Seanad Éireann debate -
Tuesday, 15 Apr 1997

Vol. 150 No. 17

Adjournment Matters. - Fifth Freedom Rights for Aeroflot.

Mrs. Taylor-Quinn

I thank the Cathaoirleách for affording me the opportunity of raising the important matter of extending fifth freedom rights to Aeroflot to allow them to pick up passengers in Shannon Airport and transport them to New York.

Aeroflot International has been a valued customer in Shannon Airport for over 20 years and, as a result of Aeroflot deciding to land at Shannon for refuelling purposes, much employment has been provided in the airport and indirectly in the region in general. When the Soviet Union split up, the Aeroflot airline was somewhat diminished in size. However, it continued to do business at Shannon.

The aviation world is rapidly changing and it is important that the Minister, the Government and the Department of Transport, Energy and Communications recognise this and, operate to take a proactive position now rather than a reactionary position at a later stage when certain decisions have been taken at international level. I compliment Minister Dukes for the fact that he has visited Shannon on a number of occasions to meet with interested parties, namely Signal, Aer Rianta and the marketing committee of the RDO in the mid-west region. The fact that the Minister came to Shannon to consult with these groups is extremely important. It was unfortunate that a certain Member of the Opposition jumped on the fact that the Minister had visited the region and used it in a negative and destructive fashion. Since Shannon lost its sole transatlantic status, this was the first time any politician in the mid-west used a situation to his or her own political advantage. That has been very negative for the region and I assure the Minister that the views expressed by the said Member of the Lower House do not generally reflect the views held by public representatives in the mid-west region. It is widely recognised that the Minister, even prior to becoming Minister for Transport, Energy and Communications, always had a very positive view in relation to Shannon Airport.

I am asking the Minister to look at the application which is before him and to treat it in a positive fashion. It is important that the Minister recognises that Aeroflot business is fundamental to the international status of Shannon Airport. I believe that they should be allowed to pick up passengers at Shannon and take them to New York. During the summer season in particular, Aer Lingus is unable to meet demand. It is imperative that the consumer is given a choice. By allowing Aeroflot to pick up passengers, the Minister would be giving the customer such an opportunity. It is important to recognise that the CIS states are going from strength to strength, with constant improvement in their economies. We should respond to that by co-operating and improving our contacts with them and by accommodating Aeroflot at this stage of its development.

Since the removal of Shannon Airport's sole transatlantic status some years ago by the then Minister, Deputy Cowen, we have witnessed a dramatic expansion of traffic through Dublin. There is no corresponding increase in Shannon. The increase in traffic through Dublin does not come through the United States and the argument which was put forward for the removal of transatlantic status from Shannon has not been substantiated at all. The traffic increase in Dublin comes primarily from Europe and the UK. Perhaps that is a matter which should be discussed on another occasion. Hopefully, the Minister will impress on the national airline the need to provide better services to Dublin, into the UK and mainland Europe from Shannon. Aer Lingus are very remiss in that matter and many in the mid-west believe that they only come to the mid-west to cream off good business in the height of summer. Aside from that, they do not seem to be interested in providing serious services into the UK and mainland Europe.

It is important that there is balanced economic and social development throughout the regions but particularly in the mid-west region. Granting fifth freedom rights to Aeroflot will assist in bringing some balance to the region. Aer Rianta and the various representative organisations in Clare and the mid-west region fully support the application. I would again like to take the opportunity to thank the Minister for the meetings he has had in the area and for listening to people's concerns about the future of Shannon. I urge the Minister to consider granting fifth freedom rights to Aeroflot as soon as possible. We are now facing into a summer season where much traffic goes through Shannon, and Aer Lingus is unable to meet the demands on the transatlantic route. It is important that Aeroflot be given the opportunity to provide transport into New York from Shannon.

An Cathaoirleach

I would like to extend a particular welcome to the Minister for Transport, Energy and Communications, Deputy Dukes, as this is his first visit to the House this session.

Minister for Transport, Energy and Communications (Mr. Dukes)

I thank Senator Taylor-Quinn for providing me with my first opportunity to address this House in my current function and my first opportunity to address it in over ten years.

Successive Irish Governments have consistently encouraged, developed and supported Aeroflot's valuable contribution to Shannon Airport. This co-operation between Shannon Airport and Aeroflot has yielded benefits to both sides both in terms of traffic for Shannon and of job creation in the region. In financial terms the airline's contribution to the Shannon region has been estimated at £12 million a year. Employment in the region, between direct and indirect jobs, generated by the airline's presence at Shannon is estimated at 200. Aeroflot's co-operation with Shannon Airport began with its use as an important transit point, but this co-operation has grown and developed over the years. It is the Government's desire and objective that this co-operation should continue to grow and develop.

In this context, as the Senator is of course aware, Aeroflot already has extensive rights at Shannon Airport. Under the Ireland/Russia Air Agreement they have full fifth freedom traffic rights at Shannon, that is the right to pick up all transfer and local traffic, for flights to all points in Central and South America and for Washington and Miami in the US. They were also granted similar rights on a temporary basis to Chicago. In addition, they were granted rights by my Department in 1994 to transfer passengers at Shannon from airlines of the former USSR onto Aeroflot services to all points in the US including New York. This allowed Aeroflot to establish their transatlantic hub at Shannon in 1995. In 1995 and 1996 Aeroflot connected passengers westbound to New York, Chicago, Washington and Miami. Passengers connecting at Shannon originate not only in Russia but also in Slovakia and Belarus. Currently Aeroflot are operating to New York direct from Moscow.

What Aeroflot have now sought is full fifth freedom traffic rights between Shannon and New York, that is the right to also carry local traffic. I am at present considering this application and am investigating in depth all of the pros and cons and all of the possible implications of a decision either way. The issue is most definitely not a black and white one. It is much more complex and the possible implications must be carefully weighed.

One of the most important issues to be considered is the effect on existing long-standing Irish and US services to the US and, in particular, Aer Lingus and Delta scheduled services. That is not to say that it is part of aviation policy to protect Aer Lingus or any other airline for that matter. On the contrary, I seek to encourage competition in the aviation sector. However, this must be balanced against ensuring the long-term viability of strategic airline connections. On the other hand, I must also consider the possible benefits for Shannon and the region in the context of additional traffic, jobs, the long-term commitment of Aeroflot to Shannon and the desire to continue to nurture that commitment. I am, of course, fully conscious of the importance of the fact that Aeroflot now have the capability to fly direct from Moscow to the US and the desirability of maintaining an Aeroflot hub operation in Shannon.

As part of my examination of the application I have had extensive consultations. I have met and discussed the matter with the Russian Federal Aviation Ministry and with Aeroflot in Moscow. I discussed the matter at length with the chairmen and chief executives of Aer Lingus and Aer Rianta. As the Senator said, I went to Shannon Airport last month to discuss this and the more general issue of continued growth activity at Shannon Airport with the Shannon Airport marketing consultative committee and with SIGNAL. I subsequently discussed the Aeroflot application with Shannon Airport management. Having had these consultations, I am now in the process of finalising my conclusions and I assure the Senator I will make a decision on the matter shortly. If I decide in favour of the application I do not expect services to begin this summer. I have been informed by Aeroflot that it would not be in a position to begin operations on the basis of this application until around September.

I would like to put on record the Government's commitment to traffic growth at Shannon. As I said earlier, I went to Shannon last month to discuss with the Shannon Airport marketing consultative committee and with SIGNAL the type of action we could take to ensure continued growth activity at Shannon Airport and the continued development of the airport as an important driver of the economy of the mid-west region. I am glad to say that in many respects the Senator's views and those of SIGNAL coincide with mine.

I, too, regret that a Member of the Opposition tried to make a little political capital from straightforward political common sense. However, after the rebuttal of his more silly remarks in the Clare Champion of last week, he may think twice before making such wild statements again. Both of the groups I met in Shannon and the other interests with whom I discussed the matter are in agreement that Shannon Airport needs better links with Dublin, the UK and the Continent. I assured everyone, as I have the Senator this evening, that I would be happy to help develop matters along those lines.

Mrs. Taylor-Quinn

Does the Minister agree the interests of the national airline cannot be allowed to sabotage those of the region and that the interests of the mid-west region must be given priority in this instance?

Mr. Dukes

I hope that when I reach a conclusion on this issue, which I hope to do shortly, the result will be a net gain for everyone concerned.