Deputy John Wilson reported progress on this amendment to the amendment. Amendments to amendment Nos. 1, 2 and 3 are also being discussed with amendment a1 and with the main amendment. Amendments to the amendment No. a1, 1, 2 and 3 and the main amendment are, therefore, being taken together for the purposes of debate.
Air Transport Bill, 1984: Committee Stage (Resumed).
Debate resumed on amendment No. a1 to amendment No. 11:
In the sixth line, after "carriers" to insert ", operating on the same route or routes,".
Amendments a1, 1, 2 and 3; is that what the Chair said?
Amendments to amendment a1, 1, 2 and 3 and the main amendment are, therefore, being taken together for the purposes of debate.
The main amendment being the Minister's amendment?
That is correct.
My amendment 1 was to deal with the nub of this whole question and it arose out of a sentence towards the end of the Minister's speech about the freedom of companies to put forward for sanction any air fares that they saw fit. I asked the Minister at that time if that meant the substance of the amendment that I have put down to section 3 at amendment No. 11.1. The saying has been that the Ritz is open to everybody, and that carried a great deal of meaning. The Minister's statement was that all air companies were free to put forward any fare structures and that they would be considered by him. I repeat the wording of my amendment.
In the tenth line after "relate", to add "and which tariff will not be rejected by the Minister solely on the grounds that it is too low".
That amendment again would leave the Minister with considerable powers but would take into account the kind of philosophical background or the national economic background which we have given in our contribution on this Bill. I am strengthened in the view that I hold of this matter by the report in "Community Report November-December 1985" where Mr. Stanley Clinton Davis, who is the relevant Commissioner, spoke about deregulation, and deregulation in a European context, needless to say. That report on page 5, volume 5, No. 10, indicates that the Commission in looking for a new policy on air fares was not looking for the process of deregulation on the basis of the experience of the US. He indicated that opponents of the proposals tended to cite the experience of the US as a kind of warning against allowing the same kind of system to obtain in Europe. Very relevantly, Commissioner Clinton Davis said that not only do the US have a single industry in a single economy but that the US administration takes a relaxed view about the fate of any one of its national carriers. The Commissioner emphasised strongly that in Europe there were were ten industries and soon 12, ten economies soon 12, and such an attitude towards its national carriers "is politically unthinkable".
In a sense he has touched upon the problem here. Of course, it may be said that it is not particularly or highly relevant to the Bill before the House that he should quote the US, but we must remember that the circumstances which prompted the introduction of the Bill in the first place were very closely connected with the US problem of air transport between Ireland and the US. I see that some commentators have now switched it more towards intra-European. Again the Commissioner is more than relevant, he is at the heart of the matter.
He commented on the proposals regarding the reform of the air transport sector in the Community. In the previous debate Fianna Fáil on this side of the House referred to that 18 month old policy proposal by the Commission. Again let me quote the final paragraph in that little extract from "Community Report". It may be a help to the House: "The 10 transport ministers have been presented with plans which will improve arrangements in the Community, in line with wider European and international systems, allow for lower fares where these are cost related"— that would cut out undercutting cowboy operations —"end the rights of one country to veto the lower fares of a competing airline..." I presume he is talking in the Euro context and that everything was taken account of considering the various rights up to No. 5 or 6, whatever the limit is. The report also refers to limiting the level of Government interference in capacity arrangements and the provision of guidelines for the use of State aids in the sector. They are all highly relevant to the Bill. I submit that the amendment is the most important one before the House and, consequently, I urge the Minister, and the House, to accept it.
I very much share the sentiments and motivation of Deputy Wilson in this regard. Unfortunately, having considered the matter in great detail and following legal advice, I am told it would have the effect of undermining the provisions of the Bill considerably. The purpose of the Bill is to be able to control affairs and not to allow them to go to a level that could be considered predatory. We have considered this matter in the two-day debate on Second Stage and on the two days already spent on Committee Stage.
The aviation world is littered with the corpses of airlines who amidst great propaganda and hullabuloo came on the scene offering all sorts of low fares. We had Air Florida, Laker Airways, Braniff Airways, Air National and several others who went out of business. Every administration, especially this one, want low air fares. As I said before a debate on air fares is not very relevant if we do not have air services. If we have, as exists in the aviation world, people prepared to give bargain offers that may look attractive but force the regular airlines off routes, leave airports without a continuous year-round air service and, subsequently, fail that is not in the interests of the air traveller.
I should like to repeat that the first requirement of our national aviation policy is that there should be a continuity of air services from major points east and west of the country. That is very important for industrial development, trade and tourism purposes. We must guarantee a continuity of air services above all else. The second most important string to national aviation policy is that such air services should be at the cheapest price possible. I should like to repeat what I said in the House, and outside, on several occasions, that since I took office three years ago this week I have kept air fare increases below the rate of inflation. We have got air fares inflation increases. We have got air fares down in real terms for the first time in many years. That has been achieved in spite of the fact that some of our neighbouring countries who are paraded as great liberals and advocates of low air fares approved on several occasions higher increases. For instance, with regard to the famous Dublin-London route the British Civil Aviation Authority approved an application by Dan Air, Aer Lingus, and British Airways for a 10 per cent increase last year but I did not approve it. I insisted that the increase should be below the rate of inflation and I got it down below that figure. The British Civil Aviation Authority justified their approval of a 10 per cent increase by the rise in costs in the aviation world but that was not good enough for me. That is one of many examples of where we kept down the amount of increases in aviation fares.
Given that the second leg of our national aviation policy is to keep air fares as low as possible it is with some regret that I cannot accept the amendment in its present form. However, because I support the motivation that lies behind it and that I am very much ad idem with Deputy Wilson in his approach to this matter, I undertake to consider this further to see if it will be possible to bring forward a suitable amendment — I cannot be sure of that — for consideration on Report Stage.
I am disappointed, but not surprised, to hear the Minister turn down this amendment. He concluded by trying to give reassurances of a type to Deputy Wilson which are designed at getting Deputy Wilson to withdraw his amendment and not have a division on it. He has done so also by telling the Deputy that he will think of some way of trying to express this in another form of amendment but it must be remembered that the amendment has been down for more than seven months and there was ample time if it appealed to the Minister to seek to reword it in some other way and table an amendment in his name. The truth of the matter is that the Minister does not want to do that but he does not want to disagree too strongly with Deputy Wilson because Deputy Wilson has facilitated him by agreeing to a guillotine of this debate today. It suits the Government and, perhaps, other Members of the House, to have a guillotine and to have the Committee Stage brought to an end. We have had only a relatively short Committee Stage, part of two days, the last one seven months ago and the previous one eight months ago.
It is as well to remind the House because of the long delays that have taken place that what we are debating now is what was described by the Minister as emergency legislation when it was introduced on 27 June 1984. At the time the House was told that it had to be passed in a matter of days or there would be a calamity in the Irish aviation scene. I pointed out some of the many defects in the Bill and, as a result of the reaction of people in newspapers and elsewhere to the speech I made at that time, the Government decided not to proceed with the Bill but to delay it for some time. The delay has now extended to 18 months and, presumably, it will take quite some time more if it is proceeded with. It was because of the seven month delay since we last debated the Committee Stage that I thought that the Bill had been forgotten about. I was surprised to discover at the weekend that it was coming up again this week and I wondered why that was the case. I came to the conclusion that it may well have something to do with — one cannot be sure of this — the success of Bord Fáilte and Aer Rianta in introducing Pan American and Delta on to the transatlantic route from next spring, a move which I welcome and which I consider will be of great benefit to our economy if they are allowed to operate in a way that will encourage them to continue to serve the Irish market as they obviously want to and not forced the way some of their predecessors were.
The whole question of price contained in Deputy Wilson's amendment is the kernel of the Bill. Due to the passage of 18 months since the debate on this Bill started it is well to remind ourselves what the legislation is about, it is all about pricing. The Bill is seeking to make it a crime here to charge too little for its service. The original intention was that if one charged too little one could get two years in jail and/or a fine of £100,000. The Minister has amendments down which are, I suppose, to liberalise that aspect and one will get only one year in jail——
No jail.
——and the fine is being reduced to £50,000 or £20,000 — the figure is in the amendment. We are asked to accept that that is some kind of major advance in relation to the Bill in the last 18 months. The whole crux of the Bill is the question of price and whether people are allowed to charge the kind of fares that they want to or whether, against their will, they have to keep up their level of charges. That is what they are being forced to do in this country if they fly into and out of it or within it.
Deputy Wilson when speaking a few minutes ago quoted from an article or speech by the Transport Commissioner, Mr. Stanley Clinton Davis, in what I think he said was the December edition of Euro Forum. I do not seem to have that edition, but I have the October one where Mr. Clinton Davis is quoted to much the same effect. I would remind the Minister that everything that Mr. Clinton Davis said in the quotation given by Deputy Wilson and in the October issue from which I quoted the last day is countered by this Bill. This Bill goes in every respect in the opposite direction to that in which the Commission want to go in Memorandum II and in all their various statements since then. What in the name of goodness is the point of this whole effort to run counter to the entire movement going on within Europe and, indeed, worldwide? What is the point of his taking on here repeated assertions of the Commission, not just the Transport Commissioner but also — and even perhaps more importantly — the Competition Commissioner, Mr. Sutherland, the Minister's former colleague, who has gone on record time and again this year — perhaps as often as six times — as saying that he is determined that the scandal of the present system within Europe in relation to cartels and the keeping up of air fares will be ended by him during his commissionership and that he will do so during 1986.
Is the Deputy satisfied that he is relating his remarks to the amendment before the House?
That is the Deputy's 15th Second Stage speech. He is filibustering the Bill and yet complaining about the delay.
The Minister gave us, in his speech on the amendment, a general statement and I am replying to that.
I spoke for three minutes.
A long general speech would not be in order.
The amendment, Sir, relates to "which tariff shall not be rejected by the Minister solely on the grounds that it is too low". The high level of fares is recognised throughout Europe as scandalous. Some people want to defend and retain that situation, but they are a very diminishing number. Could I draw the House's attention in this connection to the well known case which is going on at the moment in the European Court in which a court in Paris has referred five prosecutions by the French authorities against airlines and travel agents to that court to decide whether or not the French law which seeks to encourage airlines to fix fares at particular levels is in accordance with the competition articles of the treaty. Within the past month the Advocate General has given his opinion to the European Court in Luxembourg in which he says that that French law, which is not very different from this law but does not go nearly as far, should be thrown out by the court. It does not necessarily follow that the court in the decision, which I understand they will not give until January, will follow the Advocate General, but it is normal enough practice that they would. I am told that in over 80 per cent of cases they do. If they follow his opinion, where stands this legislation and this particular section? Would it not be very much better to have this amendment but in a way which would give the Minister some grounds for trying to argue at that stage, if such a thing were to happen, that there is the possibility that because of this provision the Minister is bound not to reject a tariff simply on the grounds that it is too low, that there is some better chance that it may not infringe the provision of the treaty?
In considering that court case, one does not even have to be certain, because one cannot be, that it will be decided by the court in accordance with the opinion of the Advocate General. Even if it is not, Commissioner Sutherland has made it clear that, notwithstanding that, in 1986 the Commission has taken upon itself to put an end to this non-competitive cartel type of practice which keeps air fares in Europe artificially up, to the detriment of all European economies, and I suggest not least our economy. For these reasons this amendment should be accepted. I cannot see what is wrong with simply saying that a particular fare or tariff will not be rejected by the Minister solely on the grounds that it is too low. Why is he not prepared to accept that? Surely it is perfectly correct for him not to reject solely on the grounds of a tariff being too low? What is his objection to fares that are too low? If an airline are prepared to fix fares which the Minister in his wisdom considers too low that is the airline's affair. They have to live with the possible consequences. The Minister quotes various airlines which have gone out of business. American airlines and Laker to which I say "So what?" How many dozens more have come into operation in recent years and more than replaced them?
Does the Deputy want Aer Lingus to go out of business?
The example that he is giving of Laker going out of business is a bad one because Laker has now been awarded very substantial damages indeed in American courts against, among others, State-owned airlines for putting him out of business illegally. It was not the best example. This amendment is absolutely harmless and should be accepted. It is simply not good enough for the Minister to say that it removes the effectiveness of the Bill.
I want to speak briefly on Deputy O'Malley's statements. First, why is the Deputy a lone ranger in this House in opposing this Bill? Is he saying seriously that the other 165 Members who are supporting the Bill are supplying, or want to ensure, higher air fares? That is manifestly and absolutely not so. It is very hard to believe that Deputy O'Malley does not know that. Of course, we want all air fares to be as low as possible, but the Deputy was Minister for Industry and Commerce for a considerable length of time. He fixed minimum price orders for all sorts of goods and this is the aviation equivalent of being able to fix a minimum price.
On a point of order, I would remind the Minister that I fixed maximum price orders, not minimum.
That is not a point of order.
Is the Deputy telling me that he did not take action against below cost selling? Is he advocating below cost selling regardless of the consequences? That is the nub of the question. I want to repeat that my policies have brought down air fares. We have repeatedly forced down the level of increases in air fares over the past three years despite the fact that other countries, who have been praised repeatedly by opponents of this Bill, have approved increases twice the size of those which we were prepared to approve.
It is appropriate to announce now that I have approved in principle a new air service from Dublin to Luton, return, costing £99. I have given Ryan Air the go ahead and it will be announced by my Department later today. It will be welcomed by many people and is another indication of the policies consistently pursued by me since I became Minister for Transport and subsequently Minister for Communications. Despite the facts, Deputy O'Malley consistently misrepresents the purpose of this Bill which is neutral and an enabling measure to put beyond doubt the powers of the Minister for Communications in the area of regulating air fares. Those powers were always considered to be there but were put in doubt by a court case involving an airline and a travel agency. As the court did not grant a temporary injunction, the question was put in doubt and this Bill is by way of clarification and improvement.
My colleagues on the European Council of Transport Ministers know very clearly where I stand. I am among the most ardent advocates of liberalisation of air transport. I go much further than any of my colleagues on the EC Council of Ministers and I am all for an open skies policy throughout the European Community. It is no harm to repeat that in the aftermath of the European Council meeting where they had been talking about further moves towards unification of Europe. One of the great ambitions which we must have in the context of European unity is to have one aviation system for the EC and that airlines within the EC would have equal opportunities to compete on all routes within the EC. Aer Lingus would then take their chances and Ireland would also take its chances in that context.
This is a Second Stage speech.
I take your point but I am just explaining the overall policy of this administration in relation to air fares and getting them down. We cannot allow a situation where below cost selling is permitted on a temporary basis and the regular airline pushed off routes causing one of two things to happen — the surviving airline being in a monopoly can push the fares up, or it collapses, which is more likely to happen.
At last I am beginning to see the fruits of my labours. I am delighted to hear that at long last the Minister has approved of a £99 return air fare between Dublin and Luton. It was applied for last April and, even though the Minister gave assurances that all these matters would be decided within a month, the application of Ryan Air seems to have taken eight months to be decided on. However, even though it took eight months thank God it has happened. At long last the kind of thing I had been asking for is happening for the first time. I assure the House that, if I had not taken the stand I did over the past 18 months in relation to this matter, the hopes of Ryan Air of getting approval for the Dublin-Luton route at that fare would be negligible. They would not have got it after eight years, let alone eight months.
The Deputy is modest.
In spite of advice that the Minister got from certain quarters he had to give in and I should like to congratulate and thank him for doing so. There is often concealment of material facts in the airline business and I should like the assurance of the Minister that this is a genuine £99 fare and not full of all kinds of restrictions like having to go out on a Saturday night and come back on a Sunday morning or something of that kind. Is this fare equivalent to the £208 cartel fare?
I am sorry to say this but Deputy O'Malley, uncharacteristically, has continuously distorted the situation. For instance, he asked if the fare of £99 is the same as the £208 cartel fare. There are different levels of fares and £208 is the highest fare. There are fares as low as £69 return but they are very restricted. I am glad to tell the Deputy that there will be no restrictions on the £99 fare. It will be a regular return fare.
This is the best news I have had since the debate started.
I do not mind the Deputy claiming credit, but this is consistent with the policies adopted by my Department——
Since today.
Since 14 December 1982.
It is contrary to the policies followed up to now but I congratulate the Minister. This is a great step forward in terms of Irish aviation policy. At long last what I have been asking for has happened and Irish people can now travel between Britain and here for £99 return which is roughly the economic cost. Unfortunately, they cannot travel to Heathrow or Gatwick yet, but I am sure that will happen shortly. That will certainly be a major event but Luton is a relatively short distance from London, I think about one hour by road. This is a marvellous advance and it is only fair to congratulate the Minister. He said it is a normal fare not subject to restriction and that it is equivalent to the £208 cartel fare——
I do not think it is in order to introduce this on the amendment. However, the Minister introduced it——
It is quite an event. This is a major advance and a very big change in aviation policy. The Minister is entitled to be congratulated but, if this Bill had been passed 18 months ago, we would not be seeing a £99 fare from Dublin to Luton today.
The Minister has announced it, the Deputy has welcomed it and neither was in order. Let us move on. Is amendment a1 withdrawn?
What about amendments Nos. 2 and 3?
You can only propose one at a time. They were all discussed together and the discussion is now over.
I have not even started on amendments Nos. 2 and 3.
Well, if the Deputy wants to discuss them now he may do so but I want to make it clear that we are discussing amendments Nos a1, 1, 2, 3 and 11 together.
I might go on to amendment No. 2 which is to insert the word "price" before the word "competition".
We have certainly discussed that because the Deputy referred to it on a few occasions during his previous contribution.
If the Chair looks at the Official Report for Wednesday, 22 May he will find that amendment No. a1 was proposed by me, while amendment No 1 was proposed by Deputy Wilson.
I am clear that during his last contribution the Deputy referred to the amendment in his name which added the word "price".
With respect, I do not think I did but I will refer briefly to it now. Non-price competition by airlines is inherently wasteful. It uses up valuable resources in image building and in artificial product differentiation. It promotes low load factors and over-staffing. This wasteful competition builds low productivity airlines and does not provide what the consumer wants, which is the cheapest feasible point to point low cost transport with fares which are not hedged in with restrictions. Airlines fly the same aircraft between the same airports. Attempts at product differentiation are wasteful and exist only because of restrictions on price competition. The real test of competition will be when airlines work out their fares independently and cease charging the same fares for every single category of passenger.
On amendment No. 3, I want to add a number of additional categories which should be taken into account by the Minister in considering an airline tariff. These factors are the promotion of economic development by the availability of price competitive passenger mail and cargo services by air, the promotion of regional development, the availability of discounted airline tickets in neighbouring jurisdictions, the provisions of the Treaty of Rome and in particular of Articles 85, 86 and 90 thereof, and the recommendations of the Report of the Restrictive Practices Commission on competition between travel agents presented to the Minister for Industry, Trade, Commerce and Tourism in June 1984. These are all matters of quite some significance which should be taken into account by the Minister when considering airline tariffs submitted to him.
On the question of the promotion of economic development by the availability of price competitive passenger mail and cargo services by air, it is somewhat startling to realise that aviation in Ireland, unlike nearly all European countries, is rather stagnant because of the very conservative policy that is pursued here. The first chink of light we have had has been within the past ten minutes. Tourism has already suffered heavily on the air tourist side and in a period of seven or eight years air tourism from Britain, as opposed to overall tourism, has declined by 50 per cent. Business trips are also down very substantially, which has a considerable bearing on the promotion of economic development.
We lost half our air tourists in the period 1975-1983, according to the Central Statistics Office. Since 1979 air travel between Britain and the Republic of Ireland has fallen from 2.015 million to 1.660 million, a fall of 17.5 per cent. Between 1980-1983 the number of business trips by air from the Republic to Britain fell from 149,000 a year to 114,000, a fall of 24 per cent. In 1984 traffic between Britain and the Netherlands rose by 16 per cent in the nine months of operation of the Anglo-Dutch bilateral arrangement. It is now running at over two million people a year.
In 1975 the London-Dublin air route was 50 per cent busier than the London-Belfast route. This year, 1985, will be the second year in which the London-Belfast route is a busier route than the London-Dublin route. We know why that is so. It is simply because of the question of price competition. Unfortunately nobody would be in a position to describe Belfast as a prime tourist destination. Traffic in Belfast airport grew from 700,000 in 1983 to an estimated 900,000 this year as a result of the competition which exists there.
The proposals earlier this year for an £85 London-Dublin air fare were turned down in circumstances which in other countries would give rise to much questioning and possibly proceedings in appropriate courts. That did not happen here because the Restrictive Practices Act of 1972 does not apply at present to air services, which is a pity. One hopes that what happened last January and February in relation to the proposals by Dan-Air will not happen again in the light of the Minister's decision to allow this new fare between Dublin and Luton. We hope that if Dan-Air propose in 1986 the kind of fare they proposed in 1985, they will not be put in such circumstances that they will not be able to go ahead.
One of the factors to which the Minister should have regard when considering an airline tariff submitted to him under this section is the question of discounted fares in adjoining jurisdictions. It is really a bit of a joke that it is possible for a travel agent in this country to sell what he likes in respect of people who commence their journey outside the Repbulic. I saw a travel agency in Dawson Street advertising within the past day or two all kinds of discounted fares ex Belfast. They are entitled to do that but if they were to advertise ex Dublin, ex Shannon or ex Cork they would be committing a crime under this Bill, for which the penalties would be very severe. Does it not underline the ridiculousness of the situation that a travel agent in Dawson Street can advertise widely and sell discounted fares ex Belfast? Of course it is an encouragement to people to go to Belfast and avail of these fares. A recent article in the Farmers' Journal pointed out that a survey they carried out indicated that some of their readers from as far south as Tipperary were travelling to Belfast to avail of the much lower fares. The leading article in the most recent edition of The Sunday Tribune stated that——
The Deputy's speeches are grossly inaccurate and full of non-factual statements. Deputy O'Malley will know what I am talking about.
The Minister will have an opportunity of replying if he wishes to do so.
It is no wonder that people go to Belfast to avail of fares that are cheaper by £100 as compared with the fares here. It would be unnatural if people did not do that. However, it is a considerable pity and obviously it is a great loss to our economy but until things change presumably people will continue to go to Belfast. There is a great danger that the situation will be made considerably worse as a result of the passage of this legislation.
Anyone who reads The Sunday Times or The Times, two great sources of advertisements for discounted air fares, will see literally hundreds of such advertisements in every issue. There is no possibility that Britain will abandon its policy of permitting discounted air fares. More than five million people use them each year. They are extremely popular and are likely to continue to be popular. The Air Transport Users' Committee in Britain in their 1981 annual report made that point. They said that the estimated five million tickets sold at various discounts were likely to increase rather than to decrease. They went on to say that the committee still believed that widespread discounting operates for the general benefit of airlines and passengers. However, they would like to see legislation for the sale of bulk fares by carriers for subsequent general resale by all travel agents, thus extending the availability of discounted air fares to a wider travelling public. They said that was a matter that the Department of Trade seemed at that time unable to resolve. In their subsequent report for 1981-82 the same committee said that what was needed was Government action that would make discounted tickets available to all, with any condition attached clearly explained, and firm guarantees that such tickets carry no extra risk of the purchaser being stranded or losing the money paid for the tickets. That is the attitude in Britain, our neighbouring jurisdiction, and in Northern Ireland. We cannot legislate in a vacuum on the basis that these practices do not exist 100 miles from this city.
I cannot understand why those connected with aviation and the Department involved go to such lengths to try to ensure that the ordinary rules of competition laid down in the Treaty of Rome, particularly in Articles 85, 86 and 90, should not apply to airlines and air services. Article 85 outlaws the following:
(a) Any activity which, directly or indirectly, fixes purchasers' selling prices or any other trading conditions;
(b) Limits or controls production, markets, technical development or investment;
(c) Shares markets or sources of supply;
(d) Applies dissimilar conditions to equivalent transactions with other trading parties, thus placing them at a competitive disadvantage.
If those four conditions were in effect now in relation to airline arrangements, which we know are made privately and subsequently ratified, they would be contravened by the kind of arrangements that are taken for granted. Article 85 has been in force in the European Community since 1958 and not without reason. It is used to the great benefit of European citizens and consumers in Europe. I do not know why it is not taken into account by the Minister in relation to these matters. He should accept them.
The Minister should also take into account the recommendations of the report of the Restrictive Practices Commission on competition between travel agents presented to the Minister for Industry, Trade, Commerce and Tourism in June 1984. We understand that the Minister, Deputy Bruton, is broadly in agreement with those recommendations. I think if he were free to do so he would be quite willing to implement them, all of which run counter to the provisions of this Bill. I should like to quote recommendation No. 9 of the Restrictive Practices Commission. It states as follows:
The inclusion of a provision in the rules of an association of tour operators and/or travel agents imposing on its members price maintenance requirements in respect of rates and fares for travel on scheduled services, whether surface or air, should be prohibited.
This statutory commission are recommending that non-competition or resale price maintenance should be prohibited under the restrictive practices law and, therefore, should be made a crime. However, in this Bill the direct opposite is happening. Resale price maintenance is not being made a crime but failure to observe price maintenance is being made a crime. What is recommended in the Restrictive Practices Commission report is in the public interest and in the interests of consumers generally, but under this Bill if a person were to carry out those recommendations he would be committing a crime, even though he was acting for the benefit of the economy and of the consumer. The Bill using very draconian penalties makes compulsory this regime of resale price maintenance which the Restrictive Practices Commission and the Minister for Industry, Trade, Commerce and Tourism thinks should be prohibited.
This is the 21st Second Stage speech made by Deputy O'Malley but I will not go into the debate again. Not even Deputy Harney is supporting Deputy O'Malley in this case. There is no Member from the Labour Party, Fine Gael, Fianna Fáil, The Workers' Party or Independent Member in this House supporting him. This illustrates the distortion of everything the Deputy has said.
That does not make me wrong and the Minister knows it.
The Deputy has not had the grace to admit that in every debate here he has made umpteen factual errors, allegations and statements that are not true. I should like to quote from the publication entitled Boardroom, a Northern Ireland business magazine, issued in June 1985. It said:
The Belfast-London routes though booming are profitless. The airlines pin their hopes on higher load factors and a growth of no-discount passengers.
The article discusses the air fares war on the Belfast route. The airlines lost £2 million on the Heathrow-Belfast service in 1984. Pre-tax profits fell by more than £1 million because of the heat of competition — there is an air fares war. The airlines are getting extra numbers but no extra money, thus losing money. This is a feature of aviation history: what would be a profitable route for two airlines becomes unprofitable for three or four. There are too many seats chasing too few passengers. This brings about a situation of depressed air fares. How long will it last? What is important is continuity of air services and at the same time to keep air fares as low as possible consistent with continuity of services. Deputy O'Malley proposes to insert "price" which would make the Bill more restrictive. His speech was in justification of that, and I am surprised. I could accept on Report Stage an amendment to insert "price" at the end of the paragraph which would then read "including tariffs which would be price competitive".
In my amendment sheet the lines are not numbered and it is difficult to follow this.
It is in line 13. I would accept an amendment to insert "tariffs which would be price competitive". Deputy O'Malley's amendment would not include quality of service.
Price is most important.
The word "competitive" would have to be taken out if we were to insert "price" in the way Deputy O'Malley suggests.
I thank the Minister because he has gone a fair way towards meeting my point.
I cannot meet the Deputy on the other points.
Is that the end of it, full stop? Is there not to be an explanation from the Minister on my points about economic and regional development and about the Restrictive Trade Practices Commission? I was particularly looking forward to the Minister's explanation.
I do not want to make long speeches in reply to every long speech made by Deputies. I have already laid down several conditions which clarify the purpose of the Bill and the maintenance of policy in relation to air services. In view of the particular relevance of air fares to the tourist industry, I thought it only right that the criteria being laid down should contain a specific reference to the tourism dimension. I recognise, of course, that there are other important dimensions, such as the promotion of general economic development, regional development, etc. I am satisfied, however, that all of these elements are adequately taken care of by the provisions of paragraph (c) of my amendment, specifically by the inclusion of the words "having regard in particular to the public interest".
I do not consider it appropriate that references to discounting in neighbouring jurisdictions or to the recommendations of the report of the Restrictive Practices Commission should be included. As Deputy O'Malley is presumably aware, air services are outside the scope of the restrictive practices legislation and, as I understand the situation, the Commission endeavoured in their report to avoid making recommendations impinging on scheduled air fares, which are the primary focus of the legislation before the House.
Questions relating to the application of the competition rules of the Treaty to air transport are being addressed in various Community institutions at present. The European Court is deliberating on a case referred to it by the French courts, while the Council are proceeding to act on the proposals in the Commission's Memorandum No. 2 on Civil Aviation.
The Bill is totally neutral in its attitude to EC law and it will be implemented in a way that will conform fully with whatever EC rules may dictate. In any event, and were a dispute to arise, the House will be aware that EC law takes precedence over domestic legislation. I believe that Deputy O'Malley's amendment is unnecessary.
I should like to reiterate that I have tabled the amendment for clarification purposes because of distortions that have gained currency. The purpose of the Bill is to clarify beyond doubt that this and future administrations will have the same regulatory power as all previous administrations. Of course, everyone in the country wants the lowest possible air fares and we in the Government want the most liberal possible aviation policy for Europe. We are pressing for that at EC level. We believe that that will bring lower air fares and an overall better service to the travelling public, but we cannot have selective liberalisation. Selective liberalisation that would suit the interests of other countries might not suit us here. There is no doubt that other countries will pick the things that suit them and their national interests. For instance, we want to deal with the fifth freedom. We are all for the fifth freedom. We grant many out of Shannon Airport, in which Deputy O'Malley is particularly interested.
What about the one to Amsterdam which was taken away last year?
It is still there.
Who is flying the Shannon to Amsterdam fifth freedom at the moment?
We have a very liberal attitude in regard to the fifth freedom out of Shannon. Delta and Pan-Am are coming to Ireland on the North Atlantic route. I have made it clear to them that they are most welcome. I have had very friendly meetings with them. Delta have filed for fifth freedom rights to Gatwick, out of Shannon. Will the British aviation authorities give them the same right? If they do that they will be breaking new ground for the British Civil Aviation authority but Delta are very pessimistic about obtaining those rights. We allow for freedom of rights but some of our neighbouring countries who pose as great liberals in the matter of aviation policy do not allow for freedom of rights. Aer Lingus, for instance, spent a lot of money developing routes out of Manchester but were thrown off those routes as soon as they had made them profitable. Similarly on the Dublin-Lourdes-Rome flight, the French got rid of Aer Lingus after they had developed the route.
What about the Spanish?
The same happened in respect of Geneva and Milan. We consider that behaviour to be wrong and restrictive. We believe in a very liberal aviation policy but aviation policy must not be selective in terms of suiting one or other country. If air fares are to be reduced overall, if there is to be improved efficiency generally in the world of air transport and if there is to be fair competition, all the airlines of the EC must have equal access to all the routes as is the case in the US. That is what we are working towards. It is a very radical policy and one that goes much further than the policy of any of our EC partners, though I am glad to say that we are succeeding in having them move in that direction, too. Because a certain credibility attaches to Deputy O'Malley——
A lot of credibility attaches to Deputy O'Malley.
The Deputy is a person of very high standing. He is one for whom I have a good deal of admiration but he is wrong on this Bill. Because of what Deputy O'Malley alone has been saying the distorted message might come across that this State is not interested in liberal air policy whereas we are the most interested Government in this regard in the EC.
Briefly I wish to state the motivation for the amendment in my name in the light of what the Minister has said. At the outset I indicated the Opposition's position with regard to Aer Lingus as the national airline. I indicated that it has been the tradition of this party to support the national airline, having established it in the first instance and nurtured it through the years.
I should like also to advert to the fact that in our last published policy on air transport we indicated that we expected Aer Lingus to be a commercially viable corporation and it was in the light of that that we approached this Bill. It is in that context also that my amendment is before the House.
Some of those economists who have commented on the legislation should be reminded that the raison d'etre of this House goes back to a policy which Arthur Griffith enunciated first, namely, that we should rely on ourselves to the maximum extent possible. That would be within the principles I have mentioned, namely, that we expect Aer Lingus to behave in a fashion that will make the company commercially viable and which will take due account of the consumer and the consumer's interest. The day of the idealist seems to be gone. It is regarded as Quixotic to ask in the market place for the Irish product. I would be regarded as a fool if, as one living nearer to Belfast than to Dublin, I chose Dublin rather than Belfast for my purchases. I am speaking not from a full wallet type of background or philosophy but from the point of view of something I believe in and that is what compels me to crawl with my car back across the Border into the Republic to buy petrol or diesel at a higher rate than I would pay a couple of miles down the road. People might smile at this but there remains some who are motivated by that type of thinking.
The purpose of my amendment is to ensure that the sharpest fares possible obtain in Aer Lingus. This would be to the benefit of the national carrier and to the benefit of the economy and would ensure that the customer is given a fair deal when he is using air transport. I used Aer Lingus last weekend. I was going to Cardiff but there was no direct flight to that city. The reason offered was that the flight had been discontinued because of lack of customer support. Consequently I had to travel first to Bristol. I was glad to note that the plane I travelled on was made in Belfast, I regard that as inportant but I would have preferred a lower fare. There were only ten people on the plane from Dublin to Bristol but there were 35, which I think was the maximum, on the return journey. I do not know whether there was any significance in that. I am putting this on the record in the light of what Deputy O'Malley has said and to ensure that the stand I am taking is not misunderstood.
I welcome what the Minister has said regarding fifth freedom rights out of Shannon. The Minister will recall that early last year TransAmerica Airlines could not exercise effectively their fifth freedom right from Shannon to Amsterdam because of their being forced to charge a fare which was so high as to render it not worth their while continuing service on the route. I am delighted to hear the good news that Delta are interested in fifth freedom rights out of Shannon but it appears from what the Minister says that their prospects of getting those rights in relation to Gatwick may not be all that good. However, I would not be concerned unduly about that because there is a service from Shannon to London, though it is an extremely bad service. It is operated by the cartel partners and could hardly be worse. If Delta are turned down for Gatwick, the Minister might suggest to them that they apply for other locations such as Amsterdam, Paris or perhaps Frankfurt.
I have suggested that already.
One of the great weaknesses of Shannon is its lack of direct connection with the Continent.
I have suggested locations in Europe to the Delta people.
I am very pleased to hear that. Occasionally in the midst of all this, we find some progress. I hope that what was forced on TransAmerica in the past couple of years in relation to fifth freedom rights out of Shannon will not happen to any other carrier and that they will be allowed charge fares sufficient to make it worth their while keeping the route open. It will be of tremendous benefit to the country if there is direct access from Shannon to the Continent.
Is amendment No. a1 in the name of Deputy O'Malley being withdrawn?
I am prepared to withdraw the various amendments. They have been discussed fully and we have made some progress. The amendments have been the means of some light being cast on the scene and the Minister has agreed to table an alternative amendment to one of my amendments for the Report Stage. I regret his attitude to amendment No. 3 to 11 but it is a matter which will have to be taken up another day.
Amendment, by leave, withdrawn.
Question put: "That amendment No. 1 to amendment No. 11 be made".
The Committee divided: Tá 62; Níl 74.
Tá
- Ahern, Bertie.
- Ahern, Michael.
- Aylward, Liam.
- Barrett, Michael.
- Brady, Vincent.
- Brennan, Mattie.
- Brennan, Paudge.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Calleary, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Leonard, Tom.
- Leyden, Terry.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- Molloy, Robert.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M.J.
- Noonan, Michael J. (Limerick West)
- O'Connell, John.
- O'Dea, William.
- O'Hanlon, Rory.
- Coughlan, Cathal Seán.
- Cowen, Brian.
- Daly, Brendan.
- Fahey, Francis.
- Faulkner, Pádraig.
- Fitzgerald, Liam Joseph.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Séamus.
- Kitt, Michael.
- Lenihan, Brian.
- Leonard, Jimmy.
- O'Keeffe, Edmond.
- O'Leary, John.
- O'Malley, Desmond J.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Treacy, Noel.
- Tunney, Jim.
- Wallace, Dan.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Níl
- Barnes, Monica.
- Barrett, Seán.
- Barry, Myra.
- Begley, Michael.
- Bell, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Boland, John.
- Bruton, John.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Cluskey, Frank.
- Collins, Edward.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- Coveney, Hugh.
- Creed, Donal.
- Crotty, Kieran.
- D'Arcy, Michael.
- Deasy, Martin Austin.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Avril.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Glenn, Alice.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Kavanagh, Liam.
- Keating, Michael.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McGahon, Brendan.
- McGinley, Dinny.
- McLoughlin, Frank.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Moynihan, Michael.
- Naughten, Liam.
- Nealon, Ted.
- Noonan, Michael. (Limerick East)
- O'Brien, Willie.
- O'Keeffe, Jim.
- O'Leary, Michael.
- O'Sullivan, Toddy.
- Owen, Nora.
- Pattison, Séamus.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Spring, Dick.
- Taylor, Mervyn.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Yates, Ivan.
Tellers: Tá, Deputies V. Brady and Barrett(Dublin North-West); Níl, Deputies Barrett (Dún Laoghaire) and Taylor.
Amendment declared lost.
Is amendment No. 2 withdrawn?
The Minister said in his contribution that there is a possibility of modifying that on Report Stage——
The Deputy can mention that on the section when we come to it. Is amendment No. 2 in the name of Deputy O'Malley withdrawn?
Yes.
Amendment, by leave, withdrawn.
Is amendment No. 3 in the name of Deputy O'Malley withdrawn?
Agreed.
Amendment, by leave, withdrawn.
Amendment No. 11 agreed to.
Question proposed: "That section 3, as amended, stand part of the Bill."
The Minister indicated some possibility of something germane to my amendment No. 1 on section 3 when we were discussing it. I just want to know whether that still stands or whether we can expect something.
I am sympathetic to what Deputy Wilson was trying to achieve in his amendment but to have accepted amendment No. 1 would have had perverse consequences. I will see if we can draft an amendment for Committee Stage which will go some way towards meeting the Deputy's point. In relation to amendment No. 2 in the name of Deputy O'Malley, I propose that we add at the end of the paragraph words which will give effect to what Deputy O'Malley is trying to achieve without importing the restrictions which Deputy O'Malley's amendment would have imported.
On the section, could I inquire from the Minister if he would agree to put in an amendment on Report Stage under subsection (2) in relation to the making of a decision on a tariff submitted. I thought there was an amendment relating to that here — but there is not — and that the Minister would make a decision within one month or some other reasonable period. My belief that the decision period would be one month arises from another ministerial amendment of similar type where a period of one month is specified. It seems appropriate that decisions should be made within a reasonable time. We have just heard about the Ryan Air flight to Luton which I welcome. I understand that was lodged last April and this is December. Perhaps it is because this Committee Stage is on today that a decision was made today, but it would be of great benefit to everyone, not just the airlines, if decisions on these matters were made within one month.
To deal with the point that Deputy O'Malley raised, Ryan Air asked for a decision in principle before 31 October and a decision was about to be made when some indication was received in my Department about management changes. One thing we have to satisfy ourselves about is the management arrangements of any airline and dates on which things take place. That was one factor which caused a delay to beyond 31 October. There is a requirement within Europe agreed through ECAC, the European Civil Aviation conference, that decisions would be made normally within one month, but sometimes the airlines file long in advance of a required decision date for all sorts of consultation reasons and reasons of testing the water in different civil aviation authority jurisdictions. Therefore within Europe there is an agreement that in general decisions would be made within one month.
Will the Minister apply that to this section? Subsection (2) relates to the taking of decisions. If it is the general rule in Europe, then presumably he follows it. Will he follow it in this country and apply it to the section or will he agree to an amendment on Report Stage to that effect?
There may be some difficulties in air routes outside Europe, but I will consider the point made by Deputy O'Malley to see if we can bring forward an amendment on Report Stage on the question of a time limit for any decision.
On a point of clarification, the Minister said he would put in something including tariffs which would be price competitive. Where? I have a problem with regard to the exact location.
It is at the end of line 13 of amendment No. 11.
The Deputy should look at the first amendment on the list of amendments here today.
On the amendment sheet rather than the Bill?
Yes.
At the Minister's amendment No. 11?
After the last few words of paragraph (b) "of competitive airline tariffs,""which would be price competitive".
I thank the Minister.
Deputy O'Malley has suggested that we may have to delete a word elsewhere in that paragraph. We will look at that for Report Stage also.
Question put and agreed to.
SECTION 4.
I move amendment No. 12:
In page 3, subsection (1), line 31, after "applying" to insert "(whether directly or through an agent)".
Amendment No. 12 has already been discussed with amendment No. 4. Is the amendment agreed to?
Hold on now.
It has already been discussed, Deputy.
Can nothing at all be said on it since it was last discussed about seven or eight months ago?
It has been discussed already with amendment No. 4 but on the section you may ask a question. Is the amendment agreed? Is it agreed that section 4, as amended, stand part of the Bill?
No, the amendment is agreed.
Amendment agreed to.
Question proposed: "That section 4, as amended, stand part of the Bill".
The Minister's amendment is all that is in question, is it not?
Yes.
On the section.
This section as now amended would apply to agents, presumably travel agents, as well as to airlines. I find it difficult to go along with this because it extends the cartel situation which exists among airlines — which is proved in this country anyway — to travel agents as well. In doing that it goes directly against the recommendations of the report of the Restrictive Practices Commission that arrangements of that kind should be prohibited. On the previous section I quoted the recommendation of the RPC prohibiting and suggesting that it be made unlawful and an offence that an arrangement of this kind should be made, but it is being made here. It seems regrettable, to say the least, that that should be the case. We have two organs of the same Government pulling in directly opposite directions. The RPC and the Minister for Industry, Trade, Commerce and Tourism say that practices of this kind should be prohibited and made unlawful and the Minister for Communications is here with his Bill and this section saying that practices of this kind not alone should not be made unlawful but it should be unlawful not to carry out practices of this kind.
This may not be of great interest to many people, it may be too technical and so on, but it is really ludicrous that at the same time in the same Government in relation to the same practices one commission and one Minister are saying "prohibit them" and another Minister is bringing in legislation here to say "not alone do not prohibit them, but enforce them and make it a crime if those very practices are not put into practice". This deserves attention. A Cabinet are supposed, where difficulties of this kind arise between Department as they do frequently from time to time, to make the decision as to what line should be taken. There are two absolutely conflicting lines. The Minister for Industry, Trade, Commerce and Tourism and the Restrictive Practices Commission take one line while the Minister for Communications takes another. It has not been resolved by the Cabinet and it should be. The Minister should take the Bill away and get the matter resolved so that we will know where the Government stand. Are we going to see a Restrictive Trade Practices Bill in the House in the next month or two promoted by the Minister for Industry, Trade, Commerce and Tourism making illegal the very thing the Minister for Communications wants to make legal? It is ridiculous.
We should ask ourselves whether, if a travel agent can perform his role in retailing airline tickets for less than the fixed 9 per cent of the retail price of the ticket, he should be allowed to pass on that saving to the consumer. Under the terms of this section, as a result of the amendment made to it and the general provisions in it, that is illegal. If a travel agent said he would work for 6 per cent commission he commits a crime. Is there any other country in the world that does that? Travel agents all over Britain sell millions of discount tickets every year — more than five million is the official estimate but that figure is probably well in excess of five million now — and not alone is that allowed there but it is encouraged. However, one can get jail for that here.
I wonder if the Minister will impose the draconian penalties in the Bill on travel agents who, for example, may give a free ticket to one of their best customers in return for his custom? That is not an uncommon practice. But how will a travel agent be prevented from doing that? How will that be policed? Who will know whether a customer paid for a ticket or not? In relation to this ridiculous provision, it was pointed out to me by a semi-State body — as the House will be aware there are several semi-State bodies up in arms, furious about the Bill——
Which one, because none of them has been in touch with me?
The Minister could have read the comments of some of them in the newspapers. They report to other Ministers, who are well aware of their views. If, for example, the Minister wanted the views of the chief executive of Aer Rianta he could have read them in the newspapers recently.
That is my own company.
I am sure that, like the rest of us, the Minister reads the newspapers.
I do not believe everything I read in them.
If a travel agent is prohibited from giving a discount — even a modest one of a few per cent — and that is a crime, will it be a crime if instead of nominally giving the discount on the ticket he writes in the full price on the ticket, charges the full price but hands the client a voucher for £20 worth of duty free goods in lieu of the discount so that the client going out on the trip will hand the voucher to the duty free shop at Dublin, Shannon or Cork and get goods to the value of £20? The client will look upon that as the equivalent of a discount, and it is precisely that. Does the Minister not realise how futile this sort of exercise is in trying to make such practices illegal when there is not the slightest difficulty of getting around them and when within 200 yards of the House, in the next street, there is at this moment a travel agent advertising all kinds of discounts ex Belfast, which is just 100 miles away? In fact, Belfast is nearer to this city than Shannon Airport.
Is it all right to offer discounts to selected people but not to offer them to the public at large? I do not think that is all right. Since they are available in virtually every country in the world they should be available here. I do not think it should be necessary for somebody to have to travel to Belfast to get a ticket. He should be able to do it from Dublin or Shannon if he wants to. He should not be put in the position that he is forced by the much higher cost of flying out of this jurisdiction to go to another jurisdiction. Not everybody is like Deputy Wilson, who said that even if it cost him £100 extra he would fly from Dublin. I salute that patriotism, but there are very few like Deputy Wilson. Most people will avail of the opportunity that there is to save £100. A lot of people are going to take the discounted flights out of Belfast now because they cannot get them out of Dublin or Shannon. That only causes loss to the country.
Throughout the debate Deputy O'Malley has been getting things very seriously wrong. He referred to the report of the Restrictive Practices Commission and suggested that there was a great divide between my colleague, the Minister for Industry, Trade, Commerce and Tourism, the Restrictive Practices Commission and myself. I presume the Deputy has read the report of the commission and I am sure that, due to a lapse of memory, he has forgotten that the report does not, like the Bill, deal with scheduled air fares. The report deals with chartered air fares. One of the difficulties in dealing with the Bill is that Deputy O'Malley continues to make comments about things that are inaccurate. It is difficult to deal with that. The points made about the report of the commission are not pertinent to the Bill, which deals with scheduled air fares and not charter fares.
I read the extract already, but obviously the Minister and his advisers did not hear it all. I will read it again. It states:
9. The inclusion of a provision in the rules of an association of tour operators and/or travel agents imposing on its members price maintenance requirements in respect of rates and fares for travel on scheduled services, whether surface or air, should be prohibited.
It only deals with scheduled services.
That quotation has been taken completely out of context. It deals with the rules of the Irish Travel Agents Association in that respect.
The Minister told me that it did not deal with scheduled services at all but with chartered services. However, after I have read out the quotation for the second time he realises for the first time that it only deals with scheduled services. He is now saying I am wrong again because the quotation relates to the Irish Travel Agents Association.
Only to the rules of the association.
The rules and what they can charge. One of their rules is that all members should charge the full fare and I am saying that any such rule should be prohibited because its members should be allowed to discount. Will the Minister have the grace to say that he is wrong and stop this nonsense of accusing me of making mistakes and wrong assertions all the time?
Will the Deputy, who is a solicitor, accept that under the legislation setting up the Restrictive Practices Commission — he was Minister in charge of the Department at the time — scheduled air fares are excluded from the remit of the commission?
The selling of tickets to travel agents is not excluded.
Does the Deputy accept what I said?
No, I do not.
I cannot help the Deputy any further.
This inquiry was held into the selling of air tickets on scheduled services among other things and the particular recommendation I read out deals only with scheduled services. It says that it should be prohibited that travel agents should be forced to sell for the full price if they do not want to. That is an indication of how difficult it is to make progress in these circumstances. However, we live in hope. I agree to the section notwithstanding the most unsatisfactory nature of the debate on it.
Question put and agreed to.
NEW SECTION.
The next amendment, No. 13, proposes the insertion of a new section. It is in the name of the Minister and on that amendment No. 3 is consequential. Therefore, amendments Nos. 3, 13 and the amendment No. 1 to No. 13, in the name of Deputy Des O'Malley, may be debated together.
I move amendment No. 13:
In page 4, before section 5, to insert the following new section:
5.—(1) The Minister shall keep a register (in this Act referred to as ‘the register') for the purposes of this Act and shall, as soon as may be, enter therein particulars of—
(a) any airline tariff submitted pursuant to the requirements of a notice under section 3 of this Act and the name of the air carrier by or on whose behalf the submission was made, and
(b) any decision given by the Minister under the said section 3.
(2) The register shall be kept at such place as the Minister shall direct and shall be available for inspection during such office hours as shall for the time being be specified by the Minister.".
As I indicated when moving amendment No. 3 which provides the definition for the register, the new section proposed in amendment No. 13 is very much a consumer orientated measure. Subsection (1) requires the keeping of an up to date register of airlines, tariff proposals and decisions made by the Minister thereon. Subsection (2) provides that the Minister shall make the register available for public inspection during designated office hours. The ready availability of one register of tariff filings as they come into my Department will mean that any interested party can see what airlines are proposing. Similarly, the public will have a ready means available to them to check what fares have actually been approved or disapproved as the case may be.
This register might be helpful to Deputy O'Malley because he asserted twice, earlier in this debate, that a filing had been made by Dan-Air. Despite denials by myself, Dan-Air and Aer Lingus he repeated that statement. With a register available now even Deputy O'Malley will not be able to get it wrong, because he will be able to check.
We will deal with the first matter first.
Would the Deputy please move his amendment?
I just want to clarify the position. The Minister proposes "in page four, before section 5, to insert the following new section". What does he mean by "before section 5"? Does he mean part of section 4 or a new part of section 5?
This is a new section. If and when the amendment is accepted, it will become section 5.
And section 5 would become section 6?
And the numerology of the following sections would be changed. That is a routine parliamentary procedure. The numbering would not be changed until the amendment is dealt with and accepted.
Usually that is stated explicitly. There is nowhere a reference to the fact that that will happen.
It would be a new section to be called section 5. Deputy O'Malley to move amendment No. 1 to amendment No. 13 in the name of the Minister.
I move amendment No. 1 to amendment No. 13:
Between the eighth and ninth lines, to add the following paragraphs:
"(c) any communication between an airline and the Minister or his Department concerning fares or charges and route access involving the said airline,
(d) any communication between an airline and the Minister or his Department concerning fares and route access involving other airlines,
(e) any communication between airlines pertaining to fares and route access,
(f) any communication between airlines and associations of airlines pertaining to fares and route access,
(g) any communications between the Minister and foreign governments pertaining to fares and route access under an air transport agreement.".
Before I get into the details of that amendment, I should like to make a brief comment on the Minister's statement, which he keeps coming back to, about my alleged mis-statements, he having been caught out on section 4.
I was not caught out on section 4.
He thinks only in these rather combative terms. I feel that I should exercise my right of reply. I said that Dan-Air filed an application, or made one to the CAA, as they told various people at the time, and that it had been granted in accordance with the normal practice. Various people told me that Dan-Air had said that to them. Dan-Air confirmed that they had said that to them when it was rechecked.
As a result of an inquiry carried out by the Minister and myself jointly on, I think, 24 September last, we got a little nearer the facts, but not right to the bottom of them because those who are actually at the meeting in question were not allowed to attend. What we did establish at that September meeting was that at the meeting held between Dan-Air, Aer Lingus and British Airways on 23 January 1985, Dan-Air, who had at that stage made informal soundings in accordance with the normal practice of airlines and had been given a positive indication by the British CAA that this proposal of theirs for an £85 fare between Dublin and London would be granted, mentioned this at the meeting. There was immediately a hostile reception to that in various statements which were made which, in turn, in the week or so later caused Dan-Air not to proceed with the matter. The Minister makes great play of this and has contradicted me about six times in this House on the basis that I said that Dan-Air had made a filing and had been accepted by the CAA. It turns out that Dan-Air did not make a filing in the formal and strict sense of the word.
What they did was what they and Aer Lingus and all other airlines do in similar circumstances. They went in before that and said: "We propose to do this. Would you agree to it or not?" After it had been considered by the CAA, that body said "Yes, we will grant it. You can now make your filing if you want to." At that stage the meeting with Aer Lingus and British Airways took place and, as a result of that meeting, Dan-Air did not proceed with the formal filing. Nonetheless, it is perfectly clear that, within the normal meaning of the terms within the industry, that fare was approved by the CAA and it is only misleading the public to suggest otherwise, or to try to rely on this sheer technicality of the technical meaning of the word "filing". People concerned for the truth should not seek to rely on or justify themselves with such things.
We had an agreed note of this meeting. I do not wish to embarrass Deputy O'Malley any further but——
I shall produce all the correspondence, including my own——
Deputy O'Malley made allegations in this House which have not been sustained, which have been rebutted. A meeting was arranged between senior executives in Aer Lingus and Dan-Air by me which Deputy O'Malley attended at my invitation. After denials had been issued by myself, Aer Lingus and Dan-Air, these allegations were repeated by Deputy O'Malley. I said that I had been assured that he was wrong and wanted to know the truth of the matter. There were four points to the allegation including that Dan-Air were threatened with being excluded from computers and so forth. It transpires that that is all false.
That certainly did not transpire.
I have a minute of the meeting agreed by Dan-Air and Aer Lingus as accurate minutes of that meeting, as an accurate reflection of the precise truth and Deputy O'Malley has persisted——
They are not minutes of the meeting.
Deputy O'Malley has a copy of the minutes as agreed. He has kept on repeating false allegations. I can understand that happening once or twice but, once we have had this meeting and have had the situation clearly agreed, it is not good enough that he comes into this House and brings up these allegations again.
If they were false allegations I would not be making them again today. What the Minister has referred to as minutes were not minutes at all. I wrote to him recently about the matter because when he sent me this statement of his, not an agreed statement——
Not of my own, of Dan-Air and Aer Lingus.
——relating to some few of the points made at the meeting, I was then in hospital and was not in a position to reply until the last few days. I have replied now and made the position clear.
The summary was agreed at the meeting.
This is becoming somewhat incestuous.
I am afraid, indeed, it is.
Would it be possible to put the report before us?
The Minister has nothing to say except to talk about all the false statements that I am alleged to have made.
Wrong, wrong, wrong.
Would it not be possible for us to see it?
If I may return to the amendment to establish the whole question of the register, this is a very welcome development indeed. It was unheard of 18 months ago. It is a welcome development because of the very thing about which we have been talking, the shadowy things that go on in the background in relation to applications for flights, arrangements made behind closed doors at different times where certain people apply for things and either get them or are muscled aside. It is a great improvement that at least some part of this process will now, for the first time, be open to some very limited inspection.
The two proposals of the Minister in relation to this register are not sufficient; they should go much further. The public will get only a very limited view indeed of what is happening in relation to applications for different tariffs, routes and so on. The register as proposed which will be available to inspection would contain only two items. It would contain only the tariff applications filed and the Minister's decisions. That is not enough, particularly in the light of my fairly detailed knowledge of the famous meeting in London on 23 January 1985 between the three airlines, which even the representatives said was unusually hostile by the standards of these meetings. It is frightening to realise the kind of muscle that is used privately behind the scenes. It is necessary to add to the register some of the things which are listed in amendment No. 1 to amendment No. 13. They are as follows:
(c) any communication between an airline and the Minister or his Department concerning fares or charges and route access involving the said airline,
(d) any communication between an airline and the Minister or his Department concerning fares and route access involving other airlines.
This point is very important because this is where much of the real trouble happens. One airline goes to the Department in privacy to comment on the application of another airline. The first airline should be allowed access to those comments.
The next point concerns any communication between airlines pertaining to fares and route access. That would cover, for example, what went on at this famous meeting in London. It would raise the hairs on one's head when one sees the image which is sought to be portrayed by the front men of some of the organisations concerned.
The next point concerns any communication between airlines and associations of airlines pertaining to fares and route access. Associations of airlines have a very strong influence on what happens. IATA is the most obvious example, but there is also the European association — a much less powerful body but nonetheless of some significance. Another association which will become of more significance is the association of independent airlines within Europe who cannot be kept down for all time.
My next point relates to any communication between the Minister and foreign governments pertaining to fares and route access under an air transport agreement. Judgment on matters of this kind could not be properly reached without that kind of information. For example, what negotiations, if any, are going on between the Minister and the Department of Communications and the British Secretary of State for Transport? The British seem to be negotiating with everybody in Europe. I hope they are negotiating with us with a view to bringing into Anglo-Irish air routes the same kind of things they have negotiated with several other European countries. This would be enormously beneficial to us and presumably also to Britain. I invite the Minister to avail of this opportunity to make another reassuring announcement, on the lines of some of those he has made this morning, that he has agreed or is on the point of agreeing with the British authorities a more liberal bilateral agreement to replace the very unsatisfactory one which now exists between Britain and Ireland and fully sustains the cartel operations which are obviously not in the interests of this country.
I want to go back to Deputy O'Malley's quotation from the report of the Restrictive Practices Commission. The Commission state at paragraph 1.7 of that report as follows:
One obvious example of an ancillary service would be the sale of tickets for scheduled flights and this is, in our opinion, outside the scope of the enquiry.
I want to put that on the record in the interest of accuracy and to reaffirm what I said earlier, notwithstanding the quotation out of context by Deputy O'Malley of a particular section relating specifically to the Irish Travel Agents Association.
It deals precisely with the point we are talking about.
Regarding the last point he made about an agreement with the British, this has been the subject of public statements by myself not once but many times. Well over a year ago, when I met Mr. Nicholas Ridley, the Secretary of State for Transport, in London, I proposed to him a bilateral agreement of a very radical nature and he expressed interest in discussing it. We have been having informal talks ever since. A meeting was to have taken place in Dublin between his junior Minister responsible for aviation and either myself or my Minister of State. Unfortunately, that cannot take place next week but will, I hope, take place within the next few weeks.
We are very much advocates of what I would call an "open skies" policy in Europe. It will take some considerable time before an overall European Community aviation policy develops because of the obvious vital interests of many countries. However, we ought to start by seeking bilateral and in some cases trilateral agreements in relation to aviation. This would include the question of fifth freedom rights.
In Britain.
Yes, but we are willing to talk to other countries as well. We are willing to grant reciprocal rights here. We are not asking anything for nothing; it would have to be reciprocal. I say this to underline the policy which we have been pursuing and developing since I came into office.
If Deputy O'Mally and Deputy Wilson have been reading the reports from European Community — they have been quoting some of them — they will see that three countries are listed as favouring radical liberalisation, ourselves, Britain and the Netherlands. Some of our colleagues in Europe have been stunned by the radical nature of the proposals we are pursuing. I say that in reply to the point raised by Deputy O'Malley. We are pursuing new bilateral arrangements with Britain. I do not know when they will come to fruition but any delay will not be through lack of effort on our part.
Deputy O'Malley is asking that we declare what we have for breakfast every day, every confidential telephone call or communication. No business could operate like that. It does not make sense. What I am proposing in this Bill goes a very long way. It is a new departure. We are proposing a register requiring the principal points of information, certainly all the points people need to know. Therefore, I cannot accept the amendment.
There has been a lot of talk about Dan-Air and I should like the Minister to tell us who owns that airline. Is it a privately owned company?
Yes.
Is it quoted on the stock exchange in either London or Dublin? Is there any Irish investment in it? These are relevant questions because in my experience of ten months in that Department there were not many countries or governments anxious to oblige Ireland in regard to any of the freedoms of the air. I am very suspicious of the activities of British Airways and the British Government. I know they are being privatised but I should like to know whether the Minister will be dealing through the Government with British Airways when privatisation is accomplished. I cannot help being suspicious when I read about what went on in regard to Laker between Britain and the United States and, in an attempt to clarify the position, Mr. Laker was involved at a very high level in governmental activity. I do not know if we should be bleating too much about Dan-Air; it may be a question of another group of capitalists trying to maximise their profits. I say this against a background of commitment to the Irish airline being as highly competitive as they possibly can in whatever circumstances obtain.
I cannot answer fully for Dan-Air but they are a privately owned British airline and it should be made clear that they are well respected. I have a great deal of respect for Dan-Air and we cannot say that about every airline. There are airlines with whom we do not like doing business and whose behaviour is not in the best interests of the travelling public. My Department and I have nothing but the warmest praise for Dan-Air.
What about British Airways and the British Government in relation to privatisation? Will British Airways have a free hand or will the Minister be dealing with the Government?
I do not think that privatisation affects anything. British Airways are like any other airline: they make filings to my Department and that will not change when they are privately owned. They did not have any special status as a State owned airline so there will be no change.
The whale was also respected but that was not much good to Jonah.
Nobody has raised any doubts about the respect in which British Airways are held and I am sure everyone will respect my comments in relation to Dan-Air.
Deputy O'Malley, are you pressing the amendment?
I do not want to be antagonistic but when I make points the Minister does not reply to them. He says that I am all wrong about this, that and the other. However, there is no reply to the points I made. It would be too strong to say that it is personal abuse but it is is, unfortunately, this rather contentious series of denials, and things from way back are dragged out as proof that whatever I say on any amendment must be wrong. I would be interested in hearing, for example, why some at least of these various matters regarding communications and the Minister regarding the fixing of fares on routes should not be made available to the public. I welcome the fact that the register has been set up but there are only two items in the new section 5 which are not enough to enable the average member of the public or commentator to form a reasonable judgment about what is proposed or about decisions made.
I am not necessarily saying that I insist on getting all the information which I set out in my amendment but even half that information would be welcome. We need more information than simply the fact that a tariff is lodged and a decision made on it. One would certainly need more information than that. If the Minister thinks that the five headings I set out are too much perhaps he would be prepared to take some of them? Even the one about association of airlines, contacts with them and what they lay down is important because the public do not realise what IATA do. They have been doing a PR job to project themselves as a trade association and to conceal the fact that they are a price fixing body. They are still fare fixing in Europe and consumers should be made aware of that to see what influence or input they have. Their influence has waned greatly in other parts of the world, but until they commission the court in Luxembourg or the Commission in Brussels to take steps early next year to put a stop to many of the existing practices, these arrangements in Europe will continue to the detriment of many of the people here.
If airlines are as reasonable as they are portrayed, why should their communications with the Minister in relation to routes, fares and so on not be published? Why should it be only the tariff and the decision? The principle of the register introduced by the Minister in these amendments six or eight months ago as a result of the debate on Second Stage 18 months ago is very welcome but it is a pity to bring in a register and then to confine it to so little information as is suggested here. Some further information is obviously needed in order to make it useful and workable.
The five paragraphs of Deputy O'Malley's amendment go very far indeed and obviously we could not accept them. It is like asking what you had for breakfast. Paragraph (g) mentions communications between the Minister and foreign governments pertaining to fares and route access under an air transport agreement. No government would want to communicate with us if we were going to publicise everything they said to us. Paragraph (f) mentions any communication between airlines and asociations of airlines pertaining to fares and route access. We do not know what communications there are between airlines or associations of airlines. You break down all sorts of commercial practices and of course there have to be conversations, discussions and preliminary planning, However, the principle, as Deputy O'Malley acknowledged, is a good one and I will see if there is anything I can do on Report Stage to meet the points raised.
Amendment No. 1 to Amendment No. 13, by leave, withdrawn.
The Minister's amendment is relevant in the light of amendment No. 1 in my name to the Minister's amendment No. 11 because the information which we would get under the provisions of amendment No. 5 (1) (a) of amendment No. 13 in the Minister's name would indicate to the general public whether the Minister was refusing a tariff on the basis of it being too low. There is a considerable improvement in that the consumer or even another air company would be able to see what is the tariff that is approved or otherwise.
Amendment No. 13 agreed to.
Amendment No. 14 in the name of Deputy O'Malley has been dealt with already when we discussed amendment No. 4. Does the Deputy wish to press amendment No. 14 which has already been discussed fully or is it being withdrawn?
The difficulty is that it is eight months since the other part of the Bill was discussed.
It was agreed seven months ago that amendment No. 14 would be taken with amendment No. 4.
I had not anticipated that the Bill would be abandoned again for a long second period. I understood it was abandoned——
The Deputy is wrong again.
It is difficult to understand how a Minister who introduced the Bill as an emergency measure on 27 June 1984, who said that disaster would befall Irish aviation if it was not passed within two days ——
That is wrong also. I was not here.
No, the Minister was on a discounted ticket in Tokyo. The Minister of State was here in the House speaking on his behalf. We were told then it was an emergency measure that had to be passed within two days and it is difficult to realise that we are still on Committee Stage 18 months later.
Is the Deputy pressing amendment No. 14 or is he prepared to withdraw it?
I did not anticipate a delay of 18 months. I thought the Government and the Minister had a stronger commitment to this matter.
At that stage the Deputy agreed to allow the amendment to be discussed with amendment No. 4.
I move amendment No. 14:
In page 4, subsection (2), line 22, to delete "or an intermediary to whom this section applies".
I will not press the amendment.
Amendment, by leave, withdrawn.
Amendment No. 15 in the name of the Minister, amendment No. 15 (a) and amendment No. 16 are consequential. Is it agreed that they be taken together?
Yes.
I move amendment No. 15:
In page 4, subsection (4), line 39, to delete "(a)".
These are technical amendments, the combined effect of which is to extend to intermediaries the same defences against prosecution as are available to air carriers in the present text. Essentially their purpose is to meet genuine circumstances where either an air carrier or an intermediary acted in good faith, notwithstanding any technical contravention of the Bill. It is in ease of the present text, to give further grounds of defence to travel agents and other intermediaries.
If I heard the Minister correctly, he says this extends certain defences to travel agents. That is because they were dragged into this by some of the earlier amendments he made. It would be quite unreasonable if they did not have whatever limited defences are open to them. I have no objection to travel agents having these limited defences but they are not of much use. That is because under this Bill a person's prospect of an acquittal would be fairly slim once proceedings were taken. I welcome the amendments so far as they go but they are of no importance.
We cannot get away from the fact that the whole operation is completely wrong. Travel agents will be prosecuted for these allegedly dreadful offences and they will be subject to huge penalties. The fact that they will have the same defence as that available originally to airline owners is not of much use but I suppose they will not be any worse off. It does not get away from the fact that the whole concept is absolutely outrageous. We are making it a serious criminal offence for someone to sell a ticket for a few pounds less than the approved IATA cartel fare. Nothing said can gainsay that and it makes this country and this House look very foolish.
If the decision of the European Court goes the way of the report of the Advocate General, all of this law will be blown out. The Minister mentioned earlier that EC law takes precedence. We know that but what is the point in bringing in a law and forcing it through against all reason and commonsense when a decision will be made, probably next month, by the European Court on these points? If they decide the way their Advocate General has advised them, all of this will be futile. I ask the Minister to consider leaving this matter over until January. I understand a decision is likely to be given about mid-January which is only five weeks away. All of this will be blown out if the decision goes the way the Advocate General has advised. Why must we go through this futile exercise now?
The Deputy has been continuously asserting this point, that it is futile and that this Bill will prevent our having low air fares. It is nothing of the kind. The Bill is neutral. Let us suppose a cartel — he has attacked cartels quite strongly and not without some merit — files a fare of £400 for a return journey from Dublin to London, is the Deputy saying I should not have the power to stop them? This Bill puts beyond doubt the fact that the Minister always had the power to regulate air fares and that means downwards as well as upwards. I have used those powers in the past three years always to reduce air fares——
They are higher now then they were three years ago.
I have persistently reduced the amounts set out in the findings to my Department, even when they have been approved by my colleagues abroad. I have ensured that air fare increases have been reduced to sub-inflation figures. All we are asking for is the right to regulate. There will be cases of filing which may be predatory and against the public interest and we need to have these powers.
What is important is the policy, how the powers will be used. Since I became Minister my policy has been to keep air fares down and to go as far as we can towards liberalisation, always bearing in mind the national interest. Nobody wants to abandon the national interest, and Deputy O'Malley would not do so if he were sitting here. If intermediaries break the law, as the Bill stands now they would not have a defence. In these three amendments they could demonstrate that they were acting in good faith and show they were not breaking the law.
Would the Minister clarify what section 5(3) will be — what will the words be, reading from "A person who ..."?
Subsection 4(a) will become subsection 4. Subsection 4(b) will become subsection (5) with the words "If in any proceedings for an offence under this subsection..."
Amendment agreed to.
I move amendment No. 15a:
In page 4, subsection (4) (a), line 43, to delete "paragraph (b) of this subsection" and substitute "subsection (5) of this section".
Amendment agreed to.
I move amendment No. 16:
In page 4, subsection (4) (b), to delete line 46, and substitute "(5) In any proceedings for an offence under this section it".
Amendment agreed to.
I move amendment No. 17:
In page 5, subsection (5), line 10, after "contravenes" to insert ", whether directly or as an agent of an air carrier,".
Amendment No. 17 was discussed with an earlier amendment.
Amendment agreed to.
Amendment No. 18 was discussed with amendment No. 4 some months ago. The discussion was concluded.
I did not speak on some of the other amendments because what I wanted to say was more relevant to amendment No. 18.
The Deputy may speak on the section, as amended.
I move amendment No. 18:
In page 5, lines 19 to 27, to delete subsection (7).
Amendment, by leave, withdrawn.
Question proposed: "That section 5, as amended, stand part of the Bill".
The section sets out a series of offences, running to a page and a half committed by all sorts of people doing various things. Somebody might charge too little——
Or too much.
I have been around too long now to believe that. If somebody charges over and above the charges of a cartel he can be prosecuted.
Only three weeks ago we had to intervene to get a fare reduced. We would have had to prosecute if the instruction had not been obeyed.
One of the main differences between the law as proposed and existing law is that this will apply to travel agents, whereas it applied only to airlines. Last year when the Minister unsuccessfully prosecuted a travel agent the Supreme Court threw him out on the grounds that he had no power——
That is not so.
The court said the Minister had a case to answer.
The Supreme Court said the Minister did not have the power to prosecute travel agents because they were not included in existing legislation. Why did the Minister rush in with this Bill as being an urgent measure?
It was not a prosecution and it was not in the Supreme Court. It was a proceeding for an injuction in the High Court. The court decided not to grant an injunction and decided to put it on the list and it would take ages to reach it. The purpose of this Bill is to remove any doubts. People know that the Bill will be enacted.
The Minister wrote me a letter of apology for various statements he had made.
I look forward to about ten letters from the Deputy.
The Minister considered the matter was of great urgency, that it was virtually an emergency, and the Bill was introduced to remove difficulties that would arise for aviation in Ireland.
Progress reported; Committee to sit again.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.