Skip to main content
Normal View

Seanad Éireann debate -
Thursday, 11 Oct 2001

Vol. 168 No. 5

Adjournment Matter. - Aer Lingus Restructuring.

I thank the Cathaoirleach for affording me the opportunity to raise this matter. I also thank the Leas-Chathaoirleach, the staff of the House and the Minister of State for waiting until I was able to be present in the Chamber.

This is an issue of national public interest. However, it is also of specific interest to Shannon because the brunt of the proposals in relation to flight reductions apply to the airport there. These proposals are extreme and dramatic and must be addressed directly by the Government. Aer Lingus proposes to reduce the number of flights going through Shannon each week by a total of 72. That is an enormous reduction and, not to mention the impact it will have on the region in general, it will render the airport non-viable.

These reductions include the cancellation of the Baltimore/Washington flight, the Newark flight, the Belfast-Shannon flight and the Paris-Shannon flight, a reduction in the number of flights from Dublin to Shannon – there will be no flights from the capital to the airport after 3.30 p.m. or 4 p.m. each day – and the cancellation until March 2002 of flights to JFK Airport in New York. This is unprecedented. Such a development never occurred during the worst economic period in our history. During the last recession, nothing of this nature took place at Shannon Airport. It is unacceptable that such a draconian proposal should be put forward by the management and the executive of Aer Lingus. There is an onus on the Government to deal with this matter directly and ensure it is addressed.

This is a serious matter and its initial effects will be felt by workers at Shannon Airport. I refer here to those who work for Aer Lingus, maintenance workers and all others employed there. The knock-on effects throughout the region in general will be dramatic. There are over 168 factories from Sligo down through Galway, Mayo, Clare, Tipperary, Kerry, Cork and Waterford which export their goods through Shannon Airport. The level of goods exported through the airport is substantial. In fact, the majority of the goods exported by Aer Lingus go through Shannon and a high percentage of these are produced by multinationals, including Waterford Crystal, in the counties to which I refer and sent for sale in the United States. Cargo exports are carried on passenger flights leaving Shannon Airport and it is vital for the continuing viability of industry in the region that such flights continue.

It must be recognised that companies considering locating their operations in the region in the future will see it as non-viable in light of the level of reduction in flights. This could prove hugely detrimental and it will make the job of IDA Ireland and SFADCo extremely difficult. The Government has a responsibility to ensure that this matter is dealt with. The Minister for the Environment and Local Government recently published a document on spatial strategy in which 16 regions were identified. The Shannon and wider Limerick area is ideal for development. However, a blow to Shannon Airport such as that to which I refer would lead to a downward trend in development in the region. The Government has a responsibility to address this problem.

Arguments have been put forward to the effect that people are not travelling. People can be encouraged to travel. The major tragedy of the twin towers is being used as an excuse by Aer Lingus at this stage. It is remarkable that the brunt of the company's proposals impact on Shannon Airport. Those proposals cannot be allowed to proceed.

The proposals also have a dramatic significance for the tourism industry. I accept that responsibility in this area rests with the Minister for Tourism, Sport and Recreation. However, if there are no flights into an airport people cannot enter a region. The late night flight from Dublin to Shannon was particularly useful, not least for business people and tourists wanting to enter the region from mainland Europe. That flight must remain in place. Under the new flight proposals for the airport, people will not be able to fly out of Shannon in the morning and carry out their day's business in London, Paris or other cities in mainland Europe because there will no longer be a late night connection from Dublin to Shannon. That is unacceptable. If business people are obliged to stay overnight elsewhere, the prospect of travelling becomes increasingly unattractive to them. I urge the Minister to address these issues directly.

We cannot always seek permission to act from Europe or look to it for funding. There are times when Government must take responsibility for its actions and make its own decisions. In this instance, the Government must see the critical importance of maintaining flights operated through Shannon Airport by the national airline. The Government owns 95% of Aer Lingus and, therefore, responsibility for the company rests with the Government. It was grand to hear the Taoiseach state earlier today that the Government will oppose any call from Europe to end the stopover at Shannon Airport for transatlantic flights. However, he should cop on to himself and look at what is being done by his company, Aer Lingus, in respect of Shannon. He should not utter pious aspirations about what might emanate from Europe in the future. That is another day's work which should only be dealt with when the need arises. The Taoiseach must deal now with the proposals put forward by the State-owned airline in relation to Shannon Airport. Pious platitudes in respect of another matter are, quite frankly, poor consolation to the people in Shannon.

I had hoped that the Minister for Public Enterprise, Deputy O'Rourke, would be present to take this matter. However, the Minister of State, Deputy Jacob, has a specific responsibility for and an interest in this area. Given that he was born in Kilrush and lived there until the age of eight, he will fully appreciate the impact these flight reductions will have on Shannon Airport. I am sure he will convey my comments to the Minister, who also has connections with Clare. She must use her position to protect jobs throughout the west. We are not merely discussing the jobs of Aer Lingus staff working at Shannon, we are concerned with the jobs of those employed by Aer Rianta, those working in the maintenance, catering and tourism sectors – both at the airport and throughout the region – and the employees of the 168 factories to which I referred earlier who export goods through the airport. That is the issue the Government must address in a serious manner.

I urge the Minister to take this matter on board immediately. It is vital that she should meet the management, board and executive of Aer Lingus, talk sense to them and arrive at some innovative ideas in relation to redressing the matter.

I compliment Senator Taylor-Quinn on raising this issue which is of huge importance on a constituency, regional and national level. As the Minister said in the Dáil yesterday, Aer Lingus is facing a very grave situation. The company is losing £2 million per day and haemorrhaging cash. Without action, it will run out of cash early next year, incur a loss of £74 million in 2001 and losses of between £120 million and £130 million in 2002. In summary, without urgent action, Aer Lingus will be insolvent within a short time. While it is accepted that a number of internal and external factors had already begun to impact on Aer Lingus's profits, the events of 11 September turned the company's difficulties into a crisis. As a result, Aer Lingus announced a range of cutbacks to address the dire situation. These measures resulted in the scale of the company being reduced by 25%. The cutbacks resulted in reductions in services across the network, including termination of services to Newark, Baltimore and Stockholm and reductions in services to Boston, Los Angeles, Chicago, London, Amsterdam and Paris.

Unfortunately, the current crisis is no respecter of regions and all must share in the pain of the cutbacks. I regret that, in addition to the Aer Lingus measures, BA has also cancelled its Shannon-Gatwick services in addition to its Cork and Belfast service. I also regret the loss of the Delta Dublin-Shannon-JFK service, at least for the winter. I hope the recently announced Aer Rianta extension of its extensive discount scheme for airlines flying into the three State airports will assist in the development of new services. The company is also providing marketing support for start-up promotions on these services.

As the Taoiseach and the Minister said in the Dáil yesterday, Government policy on Shannon transatlantic services remains unchanged. The Government is committed to maintaining a viable Shannon Airport as well as a viable Aer Lingus. We have much work to do in regard to the latter and I ask for the support of all parties in all regions in that effort. I call on all tourism and business interests in the Shannon area to intensify their marketing and promotional efforts to sustain the airport in these difficult times.

I will strongly convey the matters raised by the Senator to the Minister.

The Minister of State called on "tourism and business interests in the Shannon area to intensify their marketing and promotional efforts to sustain the airport in these difficult times". They are doing so, but flights to Shannon Airport are needed, otherwise they are promoting nothing. Bodies will not fill aeroplanes if scheduled flights are not available. That is a vital issue.

One contributes to the other.

That is true.

The Seanad adjourned at 2.55 p.m. until 2.30 p.m. on Wednesday, 17 October 2001.

Top
Share