asked the Minister for Transport if the present restrictive practices which prevent price competition between airlines operating between Ireland and Britain are in accordance with the Treaty of Rome.
Ceisteanna—Questions. Oral Answers. - Airline Fares.
16.
I am satisfied that my legislative powers in relation to approval or disapproval of air fares are adequate to enable me to ensure against the operation of any restrictive practices that are contrary to the public interest. I exercise these powers in an equitable manner in the interests of both the air traveller and the airline.
I am not in a position to interpret the Treaty of Rome but I am aware that the practices followed in the regulation of air fares are in general similar in all members of the European Community.
Is the Minister aware that it is generally felt that the restrictive practices regarding air fares on flights between here and Britain and other parts of Europe are a breach of Article 85 of the Treaty of Rome?
I am not so aware but I understand that the Commission Directorate on competition are working on some proposed legislation. The matter is being considered. There are some interesting statistics in relation to this.
The Minister should be aware of the situation.
I am not aware of decisions which have not been taken by a committee that is looking into this matter.
The Minister got plenty of notice about this matter. He is being provocative.
The Deputy should not be provoking the Minister. Each supplementary should be put through the Chair.
Cross-Channel air fares are about 30 per cent below the European norm for routes of equivalent length.
17.
asked the Minister for Transport if, in view of the disquiet in the tourist trade concerning the reduced competitiveness of Ireland as a holiday destination this year, he will take steps to have recent air fares reductions on the North Atlantic applied to European routes.
It is somewhat unrealistic to talk about reductions in air fares at a time when fuel costs have trebled in a period of 18 months and airlines have experienced substantial increases in costs generally. The special promotional fares applying on the North Atlantic including super-Apex, budget and standby fares are not fully compensatory, with the result that airlines, including Aer Lingus, are losing heavily from North Atlantic operations. Because of this airlines have been forced to withdraw or curtail their services. Aer Lingus and Air Canada withdrew from the Canada-Ireland route and TWA and Pan-Am withdrew from the US-Ireland routes. A fares policy which leads to the withdrawal of air services hinders rather than helps the development of tourism.
It is essential for tourism, as for business purposes generally, that we should maintain year round air transport links with our main markets and trading partners. This requires a fares policy which will cater for the differing needs of tourists and business travellers and enable the airline to operate economically. I am satisfied that the level of fares on routes to and from Ireland is not in excess of the level necessary to maintain regular viable services. I am also satisfied that the range of fares on the European routes cater adequately for all segments of the market including the tourist.
Is the Minister happy that the high air fares to and from this country are a contributory factor to the decline in the tourist trade in the current year?
The Deputy cannot have it both ways. The national airline is losing a substantial amount of money on the North Atlantic route and is in open competition with other major airlines.
Is that the reason for the loss?
If we are losing substantial money on that route it is in the interest of the company to try to be viable on the European runs. Aer Lingus have taken every step to match what I and international circles regard as being low.
Is it not in the interest of the tourist industry that competition be introduced if it is felt that it will bring down the air fares presently prevailing?
I would regard as acceptable the level of air fares applying on the North Atlantic route at present. They are not in any way discriminatory.
The Minister must be using the executive jet.
It is necessary to have a viable airline as well as to be able to give the consumer—business and tourist—a wide range of fares.
Which fare does the Minister consider acceptable?
The fares and the range of them on the North Atlantic route are acceptable as far as the consumer is concerned. Hopefully, that will lead to a viability of the airline. Both matters must be considered.
I agree that the fares on the North Atlantic routes are good because they are competitive but fares to and from Europe from Ireland are not good because they are not competitive.
I have called Question No. 18.
18.
asked the Minister for Transport the further fare increases expected on air services to Ireland this year; if such increases will require his prior approval; and, if so, why.
19.
asked the Minister for Transport if he has given his formal approval to the £99 Dublin-London air fare; and, if so, the date of his approval.
20.
asked the Minister for Transport if air passengers between Dublin and London, who were charged £99 fare between 1 April and the date on which it was formally approved by him are entitled to a rebate; and if he will make a statement on the legality of implementing the increase without his formal approval.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 18, 19 and 20 together.
The Dublin-London fares—£99 for the normal economy fare, £82 for the excursion fare and £64 for the APEX fare—were implemented by Aer Lingus and British Airways on 1 April 1980. At that stage I had not given my formal approval for the increases and the fares were applied by the airlines subject to my approval. If I had subsequently decided to disapprove the new fare levels, any passenger who had paid the new fare would have been entitled to a refund. However, on 15 May 1980, I gave my formal approval for the increases for effectiveness on 1 April 1980, and therefore the question of a refund does not arise. The procedure followed in this matter is in accordance with well established precedents in aviation.
Why did the Minister not give his approval on 1 April? Why did he have to wait until 15 May to approve the new fare structure?
I agree that perhaps the arrangement was not the most satisfactory as far as everybody was concerned, the Minister's Department and Aer Lingus. But there was a reason for it. At that time the Minister was involved in the examination of a series of very complex fillings simultaneously. The Deputy may be assured that it is the Minister's intention that it will not happen continuously in this way.
Is the Minister sure it is legal to charge increased fares in retrospect as seems to have happened in this case?
I understand on legal advice that it is quite legal.
In view of the unsatisfactory nature of the manner in which these increases were introduced would the Minister agree that it would be more satisfactory if the National Prices Commission were consulted before such increases were granted?
I think the people best able to judge that are the management of Aer Lingus and they recommended these fares——
They have a vested interest.
It is the Minister's job.
What about the consumers?
A final supplementary from Deputy O'Toole.
The Minister said that the procedure adopted was well established in aviation circles. In saying that is he referring to retrospective approval by him of increased air fares?
I am so saying, yes.
Shame.
21.
asked the Minister for Transport if he is aware that the Belfast-London air fare is cheaper than the Dublin-London fare although the mileage on the Dublin route is less; and if he will take measures to remedy this disparity.
Comparisons of different air fares can be misleading unless like is compared with like. The Belfast-London air service is treated as a domestic service which does not have the same cost characteristics as an international service such as Dublin-London. For example there are higher passenger and landing fees and other extra costs on the Dublin-London service. I should also point out that the fares differences are very small when account is taken of currency differences and the fact that the flown mileage difference is only about 20 miles.
Why can the Dublin-London run not be regarded as a domestic route?
The Dublin-London run is regarded as an international route.
Why can it not be regarded as a domestic route?
Because there are two sovereign States involved, whereas the Belfase-London route is regarded as domestic.
The Minister said landing charges played a part in the difference. Would that indicate that landing charges at Dublin Airport are substantially greater than those in Belfast?
On the contrary. We must take like with like. What we are talking about is: from Dublin to London is about 337 miles, flown distance, while Belfast to London is about 358. The difference is very little and £86 sterling would work out at about £97 Irish money at current exchange rates. That is close enough to £99.
Would the Minister, on reflection, not consider it extraordinary that he as a Minister of this Government should have to fall back on the defence that Belfast is part of a foreign country in trying to defend the fares structure, commented on by Deputy Deasy and that that should be his refuge—that we are dealing in fact with a foreign State and that somehow the domestic internal arrangements in the United Kingdom are an answer? Is that not a weak basic defence?
The Deputy is now making a statement.
I cannot see that the impact of the Deputy's supplementary question is very important——
Articles 2 and 3.
The Deputy will appreciate that when we fly from Dublin to London it is an international route where extras, charges, landing fees, passenger fares and fees and so on have to be jointly agreed between Westminster and Dublin. Obviously, in the case of the Belfast run there is only one authority and consequently they can make their own arrangements.
I just want to register surprise at the Minister of all people having to have recourse to what we might call the international dimension.
It is important that I should state that the question implied that it was cheaper to fly from Belfast and I am saying that it is £99 here and it works out at £97 the other way.
22.
asked the Minister for Transport if he is aware that passengers from Belfast to Gatwick enjoy a discount on their fares compared with the Belfast-Heathrow route; and if he will introduce a similar discount on services to Gatwick from the Republic.
If the airlines operating between this country and Gatwick were to seek my approval for a fare level lower than that applicable to Heathrow, I would certainly give it consideration.
That is an honest answer.