Tuesday, 27 January 2004

Questions (688, 689, 690, 691)

Finian McGrath

Question:

809 Mr. F. McGrath asked the Minister for Transport the Government or Aer Rianta commissioned report that supports or proposes the break up of the existing company; and if he will reconsider this plan. [1166/04]

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Richard Bruton

Question:

815 Mr. R. Bruton asked the Minister for Transport his plans to publish a separate strategy statement for each of the three constituent airports within Aer Rianta which will identify a credible path to commercial success for each of the airports and demonstrate that his proposals in relation to the share out of existing debt will leave each company in a position to meet competition on a level playing field. [1468/04]

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Pat Breen

Question:

817 Mr. P. Breen asked the Minister for Transport the way in which Shannon Airport, based on statistics available, which show that if the current bilateral agreement was changed from a one to one to a two to one, Shannon Airport's bottom line would be reduced by approximately €4 million; his plans to ensure Shannon's viability going forward if there is a change to the current bilateral air agreement; and if he will make a statement on the matter. [1495/04]

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Richard Bruton

Question:

826 Mr. R. Bruton asked the Minister for Transport the details of the letters of comfort which he is issuing to the workers in Aer Rianta; if he will clarify the legal status of these letters, in the event that the commercial climate for the company does not prove as successful as anticipated by the Minister; if he will outline how the letter of comfort compares with a former agreement made between Aer Rianta and the ITGWU representing catering staff in Aer Rianta which is now a matter of dispute between workers and the company after some workers have been made redundant from the airport restaurant company established under the agreement; and if he will make a statement on the matter. [1864/04]

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Written answers (Question to Minister for Transport)

I propose to answer Questions Nos. 809, 815, 817 and 826 together.

There has been a number of consultancy or expert reports in recent years on Aer Rianta and the State airports, including the Warburg Dillon Read report of 1999 which reviewed the strategic options for the future of Aer Rianta, the Doganis report of January 2002 on aviation-tourism issues and the Mullarkey report of February 2003 on the independent terminal concept for Dublin Airport. In addition, in May of last year, Aer Rianta submitted to me a copy of a report, which the company commissioned from NERA Economic Consulting on competition in the context of Irish airports.

The Warburg Dillon Read report of 1999, while offering some general observations on the issue of separating the three State airports, did not analyse this issue, draw any conclusions nor make any recommendations in respect of it. The decision by the Government in July last to restructure the State airports was a strategic decision taken on foot of the commitment in An Agreed Programme for Government to continue to transform Aer Rianta and, as part of that process, to ensure that Shannon and Cork Airports have greater autonomy and independence.

The new arrangements are designed to strengthen the contribution that the State airports make to economic development and to give both Shannon and Cork a fresh start under international and regional leadership. I believe all three airports can perform better than they have to date and, through more focused commercial operation, each can play a greater role in stimulating and supporting regional economic activity to the benefit of their customers, both airlines and passengers, and of Irish tourism, trade and industry. I will shortly be announcing the remaining members of the boards-designate for Dublin and Cork Airports. As in the case of the Shannon board which I announced in October, the new boards for Dublin and Cork will bring together people of the highest calibre combining international, national and regional expertise.

It is proposed that the two new independent airport authorities for Shannon and Cork will both commence business free of debt and that the debts associated with these airports, including the debt associated with the major new investment programme currently under way at Cork Airport, will remain with Dublin Airport. The desirability of these debt arrangements emerged from my Department's consideration of the financial position of the three State airports within the current Aer Rianta structure, which was provided to my Department by Aer Rianta. My Department was assisted in its analysis of the Aer Rianta data by PricewaterhouseCoopers which completed its work in the early part of last year.

As part of the ongoing work on the implementation of the Government decision which is led by a project steering group in my Department on which Aer Rianta is represented, broad financial projections for the three airports will be updated over the coming weeks. These projections will be particularly important in establishing the opening balance sheets for the new airport authorities. This will not in any way inhibit the commercial freedom and indeed responsibility of the new airport authorities, when formally appointed, to develop strategic and business plans, including marketing strategies, for the three airports.

As the current talks on an open aviation area agreement progress, it is apparent that changes in the relationship between the EU and US, in the context of transatlantic air services, are inevitable. Such changes will have consequences for the Ireland-US bilateral air services agreement. I am carefully monitoring the position and the compilation of the financial projections for the three airports will have regard to the emerging situation.

In correspondence with ICTU and the Aer Rianta unions over the past fortnight, I have conveyed repeated assurances and clarifications in regard to the protection of the tenure and terms and conditions of employment of Aer Rianta workers in the context of the three new independent airport authorities when established. I have also reaffirmed my willingness to underpin this undertaking by including a provision in the amending legislation currently being drafted which will ensure that the existing workers in the company will not be brought to lesser terms and conditions of employment than they currently enjoy. I am pleased that SIPTU decided to call off its threatened industrial action at the airports on Thursday last and I look forward to a resumption of the discussions between the unions and my Department, under the chairmanship of an LRC official, at which these and other issues of concern to the Aer Rianta unions can be further debated. However, contrary to some media reports in recent weeks, I have no proposals to issue letters of comfort to workers in Aer Rianta and such letters are neither appropriate nor necessary in this case. My position on this has been misrepresented as "jobs for life", a term I have not used nor do I believe it is a term any trade union has used either. It is normal when State companies are in transition to provide for the same terms and conditions for existing workers afterwards as before. Therefore, the phrase is misleading and does not apply here.

I have stated in recent correspondence with trade union representatives that the appropriate way to reflect my commitment to maintain the security and quality of employment of Aer Rianta workers post restructuring remains to be finalised between my Department and the trade unions. I have suggested that the talks being chaired by an official of the Labour Relations Commission provide the appropriate forum for this.

Issues relating to any former agreements between Aer Rianta and the ITGWU — now known as SIPTU — are a matter for the parties concerned in accordance with the terms of those agreements.