asked the Minister for Tourism and Transport if his Department condone the application of fares which are not economic and which are designed to create unfair competition; and if not, the steps he intends to take to prevent such malpractice.
Ceisteanna—Questions. Oral Answers. - Transport Fares.
26.
Transport undertakings are expected to charge the lowest possible fares consistent with adequate service and economic operation and that is the principle which I apply in the discharge of my functions in relation to such fares.
I think we would all agree that the lowest possible fares should be charged for services provided. What I am asking the Minister is if he agrees that fares which are not economic should be tolerated? Does he have any control over this aspect of competition in the travel business, whether by air, sea or road?
The short answer is yes, I do have control in certain areas. I have control in regard to the air fares and, as far as CIE are concerned, in regard to rail, Bus Éireann and Bus Átha Cliath fares. Admittedly, CIE were disappointed that I did not permit the increases in Bus Átha Cliath fares or in fares generally which they were demanding earlier in the year. The answer in short is I do have control and have exercised such control.
Where it is quite obvious that certain fares are not economic, where these fares are being operated by State-sponsored bodies and where it is apparent they are being operated to undermine competition from the private sector, will the Minister please take action rather than have elimination of competition because that is obviously the objective, whether in regard to the £5 return fare being charged by Bus Éireann on long provincial routes, whether it is the cheap fare being charged by B & I on the Irish Sea or whether it is the fare of £35 to London which has been announced today by Aer Lingus. That same company told us less than three years ago that the economic fare could not be less than £206 return to London.
The elimination of competition would worry me because competition is very important. With regard to the reference to low fares, there are different kinds of fares. It has been the custom for the last couple of years when a service is starting up to have promotional fares and they were often very low fares. It was never envisaged that that type of fare would last and it did not last in the case of the five airlines that are flying from London-Dublin and Dublin-London. There is no question of that happening. Part of the package that we will be agreeing with the United Kingdom and which I will be signing within the next couple of weeks will have a double refusal clause before a fare is refused. In other words, both Governments will have to refuse the fare before it will have any effect on the airline.
I agree that cheap promotional fares for a short period may be desirable and we could agree with that but if uneconomic fares are being charged in order to put competitors out of business we would then take action to see that that undesirable activity is stopped because it would simply be a case of using taxpayers' money to defeat the long term interests of the same taxpayer.
I can assure the Deputy that I would step in, within the powers I have, if there was an indication that competition was being eliminated.
Is the Minister aware of the terms of EC Directive 5938/84 which puts very strict limitations on the type of fare that can be charged? The type of fares that have been announced in the media today clearly contravene the spirit and the meaning of that directive in a number of instances. I would like to draw the Minister's attention to that directive. Is he aware of its contents and will he please check it to see that the airlines and any other transport bodies conform with the terms of the directive?
I am aware of the directive to which the Deputy has referred. I am quite sure that the Commission of the European Communities will be watching very closely as it is their specific function to guard their directives. No doubt we will have allies there.