Dáil Éireann díospóireacht -
Wednesday, 24 Feb 1999

Vol. 501 No. 1

Adjournment Debate. - Shannon Airport.

Mr. Killeen:

I welcome the opportunity to put forward some arguments on the need to ensure that the role of Shannon Airport in balanced regional development is not undermined by Aer Lingus in its quest for strategic partners. The Minister, and those familiar with the issue, are aware that a number of reports were commissioned recently, and others going back over a relatively long period, setting out the importance of Shannon Airport in terms of regional development.

I am aware of the criteria which the Minister has set for Aer Lingus in its quest for strategic partners but there is considerable speculation that management in the State airline is less than happy about some of the constraints placed on it by some of these criteria. There has been press coverage also which leads one to believe that unhappiness is manifesting itself either from Aer Lingus or some sources close to the Dublin lobby on this issue.

The Minister has been extremely helpful and accessible to Shannon and to myself. Unlike many of her predecessors, she has clearly understood the strategic importance of Shannon in regional terms. I thank the Minister for that and acknowledge the considerable progress made during her relatively short tenure in the Department. Many new services have been developed and it is fair to say that a relatively pessimistic view of the airport's future, which predated her tenure as Minister, has been replaced by a more optimistic one. Nevertheless, all of us have to be aware that changes in Government policy, should they arise, can have a considerable bearing. It is important to record that the changes which occurred in 1993 have had a debilitating effect on the economy of the airport and the region.

I was interested to read recently a Sunday Business Post editorial to the effect that traffic volumes have grown rapidly at Shannon. Nothing could be further from the truth. One of the reports presented to the Minister sets out the figures from 1993 to 1997 which have not changed dramatically if one includes 1998. The percentage change in Shannon over that period of five years is 6.6 per cent. The percentage change in Dublin is 74 per cent. I welcome the fact that both figures represent growth rather than loss, but the big difference at Shannon is in transit traffic where there has been a 30 per cent drop, while Dublin had a 300 per cent increase on a smaller base.

There are many figures that I know I do not have to put to the Minister because she is aware of them. I have advanced the regional argument more than any other because I believe that Dublin is as big a loser as Shannon or the west when there is an over concentration of access into Dublin and the east. It inevitably brings a dispro portionate growth in tourism and industry, which naturally contributes substantially to the gridlock. Those of us who spend a few days in Dublin each week experience the gridlock for those few days and it makes us sympathetically disposed to those who must live here and experience it every day of the week.

Improving access to the west can most easily be done by retaining Shannon's present position and building upon it strongly. There is much evidence that is happening but there is counter evidence that Aer Lingus's quest for a strategic partner has both merits and demerits. I welcome the Minister's indication that she will have the matter independently and carefully examined, if that is the case. It is a separate argument and a major one to be examined in terms of the future of the national airline. However, I am not discussing that matter now; I am talking about the possible effects on Shannon. People who have been close to Shannon Airport and who have taken an interest in the issue are very much aware that Aer Lingus's problems in 1993 were the catalyst for negative developments at that time. They are equally conscious that a spin has been put on the story in the media, that Shannon did very well from that change. Shannon has survived that change in very good economic times, but it has also suffered from it. It is well to remember that the change was a great deal smaller than what was intended and what might have happened. It is a long way from an open skies policy and we need to ensure that we remain a long way from such a policy.

It is fair to admit also that there are infrastructural issues in the mid-west which militate strongly against Shannon. I am glad they are being addressed, including road access. A proposal has been put to the Minister for a light rail link to the airport, which I hope and am confident will receive serious consideration.

In the context of access for tourism development and industry, nothing in the west of Ireland is more important than Shannon Airport. As an engine for growth in those areas, and as an attempt to spread growth in the regions, nothing is more important for this or any future Government than to ensure that the airport retains the very minimal advantage it has. Everything must be done to build on it, to provide the infrastructure – which is happening and which we welcome – and to ensure that people who are charged with developing the airport and those charged with regional policy in the west – and they are different people at the moment, which is another day's work – have the advantages which are needed to benefit the west and the capital.

Minister for Public Enterprise (Mrs. O'Rourke):

I thank Deputy Killeen for raising this matter. He has persevered with this motion for six days in a row. On one occasion I was not available, then something else happened and last week there was no Adjournment debate. However, the Deputy has kept at it until he got a debate to which I want to contribute. I thank him for giving me the opportunity to speak about the matter.

In April 1997 my predecessor, Deputy Dukes, mandated the board of Aer Lingus to explore the possibility of entering into a strategic alliance, with or without equity, and to submit proposals to the shareholder. In September 1998 I received a report from the chairman of Aer Lingus in response to that mandate.

Having examined a number of strategic options, Aer Lingus concluded that the commercial future of the airline could only be secured through participation in a major strategic alliance, of which a strong US partner would be a key component. Arising from the consideration of that report, the Government agreed, in principle, that Aer Lingus should seek a partner, that the partnership could be equity based and that the process could move to the next stage. In other words, they were looking for a bride or groom with cash in their pockets. The process is now at the stage where Aer Lingus is having discussions with a number of prospective partners. The chairman has advised me that this stage will be completed shortly and Aer Lingus will then be in a position to generate proposals for my consideration and that of the Government in April.

It is much too soon to speculate on the outcome, and on all the issues that may or may not arise. I assure the House that there will be careful and detailed consideration and consultation to ensure the best outcome for the airline, its employees, the taxpayer and for Ireland.

This week my Department advertised in the EU Official Journal for consultants to assist in that process. Deputy Killeen referred to that in his contribution. When we receive the report from Aer Lingus we will have our own advisers ready who will look at it, discuss it with us and provide us with detailed advice.

I assure the House that the Government strongly supports and endorses Shannon Airport's role in achieving balanced regional development for the west of Ireland. This will not be undermined in the quest for a strategic partner for Aer Lingus. That process is intended to secure the future of Aer Lingus, particularly on the North Atlantic, thereby ensuring a strong Aer Lingus transatlantic presence at Shannon into the future.

The construction of a new £40 million terminal, currently underway, which will double the existing capacity, is evidence of the Government's commitment to Shannon, as are the successful efforts in securing additional air services in recent months. I have made it very plain that both I and the Government are open and want to see fresh airline services coming into Shannon. We want to see people and movement there – all the things that go towards creating an airport. Because we have been so outspoken about it we have had very good results. These include the introduction of year round scheduled services by Continental Airlines from Shannon to Newark, from June last year. In addition, Royal Jordanian Airways commenced an Amman-Shannon-Chicago passenger service on 18 January 1999. That airline also plans to introduce an Amman-Shannon-New York passenger service later this year. Furthermore, Pakistan International Airlines has announced that it will operate a total of six return flights a week routing Karachi-Shannon-New York and Karachi-Shannon-Washington-Toronto, from next month.

Delta Airlines, which currently operates from Atlanta, will introduce a new New York service in the coming summer, while Aer Lingus will commence a new Los Angeles service also, serving Shannon as well as Dublin.

In addition to those new transatlantic services, major developments on the UK and European routes have included the Virgin Express service to London-Stansted, which commenced last December and the new Aer Lingus daily direct Shannon-Paris service, which will commence next month.

Complementing these new passenger services has been a growth in dedicated cargo services to Shannon, notably by Lufthansa, Cargolux, Martinair and Polarair Cargo.

I am confident that with the ongoing positive support of Government, allied to that of all interests in the mid-west, Shannon Airport will continue to grow and prosper. I sympathise with many of the points which Deputy Killeen raised. I do not have a constituency interest in Shannon airport, which is a good thing. People from Athlone and elsewhere in Westmeath travel mostly to Dublin Airport – although some, I am sure, go to Shannon Airport – to take their flights. It is correct that I should not have any constituency interest in preserving all the transatlantic stopovers at Shannon. However, I have a clear wish, which I share with my Government colleagues, for balanced regional development. That is the best way forward for this country instead of concentrating on one part, welcome though it is.

I welcome the opportunity to debate the issue in the House. I am sure it is the first of many such debates. I thank Deputy Killeen for his interest and concern. Others have expressed their interest and concern to me about this matter, including the Minister for Arts, Heritage, Gaeltacht and the Islands, Deputy de Valera, and Deputy Daly.