Liam Kavanagh
Ceist:7 Mr. Kavanagh asked the Minister for Tourism and Transport if he is satisfied with the results to date of the new air transport policy recently announced by him.
Ceisteanna — Questions. Oral Answers. - Air Transport Policy.
Eric J. Byrne
Ceist:17 Mr. Byrne asked the Minister for Tourism and Transport the reason three air routes were taken away from the national airline, Aer Lingus, and handed over to the privately owned Ryanair, in view of the fact that these routes were developed and made profitable by Aer Lingus; if he will outline the Government's plans for the future development of Aer Lingus; and if he will make a statement on the matter.
Nora Owen
Ceist:63 Mrs. Owen asked the Minister for Tourism and Transport if he will outline Government policy towards Aer Lingus with regard to allowing the company to develop and maintain new and existing routes, having regard to his recent action of excluding Aer Lingus from routes which they had opened and developed.
I propose to take Questions Nos. 7, 17 and 63 together.
On 20 September 1989, following a review which I had conducted of the recent performances of Aer Lingus and Ryanair, I announced a number of changes in the allocation of routes to the two airlines. These changes included the grant of sole operating rights to Ryanair on the Dublin to Luton, Stansted, Liverpool and Munich routes and to Aer Lingus on the Dublin to Heathrow, Gatwick, Manchester and Paris routes. Except in the case of the Dublin-Liver-pool route, the new arrangements came into effect from the end of October 1989. The change in the case of the Dublin-Liverpool route was not due to apply until the beginning of the summer season in March 1990 but Aer Lingus for their own good reasons, linked, I understand, to a shortage of aircraft on other routes, withdrew from the Liverpool route with effect from 15 January 1990. In order to avoid any short term capacity problems on the route, Ryanair recently increased its services from one to two flights per day.
The changes in route allocation were designed, inter alia, to place Irish airlines in the best possible position to take advantage of the liberalisation of air transport in the European Community in the run up to 1992 and to focus aviation policy on a strengthening of the Irish presence on services to and from Ireland, rather than having two Irish carriers actively pursuing the same traffic on identical routes.
The measures are intended to apply only until the end of 1992. They are being closely monitored in the interim to ensure that there are sufficient services to cope with growth in demand and, in particular, that there will be no diminution in tourism traffic.
As regards the future development of Aer Lingus, I have reaffirmed to the board of Aer Lingus, and to the unions representing Aer Lingus employees, the full commitment of the Government to the expansion to the airline and development of their network of services abroad. In this context, I would mention the major effort the Government made to secure additional landing rights for Aer Lingus in the United States, which has resulted in the opening up of access to Los Angeles for Aer Lingus. I should also point out that I have fully supported the Aer Lingus programme of acquiring shareholdings in charter airlines aimed at serving the large and growing charter market from northern Europe to sun destinations. I have also backed their expansion of ancillary activities, including a major new hangar development at Dublin Airport.
The routes on which Ryanair were given exclusive rights represent three out of 36 in the Aer Lingus network. I am satisfied with the results to date of the new arrangements and I am also satisfied that they will have no adverse impact on the viability of Aer Lingus. The changes are strictly limited in scope and duration and are designed to meet specific policy objectives which are in the national interest and which will, I am convinced, serve the long-term interests of both Aer Lingus and Ryanair.
The Government's commitment to Aer Lingus is of long standing and has been well justified by the contribution the company have been making to national development and wealth creation for over 50 years. That commitment remains unchanged.
What discussions took place with the national carrier, Aer Lingus, and the trade unions involved in Aer Lingus before a decision was taken to hand over the three routes, which had been served exclusively by Aer Lingus? What was the outcome of those discussions, if any? I understand from the Minister's reply that there was some correspondence between him and Aer Lingnus. I would have imagined that some discussions would have taken place and some agreement would have been reached before a decision was taken.
I did not initiate any formal discussions with either airline. I had a review undertaken as to the operation of the existing policy with Aer Lingus and Ryanair. As a result of that review I decided to pull the airlines apart, as it were, in order to get some rational approach to serving the island. I had discussions immediately before the announcement with the chairman and chief executive of Aer Lingus and subsequent to the announcement I met at length with a very full delegation from the workers of Aer Lingus representing most of the trade unions involved in the company.
Would the Minister not agree that his decision has created a position where Ryanair will have no competition at all on the routes they serve, with the exception of Luton, and that the workers in Aer Lingus have been demoralised as a result of the Minister's decision? Would the Minister not agree that Stansted played a very important role in the potential development of Aer Lingus routes between Ireland and England because of the congestion at the other London airports?
I am satisfied that there is ample competition on the routes in question. There are four airports in London and a person wishing to travel from Dublin can choose from up to six carriers operating between the two cities. In the case of the two Irish airlines a passenger can choose any one of these four airports. That is the kind of competition that makes sense for the airlines in question. I am satisfied that Aer Lingus are going from strength to strength with Government support and that this small adjustment to airline policy and strategy is something which Aer Lingus are well able to handle. I have full confidence in them.
Arising from the Minister's reply, can he tell the House if his earlier plans have now been subverted by the fact that a British based company has or is about to come on to one of the routes which he has exclusively given to Irish companies——
Which one?
——and that will make null and void the Minister's plans.
Which route?
Manx Air is the airline in question. Is it true that given the objections made publicly by Aer Lingus, following on the Minister's decision, that he called in the airline and reprimanded them for doing so?
I did not call in the airline to reprimand them for any such thing. Manx Air are on the Liverpool-Dublin route with Ryanair. At present they are working in co-operation because the sudden decision of Aer Lingus to withdraw from the route much earlier than I had asked them to do so. I am satisfied that within a very short period they will be operating completely independent of each other and that there will be direct competition between both airlines. I welcome Manx Air on that route, or indeed any other airline that is not competing directly with Aer Lingus and Ryanair.
There are a number of Deputies offering. I want to facilitate them if they will be brief. First, I will call Deputy Seán Ryan, then Deputy Byrne and finally Deputy Kavanagh.
Would the Minister not accept — probably he will not accept — that the decision in relation to Stansted effectively keeps Aer Lingus from expanding on the London route which is the most important route? It affects the tourism potential in that area, while the growth of Aer Lingus in that area is also affected. Would he not accept that this decision, without consultation, has caused much concern to the workforce who have given a lot of time to building up Aer Lingus?
I have been in touch with the workforce in Aer Lingus. There are 1,000 extra people working in that organisation now compared with two years ago. They are growing at a phenomenal rate. There was the recent announcement of a £35 million hanger. A number of new routes have been announced including the Los Angeles route. The company is going from strength to strength and this is a very small adjustment. With respect, the Deputy's statement is exaggerated. In regard to Stansted — and I will not delay the House by giving figures — I will give the bottom line on it. The capacity on this route for next summer — according to the airline flights lists and so on — will be double what it had been last summer. Therefore, the capacity even without Aer Lingus on that route — which is of tourist and business interest — is actually doubled and indeed this is roughly the pattern with all the other airports which both airlines serve. In other words, the policy has resulted in an increased number of people travelling. It has resulted in rational competition, in choice for the consumer, it has not interfered with Aer Lingus and, perhaps, it has given Ryanair an opportunity to remain in business.
Would the Minister not agree that what happened was that Ryanair could not compete with Aer Lingus on the routes, that they threatened the Minister they would not make any further investments in Ryanair and that the only solution the Minister could come up with was to discriminate against Aer Lingus in favour of exclusive rights to Ryanair? Miraculously, and almost overnight, they produced an investment programme.
The Deputy should be aware that Ryanair also gave up one route, coming off the Paris route; so it worked both ways. I should also like to refer the Deputy to the very successful regional airport programme. I estimate that approximately 650,000 passengers will use the regional airports this year. That has something to do with both Aer Lingus and Ryanair and the contribution which both have to make to the airline policy of the country. The Deputy will appreciate that taking a national view it is important that both airlines have room to breathe.
It is a valid point.
I am fully committed to the development of Aer Lingus but I am also committed to ensuring that a second airline gets a chance.
In the Minister's original reply to me he said no formal discussions took place between the two airlines as regards the allocation of the routes. May I ask the Minister if it is now the case that there may be other applications which are being discussed without reference to Aer Lingus? Can Aer Lingus anticipate that other routes will be handed over without any further discussion? Can he give us an assurance today that Aer Lingus' routes will not be handed over to any other airline, irrespective of who it is?
I can give the Deputy that assurance. The policy was designed to pull the airlines apart at the fringe — the three routes out of 36 — to enable them both to go their own way and provide alternative choices to the public. That policy is complete and is in place until 1992 so there is no question of any extension of that policy.
A final question from Deputy Carey.
In view of the fact that the Minister said there is such an advance in regional tourism, he should have considered additional routes for Shannon when he was making the policy changes. He seems to have forgotten that Shannon can play an important part in the tourism pattern and that many more routes are needed to the UK, to Europe and especially to Brussels.
I would have thought the Deputy would have been pleased with the response to my first Dáil Question today in regard to Shannon.
That is not the only thing.
It did not arise in this case because what we were doing in this particular policy was untangling routes that existed. Shannon was not involved in those routes on which both airlines directly competed head to head.
Question No. 8, please.
Will the Minister give them additional routes?
There are plenty of routes. The difficulty is in getting airlines to fly them. I have routes into all sorts of strange sounding places.
What about Brussels?
If the Deputy comes up with an airline I will gladly give him the route. If we have an airline to do it there will be no difficulty.
Question No. 8.
Be careful about making an offer like that to Deputy Carey.
He might just do it.