asked the Minister for Transport and Power if he obtained the views of Board Fáilte, Córas Iompair Éireann, Irish Shipping and B & I before granting approval to Aer Lingus to devote one-third of their capital to outside investments.
26.
Ceisteanna—Questions. Oral Answers. - Aer Lingus Investments.
25.
asked the Minister for Transport and Power if he will take steps to ensure that, whenever it is found that Aer Lingus have capital available for investment outside their direct airline activity, the bulk of such available capital will be invested inside the Republic of Ireland, having particular regard to the commitment which Aer Lingus have to the Irish taxpayer.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 25 and 26 together.
Aer Lingus, in common with many other airlines, have embarked on a programme of investment in activities which are ancillary to the company's airline business. These investments are designed to earn profits which will counter the seasonal nature and cyclical swings of the airline business and thus help to ensure the continued viability of the airline and the safeguarding of employment.
In October, 1972, the then Minister gave his approval for this policy which involves the participation by Aer Lingus in suitable investment opportunities, mainly outside Ireland using funds raised externally. I subsequently endorsed the policy because I am anxious that the air companies should be enabled to continue to provide the necessary level of air transport services to and from Ireland without the need for special State assistance.
The capital employed in Aer Lingus in associated activities is raised in money markets which would not normally be available as sources of capital for investment in Ireland. Moreover, I would have reservations about unnecessary encroachment on the private sector and accordingly any question of large scale investment by a State-sponsored body in a new area of activity within the economy would require very careful consideration. For these reasons the bulk of the Aer Lingus investment in associated activities has been concentrated abroad and the need for specific consultation with other State-sponsored bodies does not arise. There is, of course, continuing close liaison between the various State bodies in the travel and tourism field and there is a considerable amount of collaboration, particularly in the promotion of tourist traffic to Ireland.
Does the Minister agree that among the ancillary services to which he refers, the hiring of aircraft is the main source of revenue outside the normal operations of the company? It is the service which is bringing in the most revenue?
I would agree with the Deputy that it is a source of revenue, but it is not the only one and not the major one.
Is the Minister in a position to give us in brief, general terms an outline of the major investments by Aer Lingus outside this country?
The London Tara Hotel, the Irish Computer Bureau Services Limited, Cara Leisure International, Swan Ryan International Limited, Guinness Peat Group Limited, the Resort Complex at Teneriffe and the Resort Complex at Foxhill, Surrey.
Would the Minister repeat them, please?
London Tara Hotel, the Irish Computer Bureau Services Limited, Cara Leisure International Limited, Swan Ryan International Limited, Guinness Peat Group Limited, the Resort Complex at Teneriffe and the Resort Complex at Foxhill, Surrey.
Is the Minister satisfied that it is in the national interest that one of the major State companies should engage in this type of ancillary activity? Is the Minister satisfied, furthermore, that the main purpose of the company should be the running of our national airline and that this is not in any way interfered with by the diversification and these other activities?
I am satisfied on both points. In relation to the second point, I am satisfied that the running of these activities helps the profitability of Aer Lingus. There is, of course the argument that Aer Lingus could raise this money and invest it in Ireland but there is no guarantee that the money would be made available to Aer Lingus to invest in this country. I have discussed this very fully with both Aer Lingus and Aerlínte. I have impressed on them, even though I approve of this policy and think we should go ahead on these lines, that their main function is to carry people in and out of Ireland and they must never lose sight of that.
Is the Minister satisfied that in the times in which we live it is right to encourage Irish people to go abroad for their holidays, particularly as far as Teneriffe? To encourage them to do so and to spend their money in Teneriffe may be in conflict with the national interest regarding the encouragement of people to stay here in Ireland. Is the Minister satisfied that Aer Lingus will take sufficient steps to get visitors from other countries to visit their complex at Teneriffe? Has the Minister given any thought to this?
Yes. There is a big investment by Aer Lingus in the Canary Islands. They will naturally want to make the undertaking as profitable as possible. The number of people they could expect to carry from Ireland to Teneriffe would not be sufficient to make the venture profitable. They will have to seek other people elsewhere. No matter how "high profile" a campaign for home holidays is conducted, there will always be people who want to go to the sun at odd times of the year for their holidays. I think it is desirable that Aer Lingus should carry them rather than another airline.
(Deputy Coogan rose.)
This is too big an issue to elaborate on at Question Time.
(Interruptions.)