Vol. 572 No. 3
66 Mr. P. Breen asked the Minister for Transport if he will consider introducing an exemption from the high travel tax charges on domestic flights from Cork, Shannon and Dublin Airports, in view of the fact that the national carrier no longer serves the route with the exception of US flights, to make the routes more viable and attractive for new carriers; and if he will make a statement on the matter. [23188/03]
Since there is no Government tax imposed on air travel in Ireland, I assume the Deputy is referring to the airport charges levied by Aer Rianta on airlines using State airports. As I stated in my reply of 24 June 2003 to Question No. 361 from the Deputy, any proposal which might lead to discriminatory treatment between routes operated within the European Union, including internal flights in Ireland, would run counter to EU competition law. The determination of the maximum levels of airport charges that may be levied by Aer Rianta is a matter for the Commission for Aviation Regulation, which acts on an independent statutory basis as provided for under the Aviation Regulation Act 2001.
The manner in which Aer Rianta levies airport charges at the three State airports is a matter for the company, subject to compliance with the commission's determination. As the Deputy is aware, Aer Rianta has a statutory responsibility to operate on a fully commercial basis.
Aer Rianta operates incentive schemes to promote the development of new routes at the three State airports. The new route incentive scheme for the current year at Shannon and Cork Airports offers carriers significant reductions by way of discounts on the standard airport charges. The scheme covers the first five years of operating a new route, offering a 100% discount in the first year – i.e. no airport charges are payable by the airline in the first year – an 80% discount in year two, a 60% discount in year three, a 40% discount in year four, and a 20% discount in year five. Thereafter, the standard Aer Rianta charges at Shannon Airport will apply. The corresponding scheme at Dublin Airport covers the first three years of operation of a new route, with a 100% discount in the first year, a 60% discount in year two, and a 50 % discount in year three.
The incentive scheme for new routes is subject to certain qualifying criteria and is operated by Aer Rianta in an open, transparent and non-discriminatory manner.
I have here details of the prices of two internal flights. The first is from Shannon to Dublin. The fare is €62, of which the total taxes amount to €35.50, or half the price. On a single flight costing €31, the total tax—
It is not in order to quote. This is Question Time, and the Deputy appears to be giving information.
I wish to ask the Minister about the make-up of those taxes. I know the regulator is responsible for the airport security tax. Is the Government not responsible for the Irish passenger service charge, which makes up part of that price? The public service obligation, or PSO, is international, but there was a subsidy of €280 on a flight between Shannon and Knock.
Does the Minister not think there is something wrong somewhere when a fare is almost the same price as the taxes on it? We have seen Aer Lingus going off domestic routes. In an effort to promote new domestic services, could the Minister support some kind of PSO offer for those routes?
I agree with the broad thrust of what the Deputy is trying to do, namely, bring about cheaper internal flights, particularly from Shannon to Dublin. I very much accept that. We will do so by tackling the problem on several fronts, including attracting new airlines. The Aer Lingus transatlantic flight provides some service. Aer Arann dropped its remaining services there at the end of 2002, and there are other services from time to time from such companies as SkyNet on its Dublin to Moscow route. It is not possible to discriminate between internal and external charges at airports. Wherever the plane comes from, the charges are based on landing rather than the aircraft's original point of departure.
We are currently stuck with EU competition law. Neither I nor the Minister of State has considered PSO for Shannon. Hitherto there has been a commercial operation at Shannon, and where that is so, PSO would not be permitted by the European Union. I doubt if the PSO would be permitted in the case of Shannon. It is very much a commercial airport.
It is very hard for a new airline to take up a domestic route when Aer Lingus transatlantic flights are taking on passengers in the morning. That is what happened in the past. Could the Minister envisage a situation where a company such as Aer Arann could be brought back into Shannon Airport in a similar manner to what is currently happening in Cork so that it would have sole responsibility for domestic routes?
That is a good thought, and there is no reason that it would not do it. The Deputy will be aware of my plans to establish a separate Shannon Airport authority. This morning the Government cleared the heads of the Bill, and in the next few days I will be announcing the membership of the interim Shannon authority, pending the enactment of the full legislation. It will be its job to get down to those kinds of issues immediately and see what deals it can do with Aer Arann or anyone else who might provide a service. My Department, the Minister of State and I will give it every support in doing so.
