Pat Breen
Question:71 Mr. P. Breen asked the Minister for Transport the plans he has for the future development and management of Shannon Airport; and if he will make a statement on the matter. [18477/02]
Priority Questions. - Air Services.
The programme for Government includes a commitment that, as part of the pro cess of transforming Aer Rianta, we will ensure that Shannon and Cork airports have greater autonomy and independence. A debate has now been stimulated by me, both within the Shannon and Cork regions and at a national level, on the best ownership structure for these two airports going forward in the context of continued State ownership. I visited both Shannon and Cork recently to further stimulate this discussion.
There is a genuine sense of goodwill towards the airports in the two regions on the part of local tourism and business interests, and views may differ on the best way forward. However, I will listen carefully to the views of all interested parties before framing proposals which I intend to bring to Government within the coming weeks.
The new passenger terminal at Shannon, which opened in 2000, has effectively doubled the airport's capacity providing it with the capability of handling 4.5 million passengers per annum. Passenger throughput for this year is estimated at this stage to be in the region of 2.3 million. Shannon Airport is now well positioned to cater for future growth in air services.
In recent days, Aer Rianta has announced its new incentive scheme at the State airports to encourage the development of new routes. This new scheme will run for five years at Shannon and Cork airports, and for three years at Dublin. At Shannon and Cork, airlines launching new routes will enjoy a 100% discount on airport charges in the first year, reducing to a 20% discount in the fifth year, and something similar at Dublin Airport.
I am intent on achieving a return to growth at Shannon where there has been a 4% decrease in passenger throughput for the first nine months of this year compared to the same period last year. The main reason for this is the continuing negative impact of the fall-off in travel on the transatlantic routes. As part of its new incentive scheme, Aer Rianta will give special consideration to promotional support for long haul routes, including North America, with a focus on increasing the number of inbound passengers. I believe these incentives will help Shannon Airport and I am confident that it has a strong future.
If the Minister intends to break up the airport boards, on what basis will the new board be made up? Will he take heed of the various groups he met recently? I am referring to the members of Clare County Council and Limerick County Council, as well as travel agents, trade unions and the Mid-West Regional Authority. What type of budgeting and marketing does the Minister propose for Shannon Airport, given the airport's geographical disadvantage? Will the new board be made up of experts from the tourism and aviation sectors, rather than political appointees? It is important that that should be the case.
Ryanair recently offered to open up two new routes out of Shannon but the airport's local man agement had to turn down both proposals. Were those routes lost because the local airport's board had to seek permission from the board of Aer Rianta? I was under the impression that Shannon received a better deal than Dublin under the new incentive scheme, although the Minister now says that a similar scheme will be made available at Dublin Airport.
Two security breaches have occurred recently at Shannon Airport, although the Garda Síochána was there to deal with the most recent one last Saturday. Given the recent bombings at Kuta Beach and Denpasar on the hitherto tranquil island of Bali, people in Clare and the mid-west region generally are worried about what is happening at Shannon Airport. What steps does the Minister intend to take in order to increase security there?
I am committed to the board of Shannon Airport being substantially autonomous. As I said on my visit to the region, we are still consulting people about the degree of autonomy involved to see whether it would be better for Shannon to have a totally autonomous board or whether some link should be retained with Aer Rianta. I have received interesting views from all sides in the region since my visit there and I look forward to finalising this matter in the weeks ahead. It is my intention that any such board would have strong local, national and international representation, which is important for any large airport. The board will have only one objective – to help Shannon Airport to grow. The airport is currently operating at probably half its potential capacity. With a demonstration of courage all round, I believe it could make a huge leap forward and see its business interests growing dramatically.
The Deputy raised the question of marketing budgets, but I am assuming that Aer Rianta's marketing budget is an annual agreement between Shannon and Dublin. Shannon Development also has a role to play in that.
I understand that talks are now taking place concerning the Ryanair offer and that the lost offer may be retrieved. Shannon Airport management is now discussing that offer with Ryanair to see if it can make it happen. I know that an offer was made, then rejected and subsequently was hauled back again, although I am not clear about the role of Dublin Airport in the offer.
Does the board of Aer Rianta have to approve all capital projects for Shannon?
Absolutely.
Does that include opening new routes?
Yes. There is only one board – the national board of Aer Rianta – and any substantial spending would have to be approved by it. I presume they operate within annual budgets for day-to-day matters, but they would have to approve capital projects and new routes.
As regards security, the Taoiseach answered that question earlier, but I have asked the national aviation security committee to examine the matter urgently.
James Breen
Question:72 Mr. J. Breen asked the Minister for Transport the impact the loss of Aer Lingus flight EI-111, direct from New York to Shannon, will have on employment in the Shannon region; his estimate on the number of jobs which will be lost as a result; and if he will make a statement on the matter. [18476/02]
Issues relating to flight schedules are day-to-day operational issues for Aer Lingus and I therefore have no function in these matters. However, I understand from the company that the schedule changes arose from a review of the Aer Lingus transatlantic schedule for winter 2002-03. This review took into account all the relevant issues including competitive pressures, the ongoing need to reduce costs and market requirements.
The company is continuing to offer its customers a direct New York-Shannon service. The only difference is that for the winter it will commence and terminate in Dublin rather than commencing and terminating in Shannon, as heretofore. The company has also advised that the dedicated Shannon-New York EI-111 service will return for summer 2003. Aer Lingus states that the revision of schedules has no job implications for its staff. Furthermore, Aer Lingus has recently indicated plans to recommence services on the Shannon-Baltimore route from March 2003, which were withdrawn following the events of 11 September 2001. Negotiations are ongoing with the necessary authorities.
I am confident that if these services receive the necessary support from local tourist and business sectors, they will contribute to the growth of the region as well as being profitable operations for Aer Lingus. It is important for the economy in general that we should have a strong and viable Aer Lingus. It is also extremely important for the future of Shannon Airport. In this regard, I am pleased to note that, barring some unforeseen events, Aer Lingus is on track to make a profit of around €40 million this year, compared to its original projection of losses of €27 million in the survival plan. The company's board, management and staff are to be commended for addressing the serious situation that faced the airline in 2001.
I must stress, however, that the competitive and changing nature of this industry requires the airline to continue to focus on cost reductions and efficiency improvements. These cost cuts range across all areas within the company and within all regions. In this regard, the airline has currently embarked on a further series of cost-cutting measures which are essential to its future performance. This effort must continue unabated, otherwise it will remain vulnerable to market for ces and particularly to unexpected economic and other external shocks.
Given the new focus in the airline, combined with the lower cost-base and greater flexibility, I am optimistic that the airline will be in a position to respond to market opportunities which may arise.
I thank the Minister for his reply but the loss of the Aer Lingus Shannon-New York EI-111 service will create unemployment in the catering area and in the duty-free shop. Will the Minister explain how the national airline intends to slot in the extra Shannon flights required under the one-to-one US air agreement? Now that Aer Lingus has returned to profit and this route is no longer loss-making, I am asking the Minister to protect jobs in Clare and the west generally by allowing direct access to Shannon for this flight. The Minister has the power to do so. Coming from the west himself, the Minister knows how important Shannon Airport is to Clare and the west in general. I am asking the Minister not to allow anything detrimental to happen to the airport.
I am delighted to hear that the Shannon-New York EI-111 service will return for summer 2003, but in the meantime it is clear that jobs will be lost, although the Minister has not indicated how many. I again appeal to the Minister to use his office to prevent this happening.
Aer Lingus has indicated to me that the revision in schedules has no implications for its staff and, as I pointed out, it is re-commencing the Shannon to Baltimore route, which will be additional business for Shannon Airport.
I have stated time and again in the region that I am fully committed to the development of Shannon Airport. I genuinely hope to preside over the growth of Shannon Airport so that it can create more employment in the airport and through the airlines.
A strong Aer Lingus is part of that strategy. Aer Lingus can only be strong if I support the viability plan, which I have supported. This means that I do not interfere in its day-to-day cost-cutting operations, and I do not really plan to interfere – that would not be appropriate.
Surely Aer Lingus has a commitment to Shannon Airport on a one-to-one basis. Under the bilateral agreement with the US, how will Aer Lingus honour that commitment?
There are no plans to amend the existing bilateral agreement with the US. The 50/50 rule, of which the Deputy is aware, is in place and I have no plans to change it. I am assured by all of the airlines that they are able to keep to that scheduling. It is a matter of configuration and how they make up that 50/50, but I assume – if the Deputy likes, I will check it – that Aer Lingus is fully complying with the law of the land, which is, the 50/50 rule.
Will the Minister confirm that to me?
Yes.