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Dáil Éireann debate -
Tuesday, 11 Mar 2003

Vol. 563 No. 1

Priority Questions - Dublin Airport.

Róisín Shortall

Question:

129 Ms Shortall asked the Minister for Transport his views on the Warburg Dillon Read report which stated that an independently owned second terminal at Dublin Airport would make no economic sense; his further views on its analysis which suggested that a competing private terminal would not be sustainable in view of the high charges which it would have to levy to generate an adequate return for investment; and if he will make a statement on the matter. [7257/03]

The main focus of the exercise conducted by Warburg Dillon Read in 1999 was to review the strategic options for the future of Aer Rianta. As regards the concept of an independently owned terminal at Dublin Airport operating in competition with Aer Rianta, the general thrust of the consultants report, based on a very brief review of the issue, was negative.

Much, however, has changed in the aviation sector since that time and this process of change, which is global in nature, will continue. A slowdown in the world economy which began in 2000 was exacerbated in Ireland the following year by the outbreak of the foot and mouth disease epidemic in the UK and the necessary measures which we put in place to ensure that our country remained disease free. However, it was the dreadful terrorist attacks in the US on 11 September that year which had the most drastic negative effects on the global aviation industry and international travel in recent times. A number of major, well-known airlines have not survived the downturn in the market following those events and most other airlines, including Aer Lingus, have had to implement restructuring measures and survival plans to ensure their continued existence on a viable basis.

Even while the repercussions of those events are still with us, we now have the possibility of a war in Iraq which would further adversely affect international civil aviation and tourism. Compared to four years ago, the global aviation landscape has changed dramatically and it is not only prudent but necessary that we look afresh at our structures and organisations involved in the aviation sector to ensure that we are equipped to deal with the challenges facing us in the changed, and still changing, environment before us.

Last month, I received the report from the panel of experts, chaired by Mr. Paddy Mullarkey, former Secretary at the Department of Finance, which I established to examine the expressions of interest received in relation to the question of an independent terminal at Dublin Airport. The panel concluded that the development of an independently funded and operated terminal is operationally and technically feasible and that such a terminal is a viable strategic option for the development of Dublin Airport and would elicit considerable market interest. I have made arrangements for that report to be published shortly on my Department's website.

Additional Information

I have also arranged for a process of consultation to get under way immediately with relevant interested parties and stakeholders in relation to the panel's report on the independent terminal concept at Dublin Airport. The board of Aer Rianta, the unions representing employees in the company and the Commission for Aviation Regulation will be involved in this consultation process which will also deal with the other major initiative relating to airports policy in the programme for Government, namely, the issue of greater autonomy and independence for Shannon and Cork airports. Following this consultation process, it is my intention to bring proposals to Government in relation to these two major issues.

It appears from newspaper reports and the most recent Mullarkey report that while a second independent terminal may be feasible – I do not think that was ever in dispute – the likelihood is that there will be major job losses if it goes ahead, the value of Aer Lingus will be significantly undermined and, most importantly from the Minister's point of view, given the manner in which he strongly promotes competition in the State sector, it is likely to result in increased airport charges. Will the Minister tell us the arguments in favour of having an independently owned second terminal at Dublin Airport?

I will shortly publish that report and perhaps we can have a fuller debate on the matter when the House has had an opportunity to study it.

I am asking the Minister for his arguments in favour of a second terminal.

I invited the market to see if there was genuine interest in the idea.

On a point of order, will the Minister tell the House his arguments in favour of a second terminal? We know the history of the matter.

It is important I point out the current status of the report.

I would like to hear the Minister's arguments in favour of a second terminal.

My arguments will depend on what is contained in the report. The Deputy referred to three issues, jobs, value and charges. The number of jobs in the aviation industry increased when competing airlines entered the market a number of years ago.

Give us the arguments in favour of the second terminal?

That is an argument.

The Minister should not repeat the history of the matter, he should give us the arguments in favour of it.

Please allow the Minister to continue.

The arguments revolve around providing extra choice for airlines, bringing more airlines into Dublin Airport, giving the consumer and airlines options and choices on who to deal with, increasing employment in aviation – competitive atmospheres tend to increase activity and that has happened right across the board – and reducing charges. They are the arguments put forward by those in favour of a second terminal. I will discuss them further with the Deputy when the report has been published.

The Minister has referred to various issues, he has not given any arguments in terms of the benefits of an independently owned second terminal.

They did not sound like benefits to me. They are general terms in relation to competition and choice but the likelihood is there will be job loses. The Minister will destroy Aer Rianta and charges will increase. He has not advanced any arguments in favour of this proposal. Will the Minister outline the status of the Mullarkey report? Did he bring it to Cabinet last week or does he intend to do that tomorrow? When does he intend to publish it? What consultation does he intend to engage in? What regulatory framework does he propose in the context of a second terminal?

The Cabinet had an initial look at the report but it will have to have another look at it.

Will that happen tomorrow?

No. The Cabinet has cleared its publication. We have to have further consideration on how to proceed. I hope to publish it on Thursday, although that will depend on other pressures in the Department and on my own schedule. I look forward to a full debate on the report.

The Deputy asked me about arguments in favour of a competing terminal. I pointed out that in my view that type of competitive atmosphere tends to lead to more jobs—

An Leas-Cheann Comhairle

The time is up.

—and tends to bring down charges.

What about regulation?

We have to examine the issue of how to regulate the matter.

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