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Dáil Éireann díospóireacht -
Tuesday, 27 Oct 1992

Vol. 424 No. 4

Private Members' Business. - National Aviation Policy: Motion.

I move:

That Dáil Éireann:

—recognising the vital strategic role occupied by Aer Lingus in the development of the national economy and the importance of maintaining Aer Lingus on a viable basis as the national airline;

—deeply concerned at the imminent crisis facing Aer Lingus;

—determined to ensure that the job potential of the company will be fully protected and that its overall contribution to the economy will be preserved in the long term; and

—acknowledging and appreciating the role played by Aer Lingus employees in particular in contributing to the maintenance of the company as a viable entry,

calls on the Government to prepare immediately a detailed national aviation policy to secure the future survival and development of the company as our national airline; to give an undertaking to provide the necessary equity capital to ensure that the equity base of the company is strong enough to enable Aer Lingus to compete effectively in the context of de-regulation; to publish the detailed policy by November 30th; and to undertake that no decision affecting employment in the company will be taken pending the publication of such a detailed and comprehensive policy.

I should have said at the outset that I intend sharing my time with Deputy Seán Ryan.

Is that agreed? Agreed.

I want to say unequivocally that it would be an act of national economic treachery for this Government to fail to respond in a coherent and considered way to the crisis facing Aer Lingus.

It may be asking a bit much to expect anything coherent and considered from this Government. This debate takes place on a day when the Taoiseach has deliberately accused one of his senior Ministers of, in effect, committing perjury at the tribunal of inquiry into the beef industry. It is hard to imagine any more serious charge being levelled by one Government Minister against another, and it would be impossible in any normal Government to imagine such a charge being levelled without a resignation either being sought or offered. However this is no normal Government.

This is a Government which fought and won a Supreme Court action to uphold the principle of Cabinet confidentiality, based as it is on the constitutional principle of collective Cabinet responsibility. Within weeks of securing that victory in the Supreme Court, this has become a Government which make a complete and total mockery of the principle it sought to uphold.

In this Government, there are two principal protagonists. They both see themselves as hurtling together towards a narrow door set in a brick wall. One of them is going to go through, and the other will crash headlong into the brick wall of political oblivion. All they care about is elbowing each other out of the way — the economy, the social fabric of our community, the major political issues of the day, even old fashioned concepts of political honour and integrity, all take second place in this headlong rush to secure political survival.

It has long since ceased to be in the national interest that this Government should survive. Indeed, I believe it is long past time that this sordid and disreputable Government should be removed.

Our main purpose this evening, however, is to try to persuade whatever shred of principle remains in this Government to start taking at least one issue seriously. The crisis facing Aer Lingus demands nothing less than a united response from this House and the Government.

At the commencement of my contribution this evening, I want to make the point that I do not see this motion in any way as a case of special pleading for Aer Lingus. I have always been, and will remain, a committed supporter of public enterprise. I believe that public enterprise has played a major role in the development of the Irish economy since the foundation of the State; and that it can, will, and must play a significant role in our recovery and future development.

I also believe very strongly that public enterprise must be just as accountable as any firm in the private sector; that it must be just as well managed; and that it must be rewarded for its best efforts and penalised for its mistakes. In short, it is essential to separate the social and commercial aspects of any public enterprise from each other and to make commercial decisions on the basis of the soundest possible commercial criteria.

There is one other criterion which must be applied in the consideration of any issue that affects public enterprise. That criterion is the public and national interest. There might well be times in the life of a public company when the public and national interest demands decisions that are not congenial or palatable to the company or its workforce.

Therefore, I want to make it abundantly clear that the Labour Party is not motivated in moving this motion by any consideration other than our best belief of where Ireland's national interest lies. Against that background, I will repeat my assertion that it would be economic and political sabotage of the national interest for the Government to allow Aer Lingus to face this crisis alone.

Over the last few years, the present Government and their immediate predecessor have followed a policy of forcing Aer Lingus to subsidise, albeit indirectly, the operations of a small private competitor. This policy was carried out in the name of competition, but was in fact a policy motivated by ideological spite towards the national airline. At least two of the present Minister's immediate predecessors have given direct instructions to Aer Lingus the sole purpose of which was to favour Ryanair at Aer Lingus's expense.

There is some evidence to suggest that the present Minister has brought the same attitude to bear in the recent dealings with Aer Lingus. Over the five years since 1987, and particularly since the Gulf War, it has become increasingly apparent that national aviation issues require a detailed policy response; and it has become increasingly clear that this Government have no interest in anything other than ad hoc crisis management.

It may not be fair to blame the present Minister entirely since she has been in the job only since February, and can be said to have inherited the bias of her predecessors. Of course, the Minister does work for a Taoiseach who believes that policy on major national issues can consist of off-the-cuff one-liners — it is only when he wants to insult and provoke his partners in Government that he resorts to scripted notes.

It is not possible however, to exonerate the Minister from responsibility entirely. Almost on the first day she came into office the Minister announced that she would be taking all the necessary decisions to put Ireland's tourism infrastructure on the best possible footing and particularly that decisions could be expected imminently from her in relation to the Shannon stop-over. I remember her saying, because this matter was of such vital importance to tourism and aviation in general, that the decision would definitely be made by her before Easter of this year but instead it has taken her until today to make an announcement that has been promised for months.

I welcome the Minister's announcement about the Shannon stop-over. I never believed that a Government decision to desert Shannon would help Aer Lingus and I have always argued that the Shannon issue should be treated as an issue of regional rather than aviation policy, but I condemn the dithering in which the Minister has indulged on this issue. She has allowed and encouraged fear of the future, and uncertainty about the prospects of economic survival, to prevail throughout the mid-west for far longer than was necessary and she has set one region of the country against another in a way that has been most unhelpful for the economic development of both regions.

Many people will be pleased that the Minister has preserved the Shannon stop-over, but how long can it last if there are no aircraft to fly in and out and no carrier to use the airport? The Minister on radio today said she believed in balanced regional development. In saying that she was accepting the onus, whether she likes it or not, of addressing the Aer Lingus crisis as seriously as the Shannon crisis has been belatedly addressed. The Minister has, of course, taken one other step which has greatly inhibited public debate and awareness in relation to these issues. She has effectively placed a gag on the boards of the State companies under her control and has prevented them from discussing issues of great public importance in the public arena. It is an inevitable consequence of this peculiar and somewhat undemocratic approach that a crisis, such as the crisis which is now confronting Aer Lingus, will unfortunately take the public unawares when it finally erupts as it is doing before our eyes. It would have been far better, from the point of view of the development of public policy, if it had been possible for companies moving into difficult positions to have been more open about those positions from an early stage.

No one in this House should doubt the fact that the future of Aer Lingus is in the balance. If Aer Lingus's financial position was far healthier than it is and if its fleet requirements for the mediumterm future had already been met, the position would still be difficult because of the advent of deregulation within Europe. Aer Lingus's problem is therefore a two-fold one: how to recover from its present difficult financial position and how best to equip itself to meet an infinitely more competitive future.

It is nonsense of the most gross kind to argue that the State has no role to play in resolving these two problems. If the State now turns its back on Aer Lingus, we will simply have no national airline in the very near future. I cannot think of one sane or rational reason anyone would argue that it would be in Ireland's national interest to allow its national airline to die.

In the years since it was founded the State has invested just under £70 million in Aer Lingus. In return the Irish taxpayer owns a company worth more than £600 million which employs almost 14,000 people world-wide, half of them in Ireland. To put it another way, that is an average investment by the State of £1 million in Aer Lingus per annum. In terms of Irish jobs, it represents a cost per job of £9,200. The State recouped almost 100 per cent of its total investment in Aer Lingus last year alone in PAYE and PRSI.

Whether that is looked at on the basis of investment strategy or industrial policy strategy, the return that the State has got from its investment in Aer Lingus is quite remarkable. In short, it is impossible to sustain an argument that the people of Ireland have not got value for their money. This takes no account of the balance of payments surplus that Aer Lingus has earned, of the enormous investment in Ireland by the Aer Lingus Pension Fund, worth over £200 million, of the spending on goods and services in Ireland, including the payment of airport charges directly to the State, which added up to £120 million last year alone.

Of course, figures only convey part of the picture. The economy at national, regional and local level depends on Aer Lingus and has benefited greatly from Aer Lingus. The tourism industry, which has been targeted by successive Governments as the single biggest area of our economy with growth potential, would be devastated without the input it receives from the national airline.

This Government have announced again and again that their first economic task is the regeneration of the economy to provide wealth and investment. Only this morning, at the beef tribunal, when he was not busy stabbing his Coalition partners in the back, the Taoiseach attempted to be very eloquent about the need for value-added in the economy. Every Fianna Fáil manifesto since 1987 has emphasised the same point.

Here we have a company which has led the way in adding value, not only through its tourism acquisitions in other parts of Europe and the United States, but also through the development of TEAM Aer Lingus, which has created 2,000 jobs at the very frontiers of high technology. Yet, the only response the Taoiseach can make, when asked about the future of the company, is to suggest that 49 per cent of it be flogged off to the highest bidder.

How is it possible for a Taoiseach, who has a track record as a successful businessman, to so easily dismiss all of the strategic issues that surround Aer Lingus and its development? If a management consultant were to have presented a report to the Taoiseach, during the years when he was building up his own business, that suggested to him that the way to solve any temporary financial problems was to strip the most lucrative assets away from his company and hand them over to his competitor, I would venture to suggest that that would be the last time the Taoiseach would ever employ that management consultant.

The Taoiseach's response to the crisis of Aer Lingus was sadly another unfortunate example of his glib, unthinking and cavalier approach to any issue of major importance. This Taoiseach, it appears, does not know the difference between partnership and privatisation, between strategic alliances and asset-stripping, or perhaps he just does not care at this stage. He is at his most revealing when saying the first thing that comes into his head and what he has revealed about his grasp of Ireland's national interest in this area does not bode well for the future of Aer Lingus and this country.

So let me make the point again for his benefit if nobody else's — the crisis facing Aer Lingus will not disappear with a wave of the Taoiseach's hand. It requires the Government to get stuck in with a coherent and considered response, and that response must include the recognition that if it takes several years to solve Aer Lingus's problem and to equip our national airline to face the future with confidence, then the Government must stand behind the company four square throughout that time.

The unions representing employees in Aer Lingus recognise the difficulties that the company faces. They recognise, and have said so explicitly, that in any package which is put together the unions can and will play their part as they have done in the past. They know that the cost structure of the company is one of the issues that has to be addressed and they are prepared to sit down with the company and negotiate, in a serious way, the measures necessary to ensure the company's viability in so far as they are within their control. The unions also insist, and they are quite right to do so, that they are not going to indulge in a game of cat-and-mouse with the Government. It is not possible for anyone to take the Government's position seriously until it is fully and comprehensively spelled out.

In spelling out that policy the Government cannot ignore the issue of equity. Additional funding is necessary to enable the company to modernise its fleet and equipment, and without that modernisation long term survival is not possible. Even if the answer were privatisation, and I would argue strenuously that it is not, additional equity would be essential to prepare the company for that eventuality. The Government should begin this process by saying clearly — I hope in this House — that they are willing to maintain the strength of Aer Lingus and their investment in Aer Lingus as part of whatever package is negotiated by agreeing to make the necessary injection of capital as part of next year's public capital programme and, if necessary, for the following two or three years in order to sustain our national airline.

We should not be under any illusion. I said earlier that if Aer Lingus was a cash-rich company it would still face many difficulties and challenges in the coming years. On 1 January next under a new era in European-wide deregulation every airline in Europe will have to effect cost reductions. Every airline in Europe will have to achieve a proper balance between cost and revenue, between brand image and the return on that image, between route management and all the social factors that must be taken into account. For some the strategy they will have to follow will be to seek to expand as fast as possible, probably gobbling up smaller airlines en route. For others, the only viable strategy will be to achieve a dominant position in what is known as the niche market which can be protected into the future through a combination of brand image and customer loyalty.

All of Europe's airlines will have to face certain realities in a deregulation environment and these can be fairly simply stated. The first is that airlines that keep their costs under tight control will have strong advantage; second, despite low costs airlines will have to continue to improve standards; third, there will be a lot more competition for passengers and customer loyalty will not survive excessively high fares; fourth, it will be a great deal easier to protect a niche in the market-place if the airline involved has a strong, highly developed tourism package backed up by the requisite infrastructure. Fifth, deregulation opens the way, to a far greater extent than ever before, for charter carriers to compete on the basis of lower prices and lower costs than all regular carriers. The bottom line in all of this is that it will be those airlines with the strongest financial and capital base that will be best equipped to meet these challenges.

Aer Lingus has been a net contributor to our economy for many years. The staff have made many sacrifices in the past to ensure that the company remained a net contributor to our economy. They have indicated their willingness to approach the future realistically and the least they are entitled to expect from this House and Government is an unequivocal statement of support as they face a difficult and challenging future.

In calling on the Government now to make that commitment, we demand that they set aside any ideological bias they have toward Aer Lingus. We demand that the Government recognise there is a bounden national responsibility on them to assist Aer Lingus in the most positive way possible, by reassuring the company that its capital base will be strengthened to the extent necessary to enable the company face the future with confidence.

I have great pleasure in seconding the motion before the House. It is my hope that tomorrow evening this House, having considered the various points advanced, will be unanimous in putting forward proposals to the Minister and Government that will enable Aer Lingus put in place the type of structure necessary to ensure its continuity. We should not lose sight of the fact that over the years Aer Lingus has made a major contribution to the development of our society at local, national and international levels.

The aviation industry worldwide has witnessed unparalleled growth and change since the deregulation agreement was introduced in America in 1978. However, the principles of a market economy and competition, at the heart of that agreement, have been less than a qualified success. It is true that consumers have benefited from lower air fares but at the expense of enormous social upheaval worldwide, with hundreds of thousands of workers made redundant. Mergers, take-overs, bankruptcies and liquidations have been monthly occurrences as some 196 carriers went to the wall in America between 1978 and 1991. The industry in America was in the red to the tune of US$ 2.7 billion in 1991 and I understand the position is no better now. Unfortunately, similar circumstances are beginning to unfold in Europe.

In view of these developments the Government must be condemned out of hand for failing completely to produce a coherent policy on aviation, particularly when they knew that the deregulation of air transport would become fully effective on 1 January 1993. If the Minister had been unhappy with the approach of Aer Lingus management — which she made clear last week when she met them — to their future as our national airline why did she not appoint aviation industry consultants to outline in detail the options for Aer Lingus in the context of the national interest, including tourism considerations? The last time we heard of a policy was in 1985 when the then Government produced a Green Paper. To date we have had nothing except piecemeal developments of what could be classified as constituting policy. For the last three years successive Ministers for Transport have come to this House and stonewalled when answering questions on Government policy in relation to the future of State enterprises.

However, from experience, we have discovered that there is a hidden policy, that of privatisation. When the decision to license Ryanair was taken in the mideighties the objective was to secure lower consumer fares on the Dublin-London route without damaging Aer Lingus or sea transport companies. If the Minister cares to analyse passenger movements between Ireland and Britain before and after the licensing of Ryanair, she will discover there has been no direct net increase in passenger numbers; rather what happened was a simple transfer from sea to air transport.

The Dublin-London route, once profitable, is now a major loss for Aer Lingus. What has happened on this route over the past two years is unsustainable. Not only does the Minister know this but she has refused to take any action to correct it other than attack Aer Lingus when their back is to the wall. Indeed it must be pointed out that it was not Aer Lingus who struck the initial fares; they responded on the basis of figures filtering through to their offices showing they were losing passengers on the route. Last year the withdrawal of British Airways underlined the lack of profitability on that route. If British Airways, who have slashed their manpower levels following privatisation could not make a profit how could Aer Lingus, or Aer Lingus competing with Ryanair, sustain fares as low as £58 return, in any period other than off-season? It should be noted that the Chairman of British Midlands, Sir Maurice Bishop, has been drawn into this controversy, saying he will take the case of Aer Lingus to the EC if they do not increase their fares.

There is no possibility that Ryanair could expand from their present low-base operations. It would be better if the two airlines would agree that services on the Dublin-London route be provided at a reasonable profit. The Minister, as regulator, and senior Minister responsible for Aer Lingus, must intervene ensuring that sanity prevails and profitability is restored to both airlines.

The Minister's predecessor made a major mistake in taking Aer Lingus off the Stansted route in 1989. In regard to landing charges, Ryanair's landing charge at Stansted is £91.15 whereas Aer Lingus must pay £398.30 for a Boeing 737 at Heathrow.

The Taoiseach stated recently that for Aer Lingus to overcome their current difficulties and secure their future all that would be required was to find a European partner. However, in the next breath he suggested that 49 per cent of the company could be privatised. If the Taoiseach meant that a European airline could have a substantial stake in Aer Lingus that would be acceptable, but we are opposed to privatisation.

The Minister is aware that the crisis facing Aer Lingus cannot be worked out solely within the company. In her own way she has washed her hands of the matter. Basically what she is saying is that the board of Aer Lingus are responsible, that they should come up with the solutions and hand them to her.

Government involvement and a fresh injection of equity is required. Last week the Government rushed an Estimate through the Dáil which we supported, to provide £50 million to help businesses affected by the devaluation of sterling. This was done without breaching the national borrowing targets for this year. Are we to believe that the Government are not prepared to get involved in providing the resources and policies necessary to protect the future of the fourth largest employer in the State, employing more than 7,000 in Ireland and a further 6,000 worldwide?

Earlier today the Minister introduced a package aimed at securing the future of Shannon. I am now calling on her to provide the necessary finance for Aer Lingus to secure the future of Dublin Airport and its workforce. The privatisation of Aer Lingus will come about by allowing the airline to bleed to death by starving the company of equity capital until the new deregulated regime comes into force next January which will restrict greatly the possibility of State investment in national airlines.

Let us look at what some European airlines have been doing to meet the new market. Air France have bought their domestic in-flight competitor, which was privately owned, to strengthen their home market base. They have acquired a 40 per cent stake in Sabena, the Belgian national carrier, and have also taken a stake in Czechoslovak airlines. British Airways and KLM have failed to agree the terms of a partnership, but both continue to seek one. The largest European airline, Lufthansa, have embarked on a policy of increased services while recently being forced to reduce costs because of the recession. However, the financial director of Lufthansa recently stated that the key policy issue was a strategy for the future and not simply current profitability or losses.

I would like to refer briefly to the EC report on the evaluation of aid schemes established in favour of Community air services. It acknowledges the problems that existed during and after the Gulf crisis. It refers to Sabena and Air France and states that the Commission wants to create, as of 1993, a level playing field for competition — as one of my constituency colleagues said this must have been written by an Irishman — but it acknowledges that some airlines carrying the financial burden of the past must have the oppor- tunity of a fresh start provided this does not adversely affect the position of competitors. The report also refers to State owned companies and states that the Commission acknowledges that State-owned companies may have a justifiable need for additional own capital to realise an investment programme necessary to improve their efficiency and competitiveness. The first tranche of the capital increase to Air France in 1991 is an example of that.

Here we have examples of two companies whose Governments had the foresight and commitment to put forward proposals to help them out of their difficulties. That makes a lie of the assertions by right wing economists that we can do nothing in this country for fear of the EC. Provision can be made to help companies and we should work towards that aim. Aer Lingus carried 75 per cent of the total number of visitors to Ireland by air in 1991, an increase from 51 per cent in 1986. This figure alone indicates that if Aer Lingus are forced by the Government to adopt a policy of asset disposal, reduction in services and no equity, Irish tourism will be massively damaged.

It is appropriate that last Friday a report was published by the Government tourism task force, chaired by Mr. Padraig Ó Huigín, Secretary of the Department of the Taoiseach, acknowledging the role of Aer Lingus in tourism and recommending that the Government invest in Aer Lingus. Given Ireland's peripheral location within the EC the task force recommend that the European Community should be approached to assist Aer Lingus in the provision of their replacement fleet, the cost of which is a major burden on the company.

The Minister is aware that Aer Lingus have served this country exceptionally well over the past 50 years. State investment in the company has been relatively modest at £68.6 million. The result of that investment is to be seen in many areas — in Cork, Limerick and Dublin and particularly north county Dublin. The effects of the present proposals would be detrimental to the livelihood of thousands of families.

In recent years Dublin has been discriminated against in terms of jobs. In real terms Dublin has lost out in terms of industrial jobs and services. If the Minister goes ahead with this proposal the greater Dublin area will be decimated. I ask the Minister to consider the proposals in real terms and to take note of what we are requesting in this motion. I hope that some of my constituency colleagues, who advocate the same line I am taking, will support the proposal I put forward. I hope that the Minister, having looked after Shannon, will also look after the Dublin area.

I am now calling the Minister for Tourism, Transport and Communications.

I hope the Minister will look after the workers of Aer Lingus——

The Deputy will now conclude his speech.

I move amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

"—acknowledging the role played by Aer Lingus over the years in the development of Ireland's trade and tourism

—appreciating the contribution of its employees over the years in enabling the airline to fulfil that role

—recognising the serious financial difficulties currently facing Aer Lingus

—noting that it is a matter for the Board in the first instance to determine the urgent remedial action necessary to restore the airline to profitability

—noting the Government's objectives of job maintenance and job creation

supports the Government's air transport policy as being in the best interests of the Irish economy and supports the Government's view that the airline should maintain employment at the maximum possible level, consistent with maintaining a viable commercial operation."

I am not only pleased that this motion has been put down today, I am delighted because it gives me an opportunity to place on the record of this House — and before the people — the fact that this Government have a fully integrated and well thought out air transport policy for the country. Within that policy we have a clear vision for the role of Aer Lingus and their employees. Not only have we the vision, we also have a proven track record of specific measures taken to achieve a strong and dynamic Aer Lingus as well as a dynamic air transport sector for our economy.

In western parliamentary democracies there is a convention that one does not impugn other members of the House by attributing to them the deliberate telling of lies. Despite the calumnies which have been perpetrated against me personally — and the Government of which I am a member — I will abide by this convention. However, there are certain untruths which I want to expose unequivocally in this House.

The first untruth is that I am anti-Aer Lingus. I am not, I have not been and I never will be. Seán Lemass founded this great company which have carried the Irish shamrock to every corner of the world. They have done so with the continuous support of many great Ministers of Transport and, as the custodian of that tradition, I am determined that it will continue. The company are facing major problems, they have done so in the past and will do so again in the future. They have surmounted these problems in the past and they can and will do so again because I will ensure that they do. The second untruth is that I and the Government do not care about the employees of Aer Lingus. Let me expose that for the culumny it is. I am in politics and Government because I come from a tradition which passionately believes that Ireland's strength is her people. Our whole economic philosophy is built on this principle. I have consistently said that tourism is a people industry. Let me now put firmly on the record of the House my conviction that Aer Lingus are a people company. They have been built on the quality and commitment of the staff over the past 55 years.

Will the Minister now gag them?

They have survived many crises because of this. The current staff in Aer Lingus have not only shown this commitment but have also made sacrifices, over the past two years in particular, in the interests of the company. As well as acknowledging the sacrifices I want to formally put on the record my appreciation of them. I also want to assure them that these sacrifices will not be in vain. The Government have the vision and the resolve not only to maintain this great company but to develop them to their full potential.

The third untruth is that we do not have an integrated air transport policy. We do and it is better than the one which the Government of which Deputy Spring was a member and when they were in office not so long ago. I will give credit where credit is due. Fianna Fáil do not have a monopoly of great Ministers for Transport. Deputy Jim Mitchell, when Minister for Transport, was a very good and courageous one although I disagree with some of the decisions he took. It was he, with Deputy Spring's approval, who first licensed Ryanair to compete with Aer Lingus, which was a good decision and one which benefited the nation because of the imaginative and constructive way we built on it.

I will now once again articulate, for the benefit of Deputies opposite, exactly what our air transport policy is. As with all policies it has been — and must be — developed against the background of trends in the world economy in general and in world aviation in particular. Ireland is a small open economy which is heavily dependent on exports to other countries. Our primary economic objective is job creation through economic growth and we have the policies in place to achieve this. These are designed to create an economic and business climate conducive to confidence and enterprise within a framework of consistent fiscal, monetary and exchange rate policies. It is also crucially important that we are competitive in international markets if we are to be successful.

Our approach to air transport policy is based on this philosophy. In order to prepare the Irish airline industry for the European Single Market conditions which will apply from 1 January 1993, the first objective of air transport policy has been to focus on strengthening the Irish presence on existing routes to and from Ireland and to open new opportunities for our airlines to compete in international markets.

I wish to emphasise the point that with effect from 1 January 1993 my Department will no longer have any control over the allocation of routes between carriers who meet certain criteria. We will also not have any power to prevent any EC nationals from establishing an operation in Ireland. My strategy, therefore, in so far as air transportation is concerned, has been to develop new opportunities for Irish airlines through the negotiation of new and extensive bilateral agreements and, within these, the pursuit of fifth freedom rights to further widen access to markets for Irish airlines.

In the case of Aer Lingus I have a dual role. First, I regulate the air transport sector in which they operate. Second, I represent on behalf of the people the interests of the shareholder in Aer Lingus. As regulator, I have succeeded in opening up many opportunities for Aer Lingus, not only in air transport but in all the activities of the group. I have also safeguarded the airline's vital interests in EC negotiations. I did so after full consultation and with the active support of the central representative council in Aer Lingus. I wish to express my appreciation to them in that regard.

Since assuming office I have concluded new bilateral agreements with Austria, Hungary, Belarus, Malaysia, Russia and Bulgaria. That is not a bad start for eight months. In addition to route rights for the airline I have, as I already stated, personally instructed my officials to seek extra business opportunities across the whole range of activities in which the Aer Lingus group are involved. To this end, a senior Aer Lingus official is part of the Government's negotiating team.

The general policy and specific strategy I have outlined are an integral part of my overall policy for air transport, yet specific decisions I have taken within these parameters have been deliberately distorted to imply that I do not have a policy. I will be more specific, I have been accused of not having an air transport policy because of my decision to license a third Irish scheduled airline and my decision to license a fourth airline to serve Waterford, Luton and Stansted. It has been further suggested that these were anti-Aer Lingus moves.

I will nail these lies for what they are. The decision to allow Translift to operate a Los Angeles service was taken because Aer Lingus refused to operate the route. They had sought these rights since the late eighties and, following successful negotiations by the Government, they got them with effect from 6 September 1990.

Aer Lingus made specific and quantified proposals to the Government to enter into a five to seven year lease of two Boeing 767s for the Los Angeles route. Before approving this proposal the Government questioned its wisdom because they were concerned at the proposal to acquire such expensive new aircraft. However, they were assured that it made sense for the airline in virtually any scenario of continued transatlantic operations and the Government accepted the arguments of Aer Lingus because it was a commercial decision which had the approval of the board. There was no question of it being contingent on a regulatory change with regard to Shannon. Despite this, Aer Lingus subsequently refused to operate the Los Angeles route unless there was a change in the Shannon stop policy. The Boeing 767s have never been used by Aer Lingus on the trans-atlantic route. Instead they have been leased to other airlines.

It is generally accepted that there is considerable untapped potential for extra traffic from the west coast of the USA. I cannot force Aer Lingus to operate this route to take advantage of that potential. That is a commercial decision for the board of Aer Lingus to take. Equally, in the national interest, I could not refuse another Irish airline the opportunity to generate extra traffic from that region, which will generate much needed employment in Irish tourism.

There is specific provision in the Ireland-US bilateral agreement for multiple designation. If I refused an Irish airline the rights to operate on a particular route, it would be open to US interests to incorporate themselves and get automatic rights and, in all probability, use US pilots and other staff.

Tour operators and travel agents in the Boston areas have consistently told me that the potential for extra traffic from there was immense if they could get a low-cost operator to provide a service from Boston to Ireland. I decided to test this assertion by providing limited extra capacity through Translift. Indeed, I was criticised for putting such a low limit on that capacity. I also specifically sent a senior official from my Department to meet the Boston travel trade and emphasise that I expected extra business from the extra capacity. I did not want existing Aer Lingus business to be diluted.

Let me now refer to my decision in relation to Waterford Airport. I want first to emphasise to the House that under the existing bilateral agreement with the UK, I have no power to prevent any UK airline from operating on any route between Ireland and the UK provided they meet certain financial and technical standards. From 1 January next this will also apply to all Irish and other European airlines, both under the third EC air transport package and the European Economic Area Agreement.

In so far as specific services to Waterford are concerned, I remind Deputies that both Aer Lingus and Ryanair ceased services to that airport. Aer Lingus have consistently refused, for commercial reasons, to resume services to Waterford Airport. In these circumstances I cannot comprehend objections to anybody else servicing Waterford Airport, apart altogether from the fact that legally I could not prevent such services.

Let me continue to articulate other elements of our air transport policy. Apart from strengthening the Irish presence on our international air routes, a further critical part of the Government's overall aviation policy is to provide and develop support infrastructure. We have and will continue to ensure that our airports are of the highest international standard and have the capacity needed to meet the growth in traffic arising from future economic growth.

We have backed this policy with resources. Substantial investment has been put into the State airports in recent years to enable them to keep pace with traffic growth. In the four years to the end of 1991 investment in infrastructural improvements amounted to £82 million. The projects funded in recent years were a new runway, a multistorey car park and extension of the departures and arrivals levels at Dublin Airport; extension of the terminal building and of the main runway at Cork Airport; and a new self-drive car park at Shannon Airport. The continuing growth in traffic, particularly at Dublin Airport, which is reaching capacity levels, is due to the success of our policies. This will necessitate further substantial capital investment in infrastructure in the years immediately ahead. We will make that investment. Projects planned at Dublin Airport include a major extension of the passenger terminal, construction of a new passenger handling pier and extension of the apron, as well as further phases of the multistorey car park. There are also plans for improvements to the passenger terminal at Shannon and further terminal expansion at Cork Airport. Let me put a figure on our plans. It amounts to more than £138 million in the period up to 1996.

What about Aer Lingus?

I have emphasised the need for competitiveness. We have taken specific action on this front. We have frozen airport charges at their current levels since 1 April 1987. This Government's policy is and has been to keep charges at the lowest possible levels for the main users, Aer Lingus and Ryanair, in the interests of low access transport costs for tourism and other economic development.

In addition to physical infrastructure, this Government have heavily invested in high technology radar and communications equipment which have revolutionised Irish air traffic control systems. The bill for this was an additional £30 million Exchequer money. Irish controlled airspace, expanded by 50 per cent and fully covered by radar, is now among the most modern in Europe and can fully conform to the emerging plans for the harmonisation and integration of European systems. Our modern technology ensures that we offer airlines optimum routes with minimal delays or restrictions through our airspace. Our regulatory and ATC services are among the most economical and cost effective in Europe.

Despite the reported downturn in aviation, the fact is that since 1988 traffic in Irish airspace has increased by more than 30 per cent and will continue to expand. I intend to ensure that through development and investment in equipment we can fully exploit the opportunities provided by expanding air traffic.

As I have already indicated, I am firmly committed to the concept of regional development. Through the Air Navigation Services Office of my Department I already have more than 300 staff in the Shannon area. Apart from the control zones for Dublin, Cork and the regional airports, all of Irish airspace is managed from Shannon and that will continue to be the case. Indeed, I am confident that in the future the Shannon control functions can be further developed and expanded.

Apart from the State airports, the Government, in pursuit of their commitment to the regions, have also pursued an active policy of developing regional airports. The six regional airports at Waterford, Kerry, Carnmore, Connaught, Sligo and Carrickfin are operated by private limited companies. However, this Government have already invested a total of £14.2 million Exchequer moneys in the development of these airports. In addition, we have obtained from the EC Commission the resources for a capital development programme costing over £20 million. This programme, which is funded jointly by the European Regional Development Fund and the airport companies, is due for completion by the end of 1993.

This last point brings me to the fifth component of the Government's aviation policy. This is to develop Ireland as a centre of excellence in aviation, with the focus primarily on Shannon.

Employment in aviation and in aviation related activities in Ireland has been buoyant and is expected to expand in the coming years. The development of a world aviation park in the Shannon area has been a major factor in this success. This caters for industries involved in the manufacture, service and repair of aircraft, spares and components and also developments in relation to attracting additional aviation services from Eastern Europe. The aviation park has already got off to a good start and it is estimated that about 5,000 people will be employed there by the end of the decade.

I outlined earlier my role as a regulator. Let me now deal with my role as a shareholder. As I stated in this House during the Adjournment Debate last Wednesday, I have been concerned for some time at the continuing deterioration in the financial performance of Aer Lingus, particularly in its core air transport business. I have repeatedly made this concern known to the chairman and management of the airline.

The air transport division of Aer Lingus lost more than £80 million in the past two years and is facing major losses again this year. This is despite a cost reduction programme which my predecessor was assured would get the airline into a breakeven situation. This programme was introduced almost two years ago to counteract the effects of the economic recession and the Gulf War. It was still being negotiated well into this year.

Other airlines took fast and immediate action to deal with these problems. Aer Lingus took over 18 months to make a full response and it is still a long way short of sufficient. I must acknowledge that the problems are at least being tackled now so I will say no more on this. Suffice it to say that it is clear that urgent remedial action is necessary to restore the airline to profit.

I have been criticised for not giving specific proposals to the board of Aer Lingus to solve these problems. It is quite correct to say that I have not done so — that is not my job. That is the responsibility of the board of Aer Lingus. When the board have produced specific proposals then I, as the shareholder's representative, will carefully examine them.

Apart from the untruths about aviation policy which I have already dealt with, there are some other myths about that I would like to dispel here and now. One of these is that the Government have invested only £74 million in Aer Lingus. This is not the true picture. I have here independent professional advice from a major corporate firm to prove it. The fact is that the Government's direct investment in Aer Lingus in today's prices is equivalent to £612 million. The State's investment in Aer Lingus is far greater than the direct capital investment when retained earnings are taken into account.

On a point of order, for the benefit of the House it would be helpful if the Minister would give us the name of that report.

Yes, if the reference is available.

I thought it was the policy in this House that we should not give names of companies but if it is the wish of the House that I should do so I have no difficulty in circulating the name of the company.

It is the wish of the House?

I am sure it will be provided at the next party meeting.

The point of order was very properly raised by Deputy Burke. All we are simply asking is if the Minister would tell us who the authors of the report are. It is a matter for ourselves then to consult them.

My text varies from what the Minister has delivered. My text says the Minister has a report from an independent source.

The Deputy has made his point. If the Minister has the reference the House will be grateful for it.

I will be prepared to give you the reference and the name of the report, a Cheann Comhairle, before the debate finishes.

Thank you Minister.

Apart from some small dividend payments in recent years, the Government as shareholders have left their investment in Aer Lingus to be used for growth. Other companies have achieved more with less. By way of example, a recent newspaper report showed that Guinness Ireland now has an net worth of almost £0.5 billion on an investment of £16.2 million by the shareholders. This shows what can be achieved when a company generates consistent profits.

Yet another misconception making the rounds is that Aer Lingus have a value of between £600 million and £700 million. I do not know where these figures are emanating from. I wonder if the people making these claims have looked recently at Aer Lingus's annual accounts.

I have here a set of the Aer Lingus Accounts for the latest financial year ended 31 March 1992. These show clearly that the net worth of the Aer Lingus Group at March 1992 was not £600 million or £700 million but £361 million approximately. This is a substantial reduction on the previous year's level of £399 million. With the continuing high level airline losses and other adverse factors, a further reduction in the company's net worth must be anticipated. That is why I have expressed my concern to the board as the shareholder's representative. That is why the board are now taking corrective measures to turn the company around.

With the commitment and co-operation of the Aer Lingus workforce we will succeed. Many people conveniently ignore the fact that the Government's investment in Aer Lingus has not just been confined to its investment as a shareholder. For example, in the period 1983 to 1986, additional once-off funding was made available by the Government amounting to £14 million in respect of the trans-Atlantic operation.

Aer Lingus have also been extensively supported by the Government through the IDA. TEAM Aer Lingus have had two separate projects aided by the Industrial Development Authority to a total amount of over £13 million. Airmotive, both on their own and in respect of their joint venture with Pratt & Whitney, have received total IDA aid amounting to £15.8 million.

On top of this, Aer Lingus have received, via the Government, extensive EC funding for their training programmes over the years. For example, Aer Lingus have benefited from EC training grants of £5.6 million in the period since 1986.

In addition, the Government have over the years given very substantial State guarantees in respect of Aer Lingus' borrowing. I have heard it said recently that the Government should not have allowed Aer Lingus to borrow some £500 million for fleet replacement. People who make such claims misunderstand the role of the board. Let me put the record straight on this right now.

The Government certainly had concerns about the fleet acquisition proposals of Aer Lingus and made their concerns clear to the company. This was countered with cogent arguments from the board as to why the acquisition should go ahead. Detailed and comprehensive economic justification was provided in each case. I have already explained what happened in regard to the Boeing 767s for the Los Angeles route.

This Government and previous ones, including the previous Coalition Government, made it very clear when Aer Lingus were looking for approval to acquire aircraft that the acquisitions must be funded without recourse to Government equity or State guarantees of borrowing. This condition was accepted by the board of Aer Lingus.

The large debt burden now faced by Aer Lingus highlights the need for the company to strengthen its corporate planning procedures, particularly in a cyclical business such as commercial air transport. I have urged them to do so. There is no doubt that if Aer Lingus' European fleet had been replaced in a more gradual manner over a longer period of years, the current problems might not be so serious.

Nevertheless, Aer Lingus' debt burden, although a serious impediment, is not at the core of the difficulties confronting the company at the present time. The most serious problems facing the company is the level of airline losses.

On the question of funding, the Minister for Finance has already made clear on several occasions that the position of the Exchequer finances is such that the Government are not currently in a position to invest additional equity in semi-State companies, including Aer Lingus.

In any event, such investment would not make sense unless the airline can produce a credible plan showing that this business will be operated profitably so as to produce a return to any investment. The days of free equity are gone. Indeed EC competition rules preclude this.

Both I and my predecessors have down the years encouraged Aer Lingus to develop linkages with foreign airlines with a view to improving access to international markets as well as achieving additional earnings in areas such as maintenance, overhaul and training. These objectives can be achieved in a number of ways, such as minority cross investments, joint venture agreements and service contracts. No proposals for such minority cross investments or joint venture agreements have been received by me. I have always made it clear that, if such a proposal were to emerge, I would give it every support.

There is noting new in these ideas. In fact, Deputy Jim Mitchell when he was Minister responsible for Aer Lingus in 1987, raised the question of private participation in the airline. Aer Lingus were also looking for more equity at that time. Let me quote a brief passage from his speech to the Chartered Institute of Transport in that year:

If Aer Lingus needs substantial funds to expand, protect present employment and perhaps create more jobs in the future then I would not stand in the way of private shareholders up to 49 per cent.

I would remind the House again that this was stated by Deputy Jim Mitchell when he was Minister in 1987 — in the Government in which Deputy Spring was a partner.

There has been much controversy over the question of a partial sale of shares in Aer Lingus recently. Let me stress once more that proposals for a viable future for the airline are, in the first instance, a matter for the board. What I can say, and I say so publicly in this House, is that we would welcome such proposals. Finally, I want to put it on the record of the House that, in formulating proposals for dealing with the current crisis, I have asked the board to be particularly sensitive to the need to maintain employment in Ireland. Rather than see large numbers of staff laid off, I want to be assured that every other avenue has been explored. I want to see a range of options explored and costed which show the effect of different measures rather than be presented with a fait accompli. Put in simple terms, it is clear that Aer Lingus problems must be tackled on two fronts — increasing yield and reducing costs.

While calling for an increase in yields may seem incompatible with the interests of tourism, this is not the case. Our long term interests are best served not only by competitive but also economically sustainable fares which will provide the necessary resources for the long term development of our Irish airline industry. For some time I have been very concerned about the low level of fares charged by both Aer Lingus and Ryanair on the Dublin-London routes. These fares are suicidal in the long term and I have, therefore been calling for an increase in the lowest fares charged by both airlines.

In so far as the costs are concerned, I have emphasised to the board that I want to see the maximum employment possible which is compatible with the Aer Lingus's commercial viability.

The aim of this Government is to sustain and create jobs. That is what I want Aer Lingus to do when it solves, as it will, its current problems.

Accordingly, I urge the House to support the Government amendment.

Transfer 5,000 redundancies to Shannon.

I welcome the Minister to the House following her handbagging escapades of last Thursday. I should like to stitch into the record the need for statements of the kind we heard from the Minister at Dublin Airport, on RTÉ, in Luxembourg etc., on Government policy — or the absence thereof — to be made in this Chamber of the democratically elected Parliament. It is offensive to democracy as well as to the national Parliament and the people that the Minister so frequently engages in bland public relations exercises rather than making important contributions on her policy, if any, to the House. When would we have had this urgent and important debate on Aer Lingus if it had not been chosen by the Labour Party for Private Members' time this week? There was no indication from the Minister at any stage that she wished to make a policy statement within the confines of this Chamber.

We have listened attentively for 30 minutes to the Minister's response to the crisis in Aer Lingus but we heard nothing about jobs, funding or that a plan would be produced and published within a month to deal with matters affecting Aer Lingus. The most important point, continuously referred to by the Minister, was the contribution to our aviation policy of Fine Gael's Deputy Jim Mitchell who, I am sure she would concede, was the best Minister for Transport in the history of the State.

Having regard to the comments emanating from the beef tribunal this afternoon I would hazard a guess that the people might not have to wait too long before they have a choice to nominate Deputy Jim Mitchell to take responsibility — in which the Minister is lacking — of a Department.

Who will be in coalition?

That will be for the people to decide. We do not intend amending the Labour Party motion but rather adding the following paragraph to what has been proposed by Deputies Spring, Kemmy and Ryan:

", such policy to include the introduction of legislation to allow Aer Lingus commercial freedom to enter into cross investments with other airlines; to provide for the issue of shares to private investors in order to meet its capital requirements, to enable Aer Lingus to enter into joint marketing arrangements and alliances to develop new routes and achieve cost reductions with a view to placing the national airline on a sound financial footing, thereby protecting jobs in the airline and ensuring an efficient and competitive air transport service to and from the State."

I should like to address three questions to the Minister for Tourism, Transport and Communications. Why did she and her Government get us into this mess with regard to Aer Lingus? Second, why is she now engaging in national sabotage, undermining confidence in the workforce of Aer Lingus and putting off potential investors? Third, why has no aviation policy been prepared either by the Minister or her predecessors over the past five years? Is it because she and her Government are bankrupt of ideas and she now chooses to look for a scapegoat in the workforce of Aer Lingus? Since the Green Paper published in November 1985 by a previous Coalition Government on all aspects of air transport, there has been no follow-up either by way of a White Paper or a Government policy statement on aviation matters.

It is clear from this debate that the Government have no aviation policy, no plan, no vision, no co-ordinated approach. For the first time at political level there is a need for an urgent overall policy and strategy for the aviation sector. Unlike Fianna Fáil, Fine Gael are the only party with a national aviation policy, a policy which was devised following extensive consultation, negotiation and cross-fertilisation of ideas with a wide-range of people in the aviation industry.

Our primary objective for the aviation sector is that Ireland should have an efficient and competitive air transport service. This involves developing routes necessary to sustain the growth of our tourist and commercial sectors. We will only have a competitive and efficient air transport service if we deliver on four key objectives.

First, we must ensure the survival of Aer Lingus as the national flag carrier for Ireland. Second, we must develop Irish international "hubs" for passenger and freight services which will ensure that we have major aviation centres here. This is based on the fact that Ireland's geographic location is suitable as a pivotal gateway for traffic to the East as well as to the West. Third, we must establish a clear policy for Ireland at EC level. I am surprised the Minister did not advert to her role within the European Community. It would appear that we do not have any line on the process of liberalisation of air transport within the European Community. This is particularly important in view of the deregulation which will take effect on 1 January 1993. Fourth, we must develop an adequate short haul air route network between domestic airlines.

The Minister and the Government have become paralysed by indecision. It is amazing that no constructive suggestion was made by the Minister either last week in her visit to the board meeting or tonight in response to the crisis. Threats emanating from political party meetings to fire the board or to bring in Commissioner Ray MacSharry do little to address the problems. Was the Minister joking when she adverted to such suggestions in Luxembourg? Is this some kind of farce we heard from Government circles in recent weeks?

Perhaps the Minister meant Deputy Ray Burke and not Commissioner Ray MacSharry.

That might do something for the crippling difficulties being experienced by Aer Lingus. Many of the problems in Aer Lingus are global but some are peculiar to Aer Lingus and need to be addressed in a concise policy statement of the type envisaged in the motion. To put it starkly, if Aer Lingus were an airline company only they would now be in liquidation. The Minister has no right to exclusively blame staff in Aer Lingus when it is a fact that the Government have prevented the company from operating successfully over the past number of years.

As far as the workforce of Aer Lingus is concerned, it cannot be over-stressed that sacrifices of considerable significance have been made in recent years. Industrial relations have been exemplary having regard to the many demands for salary moderation, new pay scales with lower starting points, the foregoing of increases under the Programme for Economic and Social Progress as well as changes in staffing levels and increased flexibility in work practices.

What has the Minister to offer in response to the sacrifices made by the employees in recent times? It is grossly offensive to the workforce at Aer Lingus that there is no plan or policy on the airline, and no rescue package to date in respect of likely job losses which will have a devastating effect on the economy. More than anything else the problems of Aer Lingus have stemmed from the necessary purchase by them of 28 new aircraft at a cost of over £500 million. Added to this is the urgent need to replace the ageing fleet of jumbo jets which will require an investment of £150 million within the next five years. The payment by Aer Lingus of interest on loans in respect of fleet replacement has had a crippling effect on the company. It is in this area that the refusal by the Government to invest significantly has led directly to the crisis. An immediate rescue package must be put together. This can only be done by the Minister and the Government.

I would like to refer to today's decision on the Shannon stopover, with specific reference to the fleet replacement requirements of Aer Lingus for jumbo jets over the next five years. Does the Minister realistically believe that under present circumstances jumbo jets, the property of Aer Lingus, will compulsorily land at Shannon within the next five years? Will Aer Lingus have the planes?

In relation to today's stopover decision, what about the report of the Oireachtas Joint Committee on Commercial State-Sponsored Bodies which examined in depth the Shannon stopover airbusiness in recent years? What about the recently leaked Tourism Task Force Report which recommended that direct air services into Ireland on the North Atlantic Route should be shared between Shannon and the west and the generation of additional direct line traffic into Ireland. The Minister is clearly ignoring this advice, or is it true to say, as she said on Saturday last, that the report arrived on her desk on Friday. Is it still on the Minister's desk, unread? In view of what the Minister has said today in relation to the Shannon stopover, I doubt that this decision can be regarded as final. The debate will have to continue, as the information on all the related matters has not been published, all the data are not out in the open and until such time as this happens, this matter will not be resolved.

It is my belief that the long-term future of Aer Lingus will only be secured by significant private investment, most probably by way of partnership in a joint venture with another airline. Aer Lingus are the only European air carrier that do not have or are not contemplating outside share participation. Only Tap Air in Portugal and Al Italia in Italy retain 100 per cent State ownership. Many European State airlines have a significant non-Government equity investment. For example, Swiss Air have 77 per cent non-Government investment; Scandinavian Airlines have 50 per cent non-Government investment; Sabena have 47 per cent non-Government investment and they have a recapitalisation programme. In Greece, legislation is expected to allow for a 49 per cent sale in Olympic Airlines equity this year; Lufthansa have 45 per cent non-Government investment; KLM have 61 per cent non-Government investment; Iberia plan to partially float their company; Finnair have 24 per cent non-Government investment; British Airways have 100 per cent non-Government investment. There is a BNP proposal to buy over 8.8 per cent shares in Air France and Aerflot — my friends on the left might remember Aerflot — and British Airways are considering a proposal for a joint venture participation.

Aer Lingus could not get one.

The estimated expenses over the coming years are staggering. The total capital requirement within five years is to the order of £7 million. It is further estimated that from the period 1996 to the year 2000, an additional £600 million capital will be required. These sums are enormous and it is clear that Aer Lingus will not have the borrowing capacity to proceed along these lines and, therefore, an alternative capital source must be found. As sole shareholder the Government's policy on equity investment is of paramount importance. There appears to be no Government policy on the matter of EC funding for air transport. The Minister will, I am sure, agree that regional policy is vital for the survival of Ireland's national airline. Why therefore, has no application being made for Structural Funds for the air transport business? There is no reason why the craft fleet replacement should not be eligible for European funding on the basis that air access to this country, an island, is a vital aspect of our regional policy.

The Government recently allowed an extraordinary suicidal state of affairs to develop on the Dublin-London route. At one stage six airlines operated the route on which fares were slashed to grossly uneconomic levels, to allow Aer Lingus wipe out the competition. The ending by British Airways — now one of the most efficient and successful airlines in the world — of their Dublin-London service should have triggered the necessary alarm bells with Aer Lingus and the Minister. This, regrettably, did not happen and the Dublin-London war cannot be allowed to continue.

The influential Boston Consulting Group stated that cost cutting alone would not be sufficient to resolve air transport losses for Aer Lingus. Apart from the global depression in the airline industry, Aer Lingus are hampered by high maintenance costs and airport charges. Aer Lingus have in the recent past imposed a cost cutting programme and it is fair to say that they cannot operate under the current fare structure policy operated by the Government. What the airline needs is greater flexibility on fares so as to maintain viability along certain routes. Market sources are such that the airline must be given commercial price freedom in this regard.

Fine Gael have a number of policy proposals which the Government must consider in the context of the Aer Lingus crisis. We propose that a corporation development plan be set out for Aer Lingus over a ten-year period. The objective of this should be to make Aer Lingus part of a super carrier in the new air transport globalisation process. In order to meet the huge capital needs of the airline Aer Lingus must have the commercial freedom to enter into cross investments with other airlines in line with the European trend. The Government should issue additional shares to private interests in order to increase the capital available to the company while retaining a major shareholding on behalf of the Irish people. This must also include an opportunity for employee shareholding under the Finance Act as part of an approved profit sharing scheme. In this scheme the rights of the worker would be protected.

Aer Lingus should seek to pioneer new services to the Far East and the Southern Hemisphere. It is a clearly established principle that the profitability from long haul transport is the key to a greater performance by any airline. Aer Lingus should be free to enter into joint marketing arrangements and alliances to develop new routes and achieve viable costs.

At EC level, Fine Gael are committed to the following proposals: the implementation of the Single European Air Traffic Control System which it is estimated could reduce air fares by up to 10 per cent; opposition to the abolition to duty-free facilities and to the imposition of VAT on an intra European Community fares; opposition to excessive flight crew restrictions which could cost Aer Lingus over £35 million per annum; promotion at EC level of a fair apportionment of slots at congested airports.

Fine Gael call for the amending of the fare approval structure for passenger services to and from the UK and Ireland so that Government approval should no longer be required. We are not satisfied with a situation where airlines making record losses pay landing charges to State airport authorities who are making considerable profits. We believe that a civil aviation authority should be established in this country.

If Aer Lingus are to survive radical steps are needed. It is all very fine to talk about privatisation or plans to sell part of the company to an outside interest. The reality is that very few interested parties are on the horizon. The Government must ensure that the airline is put into a position of being attractive in respect of a merger or a joint venture partnership or cross investment. So far as we have heard nothing along the lines of a constructive suggestion. The Minister, in my view, has a conflict of interest between her position as sole shareholder of Aer Lingus and their statutory regulator. She is the owner of all our airports where planes must land according to her regulations. It is difficult to separate a sound commercial decision from a shortterm political decision and in this regard the Minister must stand culpable.

Good relations between the Minister on the one hand and Aer Lingus on the other are necessary if this crisis is to be tackled. It is clear that the relations, at present, are in a disastrous state. The Minister's ill-aimed attack on Aer Lingus is both unwarranted and unfair. In clear terms, the airline will not survive without a capital injection, be it public or private. Having regard to the present attitude of the Government and of the board and management it is difficult to see what crucial steps can be taken to save our national airline from destruction.

Will the Deputy please move the adjournment of the debate?

I wish to conclude my remarks as I am anxious to allow other members of my party contribute tomorrow night. What we have heard tonight falls far short of what is necessary to deal with the matter. The overall objective should be for the State to have an efficient air transport service for this country at all times. The pride all Irish people have in Aer Lingus should be directed towards practical political action to keep our airline in business.

Debate adjourned.
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