Joint Committee on Transport and Communications Networks debate -
Wednesday, 14 Oct 2020

Aviation Sector: Discussion

Chairman

I thank Deputy Joe Carey for stepping in as temporary Chair in my absence last week. I am grateful to members for the sympathies expressed on the passing of my dad and my uncle. Thank you.

We are dealing with issues affecting the aviation sector. I welcome Dr. Chris Horn, former chair of the aviation task force; and Mr. Pat Dawson, chief executive officer, and Mr. Paul Hackett, board member, of the Irish Travel Agents Association, ITAA.

Before we begin, members are reminded that this meeting must have concluded and we must have vacated the room by 1.30 p.m., so I will call everyone to order at 1.25 p.m. While I am as frustrated as everyone else by Covid, we have to abide by these criteria on public health grounds.

I draw witnesses' attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the Chairman to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I wish to advise witnesses giving evidence from a location outside the parliamentary precincts that the constitutional protection afforded to witnesses attending to give evidence before committees may not extend to them. No clear guidance can be given as to whether, or the extent to which, the evidence given is covered by absolute privilege of a statutory nature. Persons giving evidence from another jurisdiction should be mindful of their domestic statutory regime. If they are directed by the committee to cease giving evidence on a particular matter, they must respect that direction. I presume Dr. Horn understands this.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I invite Dr. Horn to make his opening statement.

Dr. Chris Horn

I thank the Chairman.

Chairman

One moment, Dr. Horn, there is a problem with the sound.

Senator Timmy Dooley

It appears the microphone is muted.

Chairman

As Dr. Horn cannot hear us, we will proceed with the other witnesses. I call Mr. Dawson, CEO of the ITAA.

Mr. Pat Dawson

Mr. Hackett will make the opening statement.

Mr. Paul Hackett

The travel industry directly employs approximately 3,500 people across the Twenty-six Counties. This is a mainly Irish-owned SME business sector, with many high street shops in rural and regional towns, as well as concentrations in the larger cities. The industry is regulated by the Commission for Aviation Regulation, CAR, offering additional financial and consumer protection for those booking travel services via a travel agent. Turnover across the sector was approximately €1.4 billion per annum, and the ITAA is the representative body for the industry. Travel agents serve both the corporate and leisure markets with the full range of outbound travel services.

The ITAA is deeply concerned about the impact the Covid-19 crisis is having on the wider travel sector and Irish travel agents. The travel industry is unique because of the following factors. First, trading is down 90% to 95% since March and will continue at that level of trading for the foreseeable future because of the messaging on non-essential travel. Second, travel companies have had to remain open to service customers with cancellations, refunds and rebooking. The companies could not close, even though they were effectively blocked from trading, and they have had to continue to carry a proportion of salary and all overhead costs. Third, travel agents have had to engage in negative trading due to the refund requirement on business that was secured in 2019 and early 2020. Fourth, the industry expectation was a resumption after six months but we currently have no reopening date. We require a compensation package to partially cover running costs, and we need infrastructure to be put in place to allow international travel to recommence that complies with health guidelines and keeps passengers safe. Fifth, travel agents are the only industry sector in Ireland that is both regulated, through our licence, and bonded for consumer protection.

The ITAA welcomed the publication of the aviation recovery task force report in July and the recommendations within. However, although the association had anticipated that the interim recommendations of the task force would be implemented by the Government following their publication on 22 June, this has not been done. We need Government adoption of the EU traffic light system and we need Ireland to follow the rest of the EU with the implementation of that system. The task force emphasises the urgency of a plan “to economically co-exist with the virus and, as an island nation, this has to include international travel.” The ITAA reiterates the urgency of this and the need to follow fellow member states with a safety-conscious reopening of international travel.

While much ITAA business relates to outbound travel, the nature of the aviation sector means that the outbound and inbound sectors are inherently linked. The ITAA supports the promotion of aviation and regional airports to save Ireland's tourism sector and, by extension, its economy. Travel agents, as the vital element in outbound travel, will do our utmost to contribute to promoting foreign travel, and our role in promoting outbound travel complements the efforts of others to promote inward travel.

Regarding the proposed EU traffic light system, the ITAA welcomes that the Government has committed to EU-wide rules for such a system aimed at opening our skies. Most EU airports are operating safely with additional structural supports, and the ITAA is of the opinion that the Irish airports should be permitted to follow suit with our neighbouring EU airports.

As for Covid testing, the safety and comfort of our customers are paramount to all member agents. We have called for the development and implementation of routine Covid-19 testing for passengers boarding flights out of the country as this will ensure a "clean" environment throughout the travel process. Evidence has shown that this significantly reduces the spread of the illness. The ITAA believes that this testing will help rebuild consumer confidence in travel. The Dublin Airport Authority, DAA, can roll out testing within days in Dublin and Cork airports, delivering 15,000 screenings daily. This will need State assistance.

I thank the committee for its interest. We would welcome any questions.

Chairman

Can Dr. Horn hear us now?

Deputy Timmy Dooley

His microphone is still muted.

Dr. Chris Horn

Can the committee hear me?

Chairman

Dr. Horn may proceed.

Dr. Chris Horn

I thank the Chairman, Senators and Deputies for inviting me. I have provided a brief opening statement to the committee. I should note at the outset that I have no direct involvement whatsoever in the aviation sector. My background is in software engineering and entrepreneurship.

I was contacted by the former Minister for Transport, Tourism and Sport, Mr. Shane Ross, in early June asking whether I would consider acting as a neutral chairman, from outside of the aviation sector, of the aviation task force which he was putting together. Having reflected, I agreed to do so. He emphasised to me the urgency with which we should undertake our work and the speed at which we should come up with our recommendations. The members of the task force were invited by the former Minister. I had no involvement in putting the task force together. Some of my colleagues on the task force, I believe, have already spoken to the committee, and perhaps in the future further members will do so. I do not know the committee's agenda.

We had four meetings in early June and mid-June and finished on 3 July. We produced an interim report after two weeks and a final report after a further two weeks. Our work was very intense. We worked with the secretariat over weekends to produce our recommendations. I hope Deputies and Senators have had an opportunity to read our reports, in particular the final report, and look at our recommendations, which I will not repeat here. We then presented our reflections to the Minister, Deputy Eamon Ryan, and the Minister of State, Deputy Naughton, on 10 July and subsequently to a broader audience, including the secretary to the Government, in late July. The task force has not met since that last meeting and in effect has ceased its work.

My only comment as somebody from outside of the sector working with young start-ups is how important aviation is to us as an economy and a small nation on the periphery of Europe. A certain amount can be done by virtual calls such as this, on Zoom, GoToMeeting and so on, but for new business development it is virtually impossible to win new customers, raise international finance, hire new international staff and develop new partnerships with virtual conference calls alone. Face-to-face meetings are important. Business, after all, is done between people, not between companies, and in establishing new business relationships one needs that personal contact. I think it is extremely difficult and frustrating for indigenous companies based in Ireland with export markets that their competitors overseas are able to travel more freely than we are in this country at this point. That places further stress on the high-potential technology start-up sector.

With that, I thank the committee and the Chairman again for the invitation. I would be happy to take any questions.

Chairman

I thank Dr. Horn. We now proceed to questions. There is a seven-minute round for each party.

Senator Jerry Buttimer

I welcome and thank our witnesses. I wish to ask Dr. Horn a number of questions. First, does he think his task force should be reconvened, given that we have an ambiguity surrounding the implementation of the task force recommendations? Second, in his prepared remarks circulated to us he refers to new business development and new and existing customers. In the context of the presentations we have heard this morning and the precariousness of travel, how would he see us as a committee working with the Government, first, to ensure we have adequate testing and, second, to restore confidence among the travelling public, notwithstanding his remarks on new business development and new and existing customers? He said the task force has not convened since 30 July. It had a meeting on 10 July. What has been its engagement, if any, with the Government since 10 July?

I thank our two witnesses in the committee room for being here. I know they are under severe pressure. I myself have been in contact with a number of travel agents who have expressed to me a number of issues with engagement with airlines. Mr. Hackett's statement says that while it was anticipated that the task force's interim recommendations would be implemented by the Government following their publication, this has not been done. What specifically should we on this committee be pushing in respect of the task force?

In the context of the European Council directive this Monday, there seems to be ambiguity again around travel in respect of the green, amber and red lights. What is the witnesses' perspective on this?

I refer to yesterday's budget. From the witnesses' perspective as travel agents who are, as Mr. Hackett rightly said, dealing with the travelling public and with airlines - and their position is far more complicated than others' because they are getting it on both ends of the extreme with little or no recourse to support-----

Chairman

I remind the Senator-----

Senator Jerry Buttimer

That is okay. I will conclude on that.

Dr. Chris Horn

Should the committee reconvene? Possibly so. I think that would be at the invitation of the Government. Perhaps the first item, if the committee were to reconvene, would be to review the recommendations that were made and the current status of their implementation one way or the other.

Moving on to the Senator's comments on winning new customers in the current environment of testing and travel, I think the question is this: if we have various actions such as the green list, quarantining and better test and trace, does it address or help to address overall the issue of how the business community can travel to extend and grow its businesses? That is the fundamental issue I see from the sector with which I am most familiar.

Finally, in fact, our last meeting was on 30 July, not 10 July. On 10 July we met the Minister, Deputy Eamon Ryan, and the Minister of State, Deputy Naughton. On 30 July we met the secretary of the Government and other senior officials. I personally have not had any interaction with the Government since 30 July, to answer the Senator's question.

Mr. Pat Dawson

I thank the Senator for his questions. As far as Irish travel agents are concerned, we are in a desperate situation. As the Senator said, we are getting both sides of it from everywhere. We have awful issues with refunds. We are owed about €20 million or €25 million, and it is the consumer who is owed that money.

As for where we go from here, travel needs certainty and we certainly have no certainty whatsoever. We had the green list and there were four countries on it, two of which have no airports. Then we suddenly opened up to ten and 12 countries and there was silence about that. We felt that the Government was not interested in pursuing the green list. Otherwise, it would have spoken about the ten or 12 countries that were to open up. Now we have to agree with our European counterparts that we are all on the same page and the same colour. We do not want a patchwork situation. Airlines have complained this morning about different countries being green, orange or whatever. The travelling public need certainty, but we do not have that at present. I ask Mr. Hackett to address our views on the budget.

Mr. Paul Hackett

Coming back to Mr. Dawson's point with regard to consumer certainty, one of the key points that came out of the aviation task force report and from the Council and the Commission yesterday that will provide certainty and allow for the removal of quarantine is the provision of adequate testing. It is critical. We do not have that in the current traffic light system of green, orange and red. It can change at a whim. There are too many moving parts to it. It is too confusing. We have to apply the testing regimes, not only in this country but at airports, it if is to work effectively.

With regard to the question on how the budget helps, the Covid restrictions support scheme, CRSS, would be very welcome. We need clarity that the travel industry fits within it. We also need clarity with regard to the fact that, while one can talk about levels 1, 2, 3, 4 and 5, effectively, the travel industry has been at level 5 since March. We have been locked down since March and we have been open since March. We cannot have a scenario whereby it is a requirement for the travel industry to be at level 3 in order to be receiving those supports because trading has been at -95%. No other industry is like that.

Mr. Pat Dawson

We do business when non-essential travel is not there. The Government is advising against non-essential travel. That means we have not been doing any business since March. Levels 1 to 5 make no difference to us. With levels 1 to 5, it is all the same. We will not be doing any business as long as the advice is to avoid non-essential travel.

Chairman

I advise the witnesses that the seven-minute clock applies for the entire period between the question and the responses. In Covid times, I accept it is difficult. I would ask both witnesses and questioners to keep an eye on the clock.

Deputy Cathal Crowe

I welcome the witnesses to the Chamber here this morning. It is good to have this engagement. I hope it will be ongoing because although their sectors are being supported through this crisis, their troubles have not ended. I am sure they will articulate that strongly.

I will begin by addressing Dr. Horn. When I spoke in the Dáil on 3 June last, I asked the then Minister, Shane Ross, to introduce an aviation task force. I am glad that he and his Department initiated that and that Dr. Horn chaired that effort. There were certainly some positives in it. I had some difficulties with the constitution of the task force. That was not of Dr. Horn's doing. I felt that there were certain omissions. For example, the workers were not adequately represented on the task force. Many issues transpired in that regard. In particular, the Aer Lingus and Ryanair workers, and indeed the workers in Shannon Airport who faced 20% pay cuts, felt that their only representation was that from their unions, whereas senior management had another layer of engagement in the form of the task force and direct access to the Minister.

I would like to hear Dr. Horn's opinions on some of the shortcomings with the task force. It looked at getting aeroplanes back in the sky. I suppose that is where aviation has to restart. There is neither an aviation sector nor a travel and tourism sector unless there are flights in and out of Ireland. One of the shortcomings was that the task force did not address the gross imbalances we have in Irish aviation. Last year, in a normal trading year, 32.7 million people came in and out of Dublin Airport and 1.6 million people came through Shannon Airport. In the second quarter of this year, 155,000 people came through Dublin Airport and just 120 passengers came through Shannon Airport. That is a significant imbalance. It was there last year. It is there this year. It is more augmented this year. The task force did not adequately look at it.

Another shortcoming related to all the stakeholders here that have looked at re-engaging the routes into Europe. I welcome what happened yesterday with the European Commission and the traffic light system. We will not see an immediate return from it but we will see the airlines being able to plan their routes for the remainder of this year and the spring season. I hope that will benefit the tourism sector as well.

I would like to hear Dr. Horn's views on how we re-establish flights to the US in a meaningful way bearing in mind its R-level is way above ours. I would like him to reflect on that. Dr. Horn might briefly speak on the imbalances also.

I have a question for Mr. Hackett and Mr. Dawson from the travel agency sector. Given everything in the July stimulus, which is behind us, and in yesterday's budget, and the stimuli that have come in again for businesses and tourism, what more needs to be done between now and early spring? Everyone talks about tourism starting on St. Patrick's Day. What more needs to happen between now and then for the various sectors? We might hear from Dr. Horn first.

Dr. Chris Horn

I thank the Deputy for his initiative on 3 June in pressing the former Minister to establish a task force. The Irish Congress of Trade Unions was represented directly on the task force by invitation from the Minister and was fully participative. In addition, we issued an invitation to all interested parties to make written submissions to us and we received 26 such written submissions. All of these, by the way, were published on the Department's website at the time. As the Deputy stated, I personally had no involvement in the constitution of the task force.

I note the imbalance between Dublin Airport and the regional airports. It has been an historical issue in the country. As chairman, I felt that my role was to try to achieve consensus across the task force. Therefore, I did not want any recommendation in the task force recommendations that would not be supported by every member of the task force and so the recommendations were by consensus. There were differences of opinion, as one would naturally expect. Where there were differences and not consensus, we were unable to produce recommendations in that respect.

Flights to and from the United States are absolutely critical for the business sector, and particularly the indigenous business sector. It is incredibly frustrating that the restrictions, at least the recommendations from the Government, are no-fly and essential travel only. That makes it difficult for senior managers and leadership in young companies to ask their own teams and staff to travel when the Government recommendation is not to fly and essential travel only. The lack of connectivity and ability to fly to the United States right now is hurting the high-technology indigenous sector.

Mr. Pat Dawson

I will talk about the regional airports from the point of view of the imbalance. I agree totally about the imbalance between Cork, Shannon, Dublin and Knock airports. These airports, as the Deputy can see, are in a precarious situation. They got a grant of €10 million but, unfortunately, that will probably not be enough. Those airports must be supported. I note there were 35 million passengers out of Dublin Airport. The figure for Cork and Shannon airports comes to approximately 4 million. At a time when we are talking about using less fuel and petrol on our roads, I would ask those who say it is an easy drive to Dublin Airport from Shannon or Cork to try to do so in two and a half hours. Certainly, that has to be addressed for both outbound and inbound tourism, which is vital to all those regions.

Deputy Cathal Crowe

I will use the last few seconds of my speaking time to say that the task force needs to reconvene to look at imbalances. We also need to put it up to Ryanair and Aer Lingus, both of which have intensively lobbied all of us. Now that the European traffic light system is in place, we need at a minimum to see the flights to Heathrow recommencing. We need to see their commitment to routes in and out of Shannon Airport and other airports. I ask this committee to push for the task force to reconvene to look at the imbalances that still exist and will prevail into next spring.

Chairman

In that regard, we should write to Ryanair and Aer Lingus and to the other stakeholders - the airports - to get their views on the traffic light system that was announced yesterday in Europe. I am absolutely in agreement. The first Sinn Féin speaker is Deputy O'Rourke. I remind members that the less time they spend asking questions, the more time the witnesses have to answer.

Deputy Darren O'Rourke

Will the witnesses outline the experiences of travel agents during Covid? Particular aspects of their business model such as cash flow are unique to the sector. I have heard about negative revenue from travel agents, some of whom have remortgaged their homes to keep their businesses running. Senior Ministers tell us there are protections and there is a suggestion that travel agents are buffered because of the bonding scheme for package holidays at European level.

Mr. Paul Hackett

The travel industry is unique in the crisis since March. Effectively, business stopped on 1 March and since then we have operated at -90% to -95% or -100% in many cases. Unlike pubs, we cannot close and shutter up and send people home because bookings are ongoing. They had to be handled. This is across the corporate sector that Dr. Horn spoke of as well as leisure and the visiting friends and relatives markets.

There was a question about the July stimulus package earlier. It was relevant for businesses that were in recovery but we have never been in recovery. We have seen no uplift since March and we do not expect to see any until the first quarter of 2021.

If the Deputy was referring to how we have engaged on cash flow and credit notes, we worked closely with the Department of Transport, Tourism and Sport to put in place a refund credit note system that is effectively cash flow, not a cost to the State. What the industry needs is support. The move from the temporary wage subsidy scheme to the employment wage subsidy scheme that was announced yesterday requires a lot of clarification that it applies to the travel industry and is relevant and that there is no requirement on the restriction levels in line with tiers 1 to 5. The travel industry is all about customer protection, which is what the bonding and licensing allow us to do, and that is why were are in a unique position. We are licensed, bonded and protected. We are in no way buffered or protected because it is our duty to refund our customers, which is what we are trying to do. Our difficulty is that we are caught in the middle between our suppliers and the customers we are trying to refund. The refund credit note was to allow some latitude in that area. All members are doing their best to comply with their obligations.

Deputy Darren O'Rourke

There is a perception that the sector is buffered because of the notion that there is protection at European level. Is it the case that does not kick in until companies are at the wall?

Mr. Paul Hackett

Effectively, yes. The package travel directive is the regulation that protects the consumer pan-Europe in the travel industry. Bonding is in place for when a company fails, not before that. It is a tribute to the industry that we have had minimal failure since March. It is because of the resilience of the sector and its viability. It has great bounceback potential; it has been profitable right until Covid and will be profitable afterwards but in the interim the industry is on its knees, without question. There is no buffer to protect us and there have been no handouts. The July stimulus was very much for industries that were able to recover and we have not been able to do so. No one has seen more than 5% trading since March.

Mr. Pat Dawson

Over the past six months, travel agents and tour operators have just been burning cash. We spend most of our time trying to get refunds from airlines in particular. We are owed €25 or €30 million. Regulation 261 states that airlines are supposed to refund in 14 days. We still have 400,000 customers booked. Refunds are taking four to five months and there are flights that still have not been refunded going back to March. We have asked the CAR to call in the airlines and ask what they are doing to the public. They are ignoring them. We ask that the committee call in the airlines and have the money returned to the consumers.

Deputy Darren O'Rourke

I support that fully. I have heard this from hundreds of ordinary consumers who are dealing directly with Aer Lingus and Ryanair in particular. Their experiences have been very difficult going back to March. Have the travel had agents a similar experience or is it better or worse?

Mr. Pat Dawson

It has been the very same experience. Ryanair, in particular, has said that it will not refund travel agents. It has dealt with us for 20 years. It should be hauled over the coals and told to refund the €25 million to customers and not have people sending in utility bills and so on. Ghost flights are another important issue. Regulation 261 does not kick in when a flight flies, and one cannot refund the money. Airlines flew during the summer because it was cheaper to fly than to cancel the flights. We know from people who were on those flights that there might have been eight or ten people on them, where the airline was paid for 70 or 80 of the load factor, so they were still making money. The Government must look, via the package travel directive, to see about cancelled flights. If there is no non-essential travel, the flight should be cancelled and customers refunded their money.

Deputy Darren O'Rourke

Travel agents estimate that between €25 and €30 million is owed via themselves to customers.

Mr. Pat Dawson

And also to consumers directly from airlines and cruise companies, which also comes into it.

Deputy Darren O'Rourke

That is an important point that the committee should follow up. Finally, what do travel agents want the committee to put to the Government for a support package?

Mr. Pat Dawson

One area relates to people who pay rates. The Covid payment is low. Everyone has their hand out and the Government cannot pay everyone. However, as Mr. Hackett said, we hope that we would come in under that scheme. We have to. Accountants will be talking to travel agents this morning. There is a query about the Covid payment and that is urgent.

Chairman

Will Dr. Horn tell the committee what is the unfinished business of the aviation task force, were it to be re-established? Did it look at any of the traffic light systems in Europe, such as the one being proposed? How quickly could it report back?

I ask the ITAA representatives if the €25 to €30 million is owed to the travel agents from airlines, which they have to refund to customers of their own. Are they at liberty to say which airlines are involved? What funding is required from individual airlines? We are getting questions on that. We will bring the airlines back before the committee. We know the pressures they are under and we accept that but there must be an element of fairness.

Dr. Chris Horn

On unfinished business, our final report made several recommendations. Some have not had any follow-up at Government level that I am aware of. The unfinished business is to ask if the recommendations have been accepted and will they be acted upon or are they unacceptable and, if so, why is that, what are the issues and how do they need to be addressed?

We did look at the traffic light system. In our interim report, there was a recommendation from an EU Commissioner that there should be harmony across member states on travel and travel policy. That recommendation had been made just before we published our interim report. I think we acted very quickly. There was an intense urgency about our work. We were asked by the previous Minister, Shane Ross, to try to be as quick as we could in producing a thorough set of recommendations and I believe we did so over four weeks. It was a very intense period with a lot of work. On how quickly we could work again, the question would be to what effect? We have already been asked to move very quickly by the Government. I believe we did so. It has been three months since we made those recommendations and it appears that some have not been followed through on by the Government at this point.

Chairman

If Dr. Horn were asked to take up the position of re-establishing the task force to do an overview, would he take it up and chair such an aviation task force again?

Dr. Chris Horn

I would like to understand the terms of reference for reconvening, the objective of reconvening and the time period. I would certainly give it positive consideration but I would just like to understand the framework for reconvening, the intent and the terms of reference of a reconvened task force.

Chairman

I thank Dr. Horn. I want to drill down into the figures as there has been a lot of talk about them. Specifically, what airlines and individual amounts are involved in the fund of between €25 million and €30 million? I ask Mr. Hackett and Mr. Dawson to flesh out the figures a bit, on behalf of the consumer.

Mr. Paul Hackett

As Mr. Dawson has outlined, when flights are cancelled there is an entitlement to refund and that is the issue. The airlines refund the travel agent and therefore the travel agent passes on that refund to the consumer. That €25 million would be a conservative number. The airlines are working through the process. This is a massive challenge for them in terms of scale and most airlines are doing their best in a very difficult and challenging situation. The airline using some of the legislation that covers this area most is Ryanair. It is calling out EU regulation 261/2004, which is EU legislation that requires airlines to refund the customer directly. The difficulty there is it is almost conflicting with the package travel directive, which provides consumer protection and asks the travel agent to refund the consumer. We have a loggerhead-type situation going on with those two pieces of EU legislation. They sit in tandem and are not designed for the consumer to get double refunds in any circumstances but there is an issue there. It is a broader issue given that some of the EU legislation that covers our area is not designed to cope with a pandemic. That is true of most legislation, because we do not write it in that particular mindset.

Chairman

What would resolve the situation or clarify the issue in order that there would be no ambiguity in this area? Mr. Hackett specifically mentioned Ryanair.

Mr. Paul Hackett

We have submitted documents to Ryanair, through the Commission for Aviation Regulation and in consultation with the Department of Transport, in the last two weeks asking if we can proceed on this basis. The commission has set out its understanding of EU regulation 261/2004 so we would ask Ryanair to engage with the commission on the most recent correspondence it was sent, at the very end of September or start of October, with a view to resolving this. It is important that we resolve it. There is no point having a shouting match with the airlines.

Chairman

Would Mr. Hackett provide the committee with a copy of that submission in order that we could follow up with the commission and Ryanair?

Mr. Paul Hackett

The submission actually came from the Commission for Aviation Regulation directly to Ryanair. The Irish Travel Agents Association had direct input into that to try to resolve the matter so it was a very pragmatic piece of work aimed at getting the refund issue resolved. That is the single biggest outstanding area of refund. To some extent, while not willing to give excuses to other airlines, Ryanair is working through the trade and complying with its regulations and obligations and the travel trade is doing its utmost to comply.

Chairman

We can follow up with the commission and Ryanair.

Mr. Paul Hackett

I will send that to the committee this afternoon.

Chairman

I thank Mr. Hackett. I call Senator Dooley.

Senator Timmy Dooley

I have a few questions for Mr. Dawson and Mr. Hackett. The Covid support scheme that was referred to in the budget yesterday links those payments to level 3 or above. That would suggest that travel agents are not included in that but they should be because they have been at level 5 since March.

I thank Dr. Horn for the work he has done. There are a few areas we need to cover. The work he did was primarily about addressing the immediacy of getting aviation rebooted and restarted in all its forms. He challenged us on what the terms of reference for a reconvened task force might be. I suggest that, rather than going back over the work it has done, the next element of task force's work would look at how we ensure a balanced development and regional aspect to the aviation recovery. Building on what Dr. Horn has already done, the task force could look at the next phase and how we ensure that as aviation activity recovers - and it will but it will take some time - we do not end up with the airlines concentrating on one airport, namely, Dublin Airport, and effectively eliminating all others. A task force under Dr. Horn's chairmanship would have to have a different set of terms of reference and a very different make-up of strategists. I would like to hear Dr. Horn's comments on that.

Dr. Chris Horn

It was indeed a matter of immediate attention and urgency, as the Senator said, and that was the backdrop to our work. As regards regional development, I note that Shannon Airport was represented directly on our committee, and Joe Gilmore of Ireland West Airport was a member of our task force. On balanced regional development, we made two recommendations in our final report on the way in which regional traffic could be stimulated, including a fixed carbon sum per passenger which could be used to stimulate traffic. I agree that there was a focus on near-term immediate and urgent actions. Medium-term to longer-term measures were part of our consideration but perhaps they did not have the same urgency as short-term and immediate actions which could impact the industry over the summer and into this winter.

Senator Timmy Dooley

I will just come back on that. I would like to see the task force look at how we might structure aviation policy into the future. Previously, the three State airports operated under the banner of Aer Rianta, as three entities within that umbrella. I would like to see some consideration given to that again to see if that might be the best model rather than the competitive tension that exists at the moment. It is ultimately a non-competitive environment because frankly, Shannon Airport, as an independent albeit State-owned entity, finds it extraordinarily difficult to compete with the financial might and strength of Dublin Airport, even in good times. The real concern now is that the airlines, working from a very low base, will try to limit a duplication of their activities to the greatest extent possible, and that can only play negatively for other airports. We will have to revisit our entire aviation policy. That is why I like the idea of someone like Dr. Horn doing the work because of his skill sets and independence from aviation, while also being someone who understands enterprise, the technology sector and where the demands come from for aviation into this country. I suggest that the committee draw up terms of reference for the next phase. We might pursue that with the Minister and the Government in an effort to get to the next stage of managing a balanced approach to what undoubtedly will be the redevelopment of the aviation sector.

Mr. Pat Dawson

To answer the Senator's question regarding levels 1 to 5, we cannot have a one-size-fits-all approach. As Mr. Hackett said, the travel industry is unique. On non-essential travel, we need to speak to the Ministers for Finance and Public Expenditure and Reform, Deputies Donohoe and Michael McGrath, to fit us in there. We do not want some technical line in the legislation or the terms of reference that excludes us. We do business when there is non-essential travel. We do not do business from levels 1 to 5 because those levels do not affect us. Once there is a ban on non-essential travel, we are told by the Government that we cannot fly anyone anywhere. It is as simple as that.

Mr. Paul Hackett

I would reflect what Mr. Dawson says-----

Dr. Chris Horn

To comment on Senator Dooley's remarks, I understand that a five-year national aviation policy was drawn up by the Department of Transport, Tourism and Sport in 2015 or 2016. That was five years ago so it is now concluded. My understanding is that consideration of a new national aviation policy is now being brought together. It is certainly timely. I am just observing that the previous policy has now expired as that five-year period is over so it is timely to reconsider the national aviation policy.

Mr. Paul Hackett

With regard to Senator Dooley's remarks, the level 3 clarification does not apply to the travel industry because of the 95% rule.

We need to understand that if a company is trading below 80%, it should qualify for support, irrespective of what level the country is at. That is where the travel industry is. The industry is unique in that no other industry will be consistently operating at that level.

We are also slightly concerned about the low turnover levels. Our turnovers are artificially inflated because we are buying airfares and other services and selling them on. Our margins are tiny. Margins in the industry relative to turnover are also an issue for us because we do not want-----

Chairman

The definition of turnover.

Mr. Paul Hackett

We believe that the spirit of the CRSS that was announced yesterday wants to include the travel industry. We just need to make sure that happens.

Deputy Michael Lowry

I will be brief. I welcome our witnesses and thank them for taking the time because this meeting is informative for us. I have met representatives of the Irish Travel Agents Association on a number of occasions and I know many people involved in the industry. Most of the businesses are family-run, professional, courteous, organised and provide an excellent service. I understand there are 190 licensed travel agents in the country and I have met many of them in my constituency of Tipperary on a number of occasions.

What is effectively happening is that the Government's advice is not to travel and thousands of people have followed that advice and cancelled flights and holidays. Most of those cancellations are package holidays which would include flights, transfers and accommodation. A ludicrous situation exists under this European Union directive whereby the travel agent is legally responsible for securing the refund of the entire package. That is simply not financially sustainable and I ask Mr. Hackett or Mr. Dawson to explain why that is the case because the consumer needs to understand. Travel agents are suffering incredible abuse from clients who think that all the travel agent has to do is reach into a bank account and refund the money. As I understand it, and the consumer does not understand this, the travel agent is lucky to get 10% of the entire package. How can travel agents refund 100% when they only receive 10%? It is a total nonsense and travesty. It is incredibly unfair to expect travel agents to shoulder the burden of that financial outlay. I have been told by several travel agents that the reality is they will be forced into liquidation. As has previously been confirmed, the bonding system to protect the consumer when agencies collapse only becomes effective after a travel agent goes into liquidation, which is another nonsense.

Travel agents and thousands of consumers throughout Ireland are effectively caught stranded between the European Union directive and Government advice. It has been crystal clear to us here and it was extraordinary to hear the comment that it is cheaper to fly an almost empty aeroplane than to cancel a flight and refund the consumers.

We have identified the amount today, but will our guests explain how the system operates and why it is impossible for them to give these refunds, for the benefit of the consumers who are listening and the clients our guests represent?

Mr. Pat Dawson

I will do that. I thank the Deputy for speaking for us in the Dáil some time ago because we seldom hear travel agents mentioned. Nobody mentioned them yesterday, which was disappointing considering we have met Ministers who have had positive attitudes towards us. Kindness is no good when it comes to keeping our doors open.

A booking through a travel agent falls under the package travel directive, a piece of EU legislation under which the travel agent is made responsible from start to finish. If the package is cancelled or does not happen because of a pandemic or a world war, no matter what happens, the legislation states that the travel agent is supposed to pay a refund within 14 days whether or not it receives the money back from the airline or hotel involved. It is crazy stuff.

We are members, and I am on the board, of the European Travel Agents' and Tour Operators' Association, ECTAA. There are moves afoot to change that legislation. As Deputy Lowry has said, the implications of that directive could close a business tomorrow morning. We must fight with our suppliers to get the money back. At the same time, the consumer is banging the door down and demanding money because the legislation insists that the travel agent pays back the money. Our staff throughout the country, the 3,500 people employed in the industry, have a banging on both sides of their heads as they try to look for money. It is not sustainable and something will have to be done. The legislation arrived in Ireland without too much thought given to it and is not fit for purpose.

Deputy Michael Lowry

What is the solution to the problem?

Mr. Pat Dawson

Many European countries have organised things so that packages are booked separately. In other words, a package is two elements, namely, the hotel and the flight. If one books a hotel one day and a flight the next, the directive does not come in. The point is that our job is to protect the consumer and the directive does not do that. We are the only people in the industry who are there for the consumer 24 hours a day. We would not be happy with a regime where the consumer is thrown under the bus. We have been thrown under the bus, as such, for the past five or six years. Our consumer is the most important weapon we have to keep businesses open.

Mr. Paul Hackett

To add some context to that, the industry changes fast. When the package travel regulations were drawn up, the industry was very different. It was very much charter and tour-operator driven and that has changed. Ireland has two airlines, Ryanair and Aer Lingus, on which we depend massively. They are used in what we now call "dynamic packaging" for package holidays. Holidays have moved from being charter holidays to being part of a scheduled operation. The money comes in from the consumer to the travel agent and goes straight to the airline and then, when something like a cancellation happens, the money has to work its way back and that is the challenge. When the industry was charter-based, the money was effectively sitting in one's house so it was easy to give refunds. The package travel directive was designed at a different period of time and the industry has moved on. As I said earlier, when a situation like the one we are in arises, some of the legislation is difficult to implement. It is not because the industry does not want to protect the consumer and do what it is obliged to do for the consumer.

Deputy Michael Lowry

The committee needs recommendations in this area. It is incredible to think that the travel agent is placed in the middle of this invidious situation and that the airlines are playing puck with everyone. We, as a committee, need to put pressure on the airlines-----

Chairman

Absolutely.

Deputy Michael Lowry

-----to co-operate and facilitate refunds through the travel agents association. I would not like to be at the end of a phone listening to angry, frustrated consumers who are blaming the travel agent, and even though it is not the fault of the travel agent, that is who takes the abuse. It needs to be resolved.

Chairman

Following on from my previous question, is the correspondence between the Commission for Aviation Regulation and Ryanair the kernel to resolving the matter now?

Mr. Pat Dawson

It would resolve the refund issue in the short term. A bigger piece of work would be involved in looking at the package travel directive and how the market has changed.

Chairman

That is a body of work that we will undertake, as a committee.

Mr. Pat Dawson

I will make sure that the committee gets the documentation from the commission.

Chairman

I thank Mr. Dawson.

Deputy Ruairí Ó Murchú

We have all met many travel agents. They are in a particularly precarious scenario and I suppose it is because they are at the front line. It is like working in a bank during the previous economic downturn when the teller got the blame. Similarly, people are asking travel agents why they are not refunding money because that is who the consumer sees. I get the challenges.

Our guests mentioned that the worst offender for not paying back money is Ryanair. Are any other airlines doing that?

I want to deal specifically with an example that came to me from a travel agent who dealt in an awful lot of group bookings. He would buy flights at different prices in different batches. Some of them were for school kids in school group holiday scenarios and that created a difficulty because there could be a large disparity between the prices and the problem was how to separate it out. Our guests are probably aware of travel agents who, particularly early in the pandemic, paid back the consumer straight away, anticipating a quick payback from the airline, which obviously was not forthcoming.

We need to give our guests clarity around the supports, which needs to happen straight away, and address the scenario around the package travel directive. Regarding some of the excuses used earlier by Ryanair, such as the letter of the law and paying directly back to the consumer, a number of these travel agents will also have been accused during this period of having been screen scrapers. Will our witnesses deal with that point, please?

Mr. Paul Hackett

I will start with the Deputy’s last point first. Screen scraping means that we are using data from the airlines' website to offer flights. It is a feed, like a dotcom website, and it is a public website. For us to sell holidays using Ryanair or Aer Lingus flights, we either have feeds which are official or they are screen scraping, which is effectively taking the data. Ryanair has a particular issue with that which is to do with its own distribution policies and the terms and conditions of its website. It is entitled to set those and there is no question about that. Screen scraping in itself is not inherently damaging to the consumer. Effectively, what we are trying to do is to provide the consumer with the holiday and flights that he or she wants to book. Ryanair is very happy to accept the money. From a contract law point of view, the names are presented, the prices are quoted and the transaction is completed, so there is offer, acceptance and consideration. That part is dealt with.

On the airlines and the refund piece, it is fair to say that the other airlines are doing their best but it is mainly around the scale of this problem, and that is where the challenge is. There is only one airline that is trying to sit within the EU 261 regulation, and it may have very justifiable reasons for sitting within that regulation - I am not a lawyer - but EU 261 is there for airline regulation, the aviation sector.

Deputy Ruairí Ó Murchú

The letter of the law could save them there.

Mr. Paul Hackett

Yes, and the package travel directive sits there for the travel agents. There are two pieces of legislation and currently those two pieces are not working simultaneously to the benefit of the consumer. That would be the most diplomatic way of putting it.

The issue on the groups would be a prime example of why the travel agent needs to be refunded. In a group situation one may have a group booking with 20, 30 or 40 unknown individuals. They could be all different couples going on an escorted tour or, in the case quoted by the Deputy, they could be in a school group. It would not be feasible to return the money to one passenger in the school group. In the first instance, the person may be underage or a minor. How could this happen? This would not be the case. The school group has come to the travel agent, has handed over a deposit, has asked for a tour to be booked for education purposes to whatever destination and has put everything together. That has been done. The airline is trying to manoeuvre the scenario to say that it has to refund directly back to the passenger. It does not work in that situation. Groups are one example in which this does not work and there are many other examples. It does not work in the corporate travel sector where a company will have used the company credit card to pay for a flight for an individual to travel to a destination and not that of the individual passenger who is travelling to the destination.

There are many reasons, and what is unfortunate is that up to the time of this pandemic, there was precedent for all of the refunds to go back through the travel agent. This is something new that is being somewhat exploited or used in the current circumstances which is not helpful.

Deputy Ruairí Ó Murchú

It is not viable and it needs to be dealt with as quickly as possible. My next query is probably a wider issue concerning more than just Mr. Hackett. Some travel agents are small, one to two-person operations. While there was an extension on tax returns this year, unless a person made his or her return in October and instead sought the later date in November - it is now December - it was necessary to pay tax for 2019 and preliminary tax for 2020. Has this issue arisen with any of the association's members who are under severe pressure?

Mr. Pat Dawson

Not really as such, because we have no turnover.

Deputy Ruairí Ó Murchú

I understand, but that is going to create difficulties for people like our witnesses because they are absolutely exposed.

Mr. Pat Dawson

Yes. The smaller airports in Ireland in particular have to be very careful that they are not dominated by one or two airlines because they will hold them to ransom when it comes to putting on routes and will not want to pay their way. Yes, there is competition and predominantly between, as Mr Hackett has said, Ryanair and Aer Lingus. As to the American carriers, for example, their Government told them that they were not going to get any funds from it unless they refunded customers, and that is what they did. We have to have consistency and fair play to the consumer. There are many hundreds of thousands of consumers who do not want to book directly with an airline or with a cruise company but want to speak to their local agent in Thurles or wherever they might be.

Deputy Ruairí Ó Murchú

And they will have the protections that go with that.

Mr. Pat Dawson

Yes, they will have the protection that goes with that. Remember, airlines are not bonded. People's money is safer with a travel agent than with an airline.

Deputy Ruairí Ó Murchú

I accept that and the protections are actually killing the travel agents at the moment, to put it mildly. What I was talking about was putting in tax returns. It is a particular difficulty that I will refer to again. We definitely need to look at setting terms of reference for the aviation task force.

It is very welcome that we are going to operate with the traffic light system. However, we heard last week that HIQA is operating pilot schemes around testing facilities in parallel with the PCR test to come up with some sort of solution. We as a committee need to find out some more detail on that and it needs to happen as soon as possible, while accepting that the travel agents may not necessarily be moving in that direction.

Deputy Steven Matthews

I thank Mr. Dawson and Mr. Hackett for their attendance and submissions. I will speak first to the travel agents. Like other Deputies, I have met many travel agents from across Wicklow and south County Dublin throughout the pandemic. It was an insight into a business that I knew very little about before this. It became apparent to me that it is very regulated, there is great safety for people booking through travel agents, and many people get comfort from that. The staff engaged in that business are very experienced and offer that level of service and comfort.

What was stressed to me in those meetings was that the emergency Covid-19 payments were very important in retaining the staff who had been with the agents for a very long time. Given that the witnesses said there is some concern about those payments, we should get clarity on that straight away. The last thing that people in this business who are struggling need is further uncertainty. They need certainty because the business model they have is viable but vulnerable. One of the benchmarks that we need to use for Covid-19 emergency payments is that these businesses that need assistance and get it during this time will be viable once they come out of the pandemic. This is really important.

We had representatives of the airlines before the committee last week, and not one single person asked about ghost flights. I find it incredible and unacceptable that a large, well-funded and resourced business like that would engage in running ghost flights in order not to have to pay refunds. I do not know if we need to get the airline representatives back in before the committee to ask them that question, but it is definitely something we need to write to them about, seeking clarity on that question.

On the point of the 3,500 jobs, these also represent 240 shopfronts and businesses in towns, villages and cities throughout Ireland. It is very important that we maintain the viability of those businesses.

Points 5 and 6 in the recommendations of Dr. Horn's report refer to rebates and stimulus. He states that this would require state aid and would need to be notified to the European Commission in accordance with state aid rules. Has that been done by other European countries? Would Dr. Horn see that as being a barrier or has it been done before and is it just a formality that needs to be gone through?

On point 9 regarding Government investment in the aviation sector in response to the cost of transition to carbon-neutral operations, will Dr. Horn outline what investments or offsetting need to be made now to assist that transition or to get that carbon neutrality?

Mr. Pat Dawson

On the Deputy’s point about ghost flights, I am sorry that I was not here when those airline representatives were before the committee-----

Deputy Steven Matthews

So am I.

Mr. Pat Dawson

-----because I would have told the truth. If they are ever before the committee again, Mr. Hackett and I will be delighted to attend. Worse than that happened throughout the summer. When people could not travel because it was non-essential and they wanted to change their arrangements because the flights were going to go, and I am speaking of ordinary families around Ireland going on a precious holiday in school time who paid a great deal of money for the holiday, many airlines - not all, because some are very good - charged families €800 to €900 to change the date. They really took advantage.

This committee and the Government need to stand up and protect the public from that. It was incredible that families, as Deputy Lowry said, were crying on the phone and being told they had to cancel their holidays because they did not have €800 or €900 for these so-called amendment fees. A lot of profiteering went on when people were at their lowest and were worried about their health and jobs. These people did not want to fork out several hundred euro to change their holiday plans because of this profiteering. There is a lot of work to be done on this.

Mr. Paul Hackett

I have nothing to add other than to recognise that this is a strong SME sector within the economy that we need to protect. We have a strong, mainly Irish-owned group of travel companies but there is nothing to stop a travel company anywhere in Europe trading in Ireland, operating with an Irish web address and complying with all of the regulations that require them to have protections for the consumer. They will not have people on the ground, they will not have Irish employees and they will not have a headcount in Ireland. That is what is important and we want to protect that. As we said previously, this is a viable industry that can bounce back. It has survived and it is well regulated and licensed so we need to make sure we support it. That means we need clarifications from the Government on the CRSS initiatives announced yesterday.

Mr. Pat Dawson

I want to add to Mr. Hackett's point about travel companies. There are many travel companies based outside of the State and they operate with a Dublin phone number and an Irish email address. Hundreds of thousands of people are involved in this and consumers find out at some stage that they are dealing with a company based in the UK, the Netherlands or wherever else. As we know, the legislation governing companies depends on where the company is based. These people then have to go to the Civil Aviation Authority in the UK or to the different authorities in Belgium, China or wherever else.

Chairman

I am sorry to interrupt Mr. Dawson but I want to bring Dr. Horn in to answer the three questions. I ask Dr. Horn to first address the second question about the investments in a carbon-neutral transition.

Dr. Chris Horn

Our consideration was that it is not just the airlines. It is the entire sector and, therefore, it includes the airports and the supply chain. We were looking at the sector as a whole, rather than just the aircraft. The feeling was that there are a number of initiatives under way at European level with respect to carbon neutrality that I am sure the committee will be aware of. These range from the European Environment Agency to Eurocontrol, the aviation safety regulator. We felt there was a great opportunity for Ireland to lead in this respect by considering a holistic approach to the domestic sector. There are a number of initiatives and I want to stress again that it is not just the aircraft but the whole industry.

On the state aid issue, a number of other jurisdictions within the EU have offered, and are offering, financial incentives to airlines to continue to fly to particular airports, including regional airports, as well as providing state aid directly to the airlines. Our understanding is EU regulations require that this state aid be approved and that other nations have gone through this process and received such approval. It is my understanding that in some cases the EU has waived the requirements for state aid approval but I may be wrong about that. It is a personal view.

Deputy Joe Carey

I thank our witnesses for their presentation and engagement with the committee. One of the flaws in the task force's report was that it did not examine the imbalance in our national aviation policy. A dominant Dublin Airport accounts for 86% of all passengers in Ireland. In a post-Covid-19 era, surely we should move away from congestion, giving other airports an opportunity and reinforcing balanced regional development. I do not know if the witnesses are aware of the report Limerick Chamber published last year, which considered this question and looked at other countries that are grappling with this question. A good case in point is Amsterdam Airport Schiphol in the Netherlands, which is ultra-dominant. The Dutch Government introduced a cap on Schiphol to give other airports a chance. Why did the report not look at that particular measure and does the task force have a view on that? What is the view of the task force on a post-Covid-19 era? Should we endorse a policy of balanced regional development to give other airports such as Shannon Airport an opportunity to grow, develop and be sustainable? It is a driver of economic activity in the western region and it is so important for foreign direct investment and tourism along the western coast. Why did the task force not examine that question or make a recommendation on it?

On the travel agents, the task force has made a strong case. Some 3,500 people are employed in that area. This committee provides an opportunity to shine a spotlight on those questions and put them out there. As a committee, we need to engage with the airline sector and the Government. Following on from what Deputy Lowry said, if we were to take away two or three recommendations from the task force that we could pursue on its behalf with airlines and the Government, what would they be?

Dr. Chris Horn

I am aware of the work of Limerick Chamber and in fact it was in direct contact with me during our work with the task force. We also had, as I am sure the Deputy will be aware, the CEO of Shannon Group, Mary Considine and the CEO of Ireland West Airport Knock, Joe Gilmore, as members of our committee. My understanding is that the national aviation policy has expired and there is a need for a new one. I imagine that a new policy would consider Ireland's regional development. It was not directly in our terms of reference but I want to remark again that my approach was to drive consensus and, therefore, I wanted to make sure that every recommendation in our final report was supported by all 40 members of our task force. Unless there was unanimity, we would not have a recommendation. That is what drove the way I worked. If the committee is reconvened, it would be appropriate to have this in the terms of reference.

The national aviation policy has expired. It would be appropriate to revisit the policy for the next five or ten years, and balanced regional development should be an intrinsic part of any such review.

Mr. Paul Hackett

On the recommendations, we have covered the points about CRSS inclusion and refunds and we have alluded to the need for a legislative evaluation around the package travel directive and Regulation EC 261/2004. The key matter we would like to discuss with the committee is the requirement for testing at airports. That will build confidence in the consumer to travel again. We wish to comply with what needs to be done in respect of public health until such time as it is safe to travel but Covid-19 is here for the medium and long term, to use a travel analogy. One of the key things that did not happen yesterday with the Council documentation and the Council recommendations was a recommendation for the lifting of quarantines and the implementation of testing. The system still has a patchwork nature and traffic lights change colour, as we know. We can see what has happened in recent weeks with the case numbers, which can move dramatically. The rate of transmission within the community is transmission that we effectively do not know the origin of.

We need clarity. The one way that we can have clarity is if we create the infrastructure and environment in our airports. Having recognised the importance of connectivity to this island and across the corporate and leisure sectors, testing must happen in the airports. We must support the Dublin Airport Authority and Shannon Airport in what they are trying to do to put that in place, and see what we can do to work with the airlines.

From our point of view, we will call out the flaws in what happened yesterday. We would be supportive of the airline industry in terms of its criticism of what happened yesterday at EU level. The issue was kicked down the road, possibly because of the timing issue insofar as case numbers are increasing right across Europe. Testing at airports must be a key factor in the recovery of travel and the aviation and airline sectors.

Dr. Chris Horn

I wish to make one more comment in response to Mr. Hackett as I do not believe we have heard it made this morning. It is that we should not forget the travel and health insurance industry. In terms of encouraging consumers to travel again, as Mr. Hackett was observing, I suggest that travel and health insurance are important aspects in encouraging consumers to travel again in this Covid environment, as is being clear about what insurance is available to them. I ask that the joint committee invite representatives of that industry to a meeting to get their perspective.

Mr. Pat Dawson

I totally agree. We know the type of action that is going on with insurance companies avoiding professional indemnity and personal liability insurance. Travel insurance was not worth the paper it was written on and most travel insurance companies asked consumers to go to travel agents, as they fall under the package travel directive and will provide a refund.

Chairman

How many insurance companies are in the market to provide travel insurance?

Mr. Pat Dawson

There are either four or five, at a maximum.

Chairman

How many of those provide the bulk of insurance?

Mr. Pat Dawson

Those would be Blue Insurance, Accident & General Insurance and the VHI. The VHI was particularly strong in passing the buck to the travel agent.

Chairman

We must be careful as no one from the VHI is here. I assume Mr. Dawson was making an observation.

Mr. Pat Dawson

It is an observation, yes.

Chairman

We can follow up on that with the various insurance companies.

Deputy Duncan Smith

I thank the witnesses for their testimony and submissions and the work they have done in recent weeks and months. This discussion is, to some extent, a continuation of the work done over the summer by the Special Committee on Covid-19 Response. It is unfortunate that we always seem to have the aviation industry before us when domestic pressures arising from Covid are moving in a particular direction. On tackling Covid domestically, the impact of the short-term measures of moving levels will take a few weeks. However, we must be clear and strong in our messaging that getting the aviation sector back up and running, as we all agree is needed, is a short, medium and long-term project. We cannot let the mood in Ireland affect what we need to call for in the aviation industry.

Travel agents are the forgotten sector in the aviation sector. In their representations in recent weeks, Mr. Dawson and Mr. Hackett did a good job in getting travel agents into the conversation. Have they had time to make representations on testing either to the Minister for Transport or senior officials in his Department? What is their impression of what came back from the other side of the table? I and other members of the committee are blue in the face talking about testing. Last week, Mr. Dalton Philips of the DAA informed us that the authority was ready to go and could carry out 15,000 tests a day from its own resources. He said testing would not impact on the public system, it could be done now and asked that the DAA be given the go-ahead. When the witnesses made representations on testing to the Government what was the response?

Mr. Pat Dawson

It has been silent on testing as such. There has been no feedback. We have put it out there that certain testing is the only solution because it provides certainty. The excuse being used is that we do not want to take from the HSE testing. Cork and Shannon airports are not talking about doing that but certainly it has to be done in a singular way by the airports. Without such an initiative, nothing is going to move.

Mr. Paul Hackett

The airports are the driver for testing. We are incredibly supportive of the initiative announced by the DAA last week as to what it can do. I am aware that the proposal was put to the Department but it does not seem to have gone anywhere since. We have had very good engagement with the Department of Transport on the matters that are relevant to us. It is our line Department and it has been very helpful in guiding and directing us.

Testing is a moot point for us because we are the travel agents. We cannot initiate it. The airports have to do so. It is key for the airports and the airlines and we will do whatever we can to support that. We will also call out the weaknesses in the current traffic light system or in the previous shades of green system we had for travel. We have to get back to travelling and having a safe environment for consumers. We have to look at best-in-class cases in Europe. Düsseldorf and Frankfurt airports have airport testing. Rome airport has been awarded a five-star Skytrax award. It has 40 biohazard staff in the airport working with passengers on a daily basis. Why are we not looking at those examples? How can we assist the DAA to get its testing protocol through? If the DAA has told the committee it can test 15,000 people a day, why are we not doing that? That would provide certainty, one hopes, for the medics who have genuine concerns in this area.

Chairman

Why is that not happening?

Mr. Paul Hackett

I have no idea. It is the single biggest inhibitor to travel being restarted in this economy across all sectors.

Chairman

I ask Mr. Hackett to give us his honest opinion.

Mr. Paul Hackett

Possibly it is timing and case numbers going high. I do not understand some of what we are doing in this country because we seem to be on solo runs on so many issues, and travel is one of them.

Chairman

What are we doing that Mr. Hackett does not understand? I will give him plenty of time to respond.

Mr. Paul Hackett

Last February, Italy was pandemic central yet it opened for inbound and outbound travel on 3 June. It has done so successfully and safely, and continues to have lower case rates than we have. We have lockdown, with travel and pubs closed. We have effectively closed entire sectors of our economy to no avail in terms of where community transmission rates are going. If we are calling out community transmission, we are acknowledging that we do not know where the cause of the infection has come from. That is not good enough when we are seven months in and the economy is in freefall.

Mr. Pat Dawson

The medical profession is doing a wonderful job, as we all know. Travel is like a bad word, by which I mean one is a pariah if one travels. Medical people have said travel is bad news and so on and the Government until now has certainly listened to that. The Covid app showed travel was responsible in 2% of cases. That percentage was just thrown in as a number with no scientific basis. In our engagement with the Government testing was never on its agenda.

Mr. Paul Hackett

We can get back to travelling safely if we provide the testing environment. We have case studies from customers who recently travelled for business through the airports in Frankfurt and Düsseldorf. They have highlighted the total dichotomy between Dublin Airport and these two German airports that are maintaining connectivity and providing the safe environment that consumers want for travel. We have got to move on this issue. It is somewhat ironic that we are treating travel as a pariah and have a 14-day quarantine in place, yet we can all travel north of the Border where the number of cases and infection rates are far higher and fly in and out of Belfast Airport where there is no quarantine requirement. There are anomalies all over the place here.

I appreciate that we have never been in this position before but we are where we are. The DAA has suggested it can put testing in place. We are dealing with the single largest indigenous sector of employers in Ireland, namely, tourism, both outbound and inbound. They include the Irish Hotels Federation, restaurants, cafés and attractions. There are between 270,000 and 350,000 people employed in the sector, depending on who one listens to. If we can resolve the safety issue and reintroduce safe travel by getting testing done in airports, we do need to do that.

Deputy Duncan Smith

I do not have much to add but this is the issue. It knits everything together in the aviation sector, from the travel agents to the airlines. It will keep workers in work. At the moment, I feel safer having someone from Italy, who has availed of a testing regime in an Italian airport, than someone from my home city of Dublin visit my house given the level of community transmission.

That is the way it is. We have said this time and time again. The Minister said he was considering a testing regime in early August. More than two months have passed and the authorities are still silent on the matter. Based on testimony we have received, my personal observation is that there is a blockage at the National Public Health Emergency Team, NPHET, on this. Public representatives and the sector's representative bodies are not asking for travel at any cost. I do not want to see planes put in the air recklessly. I want safe travel with reduced stigma. If I see on social media that someone has gone away, my instinctive reaction is to wonder what they think they are doing. If I knew a testing regime was in place, that feeling would go away instantly. That would allow travel to take off. We are going to be here week after week. We are seeing no signs from the Government that this is going to change any time soon. I am sorry I did not get to Dr. Horn, but the testimony we have just heard is very important.

Chairman

Did Dr. Horn's aviation task force give in-depth consideration to testing at airports? He has heard the committee members' comments. Can he give his overall perspective on how testing would fit into the revitalisation of the airline industry, with particular regard to Dublin Airport, Shannon Airport and Cork Airport?

Dr. Chris Horn

Indeed we did. We deemed it critical to restoring consumer confidence in flying. Our third recommendation calls for nationwide comprehensive testing and tracing. In June we felt the system was under-resourced and lacked investment and that addressing the issue nationwide would increase consumer confidence in travel. We stated that routine testing should be a cultural norm and provide public reassurance. We absolutely did consider the matter, and we fully support anything that increases testing and tracing ability.

Deputy Cathal Crowe

I wish to speak to Mr. Dawson and Mr. Hackett about the issue of pseudoflights. From May to late August-----

Chairman

Is the Deputy referring to ghost flights?

Deputy Cathal Crowe

I think there is a difference. Ghost flights involve the refund issue. Aer Lingus operated pseudoflights. Passengers made bookings but the flights never took place. Passengers will be refunded. If the Chairman does not mind, I will explain.

For about ten weeks Aer Lingus continued to advertise three flights a day from its Shannon Airport base. Customers would make a booking and pay. About ten days later they would get a follow-up email saying the flight was not operating and they would be refunded. To the dismay of travellers planning journeys, the refund has still not come through for some people. Some refunds have taken six months to issue. At a time when a lot of people are hard pressed for cash it was amoral of Aer Lingus to continue to take bookings when it had no intention whatsoever of flying. The company took money from customers and promised to reimburse them but it is delaying that process. Consumer cash was coming into the airline, albeit not much because bookings decreased hugely, and being held up in its inner processes. It is only very slowly being reimbursed.

Chairman

The Deputy should be conscious that Aer Lingus is not here to outline its position.

Deputy Cathal Crowe

Absolutely. I am more than happy to keep going in this vein if the Chair does not mind. This issue is quite distinct from what Ryanair did. Ryanair continued to fly and put the challenge to consumers; flights were operating and if customers did not embark the airline would not refund them. Was Aer Lingus's practice of operating notional flights for ten weeks and delaying the refund process damaging to the travel agency sector? I am sure travel agents were booking people in that period. I am sure some people made bookings in that period, although perhaps not many. Could Mr. Hackett respond?

Mr. Paul Hackett

Bookings were so few at that time that this was not really an issue. To be perfectly honest, I am not aware of this practice going on much. I do not doubt what the Deputy says for one second but the issue was not apparent to us. At the beginning of this pandemic the degree of uncertainty around how things would change and whether flights would restart may have caused airlines to make changes to schedules and rosters very close to the time of departure, as little as a week or two before. For the most part they did their best to keep us up to date. They were putting flights into the system which they probably hoped would operate. I do not know that there was malice in it. The refunds should have been processed by now, but we would not have seen this as a serious problem.

Mr. Pat Dawson

If a customer came to a travel agent at that time we would advise them not to make a booking because we knew those flights would not depart. People who made online bookings themselves would not have been aware, but as Mr. Hackett says, this did not happen to the degree that we would complain about it.

Deputy Cathal Crowe

I was told by Aer Lingus that the airline was testing the waters. It may have done that once or twice, but continuously cancelling flight after flight for a sustained ten-week period damaged the brand of Shannon Airport. A lot people reverted to using Dublin Airport.

Finally, I absolutely agree with the points made about testing. People will only have the confidence to board a flight if they know that those in front of and behind them are Covid-19-free. Passengers should be tested at the point of departure and probably at the point of arrival as well. That will allow travellers to exit the arrivals hall, book a car and go to a hotel Covid-19-free. Are there any other measures which the witnesses believe would instill consumer confidence in the coming months?

Mr. Paul Hackett

That is the single biggest ask and the single most translatable result where travel is concerned. Yesterday's budget showed what the Government is willing to spend. What will testing and tracing cost? If we can do that, we can much more quickly and effectively ensure that the money the State spends pays dividends.

Mr. Pat Dawson

As the Chair knows, we need to get this country working again. We need to get aeroplanes in the sky and increase inbound and outbound tourism. As Mr. Hackett says, every day of restrictions costs millions. Testing would cost a small amount of money by comparison. It must be done. I ask this committee to apply pressure anywhere it can to get testing going.

Chairman

That will be a theme of our upcoming work. We will write to the Minister about testing. He is scheduled to appear before the committee next week regarding the Estimates. We will hold a committee meeting devoted specifically to testing. We will invite whatever witnesses we need to discuss that specific issue, including NPHET and Department officials. We will look at it empirically. I want us to do this as quickly as we can.

Deputy Duncan Smith

I am not sure if such an individual will be available, but perhaps we could find someone involved in a testing regime at a European airport.

Chairman

We will do our own body of work. We will decide which witnesses to invite and hold public hearings on this specific issue. Time is of the essence.

Mr. Pat Dawson

If we can be of assistance at any time we will be glad to help.

Deputy Joe Carey

Perhaps we could look at practices at Leonardo da Vinci–Fiumicino Airport in Rome.

Chairman

Absolutely. This is a body of work we will have to do in private session. It will be a comprehensive meeting. The message is coming through from Mr. Hackett, Mr. Dawson and Dr. Horn.

Mr. Paul Hackett

The DAA and the national airport associations will be able to pull in relevant witnesses from the airports.

Chairman

The role of this committee is to do a constructive body of work. One is needed on the specific issue of testing.

Senator Jerry Buttimer

Arising from today, I wholeheartedly endorse inviting NPHET and the Minister for Transport, Deputy Eamon Ryan. We should also invite the Minister for Health, Deputy Stephen Donnelly.

Chairman

The issue around testing before flights also appears to fall under the remit of the Department of Foreign Affairs. We will probably have to invite the Minister for Foreign Affairs, Deputy Simon Coveney, as well.

Senator Jerry Buttimer

This is about testing, testing, testing. As our two excellent witnesses have said-----

Chairman

There are three.

Senator Jerry Buttimer

I will come back to Dr. Horn in a second. This is about restoring the confidence of the travelling public. Dr. Horn must be available to continue his role as chair of the aviation task force so that it can be reconvened.

The other point for us as a committee is that we should not be afraid to re-invite in representatives from the airlines in the context of the refund issue we heard about earlier from our guests but also to acknowledge the work of the Irish Travel Agents Association and the many people working in that very important sector, who have drawn the short straw through no fault of their own.

My final point is about re-establishing confidence in a safe manner. From our perspective as a committee, we should not fear this work ending up long rather than short because this is a very important matter.

I thank all our guests for their attendance.

Deputy Ruairí Ó Murchú

On testing, Senator Buttimer made a fair point and mentioned possibly inviting in the Minister, Deputy Donnelly. In any event, the Minister last Thursday spoke about HIQA carrying out antigen pilot tests. To me, that was being sold as a means of dealing with this solution. The question is why it has taken so long to start it. If that is the process we are going down-----

Chairman

There is a body of work to be done.

Deputy Ruairí Ó Murchú

Representatives from HIQA need to appear before us and they need to be people who have particular information about that.

Chairman

Correct. We need to do a comprehensive, short-term body of work.

Deputy Ruairí Ó Murchú

As I said earlier, I am slightly annoyed by the answer we got on Wednesday from the Minister, Deputy Eamon Ryan, and the Minister of State, Deputy Naughton. We all received a science lesson about testing and what is or is not good about antigen testing. When the Minister, Deputy Donnelly, was asked a question the next day, he replied that pilot schemes were about to be operated. I think that information should have been brought to us earlier.

On the insurance difficulties spoken about earlier, I met a number of travel agents in Dundalk fairly early on. They said that when things got back up and running and there was a green list, people came to them to book essential travel or for whatever reason. They bought tickets and packages and went abroad. If an area then fell off the green list, travel agents were worried that they would be wholly responsible if the person got sick. The travel agent would have been on the hook for it, even though the person chose to go and was informed that the destination he or she had booked was no longer on the green list. Once again, travel agents found themselves in a brutal scenario.

Mr. Paul Hackett

It comes down to the travel guidance and advice. Insurance applies when someone travels within the advice of the Department of Foreign Affairs. That advice, pretty much since the start of March, has been against non-essential travel, and then the green list was published. The green list is similar to the traffic light list; it can change quickly, which does not give consumer certainty. It will not resolve the issue of rebuilding travel and restarting the aviation and tourism sectors in this country.

Chairman

For the sake of simplicity, what are the criteria to get airline travel insurance?

Mr. Paul Hackett

To get travel insurance, one has only to purchase it-----

Chairman

At the moment, must it be for essential travel?

Mr. Paul Hackett

One can get it only if it complies with the Department's guidelines that state persons can travel. The insurance company will honour the travel insurance provided that the person is travelling in compliance with the Department's guidelines.

Deputy Ruairí Ó Murchú

Am I correct in what the travel agent told me, namely, that if somebody decides to fly to a country on a green list and that destination then falls off the green list, and if that person then gets sick or whatever, there is a responsibility on the travel agent. That is how the travel agent I spoke to sold it to me. Is that an issue Mr. Hackett is aware of?

Mr. Paul Hackett

The travel agent is ultimately responsible at all times. The insurance can go from being in place to not being in place.

Chairman

That is a separate legal arrangement outside of the arrangement with the travel agent.

Mr. Paul Hackett

Yes.

Chairman

It is an arrangement between the person travelling and the travel insurance company.

Mr. Paul Hackett

Exactly.

Mr. Pat Dawson

It depends on the company's terms and conditions.

Mr. Paul Hackett

This is a falling-into-a-pandemic-type scenario. Previous cases like this would include a terrorist attack. For one particular destination, the Department stated it did not want travel to that destination because it was a terrorism risk. It is clearly defined. In this case, however, we are dealing with such a global scenario that it is proving very difficult for all the providers.

Deputy Ruairí Ó Murchú

I accept that. My point, and the one made to me, was that it was just another set of circumstances where travel agents have fallen between multiple stools-----

Mr. Paul Hackett

It comes back to the package travel directive, which was dreamt up in the 1990s.

Chairman

I thank Dr. Horn, Mr. Hackett and Mr. Dawson for taking the time to attend the meeting. We want to take up a couple of the items. Mr. Dawson might write to us about the key points including refunds and what is required both short term and long term. The Commission for Aviation Regulation has written to Ryanair and others, and our guests might revert to us on that matter. They might also comment on the longer-term issues and on what is required in regard to testing, so that we can follow up on it.

Deputy Ruairí Ó Murchú

Are we going to write to the commission?

Chairman

We will do that but I would prefer there to be a bit of a structure and the correct information. We will then follow up with the Minister, Deputy Eamon Ryan, and the airlines. We would very much welcome it if the task force on aviation recovery was put back in situ and we strongly recommend that Dr. Horn take the helm there and report back. As a committee, we will look at what should be terms of reference. Our first item of work will be when the Minister appears before the committee next week to discuss the Estimates and we will raise testing issues. Immediately after the mid-term recess, our first item of business will be public meetings about testing. If members agree to that, that is the area we will discuss.

The industry directly employs 140,000 people. We are an island nation and Dr. Horn referred to the impact on business. We want to work within public health guidelines. Covid is with us for the immediate future and we must find a way to operate. In keeping with what Deputy Carey and others have suggested, we should bring in expertise including NPHET and representatives of international airports that have good testing in place. There is no reason that, with virtual conferencing now, we cannot do it. Dr. Horn might correspond with the committee as to what he believes is needed in the terms of reference for a new aviation commission. We take his points on the new aviation policy but that is long term. There are immediate issues with Covid. We would welcome him corresponding with us as a committee and giving a general outline of what he thinks should be the terms of reference of any new, reformed commission for aviation regulation.

The next meeting of the committee will be a private, virtual meeting at 4 p.m. on Tuesday, 20 October 2020, where we will consider all the items that have not been discussed.

The joint committee adjourned at 1.20 p.m. sine die.