Dáil Éireann díospóireacht -
Thursday, 20 Jun 2002

Vol. 553 No. 4

Adjournment Debate. - Regional Airports.

Mr. P. Breen

I congratulate the Minister on his appointment as Minister for Transport and wish him every success.

As a new Deputy for County Clare who takes pride in our international airport at Shannon, I have to say that the Government's record of dealing with aviation issues over the past five years is nothing short of a disaster. The events of 11 September last cannot be blamed for the problems of Aer Lingus, and Shannon Airport should not be used as a sacrificial lamb. In the Shannon region we have a valuable asset which must not be used as a pawn in any deals that emerge in the coming months.

Since its establishment in the 1940s, Shannon Airport has been a generator of opportunity and confidence. Shannon is called the airport of necessity because it was deliberately located where it was most needed in the national interest of generating opportunity for an area that was economically barren. The airport is a success story of which the nation can be proud. It is essential for the success of the region and is of future paramount importance for the growth of tourism in the mid-west region.

The Minister may be aware of proposals from Aer Lingus management that as and from 27 October next both direct flights to New York and Los Angeles flights will originate and terminate at Dublin Airport. These flights operate seven days a week and are the only direct transatlantic service on the transatlantic route, that is, the Shannon-JFK route. With tourism numbers down by 21%, the change in this service could spell disaster for the Shannon region. Shannon airport has enjoyed a very special relationship with Aer Lingus on the transatlantic route. Aer Lingus has been the cornerstone of Shannon and we want to keep it this way for the future.

Rerouting this service will have a very negative impact on the region, which will affect about 280 transatlantic cabin crew who are based in Shannon. About 150 of these are married and live locally with their families. This will also probably mean job losses in the Shannon region. It will also affect passenger numbers at the airport as Aer Lingus claims that first class business out of Shannon is not profitable. Aer Lingus cannot cope with first class traffic out of Dublin and first class passengers are three times more profitable than economy passengers. This will also affect overnight bed numbers in the region. This is why the Hotels Federation is up in arms on this issue. There must be concern that the Aer Rianta catering service at Shannon will not now be available out of Shannon and this business will be transferred to Dublin. This will have a severe economic impact on in-flight catering especially given that Aer Lingus is now looking for a survival plan.

Are there further plans to reduce transatlantic services out of Shannon, particularly the Boston route? It is widely rumoured that the bilateral agreement will be up for negotiation later this year or early next year. Is that linked to the reduction in direct air services? The current bilateral agreement is a 50-50 arrangement. If all services are re-routed through Dublin, the long-term objective must be to change the bilateral agreement. Either way, is it up for negotiation?

Fine Gael believes in protecting the needs of the entire nation and the Government. We ask the Minister to join us in ensuring a vibrant rural economy with a strong airline. The country would be much better off as a result. I ask the Minister to earnestly consider developing Shannon to its full potential. At present the Government has no vision for our international airport.

Mr. Brennan

I thank Deputy Breen for his kind wishes, congratulate him on his election to Dáil Éireann and wish him well here. It is a difficult but exciting place to be.

Issues relating to rostering and staffing are day-to-day operational issues for Aer Lingus and I, therefore, have no function in these matters. However, I understand from the company that the Deputy may be referring to possible crewing changes arising from a review of the Aer Lingus transatlantic schedule for next winter. A draft schedule for next winter is currently being finalised taking account of all the relevant issues, including competitive pressures, the ongoing need to reduce costs and market requirements.

Any changes will respect the terms of the Ireland-US bilateral agreement under which Aer Lingus and all other airlines must fly as many direct services to Shannon in a 12 month period as they fly to Dublin. There may, however, be a change in the Los Angeles service which currently operates Shannon-Dublin-Los Angeles-Dublin-Shannon, with the Shannon leg being dropped due to cost factors. There will, however, continue to be a connecting service operated by Aer Arann. In addition, the New York-Shannon services will commence and terminate in Dublin for the coming winter rather than commencing and terminating in Shannon as heretofore. I understand from the company that the schedule will be finalised over the next few weeks.

It is important for the Irish economy in general that a strong viable Aer Lingus emerges from the difficulties of the past year. The survival of Aer Lingus is also extremely important for the future of Shannon airport. Aer Lingus has made significant progress since the impact of the dreadful events of 11 September became known and a degree of stability has emerged as a result of implementation of the survival plan. However, the competitive and changing nature of the industry and the ongoing market uncertainties require a continuing focus on cost reductions and efficiency improvements. Unless this effort continues unabated, the airline remains vulnerable to market forces and is particularly vulnerable to unexpected economic or other external shocks. The airline, like its competitors, must become profitable and, in particular, must be able to respond flexibly and rapidly to changing market conditions if it is to have a viable future. For my part, I will fully support the efforts of the board and management in this regard over the coming weeks and months. My priority is to ensure that Aer Lingus is brought back to full health.

It is appropriate for me to use this opportunity to put on record the new Government's commit ment to ensuring a viable Shannon airport, playing a major role in the ongoing development of the mid-west region. The programme for Government gives a commitment that as part of the process of transforming Aer Rianta, the Government will ensure that Shannon and Cork airports have greater autonomy and independence. I will look carefully at that in the weeks ahead to see how I can implement that commitment to give more autonomy to Shannon and Cork. There is a sound foundation from which to continue to build at Shannon Airport notwithstanding the impact of the events of last year. Over the two years, 1999 and 2000, traffic through Shannon Airport increased by in excess of half a million passengers, representing growth of more than 30% on 1998 levels. Passenger traffic for 2001 was 2.4 million, a marginal downturn on the previous year.

There have also been significant infrastructural developments at Shannon. The new passenger terminal which opened in 2001 has effectively doubled that airport's capacity bringing it to 4.5 million. In addition, to assist route development Aer Rianta extended its zero charges incentive scheme for airlines which launch new routes into the three State airports following the events of 11 September. In the case of new routes at Shannon, Aer Rianta extended the period for zero airport charges from three to four years. In addition, Aer Rianta will provide marketing support for route development promotional activities.

These initiatives are intended to help reduce the impact of the current global aviation downturn on traffic at State airports, including Shannon Airport, and to boost the Irish aviation and tourism sectors in the months and years ahead.

So far this year, Ryanair has launched a new route to Paris-Beauvais from Shannon and Aer Arann Express has commenced a twice-daily flight from Shannon to Dublin. I was delighted to launch a new Air Canada service linking Toronto and Shannon last week. I understand that Continental Airlines has increased capacity on its Shannon-New York route.

I am confident that, despite the current difficulties in the aviation sector, the future viability of Shannon Airport is secure and that it will continue to grow and prosper, continuing its valuable contribution to balanced regional development.