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Dáil Éireann díospóireacht -
Tuesday, 23 Nov 1993

Vol. 436 No. 1

Written Answers. - Air Services.

Martin Cullen

Ceist:

165 Mr. Cullen asked the Minister for Transport, Energy and Communications if, in view of Ireland's peripheral location and the growth in trade with EC and other countries, he will give the plans, if any, he has to develop efficient and cost effective air freight transport services; if such plans will necessitate the provision of additional storage, distribution and handling facilities at Irish airports; if he has received the Stokes Kennedy Crowley/CHL report; if so, the findings of the report; if a regulation on the liberalisation of air freight has been adopted by the EC; and, if so, if he will give the details of this regulation.

The Programme for Government attaches a high priority to the development of modern efficient transport links with Britain, Europe and further afield and to improving access arrangements to/from Ireland. As the regulatory authority for air transport, my Department makes every effort to ensure that there is a wide range of reliable and regular commercial air services for Irish tourism, trade and industry, at the lowest economic cost. However, the actual development of air services on specific routes is a matter for the individual airlines.

Outside the EC, traffic rights for air services are negotiated within the framework of bilateral air transport agreements. In order to facilitate the commencement of new services to and from Ireland, I have and am pursuing a vigorous policy of negotiating air transport agreements with countries with whom there is potential for services to operate in the short, medium and long term.

Under Council Regulations (EEC) No. 2408/92 on access for Community air carriers to intra-Community routes, which came into effect on 1 January, 1993, all Community air carriers are free to fly on international routes within the Community without Government regulation.

Council Regulation (EEC) No. 2409/92 on fares and rates for air services provides that cargo rates charged by Community air services shall be set by free agreement between the parties to the contract of carriage.

Air freight is a strong growth sector, with throughput in the three State Airports increasing from 70,000 tonnes in 1989 to 87,000 tonnes in 1992 (24 per cent increase). At Dublin Airport, the increase was from 47,000 tonnes to 63,000 tonnes (34 per cent). With the advent of the Single Market and the abolition of customs controls from 1 January, 1993, air freight is becoming increasingly important for the quick export of goods, particularly those with a high added value/low weight ratio, such as electronic/computer components and pharmaceuticals. Freight facilities at the three airports are being further developed to cater for this traffic growth.

The report referred to by the Deputy was prepared by KPMG/Stokes Kennedy Crowley for my Department and the EC Commission. Following its completion, the Government formally applied in 1991 for EC aid for mobile assets.

The following were among the main findings of the consultants access transport study which supported the application: the Irish economy is heavily dependent on the export and import of goods and services; improved external access is essential to offset the competitive disadvantages of Ireland's peripheral location and investment measures under the Operational Programme on Peripherality to develop road, rail, port and airport infrastructure, while necessary, would prove insufficent without a parallel upgrading of external access transport services.
The European Commission has formally responded negatively on three occasions to Ireland's application. The main reasons for rejection centre around the Commission's belief that aid for mobile assets would lead to a distortion of competition and there is insufficient evidence for market failure to justify intervention.
The Government has mounted a sustained campaign at all levels to convince the European Commission of the need to take practical measures to offset the unique disadvantages caused by Ireland's island status and peripheral location. The Government's case has been carefully formulated and, on the basis of the best professional advice, I am satisfied that it is fully justified.
The Government will accordingly continue to press for EC support to further develop Ireland's external trade and tourism.
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