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Seanad Éireann debate -
Thursday, 2 Apr 1992

Vol. 132 No. 2

Adjournment Matter. - Shannon Stop Policy.

First, I welcome the Minister, Deputy Kenneally to the House whom I have not met. I am disappointed that the Minister, Deputy Geoghegan-Quinn, is not here to complete the triumvirate of women with a consensual approach towards the retention of the Shannon status.

I am grateful that time has been allowed for this issue in advance of the decision promised by the Minister, Deputy Geoghegan-Quinn, on the long running debate over direct US flights into Dublin and the continued designation of Shannon Airport as the transatlantic gateway to this country. The tug of war over flights from America has gone on for a long time, yet we have seen some benefit from the fact that the controversy has continued. For Shannon one of the most gratifying results is that the new Minister for Tourism, Transport and Communications, Deputy Geoghegan-Quinn, has recognised and acknowledged that the uncertainty about Shannon caused by the demands of the Dublin lobby has hit investment and morale in the Shannon region and beyond. It took a long time for people outside the Shannon region to understand the damage that was being done and that if damage was being done to Shannon, it was being done to Ireland in tourism promotion and in generation of industrial and business investment.

Another positive by product of this long debate was quickly identified by the Minister when she acknowledged at Shannon that many myths had been exploded during her briefing there by the Shannon status and signal groups. In the past six months we have seen what this row is all about. First, we were led to believe the demands for flights into Dublin were about tourism and getting more United States visitors into the country. We were told that it was all about getting new carriers to operate into Ireland, as if they were some gigantic queue of America's most bankrupt airlines waiting to get rights into what is essentially a seasonal destination.

Then, despite persistent promptings from the Dublin lobby and its allies and overseas trips geared to round-up prospective operators, the only carrier that came forward with any proposal to operate into Dublin was Delta Airlines — not a new carrier but one already operating into Ireland. It proposed to come on direct routing into Dublin from New York on the prime route of Aer Lingus, to compete with the Irish airline which has been pleading that it cannot survive on the Atlantic route without cutting back on its costs. Where would Aer Lingus be against an operation like Delta which can offer free flights anywhere in North America to anyone who will buy a return ticket from Detroit to Gatwick until the 15th of this month?

Finally, it became clear Aer Lingus came out of the clouds which had been whipped up by the Dublin lobby. Suddenly the Shannon stop was not about tourism, not about getting more visitors into the country, or getting more airlines to serve Ireland. It was all about the capacity of Aer Lingus to manage and to find solutions to its own problems. It turns out that Aer Lingus is so obsessed with finding a short route through its problems that it is prepared to sacrifice Shannon Airport and its gateway in the interests of sticking with the course it has charted. Aer Lingus is arguing that its survival depends on by-passing Shannon, but the price Aer Lingus is asking is the future of the West. What Aer Lingus is pushing for must be resisted because it is bad for Ireland, bad for business and, most of all, it is bad for jobs and job creation.

Over the past 20 years the finest job creation record has been in the Shannon region, thanks largely to the back-bone of quality overseas investment attracted by Shannon airport and its services and the programmes which have cultivated new crops of native enterprises. Since the start of the seventies, industrial employment in the Shannon region has increased by 5,000. With the hindsight of recent reports, we all know how much that is worth, not only to the Shannon region but to the entire country. Firms flourish in the Shannon region. They grow and they put down roots. At a time when other parties in the Oireachtas are absolutely at one with the social partners in making unemployment the number one task on the national agenda for action, any move to diminish or downgrade Shannon would be not only counter productive but almost suicidal. It reminds me of the act of Saddam Hussein setting fire to the oilfiels of Saudi Arabia, wanton destruction of the most important resource and support to economic activity.

You do not have to take it from me that Shannon Airport and its gateway stands as a cornerstone of the national economy. I am biased in favour of Shannon, but there are others who fully appreciate just how valuable Shannon is to this country, and especially to our futures. Commissioner Bruce Millan, the EC Commissioner for Regional Affairs, he went on record last month and stated that he would not like to see the major EC investment in Shannon jeopardised. He also stated that what has being going on around Shannon Airport was what he called proper regional development.

The John Hume report prepared for the European Parliament in 1987 looked at Ireland's regional problems. It strongly urged that development and build-up of population and activity should be shifted away from Dublin. That same report highlighted the Shannon region as a model of balanced regional development.

More recently the Culliton report review of industrial policy mapped out the way ahead for the critical task of job creation, and put the spotlight on the special approaches which have been taken in the Shannon region which once again were seen to be ahead of the rest in taking steps to make things right for the country. The Culliton report, which we will be debating next week, highlighted special resources and attributes which should be the base for building new industry, enterprise and secure jobs, and there were quality infrastucture, development of clusters of specialist industry such as aerospace, development of indigenous industry, good access with airports and other facilities and development of freighting traffic and regional structures. If you were to take all these together, these resources and strengths are an identikit picture, to my mind, of the Shannon region.

While we are debating and talking about other aspects of the Maastricht Agreement thees days, it is important to stress that the entire Maastricht Agreement has as its overriding principle social and economic cohesion. The Single European Market aims for social and economic cohesion from the new Europe but also from each member state. This is also one of the guiding principles of the recent Fine Gael policy on regionalisation which again takes the structures, strategies and the success of the Shannon regions the model of what can be achieved throughout the country for the good of the country.

I am glad the Shannon gateway debate has gone on until this time because Shannon came under heavy attack last year. When US tourism to all parts of the world was in decline, Shannon was singled out by vested interests here and blamed for what was caused by the Gulf War and deep recession in the United States. I am glad to tell this House that there is a great improvement in the number of American tourists coming to Ireland this year. I am delighted to say that bookings into Bunratty and other castle banquets are already up by 40 per cent on the same time last year, and things are looking better by the day. This recovery is taking place in what is traditionally a slow year for American tourism.

We know the people of the United States do not tend to travel as widely in an Olympic year or a presidential year, and both have coincided this year. There is also the continuing recession in the United States. If US tourism was falling off this year, those factors would not be blamed in quarters that are all too predictable. In those same quarters let there be no suggestion that the American visitors are coming back to Ireland for any reason other than what we all know. Americans like the west. They like what it has to offer, which is peace, tranquility, a pure environment and lavish outdoor natural resources and amenities.

Let us get another thing straight at this time as the figures for US tourism in Ireland are climbing again. This year the capacity being offered on the North Atlantic by Aer Lingus is down on what was offered in 1990, which was the last good year of our drive for increased tourism and the jobs which flow from the industry. It is admitted that Aer Lingus capacity from New York and Boston is certainly up on last year, but 1991 was a slump year for American travel. Compared with 1990 Aer Lingus seats available on the Atlantic are down by almost 13 per cent this year, but Delta have stepped up its seat capacity by over 30 per cent out of Atlanta.

Aer Lingus has also pleaded during this campaign against Shannon that it wants to get on with the job of building up transatlantic business out of the UK and to become a hub between the US and Europe. What Aer Lingus has not said is that it was offered a chance of doing just that ten years ago and was offered payment to do so. In the early eighties, Shannon Development offered £140,000 in support funding to Aer Lingus for development of a Manchester to Shannon service. That opportunity and finance which would be worth some £250,000 today was spurned, yet today Aer Lingus is spending and losing millions on its European operations, which includes its efforts to develop Manchester as source of transatlantic business. Aer Lingus turned down the chance of setting up a service from Manchester to Shannon which, had it been established, would now be chanelling UK passengers to Shannon, where the only US emigration pre-clearance station in Europe would help to sell the service by helping to cut up to two hours off waiting times in United States airports on arrival. Aer Lingus did not recognise that opportunity, just as it continues to scorn the prospect of getting involved in a hub operation at Shannon, which could not only secure the future of Shannon but also provide the network of service into Europe from Shannon which would add new vitality to the lifeline which Shannon is to the west.

I am glad of the opportunity to day to raise this matter and I am glad Senator Honan got ten minutes to speak. I know that Senator Howard, who has fought hard in the past number of years, and Senator Foley and others, would have liked some time but, unfortunately, there is such a demand to speak on the retention of the status of Shannon, that we would need a full day's debate.

In Limerick on 11 April there will be people on the streets marching peacefully but rallying in support of employment in the area and an overwhelming wish to retain the status of Shannon. I hope the Minister of State will convey to the Minister, Deputy Geoghegan-Quinn, our extreme concern that the status of Shannon should be retained.

I thank you, a Chathaoirligh, and Senator Jackman for allowing me some time. It is with special delight that I speak here this evening in the presence of the Minister, Deputy Kenneally, who is a long time family friend. I hope he will be a Minister for a long time.

I appeal to the Government and to the Minister, Deputy Geoghegan-Quinn, to look at this matter with great care. She has been gracious to us since taking up her portfolio. Shannon is the greatest example of successful regional development in the country today. It will celebrate 50 years in existence in 1993. I am not talking about the effect of the proposal on three constituencies; I am talking about the effect on as many as 12 counties where jobs are concerned. The simple question I must ask the Government is why change something that is so successful? Why allow anybody to do away with between 3,000 to 25,000 jobs? That is why we have the support of SIPTU. When you explain the true and full story of Shannon, why its status should be retained, and why no planes should be allowed to overfly it you immediately have people who are not aware of the situation with you. Reference has been made to the bilateral agreement of July 1990 which states that any direct services to Dublin from the USA will set aside immediately the full bilateral agreement for Shannon and all routes. That is quite important. Shannon is the only airport in Europe with US pre-customs clearance but it requires 350,000 passengers to hold that clearance. This means that if we divert any passengers to another airport we will lose that pre-customs clearance. It is crucially important that the Government remember that.

I am puzzled why our national airline, Aer Lingus, have not worked with Dr. Tony Ryan and GPA. Ryanair has been the most successful aircraft leasing company in the world. Rather than competing with Ryanair, Aer Lingus should get off those routes for the nation's sake. I am puzzled why they decided to take on Ryanair rather than letting them operate routes they have successfully served.

Let me put on record here this evening my sadness at the information given regarding the profit and loss of Aer Lingus. In the seven years up to 31 March 1991, they made a profit of £23 million on the Atlantic route and lost £46 million on all other routes. Therefore, trans-Atlantic passenger profit per head was £8.21 and all other routes at that time lost £2.50 per passenger. What I am saying is that if Aer Lingus had the same profit on their other routes as they had on the North Atlantic, having their flights landing at Shannon, they would now be in profit of £190 million. That information comes directly from the Aer Lingus annual report.

I also wish to put on record the figures on four other routes. The profits on the trans-Atlantic route was £7.6 million; the loss on the London route was £18 million; a loss of £5 million on the Manchester route, and a loss of £8 million on domestic flights. That information comes directly from the Boston Consultancy Group, London.

I rejoice with Aer Lingus in their success in hotel ownership. What do they intend to do with the £51 million they have on hand as a result of the recent sale of a hotel in New York? Traffic through London, has been used as a stick with which to beat Shannon — the rest of the nation versus Dublin. I wish the Dublin lobby would stop saying it is Dublin versus Shannon; it is not and we never saw it that way. Former Fianna Fáil Governments never saw it as being Dublin versus Shannon. Whoever is saying that now should stop. The reason we have a lot of traffic through London to the United States is clear. In one week 31 flights go out from Ireland to the United States; 447 flights go from London, and they are cheaper.

The hub has been mentioned. This is the most exciting plan Aer Rianta have put on paper. Shannon Airport is to be the centre. I wish we would all work together. The Shannon hub plan will allow airlines direct access to the North Atlantic cities without any controversy and straight to Europe. The only transfer required will be at Shannon Airport. Shannon Airport has always relied on transit traffic. This is nothing new. That is why we have been so successful and why Aeroflot, for which we on the west coast are grateful, and Aer Lingus have enjoyed such success. The benefits of the hubbing facilities are for all who use Cork Airport, the Connacht Regional Airport and all the airports outside Dublin.

The hub plan for Shannon Airport must be put in place at a cost of £6 million; the same hub plan in Dublin — and these are the figures provided by the specialists who have put a costing on this — is £60 million. It is not possible to have two hubs when one is talking about a feed to the airports. Cork Airport have asked for that hub. They want the feed from Shannon rather than coming to Dublin. Somebody told me recently that he landed in Dublin and it took him 15 hours to get to Cork.

I would like to refer to Waterford Airport. I understand the Minister, Deputy Geoghegan-Quinn, and the Minister of State, Deputy Kenneally, are deeply concerned about the significant curtailment of regional air services into Waterford Airport. There is no point in business people landing at Waterford Airport at 12 noon and expecting to take off at 1 p.m. to get to Dublin or to other points. Aer Lingus have done this. The balanced regional development of the tourism industry in the south-east must be kept.

Because of the service and the Shannon gateway at the moment, exports out of Shannon were worth £2.5 billion in 1991. No Government can lightly brush that aside. Yesterday the Minister for Tourism, Transport and Communications announced an Aeroflot Moscow-Chicago-Shannon service from 15 May 1992. I welcome this. Aeroflot will also have a Shannon-Miami-Washington service.

I want the Minister of State, Deputy Kenneally, to convey our message to the Minister, I know she will listen to us. I was a friend of Aer Lingus — Senator Howard knows this well — in tougher days than today and I would be sorry if the personnel at the top saw us as anything other than pro our national airline. However, we have to look at this issue from a nationwide point of view and all we are asking is that we leave Shannon as it is, set up the hub and get more people using the airport.

I apologise to Senator Jackman that the Minister, Deputy Geoghegan-Quinn, could not be here this evening and that I broke up the triumvirate of concerned women. I would also like to thank my good friend, Senator Honan, for her kind remarks at the outset. I will certainly convey the remarks Senators made here today to the Minister.

Following the appointment of the Minister for Tourism, Transport and Communications one of the first issues she set out to deal with was that of the Shannon stop policy. Since then, the Minister has embarked on a round of discussions with all the major interests concerned including Aer Lingus, Aer Rianta, Bord Fáilte, the fly Dublin Direct Committee, Dublin and Galway Chambers of Commerce, the Irish Airline Pilots Association, the Irish Congress of Trade Unions, Ryanair, Shannon Development, Shannon Status Committee, Shannon Town Commissioners and Signal, representing the workforce, an impressive array.

All the parties consulted by the Miniser have expressed in a very clear and open fashion their assessment of the implications of a change in the Shannon stop policy. Arising from these consultations the Minister has been made very aware of the pivotal role which trans-Atlantic services plan in regional development and employment creation in the west. At the same time, the Minister is acutely aware of the crisis facing Aer Lingus on their trans-Atlantic operations, their inability to undertake the investment in fleet replacement so urgently needed on these routes and of the need to ensure that Ireland is in a position to take full advantage of the increasing number of US tourists coming to Europe. The Minister is at present assessing the outcome of the recent consultations as well as submissions received both for and against the change in policy. While she has not yet formulated any proposals in the matter for consideration by the Government, she hopes to be in a position to do so after Easter.

The Seanad adjourned at 5.15 p.m. until 10.30 a.m. on Friday, 3 April 1992.

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