Seanad Éireann debate -
Wednesday, 24 Mar 1965

Vol. 58 No. 15

Air Navigation and Transport Bill, 1964—Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time:

Minister for Transport and Power (Mr. Childers)

The objects of the Bill are stated briefly in the explanatory memorandum circulated with the text. Under the provisions of the Air Navigation and Transport Act, 1936, the Warsaw Convention has the force of law in this country in relation to carriage by air between Ireland and other countries to which the Convention applies. In general terms, the Convention provides that when an accident occurring during international carriage by air causes death or injury to a passenger or damage to cargo there is a presumption of liability on the carrier. The Convention enables some compensation for death or loss to be obtained, without litigation. The contracting carrier's liability for each passenger under the Warsaw Convention was limited to 125,000 gold francs, approximately £3,000. Under the Hague Protocol to the Convention, which was given effect here by the Air Navigation and Transport Act, 1959, the limit was doubled to about £6,000. In any case, however, where wilful neglect or misconduct can be established against the carrier there is no limit to his liability.

The Warsaw Convention governs only cases where the contracting carrier performs the carriage and does not contain particular rules relating to international carriage by a person who is not a party to the agreement for carriage, such as, for example, the case where a passenger has made an agreement for carriage by one airline and that airline arranges for the passenger to be carried by another airline.

In order to cover cases of this kind, the Convention, Supplementary to the Warsaw Convention, for the Unification of Certain Rules Relating to International Carriage by Air Performed by a Person other than the Contracting Carrier was concluded at Guadalajara, Mexico, on 18th September, 1961. Under this Convention, if an actual carrier performs the whole or part of carriage which, according to the agreement of the contracting carrier with the passenger or consignor, is carriage subject to the rules of the Warsaw Convention, then he, as well as the contracting carrier, shall be subject to these rules. The contracting carrier, is subject for the whole of the carriage contemplated in the agreement, the actual carrier solely for the carriage which he performs. Section 2 of the Bill will apply the Guadalajara Convention to carriage between this country and other contracting states.

Section 4 of the Bill reenacts with amendments section 18 of the Air Navigation and Transport Act, 1936, which concerns the manner in which the liability imposed on the carrier by the Warsaw Convention in respect of the death of a passenger shall be enforceable and contains for the purpose of enforcement a definition of the expression "member of a family".

Section 18 of the 1936 Act was first amended by section 4 of the Air Navigation and Transport Act, 1959, to provide that in deducing any relationship, a person adopted under the Adoption Act, 1952, shall be considered a lawful child of the adopters and a person in loco parentis to another shall be considered the parent of that other. The Civil Liability Act, 1961, further amended and replaced section 18. This amendment was designed to bring the law in regard to fatal air accidents, as far as possible, into line with the general law governing fatal injuries. The Civil Liability Act, 1964, amended the general law for fatal injuries by repealing the provision in earlier Acts limiting claims for mental distress to three years. It is desirable to make the same provision in respect of air accidents. It is also necessary to take account of the Guadalajara Convention in the application of the section. Rather than introduce a series of amendments in the present Bill it is proposed to reenact the entire section as amended.

The Warsaw Convention, as amended by the Hague Protocol, can, by section 20 of the 1936 Act and section 8 of the 1959 Act, be applied to internal carriage as well as international carriage by air. It is desirable that internal carriage should also have the benefits of the Guadalajara Convention and section 5 of the Bill so provides.

The rationalisation of the present controls over commercial air services is one of the main purposes of the Bill. I must emphasise that the controls referred to regulate air transport from the commercial viewpoint only. The existing controls over the technical and operational aspects of aviation are not in any way affected by the Bill. For example, the regulations concerned with ensuring the safety of the public will continue to apply to all aircraft, whether or not those aircraft come within the scope of the Bill.

At present the Minister's powers in this matter derive from two measures. The first is the Air Navigation (International Lines) Order, 1935. This Order, which was made under the Air Navigation Act, 1920, was expressed to give effect to certain provisions of the 1919 Paris Convention on aerial navigation. Under the Convention each contracting State was to make prior authorisation a condition of the establishment of international airways on its territory. The Paris Convention has been superseded by the Chicago Convention of 1944 but the International Lines Order was continued in force under section 15 of the Air Navigation and Transport Act, 1936. There are, however, certain doubts as to the validity and efficacy of the Order in present day conditions and its replacement is desirable.

The Air Navigation and Transport Act, 1946, provided for the bringing into operation of and giving effect to the Convention on International Civil Aviation signed at Chicago in 1944. The Chicago Convention recognises that each contracting State has control of the air space over its territory and consequently proceeds to lay down that no scheduled international air services may be operated over or into the territory of a contracting State except with the special permission or authorisation of the State concerned and then only in accordance with the terms of such permission or authorisation. Contracting States, including Ireland, normally accord this permission or authorisation by way of bilateral air agreement with the State of Registry of the airline concerned.

Such agreements are based on the premise that the State has control and that the Minister for Transport and Power, acting for the State, may attach any conditions he thinks fit to permissions or authorisations for air services issued by him. It is thought desirable, therefore, at this stage, by enactment of the present measure, to put beyond doubt the State's control over air services to, from within or over its territory. It should perhaps be made clear that the intention is not to introduce any new or onerous restrictions on international aviation operations but to ensure that the State's powers are clear cut and unequivocal. It is proposed that this control will be exercised through the provisions of section 6 of the Bill in conjunction with sections 7 and 8.

The main control authorised by section 6 will be brought into operation on such day as the Minister may appoint by Order. This will afford sufficient time for the preparation and publication of the necessary Order under section 7 and authorisations under section 8.

Section 6 of the Bill restricts the operation of air services to, from, within or over the territory of the State unless the service is either covered by an order under section 7 of the Bill or by an authorisation under section 8. The services to be permitted by order under section 7 will include:—

(a) the type of services covered by our bilateral air agreements;

(b) flights for non-traffic purposes and overflights which may be operated by countries which, like Ireland, are parties to the International Air Services Transit Agreement which ensures between signatories automatic rights to overfly and make stops for non-traffic purposes; and

(c) the individual flights or short series of non-scheduled flights permitted by the Multilateral Agreement on Commercial Rights of Non-Scheduled Air Services in Europe.

These flights are all of a type covered by international agreement, either bilateral or multilateral. The list is not exhaustive; other categories of flights and extension of the present categories may arise in future. It would be difficult to delineate and keep up to date all categories of flights in the Bill; authorisation by Order seems, therefore, a more appropriate method of dealing with the matter.

In addition to the types of services to be covered by Order a number of air services of various kinds are operated such as charters, inclusive tours, casual non-scheduled flights etc. Control over such services is intended to be operated under section 8 of the Bill. Under this section the Minister may issue authorisations to operate one or more flights under such provisions and conditions as he thinks appropriate.

It is intended that the sections of the Bill which authorise control of international services will be used also for control over internal air services and over Irish aviation businesses. At present under section 84 of the Air Navigation and Transport Act, 1936, the Minister for Transport and Power may authorise the operation of internal air services only if they are carried on by one of the statutory companies— Aer Rianta or Aer Lingus or a subsidiary company—or by a person who is already authorised to establish an international air service, provided such international air service and the internal service are carried on with the same aircraft.

Conditions have changed to such an extent since 1936 as to justify repeal of section 84 and the introduction of the measures proposed in sections 6 and 8 of the Bill. This enables the Minister for Transport and Power in his discretion to grant an authorisation to any person to operate an air service within the State.

Apart from the categories of flights which I have already mentioned, there is in Ireland a certain amount of small aviation business which at present is carried on by virtue of licences granted under Part X of the Air Navigation and Transport Act, 1936. The work authorised under these licences falls into three categories (i) aviation private hire business; (ii) pleasure flights; (iii) instruction flights. Private flying as such is not subject to control under this part of the Act, neither is aerial photography or other such aerial work. It is most desirable that our legislation regarding the control of air space should be as compact and consolidated as possible and in view of the generality of sections 6 and 8 of the Bill, it is no longer necessary to retain Parts IX and X of the Air Navigation and Transport Act, 1936. It is proposed, therefore, to repeal these Parts and to cancel licences issued under Part X. Fresh authorisations under section 8 of the Bill will be issued to the holders of existing licences and the conditions and provisions attaching to the new authorisations will as far as practicable be in line with those attaching to the existing licences.

The definition of an air service in this Bill will exclude from the proposed controls private flying, executive type flying and aerial work generally as well as instruction flights. These excluded categories will, therefore, in future be subject only to the operational control exercised from a technical and safety aspect and will not require a special licence or authorisation under this part of the Bill. Part X of the 1936 Act contains provisions relating to applications for the grant and renewal of licences, attachment and amendment of conditions, commencement and duration of licences and other similar matters of detail. It seems more appropriate to deal with these matters of detail by means of regulations rather than by an Act of the Oireachtas and it is so proposed in the Bill. The fees to be charged for authorisations will be fixed in consultation with the Minister for Finance.

It has already been mentioned that under the Chicago Convention scheduled international air services may be operated over or into the territory of a contracting State only in accordance with the terms of the permission or authorisation given by the State concerned. Here also it is felt desirable, at this stage, to put the position beyond doubt by enacting sections 9 and 10 of the Bill. Section 9 gives the Minister power to fix by Order rates and fares charged on air services while section 10 gives him the right to approve or refuse to approve of the fares or rates proposed to be charged on such services.

I do not anticipate that the necessity for fixing rates for carriage of passengers, cargo or mail by Order will arise very frequently because the present method of fixing international rates is on the whole working satisfactorily. This method, which is set out in most of our bilateral air agreements, provides that the rates to be charged on the air routes governed by the bi-laterals shall be agreed by the designated airlines of the countries concerned. Agreement shall where possible be reached through the rate-fixing machinery of the International Air Transport Association (IATA). The rates so agreed must then be submitted for approval to the aeronautical authorities of the countries concerned. If agreement is not reached the aeronautical authorities themselves shall try to determine the tariffs. If the aeronautical authorities fail the matter can be referred to arbitration appointed by the parties themselves or in the final analysis by the International Civil Aviation Organisation.

As I have indicated, the present method of fixing international air fares and rates, through the IATA machinery, has on the whole worked quite satisfactorily. As I have already stated, the IATA arrangements insofar as they affect transport to or from Ireland are subject to my approval. In these circumstances, it is not likely that use will often be made of the rate fixing powers in the Bill to control scheduled airline operations unless IATA fails to agree on rates. The fixing powers will of course also be applicable to non-scheduled operations and to non-IATA airlines, so that if necessary, control of these rates, which are not at present subject to any special control, can be effected.

Sections 11, 15 and 16 of the Bill provide for the making of regulations for the keeping of records and statistics, the production and inspection of these records and the submission of extracts, copies and summaries. I think Senators will agree that these provisions are desirable.

Sections 12 and 13 of the Bill provide for penalties and detention of aircraft. There are two types of penalties, administrative and legal. Administrative penalties can take the form of revocation or suspension of the traffic rights of the airline concerned. The advantage of this type is that it is efficient and can be implemented at once. The disadvantage is that it is on occasion too strong a sanction and may not then be enforceable in that it would mean an unfair punishment on the travelling public. Legal penalties as provided in section 12 of the Bill include fines and/or imprisonment. On summary conviction the fine proposed in section 12 is £100 or imprisonment for six months or both. On conviction on indictment the money penalty is raised to £1,000. These sums are, of course, small as far as airlines are concerned; a more real deterrent is the power of detention of aircraft under section 13 of the Bill. The ultimate sanction would, of course, be denunciation of the bilateral agreement with the country of registration of the air operator concerned.

This Bill relates to commercial aviation only and therefore proposes to exclude State aircraft from its scope. The Minister for Transport and Power may, however, by Order, direct that such provisions of the Bill as may be specified in the Order shall apply to State aircraft. A similar provision appears in the 1936 Act, and it is desirable to repeat it here.

The usual provision regarding the laying of Orders and Regulations before both Houses of the Oireachtas applies to all Orders and Regulations made under this Bill.

Mr. McGuire

There is nothing in this Bill with which anybody could quarrel, at least, insofar as it is designed to give effect to the provisions of the Guadalajara Convention, which has to be done in order to carry out international arrangements between all the airlines and then, of course, there are certain amendments in relation to the Warsaw Convention relating to transport.

In addition, the Minister is taking certain controls over internal aviation. The international arrangements are by agreement between all airlines. We all agree that the Minister should have the powers provided in the Bill over the airlines flying internally. From a safety point of view, that is absolutely essential and as time goes on, there will be increasing need for more and more control of all kinds because of the growth of air traffic. At present the airlines have an extraordinarily high safety record and it is only by control that that record can be projected into the future.

We all agree with the Bill insofar as it gives effect to the Guadalajara Convention but the Second Reading provides us with an opportunity to say a few words about airlines and about our own airline in particular.

One feature of international airlines is that there is really no competition because rates are fixed internationally and it is difficult to see how, in the present set-up, there can ever be any competition as regards fares or freight rates. At present freight rates are too high because of the fact that weight is the real consideration in flying, both in relation to passengers and freight. It was pointed out in the Dáil that for highly valuable goods that do not weigh heavy, air transport is the best, the quickest and perhaps even the safest way to send such merchandise but in the case of goods of a heavier nature, air transport is much too expensive.

I do not know what the position in that regard will be in the future but there is a proposal at present that certain kinds of heavier type freight will be carried at special rates. I do not know how far that proposal has gone. It seems to me that the only competition that exists at present is in the matter of service—if one airline gives better service than others—and in personnel. Recently there was talk about having films projected in aeroplanes. I hope that will never happen. Film shows would be a disturbing factor to those people who do not want to be disturbed in that way and it would be an additional nuisance to the present arrangement allowing people to smoke.

I suppose that originally smoking was allowed in aeroplanes because people were nervous in the early days of flying and smoking cigarettes relieved tension. That time has passed. It is a grave imposition, especially now that it is known that smoking can be so detrimental to health, that people should be allowed to impregnate the passenger cabin of an aeroplane with smoke and those who do not want to smoke should be forced to breathe in tobacco fumes. Personally, I find that most objectionable. Some passengers may feel ill as a result of a bumpy passage and by the fact that people are puffing cigarettes alongside them. The question of permitting smoking in aircraft should be reconsidered. It is not a great deal to ask people to abstain from smoking for the one and a quarter hour duration of the flight from Dublin to London. Many passengers would welcome a restriction on smoking.

The debate on the Bill in the Dáil was availed of for the purpose of eulogising State operations as opposed to private enterprise. This is not a case in which comparisons should be made between State enterprise and private enterprise or in which a State enterprise can be eulogised because it is as successful as Aer Lingus is. Aer Lingus is a great success but, in fact, airlines are included in the special kinds of operations that could only be carried out by the State in our particular circumstances. The capital investment is enormous, as also is the depreciation of equipment of all kinds, especially as newer and faster planes seem to be the order of the day. It is only a State-operated company that could afford to put up the capital investment necessary and to stand the high charges of operation and the high rate of depreciation. Nobody quarrels with that. An airline is one of the operations that simply could not be carried out, in Ireland at any rate, by private enterprise.

We are all very proud of Aer Lingus but the airline is an expensive operation and we know that it does not, in fact, really make a profit when the capital investment is considered. It makes an operating surplus. I have no objection to that. We are, I think, all very happy with Aer Lingus and our other airlines so far. As I said at the outset, this Bill is necessary in order to implement international arrangements and we are in full accord on it.

Mr. Murphy

The Seanad should, I think, agree to the Second Reading of this Bill because it is desirable we should enact as quickly as possible something which has been internationally agreed. I must say I was surprised to discover the Warsaw Convention did not apply where one changed carriers. If one bought a ticket on one airline and was switched to another at some point in the flight one was not covered then by the Warsaw Convention. It is very necessary, in my opinion, that any other airlines participating in the completion of a flight should be bound by the Warsaw Convention.

I understand that is one of the matters covered in this Bill. With increasing traffic between Ireland and the Continent many international airlines participate and it is very desirable that all the participating companies should be similarly covered. Many people would, in fact, prefer to complete their journeys to and from the Continent in Aer Lingus planes, but the flights up to now have not always been suitable. With the new jets I imagine many more people travelling between this country and continental countries will prefer to take Aer Lingus flights. I know from my own experience that, if there is any choice, apart from normal patriotism, I prefer to travel by Aer Lingus. I have always had the impression that one is in better and more capable hands on Aer Lingus flights. That may be imagination, but the general impression seems to be that Aer Lingus is a very good, efficiently operated nationalised undertaking. We can all be proud of its success.

The Minister said that under section 7 there would be practically automatic rights to overfly. In the 1946 Act the authority of the State to control its air space was recognised and it was under that Act, I think, that there was an obligation on planes flying over this country to set down at Shannon. For some period in our air history that was the position. If planes wanted to pass over our air space there was an obligation on them to set down at Shannon. One of the purposes of that arrangement was, I think, to compel planes using our air space not merely to set down at Shannon when they found it convenient to do so or when operational or safety purposes dictated it. I do not know when that changed and I do not know the reason for the change. I should like the Minister to tell us what the reason is for the change when he comes to reply. The practice now is to overfly the southern part of the country and not to set down at Shannon. Anyone travelling down south sees the trail of the jets passing over almost continuously. I think only a small fraction of the number which pass over set down at Shannon. Am I right in thinking there has been a change in the obligation? If there has been I should like the Minister to tell us why the change has been made.

Professor Quinlan

This Bill is governed largely by international agreements and all we can do is to give it a welcome. Obviously, we are not free to make changes in its provisions. The Bill provides largely for the regulation of commercial operations. These are themselves governed by very strict IATA rules. It always seems to me that these rules are framed to suit the big, independent carriers, such as American Airlines, Trans-World Airlines and so on. They are rather restrictive on what one might describe as small, national airlines like our own.

We should not, I think, operate the Convention in a restrictive way because I look on Aer Lingus as the property of the country as a whole. Empty seats mean a loss to the country. If we could use these seats to boost some other part of our economy, whether it be freight or tourism, we would be to a large extent merely putting the money from one pocket into another. If, by giving greater grants to Bord Fáilte for the development of tourism, that money finds its way into filling those empty seats on Aer Lingus transport, ultimately it will go into the reserve fund of Aer Lingus for the replacement of aircraft and to that extent the taxpayer will be relieved of a burden he might otherwise have to shoulder. The Government have the power to tax rates, as they apply to the company as a whole, and the charges with reference to the services provided. In that way they can get back some of the money, if that is thought desirable.

While our State companies are doing very good work, it seems to me there is a tendency to operate in isolation and on a rather strict bookkeeping basis. The Government should have at some point a high level committee to ensure there is a proper taking up of the slack in these services by other services where this merely means a transfer payment from the Exchequer to the first service on to the second service. In the case of tourism, for instance, there should be more inducements in the way of providing cheap travel for groups of tourists to this country. That travel, paid for by Bord Fáilte, would in turn boost the coffers of Aer Lingus and achieve the desired result of taking up the empty space and, at the same time, providing for the replacements. By and large, aircraft modernisation is proceeding so fast and the cost is increasing so rapidly that it is impossible to see in the foreseeable future that our airline would be able through its own efforts to provide the necessary capital to keep in the air navigation race.

In regard to reciprocity of flights, it seems rather difficult to see why we have not made greater head-way in this regard with the United States. We have a charter to operate only to New York. I often wonder why that cannot be extended, even if hard bargaining is necessary, to enable our airline to operate into Chicago and even to the west coast. When you stand in the airports in Chicago or Los Angeles, one is struck by the number of carriers' flags coming in from all the other countries, but the Irish flag is not present there. We know there are difficulties, but it is about time we were making some headway in overcoming them.

I think the welcome accorded to travellers at Shannon is singularly inept. It is just the same as at an airport anywhere else. You simply get off your plane and make your way in. There is no suggestion of this wonderful Irish welcome. There is no suggestion that they have touched down in Ireland, except that the fields around look rather green. I would have thought a special effort would be made to provide a real Irish welcome at Shannon, and I would ask the Minister to try to do something about it. Also, the music on the Aer Lingus jets could much more reflect our national character than it does.

This Bill deals with the commercial operation of aircraft but the other twin problem, the certification of aircraft, is a field into which we are venturing now with the Potez factory. I wonder what the position in that is at the moment? Have we got a fully equipped certification section ready to perform the functions which will arise in the course of the next year or so?

There is a provision about overflying. Apparently, very little sanction is required for this. At the moment it does not cause any inconvenience. But, seeing the jet trails in the sky, we should begin to think about the nottoo-distant future, perhaps ten years' time, when supersonic aircraft will fly. Unfortunately, their path, as charted at present, leads straight across the southern part of Waterford, Cork and Kerry. The very disagreeable and dangerous effects of the supersonic boom is something we do not want to have to put up with, if it can be avoided. No country or part of a country would welcome it. Consequently, I suggest the passage of supersonic aircraft will have to be treated in a very different way from the passage of the ordinary aircraft we have at present. Now is the time to begin thinking on this before we are presented with a fait accompli within the next ten years.

We know the great complexity of booking arrangements and the necessity for their mechanisation. That calls for very large computer facilities with great storage and considerable access times. That is likely to prove a very costly undertaking. I think Aer Lingus are looking at it. However, I suggest to the Minister that before this becomes in any way finalised, it would be necessary to look on the country as a unit and particularly at Dublin—look at what computer facilities you want here and arrange those in the most efficient manner possible. The peak load of airline booking will occur in the ordinary tourist season, whereas in between we are likely to have great surplus capacity. Arrangements should be made to co-ordinate that so that it will be available in the slack periods for carrying out a census or for doing many of the other large-scale jobs required today in a modern State. I suggest the Minister should see that this is co-ordinated and done before any vested interests are brought in to such a degree that at that stage the optimum solution cannot be obtained. The whole thing should be centralised, and the Minister might well consider then renting those facilities to Aer Lingus. They should be available to the Statistics Office or to any other large-scale user of time on computers.

I cannot allow the Bill to pass without referring to section 7. Again, this reflects the modern trend of government by Orders. I would have thought the Minister could at least have given us some idea of the Orders he will bring in of a restrictive effect. I would much prefer to see it done by way of positive statutes. Their very putting down would give rise to a discussion here which might bring forth very valuable ideas appertaining to the regulation of air traffic, reciprocity and the other factors concerned in this. It is a pity the Minister did not even hold up the Bill for another couple of months until he had advanced to a greater degree with the Orders necessary so that we would have an opportunity to discuss these preliminary draft Orders.

Mr. Sheldon

I have very little to say on this Bill because, as has been remarked already, by and large it is giving effect to an international agreement. I was slightly provoked into saying something by Senator McGuire's remark about prohibiting smoking in aircraft. If the smoker is expected to give up for an hour, the non-smoker might be expected to do likewise. I think there is a fallacy in the Senator's argument that people are now accustomed to air travel and do not need the possible soothing effect of a cigarette. I doubt if anyone flying for the first time is at all reassured by the experience of others. I think people going on a flight for the first time are probably just as nervous as Senator McGuire was on his first flight. The fact that he has acquired a certain ease and calm is no consolation to other air travellers. I do not think the argument is a good one.

In relation to what has been said by several people about Aer Lingus, I would like to agree. I have been fortunate to travel with quite a number of airlines, and I do not think any of them is better than Aer Lingus from the point of view of comfort, care and attention. I have not been quite as lucky as Senator Murphy. Apparently, he got into the hands of the staff; I never got quite so far. It is an extremely well run airline, and I have heard this remark passed by non-nationals. It is not, as Senator Murphy said, a matter merely of patriotism. Quite a number of people in England have remarked to me on how very pleasant it is to travel by Aer Lingus rather than by another company which I need not mention.

I was fascinated by a theory propounded by Senator Quinlan that the public would prefer to pay taxes to subsidise Bord Fáilte rather than to subsidise the airlines which seem to be on the point of using Bord Fáilte money to buy up space——

Professor Quinlan

And tourism.

Mr. Sheldon

If there were a hidden subsidy to Aer Lingus, the taxpayer might get suspicious at being encouraged to pay money towards a good enterprise like Bord Fáilte. I should not like to see that sort of development at all. When money is voted for a certain purpose, then, if it is not needed, let it go back to the Exchequer. Reconsideration the next year may show that less should go to one service and more to another but I should not like to see it given to one service and then passed on to another.

I trust that the Minister will not listen to Senator Quinlan when he looks for this Irish welcome at Shannon or anywhere else. I could not imagine anything worse. After an air journey, my idea is to get out of the place as quickly as possible. I look forward with horror to being received at Shannon or any other airport with someone else's idea of a traditional welcome.

Mr. Childers

I thank the Seanad for accepting this Bill so kindly. Senator McGuire referred to the still high air freight rates. As he knows, there are reductions for bulk consignments and a great deal is being done to consolidate and alter and amend the commodity rates with a view to getting more traffic. It is a process that is fairly continuous. We are in an intermediate stage with regard to air freight progress. Air freight is increasing all over the world, but in certain areas, where distances are shorter, the container traffic service, even for quite small unit loads, provides rates which offer terrific competition to the airlines, particularly when a container service carried across the Irish Sea can be delivered to the consignee within 24 to 36 hours. I hope there will be further consideration of air freight rates in the future, just as there have been in respect of passenger rates.

In the past ten years, the élite of the airlines and the élite of aeroplane designers have been concentrating on passenger or military planes. I think some companies have been changing that in order to give those airlines in charge of freight facilities as high a capacity as those in charge of the passengers. I asked Aerlínte some years ago to make sure that the best possible people were employed in the air freight field. It is equally true that not very many special air freight planes have been designed and often they are suitable only for certain types of traffic. I hope that will change and that we shall have the same kind of positive thought about increasing the volume of air freight as has taken place in connection with passengers.

The volume of air traffic across the Atlantic is such that we hope it will benefit Shannon as a depot, an entrepôt for freight there. It is interesting to note that all the warehouses built by the Shannon Free Airport Development Company have already been rented by various companies so that the air freight business there should show an improvement, although it has been affected by the coming of jet planes which fly across the Atlantic without stopping at Shannon. There has been that effect on the traffic.

Senator McGuire and some other Senators spoke about the financial position of the air company. I want to make quite sure that nobody can accuse me of trying to conceal the facts, as I have been so accused particularly by members of the main Opposition Party. About £10 million of the air company's capital is not remunerated: the interest on principal is therefore paid by the taxpayer. However, for £14 million of capital to be invested from, say, about two years ago until 1968, all but £2 million will be remunerated by the air company. Therefore, this is a company which, in the past, has not remunerated its capital but is now doing so, as I believe it should.

The reason for the non-remuneration of the earlier capital invested in the air lines is simple. If Aer Lingus had started as a company that was obliged to pay its way, it would have run air services probably only to Birmingham and London until it had accumulated sufficient profits to buy the planes to run air services to Liverpool, Manchester, Glasgow, Edinburgh, and so on. The Minister of the day naturally believed we should expand the traffic at the greatest possible rate for tourist purposes and because many people of our own country living in Great Britain wish to return for holidays, but, above all, to bring the people of Northern England, particularly, and the people of Scotland as close to our country as possible because we believe they would benefit the tourist business, so that the air company is a company of a mixed policy—partial non-remuneration and partial remuneration of its total capital.

I think the decision is wise. It is based purely on reasons of a practical character. Any Minister in charge of aviation would always have to look at each new injection of capital on its merits to see what the relationship of the capital to the taxpayer should be. I am satisfied that at the moment the air company is doing well enough to get into the position in regard to its new capital of remunerating it in one way or another.

Senator Murphy asked why international air services no longer require to land at Shannon. The answer is that this requirement ended in 1957. It was quite inevitable because of the growth of jet air traffic and aeroplanes designed to fly far greater distances than would be required in the ordinary way so we made the inevitable change.

Senator Quinlan raised the question of various methods of encouraging tourist traffic to this country. I think the best scheme is for Bord Fáilte to make use of its general promotional funds to encourage traffic to come to Ireland by all the means of transport available. The estimated expenditure in the Budget for Bord Fáilte in 1956/57 was £398,000 and this coming year it is £2,600,000 and Bord Fáilte is entering in a bigger way into the United States promotion field, into the European field, while at the same time recognising that the great majority of tourists coming to this country will come from Great Britain, our nearest neighbour.

He also raised various questions in regard to empty seats on Aer Lingus and Aerlínte. The position is that Aer Lingus and Aerlínte have a very high load factor, that is, the percentage of seat-mile capacity available to seat-mile capacity sold. They have had a particularly high air load factor on the Atlantic; in fact, I think they hold the record for two years. There is no chance of the company becoming wealthy. It will need every penny for depreciation and for development expenses so the question of the air company accumulating large reserves does not arise, and is unlikely to arise in the future. There are also overhead costs, labour costs, depreciation and maintenance costs, and the costs of fuel.

The load factor relates to the length of the season. The longer the season the better for the Air Company, and the shorter the season the more difficult it is to provide aircraft which will be flying only for a few months of the year. Unless one can hire aircraft from countries with a different tourist season, that can be a very expensive operation. It has been found that cheaper fares increase the off season traffic. The cheaper fares across the Atlantic which have been arranged, after a lot of negotiation and trouble, have increased the total traffic of Aerlínte. Aer Lingus have also arranged group flights, charter flights and late night flights, at lower fares, with the permission of IATA. The European air fares across the Irish Sea are a little lower than the prevailing international fares so the fares in relation to the general IATA structure are a little lower.

Fares have been increased and reduced at various times depending on the total financial calculation at the moment. This is a difficult calculation to make because we have to make quite certain that if we have cheaper fares we will get the traffic in the off season, and are not merely inviting enormous numbers of people to come here over a period of six or eight weeks when, in fact, there would not be hotel accommodation for them. As I have said, it is a difficult calculation to make and one could speak on it for a long time, but I think I have explained it sufficiently for the House to appreciate the problem, and my attitude and that of the air company.

Senator Quinlan referred to our American rights. We have rights to Boston and New York, and we have rights to Chicago which we shall be exercising in the near future. Senator Quinlan also referred to the Irish welcome at Shannon. I think the best thing we can do is to have the place looking attractive, to have Irish goods on display, and to make sure the staff are kindly and welcoming, which I am absolutely certain they are. The staff in the neighbouring hotels and hostels are equally welcoming. All the people I know in Shannon are very pleasant people. The taxi drivers are all very pleasant, and I have talked with quite a number of them. The people who greet travellers at Shannon are very nice to meet. When passengers have recovered from the effects of the flight—as Senator Sheldon suggested, fatigue and lack of sleep—they can join a medieval tour which is now really world famous. There were something like 21,000 medieval dinners during the past year. There is also native dancing and music and they can go to a typical Irish hosterly, or have a typical Irish tea in an Irish cottage, or go to a medieval castle for 16th century entertainment. That is a unique type of tour even by European comparisons.

Senator Quinlan referred to supersonic boom. I agree that is a matter of great importance. I should like to be able to say we could prevent supersonic boom. One difficulty is that under the international convention we cannot actually control air space at more than the distance of the territorial waters around our coasts, so that planes can fly happily ten or 12 miles off the Irish coast, and not fly over the country, but cause the most terrific boom. A question is now being asked by various countries using up-to-date measurements of what constitutes supersonic boom: if one could confine it to what sounded like the faintest far-off thunder on a summer's day, would that be tolerable as apart from the maximum crack and explosion that break windows and shake ceilings? All that will have to be studied in order to preserve the tranquility and peace of the countryside. There is one country which I shall not mention whose Minister told me he had made a decision that there would be no supersonic boom of any kind over his country but, as I have said, if the design of the plane is one which gives a kind of silvery faint thunder which would not be noticed if the wind were blowing, would that constitute boom? This has to be studied technically.

Professor Quinlan

It is an urgent problem.

Mr. Childers

Yes. I am also glad to be able to tell Senator Quinlan that we have formed a State companies committee to study the use of computer capacity, and to make sure that computers are not idle but used to their full capacity where that is technically feasible. At present Aer Lingus are studying the best method of carrying this out. I am sure Senator Quinian knows that buying computers is like buying aeroplanes. When you decide to order one, you hear that another will be ready on three months from a certain date, which will be better and cheaper that the one you are about to order. Quite obviously the air company will have to make up their minds and make the order. It may be a gamble but they must make up their minds.

I do not think it would be practicable to discuss all the Orders and Regulations made under the various sections of the Bill dealing with the control of transport. They are very comprehensive and detailed. The answer is that very many of the Orders are simply a repetition of those already in existence, and there has been no great criticism in regard to them. I think I have answered all the questions put to me.

Agreed to take remaining Stages today.

Bill considered in Committee.

Sections 1 to 5, inclusive, agreed to.

SECTION 6.

Question proposed: "That section 6 stand part of the Bill."

Professor Quinlan

In connection with the restrictions imposed by IATA on the commercial regulation of the air company perhaps I might try to put my earlier proposition to the Minister in a slightly more concrete form. It is simply this: If, as the Minister said, the air company will find it difficult to meet its own capital requirements in the future with all the development there may be and so on—if we all agree on that—therefore, if it was foreseen now that in six years' time, say, the air company would need a grant equivalent to £1 million or £2 million to modernise its fleet over and above what it had from its own resources, that could be an outright grant or, if you give a low interest loan, it is effectively equivalent to a grant. If that position is foreseen, the proposition I was making is that that £2 million could be used in the intervening period through the agency of other State companies to buy up some of the vacant seats in Aer Lingus aircraft during that period. The money would still pass into Aer Lingus and would be available to them for their capitalisation and at the same time it would have given a boost to tourism or commercial freight or for whatever purpose it was used in that period. I think we can get a double use out of money used in that way.

In raising that point I did not in any way wish to indicate that Aer Lingus had more vacant seats than any other airline. We are proud that it has not. Still it has about 40 per cent vacant seats and I think there should be some means of putting those seats to work for our economy as a whole.

Mr. Childers

The question of vacant seats is a most complex one. There are some cases in which no matter what one does one could not get seats filled by the injection of any given amount of money. For example, there is the Christmas traffic of Aer Lingus. While it is true that more people are going from this country to visit relatives now because of the economic travel, on the whole traffic is still mainly to Ireland before Christmas and from Ireland after Christmas. The load factor of that period calculated on the basis of flights east and west is not therefore as high as one might expect.

A similar traffic exodus takes place from England at the time of the summer season. There are all sorts of reasons for empty seats that might not necessarily be filled by the injection of money from another source. I think the best way of dealing with this is to make quite sure that the capital structure of the air company is composed in the best way and if some emergency arose where it was quite obvious you had a great chance of securing masses of traffic but for the time being it might not be wise to ask Aer Lingus or Aerlínte to remunerate capital in full and interest or to repay capital over a short period, we could devise systems of payment of interest which would enable the aircraft to be flown economically.

Again, all of this depends upon what the passenger rate structure is likely to be in the future. All I can say is that we shall examine the situation at all times with a view to finding what is the best that can be done. One way out of the difficulty is that sometimes it is possible for Aer Lingus to hire aircraft which are not being used in a country where the low season does not correspond to ours and equally to let aircraft during our low season when they are having a high season in other places. There are many ways of doing this but I would not be prepared to commit myself to the desirability of providing a grant from public sources in order to fill the seats of the air company.

Professor Quinlan

The season I have in mind, of course, is the off-season. Nobody is suggesting that we should boost traffic during the peak season. We are always being told of the necessity to increase traffic during the off-season, and if the grant succeeded in providing attractive free seats on Aer Lingus or assisted passages through Bord Fáilte, I think it would benefit both the tourist industry and Aer Lingus.

Question put and agreed to.

Sections 7 to 15, inclusive, agree to.

SECTION 16.

Question proposed: "That section 16 stand part of the Bill."

Mr. Sheldon

I should be glad if the Minister could tell us, if it is possible, what precisely subsection (1) of the section means.

Professor Hayes

There is only one subsection.

Mr. Sheldon

It says:

An order or regulations made by the Minister under this Act may authorise the Minister to make regulations and give directions for carrying out the purposes of the order or regulations in respect of such matters and things as may be specified in the order or regulations.

Mr. Childers

That is not section 16.

Mr. Sheldon

I think the confusion arises because I am looking at the Bill as introduced instead of as amended. I am looking at the wrong copy.

Question put and agreed to.

SECTION 17

Question proposed: "That section 17 stand part of the Bill."

Mr. Sheldon

May I repeat what I said, in reference to subsection (1) of section 17? I think it is anything but clear.

Mr. Childers

It simply lays down that an order or regulation made by the Minister may authorise him to make regulations and give directions for the purpose of carrying out the purposes of the measure in question, in order to have it put into effect. It is the usual drafting phrase to enable the Minister to do everything he needs to do in making regulations.

Professor Quinlan

The Minister says it is the usual one but I have never seen one quite as complex as this before.

Mr. Childers

I think the draftsmen, in this Bill, exceeded themselves in their desire to make everything absolutely clear as regards what the Minister could do.

Professor Hayes

I never saw subsection (1) before. If it is there in the interests of clarity, it certainly has not accomplished its purpose.

Question put and agreed to.

Sections 18 to 20 inclusive, agreed to.

Schedule agreed to.

Title agreed to.

Bill reported without amendment, received for final consideration and passed.