Minister's point of information, but if the largest of the German airlines was involved, would Commission officials adopt a different attitude? As the Minister knows, Sabena is a Belgian airline and Swissair is not an EU airline. I suspect that the approach might have been different if a German airline was involved. I do not know this for a fact and this is conjecture on my part. However, the EU must examine this issue in the long-term as we cannot allow a situation to develop in which strategic industries, such as those in the aviation and banking sectors, can collapse without any state intervention being allowed to support them. There are crises in human affairs which require radical government, state support and action.

I am not part of the radical conservative move ment such as that which existed in the 1980s, particularly in the UK, which believes that all state intervention is bad. There may be a strong argument for State intervention in certain situations but, having emerged from a background of strong State support, it is now in our interest to divest ourselves of a great many State companies. Thus, we can take a more enabling approach, including the appointment of an aviation regulator to oversee the ground rules of competition. As regards its involvement in companies, the State should act to enable rather than to disable.

The Minister for Public Enterprise knows more about State companies than anyone else. She has an enormous amount of them under her control and there seems to be a great deal of trouble in virtually all of them. This indicates a requirement to bring to these companies new, strong and self-assured management which will adopt a commercial ethos. The lack of such management style is the fundamental flaw in all these State companies. At the mini-CTC inquiry we have seen clear admissions from senior executives in CIE, Irish Rail and Dublin Bus that politics plays a role in those organisations. I am not referring to the kind of politics in which we are engaged, but the office politics concerning who does what and who gets promoted. That sort of negative office politics is to be frowned upon in organisations, although it seems that some State companies are virtual havens for such activity. We saw this happen in relation to a former executive in Aer Lingus and we see it has happened in CIE, also. If such things can occur in an organisation it is a sign that a bad culture exists there. The Minister should take this point into account as regards both those organisations. At the same time, she should assure Aer Lingus and CIE workers that there is a future for both companies, be it in the private sector or under public ownership.

The main reason for the failure of companies, both public and private, is bad management. The Minister should acknowledge fact and I hope she will put it across to the workers concerned. A great many workers in Aer Lingus are worried and feel that perhaps they have done something wrong, when they have not. Apart from the terrible events in the United States, the main reason Aer Lingus is in difficulties is poor management. That fact should be stated clearly and reflected upon.

I welcome the opportunity to speak on the Air Navigation and Transport (Indemnities) Bill, 2001. It is regrettable and disappointing that the Opposition is not in the House to help us to debate this important legislation. Sometimes it is better to stay and continue negotiating, arguing and putting forward points, rather than abandoning the table altogether. I fail to see what the Opposition's absence can achieve.

I was interested to hear what Deputy Killeen had to say about Shannon airport. There are similarities between some of the difficulties being experienced there and those at Knock airport. The Minister has taken a particular interest in Knock airport. An official from her Department, Mr. Matt Benville, produced a report which was negotiated at Cabinet level. Many members of the Cabinet have expressed great interest in the future of Knock airport.

The outbreak of foot and mouth disease earlier this year and the tragic events in the United States on 11 September, have contributed to a serious fall off in tourism and business generally in the west. The importance of the aviation industry cannot be over-emphasised because there are serious problems of access to the west. The Minister will be familiar with this matter because I spoke about it recently in the House, particular with regard to the railways. At this stage, everyone knows my view on the N5 route. Knock airport provides a vital access to the west for business purposes.

The Minister has played a big role by introducing the PSO at Knock airport. Although it got off to a rocky start, it has been very successful. The airline is now leaving a plane overnight at Knock airport and as a result passenger numbers are increasing. The service has the potential for long-term success if it is allowed to continue. While there are difficulties relating to PSO at present, I hope they can be overcome.

Within the past ten days, I met the board of Knock airport but the meeting was wholly unsatisfactory from my point of view. Knock airport is being run by a private company but it is held in trust for the people of Connacht, and County Mayo in particular. Members of the private company seem to hold the view, however, that they are running the airport for the benefit of the company, while the interests of people in Connacht are secondary. I pointed out to the board that few private companies – none, in fact, that I know of in this country – have received more than £10 million in State aid. The company is continually seeking State aid to enable it to go on. In those circumstances, the company has a clear obligation to keep the people of the west informed. If that means having regular contact with their elected representatives, or maybe even putting representatives on the board of Knock airport, it should be examined. The Minister and the Taoiseach have their own very clear views on that matter.

The issue of management is the key to Knock airport. It has been operating for 20 years, although it was only established as a private company ten years ago. Knock airport certainly needs to be examined and rejuvenated in some way, given its recent results. Some public representatives seem reluctant to criticise the airport, working on the basis that if they say nothing they will offend no one. They are right, but this is not about offending people. I have complimented members of the airport company's board who have worked there for 20 years in a voluntary capacity, but that is not what this is all about. It is about having the best people in place to maximise the benefits from a vital asset for the west, which has attracted massive amounts of State investment to the tune of more than £10 million.

The Minister knows that Knock airport requires huge additional infrastructural investment. For the Minister to be able to allocate the required funds to improve the airport – whether for water, sewerage or other facilities – she must have confidence that we will get the best from the company's management structure. Otherwise, we will be throwing good money after bad. While there is an infrastructural deficit at Knock airport, additional investment must be linked to a willingness by management to change.

I compliment the Minister for introducing the legislation and her plans to implement it. In so doing, the Minister has kept airports open and planes in the air. Following the tragic events of 11 September in the United States, insurance companies changed the rules in mid-stream and reduced the amount of cover they were prepared to provide. This effectively left airlines and airports unable to operate without letters of comfort and legislation, such as the Bill that is now before the House. The Minister has underwritten the gap between the insurance cover available to airlines before 11 September which was withdrawn following those tragic events, thus making good the difference. In addition to airports, the Bill covers air traffic service providers, essential aircraft maintenance companies, ground handlers and other related services.

When the Minister issued the letter of comfort outlining the commitment of the Government to the airlines and those involved in airport related activities she highlighted where the cover would begin and end. There were a number of conditions attached, for example, the liability for which the Irish people might have to provide in the event of something terrible happening. Section 7 limits the period of indemnity to one month, within which it is hoped the insurance market will return to providing adequate cover. Negotiations are continuing between insurance companies and airlines. We would like to return to a situation where insurance companies provide the level of cover provided prior to 11 September. I understand indemnity has been extended to 23 September. Section 7 provides that provision is also made to cover the period back to 24 September 2001, but for no greater period than 120 days. It is important that we are clear about what we are talking about, that it is for a fixed period. I welcome this.

Section 4 provides that the liability of the State for any one incident will be determined by the terms of each company's insurance cover on 23 September. It is important to know what exactly is being covered. We do not want some airlines to receive enhanced cover, which they may not have had prior to 11 September. Section 4 states exactly what the liability of the State will be.

Section 14 which limits the State's exposure provides that indemnities will cease to be available for a certain period after an incident that might give rise to a claim – 24 hours for airlines and four hours for all others. The Minister touched on this in her contribution when she said she can terminate or suspend indemnities at any time. She went to say that an indemnity would not be terminated while a plane was in the air – this is something everyone would appreciate. It happens only when it lands. If indemnities are terminated, airlines must get their aircraft to land at the nearest airport as soon as possible. We have a clear picture of what will happen in the event of another incident and the extent of the State's exposure.

Section 6 limits the State's liability to a maximum of 9 billion – 5 billion in the case of airlines and 2 billion for all other airport related activities. Section 8 allows the Minister to impose charges for indemnities. I understand it is not proposed to make any charges during the first 30 days and that this matter will be discussed with the Department of Finance. While indemnities have to be paid for, it is invaluable that the Government can step in at this time and provide this valuable service. I know there are some concerns at EU level in regard to the whole issue of state aid and what can and cannot be offered to airlines. We are not alone in this. All other EU countries – countries all over the world – are experiencing similar difficulties and will continue to do so until insurance companies can provide the cover previously provided.

Section 10 deals with the defences available to the Minister. If an airline had insurance prior to 11 September, there were always certain exclusions and defences contained in the insurance policy. If one were to step in and fill the gap, it is important that those self same defences would be available to the Minister to protect the State and limit its exposure in a comparable way, in the same way as an insurance policy. Section 15 allows the Minister the option to reinsure, if necessary.

This is essential legislation at a time when the airline industry throughout the world is going through a particularly difficult period. We, in Ireland, have suffered the consequences of 11 September with the difficulties in Aer Lingus.

Deputy Lenihan said there was not a constituency in Dublin that would not affected by the 2,000 redundancies in Aer Lingus. It is not just the Dublin constituencies that will be affected, many of my constituents from County Mayo are working for Aer Lingus and have done so for many years. This has consequences for the entire country. While everyone wants Aer Lilngus to be a strong, profitable airline that can play its part in the commercial world, unfortunately, it has to be made leaner as a consequence of the difficulties in the air navigation industry which are not unique to Ireland. Many other countries in the world and their national airlines are experiencing similar difficulties. It is unfortunate that the events of 11 September happened which brought all these difficulties to light.

I commend the Minister for acting swiftly and ensuring that in Ireland our air industry can continue to operate and that its insurance cover is adequate at what is a very difficult time.

I join Deputy Cooper-Flynn in complimenting the Minister, Deputy O'Rourke, on her initial response in bringing forward this legislation. It was critically important in the context of keeping our airlines and passengers moving that letters of comfort were issued in the first instance. The situation that arose was complicated because there appeared to be a few loopholes in EU regulations, in that Britain, for example, seemed to be able to use 1952 legislation to help while the Minister found herself caught in a bind. She was able to take the initiative, look after the airlines and keep airports open.

With your indulgence, a Leas-Cheann Comhairle, I wish to remark briefly on previous speakers' comments about the Opposition's tactics. They made points which were relevant in the context of the Bill. Each of us here today is doing the work of the public rather than being in the constituency hustling. The Opposition came back in this Dáil session to target and attack individual Ministers and was using that tactic. However, it backfired radically about two weeks ago when the Minister scattered it to the four winds. While helping to propel her to the top of the opinion polls, it incurred the criticism of many outside commentators. It was particularly interesting to read Fergus Finlay's comments in The Irish Examiner about the personalised nature of the attack on the Minister. Considering the comments of the outside commentators it was particularly ironic to hear the Fine Gael leader last night claim that Fianna Fáil was making personalised attacks. It smacked of the old adage, suspicion haunts the guilty mind. In a personal context—

I want to make a point on the Bill. I spent much of the morning preparing contributions for the earlier debate on the Extradition (European Union Conventions) Bill, 200l, as well as on this Bill and also participating in the select committee dealing with the Twenty-fifth Amendment of the Constitution (Protection of Human Life in Pregnancy) Bill, 2001. In doing so I was on call from my local radio station to debate, as the researcher put it, the disgraceful situation in Dáil Éireann today where the Opposition is not present. I mention this because the member of the Opposition with whom I was going to debate is working is Cork South-Central. I leave it to the public to decide who is doing the job for it. I am here doing my day's work, for which I am being paid, not hustling on the doorstep in Cork to get re-elected.

We are all aware that following the tremendous happenings of 11 September everyone was in a state of shock. People's immediate thoughts and for a long time afterwards were for those who had died or were injured and their relations, particularly in New York. It took a few days for people to settle to discuss any other aspect of those awful happenings. I recall just 48 hours afterwards listening to international insurance experts say that one of the fallouts for them would be the ongoing question of insurance, particularly for air navigation and transport facilities. I am sure the immediate business reaction from most insurers would have been to get out of the business if possible. From an actuarial viewpoint, even doing a simple exercise on risk evaluation must have been a nightmare for the people involved. In that context, it was essential the Minister moved speedily and she did just that.

I want to compliment her but I also want to emphasise that, irrespective of what issues backbenchers and others raise, we appreciate the difficulty of the task she faces. Many other Ministers, including the Ministers for Tourism, Sport and Recreation and Enterprise, Trade and Employment, will face similar problems. I would be concerned if there was a knee-jerk reaction or solutions were found to some of these problems that might have a knock-on effect for Cork Airport which is located in my constituency of Cork South-Central. I can only go on the comments in the media. I have met some airport workers and other interested parties about what has been proposed and what is happening.

I have no difficulty with the growth of Dublin Airport. Natural growth must be catered for. Exactly the same is happening in Cork. The throughput of passengers there has rocketed and they must be facilitated. I have a difficulty with any suggestion that some type of deal might be done that could negatively impinge on Cork Airport, which has been run successfully for the past 40 years. Its logo is "The small airport with the big heart". I am sure it is becoming difficult to maintain that approach for the paying public, given that the number of passengers has grown to the 1.5 million mark.

The Minister has put in train infrastructural development works for the expansion of that airport to cater for the increase in passenger numbers. I complimented her previously and I do so again on that action. Approximately £68 million is available for infrastructure development there and it is critical that allocation is not tampered with. If any deals are done or issues addressed in respect of the other two international airports, so be it, but they must not be to the detriment of Cork. Airports have a natural growth cycle and changes must be catered for.

The south-west region is directly affected and enhanced by the work of Cork Airport. The region is enhanced in the context of tourism, industry and on the commercial side and we want to ensure that continues. That is a natural growth. There is nothing artificial about it. Cork Airport has never received any payments that were not available across the board to the international and the regional airports. The people there would vigorously fight any deal that would be damaging to them.

Prior to the recent events, one of the impediments to the development of Cork Airport was a call by the EU for whole luggage screening, that all luggage should be checked rather than a random checking of luggage. That slowed down the development of the airport, but its development has taken off again. All that was planned is happening.

My colleague, Deputy Michael Ahern, mentioned that the relationship between Fianna Fáil Ministers and the staff of Cork Airport has been excellent and has worked successfully over the years. The demands put forward for improvements at the airport were met, with one notable exception, which Deputy Ahern mentioned, in the early 1980s. That was regrettable because it held up the development of the airport. However, the Minister's record is good and I want to ensure that continues. I am confident that if the Minister has her say on these plans, the airport will develop and that happy relationship will continue. I do not want those development works to be put under pressure from any other source. Concern has been expressed within the South West Regional Authority that the plans could be tampered with, but I am sure we will hear more about that. They are important to the growth of the area.

Great concern is felt by many regarding Aer Lingus's difficulties and people have different views on how the company should proceed or on how it was performing or not performing. Irrespective of these views, nobody would be happy with the idea that any competitor could dance on one's grave. That type of carry on is not good for the country. Everyone tries his or her best. If there are complaints about the standards in Aer Lingus, how it does its work, carries passengers or the prices it charges, Members are entitled to make those points and that would give rise to strong competitive talk, but I am not happy with the comments of at least one of its competitors on its performance or, worse still, its future.

How one reacts in a crisis often determines the quality and ability of a Minister or Government. History was mentioned this morning in the context of the Irish Shipping debacle and a different reaction taken by the then Minister, who is still a Member of the House, compared to the reaction by the current Minister to the present difficulties. Nobody could have anticipated or planned for the events of 11 September, the reactions to it and the difficulties created. Whatever about keeping the ships afloat, the Minister has been able to keep the planes aloft and long may that continue.

We are all concerned about the safety of airlines and safety at airports and aerodromes. I welcome any improvement in security in this area. Security, particularly on inter-state flights in the US, was very lax. There are a great number of internal flights and the same care may not have been taken on internal flights as was taken on international flights.

As debated under the extradition Bill, gangsterism and terrorism are international problems that know no boundaries. Sleepers of terrorist groups have been planted in various countries. They are quite happy to carry out acts of terror within the confines of those countries, whether that involves hijacking planes or other activities. They are not too concerned whether a flight is internal or international. They will use the plane as a weapon, a factor that is covered under this Bill. It is critical that all aspects of travel including baggage handling, maintenance, refuelling and security are properly accounted for and controlled. The standard imposed must be the highest possible but that will undoubtedly cost money. However, it is the security of every traveller we are discussing.

The Minister must be given the moneys that are necessary if there is a call for the Department to provide financing for security. That argument is ongoing in the European Union, as is the commercial argument about supporting state or other companies involved in the air navigation business. We should put forward the Irish point of view and if we meet any particular difficulty, we should face up to it, as I am sure the Minister will do.

The Minister mentioned the various aspects about which she was concerned, including the problems caused by 11 September. She also dealt with the economic problems. It is critically important also that the national civil aviation security committee is in touch with international best practice, and that any financing it requires is made available. The withdrawal of insurance is what led to this legislation being brought forward, but there are ancillary aspects on which we need to work.

On the question of deals that might be struck, I am reluctant to go into the difficulties faced in the past, but a number of measures were taken with very good intent which, when analysed ten, 15 or 20 years later, did not stand up to scrutiny. They were taken in the context of difficulties faced by the State and with the idea of promoting our own business, and there are several examples of that. I am concerned that we might follow the bad patterns of the past and, in an effort to resolve our tourism and other difficulties, we might make deals that would not stand up to scrutiny in five or ten years' time.

There is already a natural upturn in terms of people travelling. There was a side benefit for us this year in that many people who were concerned decided to holiday at home, and I believe that trend will continue. There is a trend for UK citizens who might otherwise have travelled abroad to come here, and we will gain from that. I would be concerned, however, that we might enter into a 15 or 20 year commitment, particularly with the private sector, in that we might not ringfence the benefits for the State, something we could regret in the future. I ask the Ministers involved, perhaps not the Minister for Public Enterprise, although I am sure she will have a part to play in any deals or transactions involving the use of the airports, not to repeat the mistakes of the past and to be careful regarding long-term deals.

I have no problem with people making a case where there is natural growth of the facilities or the infrastructure required, whether it is shipping, air transport, etc., but I have a great difficulty in artificial cases being put forward to try to promote some aspect of business. I have a particular concern about such cases coming from the private sector, whose primary role is to make profit. The primary role of the State side is to provide a service for the people.

I will keep a close eye on what is happening. I assure the person in charge of capital development at the three national airports that we are ready to proceed in Cork. The change in planning required for full luggage inspection has been implemented and we are ready to roll. I will work to ensure that there will not be a financial millstone around the neck of Aer Rianta operating in Cork in the future and that it will be able to compete at least on an equal footing with Shannon and Dublin Airport. The Minister is committed to ensuring a level playing pitch throughout the country, be it in the western regions or elsewhere. She is extremely concerned about that and I am relying on her good will to ensure that the region of Cork, but particularly Cork South-Central, will be to the forefront in developments.

I thank the Deputies who contributed to the extremely interesting debate, Deputies Michael Ahern, Tony Killeen, Conor Lenihan, Beverley Cooper-Flynn and John Dennehy. Aviation is a topic on which people have decided views, whether they come from an urban or rural background. The debate could have been more interesting, however, if the Opposition Deputies had participated, but they chose not to come into the Chamber and I am disappointed because it was an important debate.

I appreciate the points put forward by Deputy Dennehy about Cork Airport. I am giving a commitment to the people of Cork and its elected Deputies and Senators that the recently announced investment of £86 million on a new terminal, car parking and related facilities at Cork Airport, as laid out by Aer Rianta, will go ahead.

Deputy Conor Lenihan raised the issue of a clawback in the event of a claim. We talked about that in the debate. We hope that claims are very unlikely and clawback, therefore, should not be considered now. Also, the size of a claim, should there be one, may be much larger than was the case in regard to the banks, and in the current situation airlines might not be able to afford such a clawback.

Knock Airport came up in the debate again, which highlights an interest in the west in this topic. We are endeavouring to ensure that the trust which underpins Knock Airport to serve the people of Mayo and Connacht will be fulfilled in every way. I am aware that Deputy Cooper-Flynn is extremely conscious of that and wants to bring about greater usage of Knock Airport.

Deputy Killeen spoke about Shannon Airport, and clearly he has the interests of the people in Shannon at heart. I share with him the view that there is a need for a strong, continuing role for Shannon as an international airport.

Deputy Conor Lenihan spoke about the need to develop Baldonnel, among other matters, and said that whichever Government comes to power after the election, it should move immediately on that issue. Deputy Michael Ahern spoke again about the need for us to keep in mind the importance of Cork Airport.

I thank the Deputies for their contributions and their compliments, which are always nice to hear in a difficult situation. There is a realisation on the part of all who spoke in the debate that the Government acted quickly to ensure that airports, airlines and all the related business of airports continued to operate to the highest standards of security and safety post 11 September, as we would expect.

I thank you, a Leas-Cheann Comhairle, for your forbearance in the debate. I thank the officials in our Department who prepared all the material and who literally worked night and day in the period immediately after 11 September on letters of comfort and on the advice of the Attorney General. I appreciate his intensive work also. There was a period in which the work to ensure the security and safety of our airports and airlines was intensive. We wish to ensure that Aer Lingus has a viable future and I hope the current talks will have a fruitful conclusion.

Question put and agreed to.
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