Vol. 403 No. 5
9 Mr. G. Reynolds asked the Minister for Tourism and Transport the effect the cutbacks in planned services announced by Aer Lingus will have on the targets set down by the Government in The Programme for National Recovery; and if he will make a statement on the matter.
12 Mr. Creed asked the Minister for Tourism and Transport the effect the cutbacks in planned services announced by Aer Lingus will have on targets set down by the Government in The Programme for National Recovery; and if he will make a statement on the matter.
23 Mr. Kemmy asked the Minister for Tourism and Transport if he is concerned about the decision of Aer Lingus to discontinue some of their services to the north-west; and if he will make a statement on the matter.
25 Mr. Connor asked the Minister for Tourism and Transport if he has given sanction to Aer Lingus to discontinue the Dublin to Knock daily service; and his views on whether the withdrawal of this service will seriously damage the regional development role of this airport.
93 Mr. Moynihan asked the Minister for Tourism and Transport if he is concerned in regard to the decision of Aer Lingus to discontinue some of their flights to the north-west; and if in view of the impact this decision will have on the economies of counties of the north-west, he will investigate the possibility of introducing some basis of subsidisation to Aer Lingus to enable the re-opening of these two services.
I propose to take Questions Nos. 9, 12, 23, 25 and 93 together.
On 22 November 1990, I was advised by the chairman of Aer Lingus of decisions taken by the board to counter rising costs and the effects of the recession in air transport, particularly in the US and UK markets, which has been exacerbated by the continuing Gulf crisis.
The chairman informed me that the board had undertaken a major review of the airline's operating plans in the light of weakening demand and escalating costs affecting airlines worldwide. As a result, they had unanimously adopted an integrated action plan designed to protect the airline's strategic longer term interests and to position the airline to take advantage of expansion opportunities when buoyancy returns to the market. The plan requires cost reductions of £20 million per annum within Aer Lingus, savings from operational changes of £15 million per annum, as well as increases in fares.
Key elements in the plan include postponement of commencement of the Ireland/Los Angeles passenger service, suspension of the Ireland/Los Angeles cargo service, reduction of flights on smaller cross channel and domestic routes and cessation of the Dublin-Manchester-Hamburg service.
In addition, the plan proposes that services between Dublin and Knock and Dublin and Derry will be discontinued. It also provides for the disposal of a number of the airline's older aircraft.
On the basis of the financial forecasts provided to me by Aer Lingus, I fully accept that urgent corrective action has to be taken by Aer Lingus to avoid substantial losses on air transport which, without such corrective action, could amount to as much as £50 million in 1991-92.
While I have conveyed to the board in general terms my broad approval in principle for the thrust of their recovery plan, I have asked them for further detailed information before deciding whether or not to approve the plan in detail. It would be premature, therefore, to comment on individual elements of the proposals or on the effect the proposed cutback in services would have on the targets set by the Government in the Programme for National Recovery.
Will the Minister not agree that for 1991 an increase of 400,000 tourists are expected in conjunction with the Programme for National Recovery? The North American market is very important to secure that increase. Last spring the Minister announced in the Dáil that negotiations were taking place with airlines in the United States following the withdrawal of Pan Am but nothing has happened. With the withdrawal of Pan Am we have lost a good promoter of Ireland in their outlets throughout the United States. If we do not have a proper service in and out of the United States there is no way the expected increase in tourist numbers for 1991 can be met. That would be catastrophic for the tourist industry and not alone are we talking about £50 million—
The Deputy has made his point.
——being lost by Aer Lingus but of a much greater loss by the tourist industry.
I have never made any secret of the fact that I would welcome and continue to invite — and have done so at the highest levels — American airlines to fly to Ireland. At present only two companies, Aer Lingus and Delta Airlines, are doing that. They are doing an excellent job but we could do with many more. I am doing everything possible to attract them to fly to Ireland because at the end of the day that is the solution to our difficulties. Aer Lingus have informed me that despite these cuts the number of passengers they will carry for the year ending 1992 will be approximately the same as the number they carried last year. They expect to increase the load factor with the same capacity.
I am calling Deputy Kemmy whose Question No. 9 refers.
Would the Minister not agree that a special case can be made for the north-west of the country — he knows a good deal about that as he comes from that area — in view of the high unemployment and emigration, for a subsidy to be given to Aer Lingus to re-open this route?
I am particularly disappointed that the company felt they had to discontinue the Dublin to Knock and Dublin to Derry services. I have asked for full details on those services as I want to study the costings to see whether we can formally sanction the entire plan. That is the reason I have told them that in principle I approve their plan but I want to examine the details. I am disappointed about their decision but that is no reflection on Aer Lingus. They are trying to run a commercial operation and I gather that those two runs have shown very substantial losses. They made a commercial decision.
In view of the fact that many parts of the north-west are without proper facilities in terms of rail lines and proper roads would it not be a good thing to re-open this route? Would the Minister not consider my proposal to give a subsidy to Aer Lingus to do so?
I will answer that question straight, I have no proposals to do that and it would not be my intention to offer a State subsidy to the airlines.
Why not?
I am calling Deputy Moynihan, if he wishes to intervene, whose Question No. 93 refers.
I am sure the Minister will agree that the development and expansion of US business is absolutely vital for the anticipated growth in the Irish tourist industry? With the current exchange rate in the dollar and the mini — if not major — recession in the United States economy a very aggressive marketing and promotional campaign will have to be engaged in by Bord Fáilte, and the Department, if we are to achieve the anticipated growth. In 1989, 427,000 people from the United States travelled to Ireland. Having regard to the ethnic population, and the immense wealth in America, surely Ireland can hope for a very substantial increase in the number of tourists in future years but it will require very aggressive marketing.
I agree with the Deputy. He has analysed the situation properly. The transAtlantic traffic is growing at the rate of about 5 per cent whereas the overall increase in tourism is about 15 per cent. The transAtlantic market is certainly under-performing compared to the others. The continental routes are very exciting but the transAtlantic routes are down. Of course, marketing is critical and Bord Fáilte are doing an excellent job in this regard. I have to say to the Deputy — he referred to this himself — that the approach to travel of the average American citizen is based on the performance of their economy, the Gulf crisis and other matters which they take into account before they travel.
Unfortunately, there is an upward trend in airfares which we are desperately trying to keep down. Every country has the same difficulty in that area.
Deputy Bernard Allen.
May I——
Order, I have called Deputy Allen.
Is the Minister satisfied that we are not fooling ourselves? Can he differentiate between the number of real tourists coming to Ireland and emigrants returning home on holidays? Is there a mechanism by which he can differentiate between the real bona fide tourist and the returning emigrant?
I have a bevy of statisticians and economists poring over that kind of problem regularly. I am not holding my breath for a clear response because, to be honest, I do not think it matters that much. Visitors come to this country, they leave their money behind, they stay in hotels and use our transport services and at the end of the day a visitor——
With all due respect to the Minister, it makes a big difference.
I have a bottom line to deal with and at the end of the day a visitor is a visitor. It is neat and useful for planners — we are drawing up the figures and dissecting them — to know the origin of the traveller because they have to engage in marketing programmes and so on but once the tourists are here I do not see any major difference.
Surely it is important to hoteliers, those who run guesthouses and others in the tourist business to know whether a person is coming into the country to avail of the services here or whether they are just returning to meet their mothers, fathers, brothers and sisters. There is a follow-through on this and the Minister should satisfy himself as to whether we are talking about bona fide tourists or returning emigrants. All the hype we are hearing from tourist chiefs is superficial——
Please, Deputy Allen.
I can give the Deputy the figures——
I want to dissuade the House from debating this matter now. I am going on to another question. We have only disposed of nine questions in one hour.
A Cheann Comhairle, I offered——
Resume your seat, Deputy Byrne, please.
I will be very brief.
I should like to ask a brief supplementary.
I want to deal with Question No. 10. We have only dealt with nine questions in one hour and Members are complaining.
We are looking for answers.
The Minister——
Please, Deputy Byrne, you had a good innings today.
I did not because the Minister did not address the issue of the Shannon stop-over which was relevant——
Question No. 10——
With respect, a Cheann Comhairle, you took Question No. 20 which was not taken with Questions Nos. 9, 12, 23, 25 and 93. Is that not correct?
There may have been an error there. I called Question No. 93 in the first instance. It was the Deputy who disputed that.
The Deputy spoke to Question No. 20.
Question No. 10, please.
