JOINT COMMITTEE ON TRANSPORT díospóireacht -
Wednesday, 16 Jan 2008

State Airports: Discussion with Dublin and Shannon Airport Authorities.

Chairman

I welcome members of the management of the Dublin Airport Authority. Unfortunately the chairman of Dublin Airport Authority, Mr. Garry McGann, became ill this morning and is unable to attend. We convey our good wishes to him. We are joined by Mr. Declan Collier, chief executive, Mr. Oliver Cussen, deputy chief executive, Mr. Vincent Wall, director of communications, and Mr. Ray Gray, director of finance.

I draw attention to the fact that while members of the committee have absolute privilege this privilege does not apply to witnesses appearing before the committee. Members are also reminded of longstanding parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official, by name or in such a way as to make him or her identifiable.

I propose hearing a short presentation by Mr. Collier followed by questions and answers. This meeting is part of a series of hearings the committee is holding on air transport. It developed from the Shannon situation but we want to examine the wider issue of airport management, the structure of our airports given the proposed independence of the airport and the plans for expansion, such as the development of terminal 2 and other plans. We appreciate that the authority has put a business plan before the Minister for Transport and the Department and cannot give us the detail of that business plan. However, we want to have a general discussion on the future development of the airport and the arrangements for the independent operation of Dublin, Cork and Shannon.

Mr. Declan Collier

I thank the Chairman for the invitation to address the committee. I apologise on behalf of the chairman, Mr. McGann, who is unable to attend due to illness. We are appearing at this meeting to discuss the DAA proposals for Dublin Airport, relations with Cork and Shannon and the arrangements for the independence of those airports. In this context, it is important to restate the policy background underpinning the key business objectives of the DAA, including the objective of delivering the required capacity at Dublin Airport to serve more than 30 million passengers by 2015. In this context, the Government's 2005 aviation action plan specifically provided for the delivery of pier D by 2007 and of terminal 2 in 2009.

A second objective is to fundamentally transform the passenger experience at our airports and a third is to strive to effect the separation of Dublin, Cork and Shannon as commercially self-sustaining, independent airports, as stipulated by the State Airports Act 2004. I am pleased to report that significant progress has been made towards each policy objective over the past year and that 2008 will see further significant developments.

I refer to the DAA's transformation programme at Dublin Airport. Dublin Airport has been one of the fastest-growing major European airports for some years. With slightly more than 23 million passengers last year, it is now Europe's eighth busiest airport in terms of international traffic. It serves more international traffic than JFK Airport, LA International Airport and the airports in Zurich and Rome. However, as is clear to the vast majority of its stakeholders, its passenger processing and airfield capacity has not kept pace with traffic growth, thereby leading to a less than satisfactory travel experience for many customers, particularly at busy travel periods. The Government's aviation action plan of May 2005 addressed this capacity deficit and directed the DAA to deliver the facilities required as swiftly as possible.

In the two and a half years since the Government's decision, the DAA has responded effectively and efficiently to the requirements of its shareholders and airline and passenger customers. It has developed a master plan for the progressive development of infrastructure at Dublin Airport and consulted intensively with airlines and other key customers about their business plans and capacity requirements. Following a full planning appeals process, it has secured planning permission for a new 75,000 sq. m. passenger terminal, an adjoining major boarding gate facility and a new parallel runway. It has also secured indications from the Commission for Aviation Regulation that more than 95% of the first stage €1.2 billion investment plan for Dublin Airport will be remunerated and delivered a spacious new boarding gate facility, Pier D, on time and within budget. It has also delivered a host of projects and measures to mitigate the impact of congestion in the existing passenger terminal. These measures include the doubling of passenger security and customer care staff to more than 600, the creation of a new check-in facility, Area 14, beneath the arrivals floor, and the construction of a new centralised immigration facility to cater for more than 50% of the airport's inbound passengers. Construction work has commenced on the second terminal, T2, while this year the DAA will invest €450 million, or more than €1 million per day, as the airport's transformation programme gathers momentum and scale.

Perhaps it is worth reminding the committee at this stage that the investment programme is funded through a combination of regulated passenger charges, borrowings and commercial income generated by the DAA. Dublin Airport which receives no direct State funding has the lowest level of passenger charges of any major European airport. Recent IATA and Association of European Airlines, AEA, statistics show that globally we have the fourth lowest passenger charges of any major airport.

As a consequence of the protracted planning appeals process, construction of T2 will now be completed in the fourth quarter of 2009. Following a rigorous commissioning and testing phase, the new terminal will open to the public in April 2010. T2 which will handle up to 15 million passengers per year has been designed around passengers' needs and will provide them with a pleasant and efficient travel experience. While T2 is the largest single element of the programme to transform Dublin Airport, approximately 70 additional construction projects will also be progressed during 2008. Work will begin shortly on a €55 million extension to the existing terminal which will provide more circulation space for passengers, an enlarged and reconfigured check-in area at the northern end of the terminal and additional catering and retail space.

The investment programme includes many areas of unseen infrastructure such as the upgrading of services and utilities and the provision of new aircraft parking stands and taxiways which will make the operation of the airport more efficient from a user's point of view. The DAA is determined to deliver at Dublin Airport the 21st century aviation gateway which Ireland and its economy requires. This gateway will in the next ten to 15 years manage in excess of 30 million passengers per year in a comfortable and cost effective manner. It will connect Ireland directly to each of its key trading blocs and contribute significant additional employment and national wealth. The company is also committed to ensuring the highest standards of environmental sustainability throughout its development programme.

While Dublin Airport is being transformed, the DAA acknowledges that the travel experience for many of its customers is still far from satisfactory. We believe the congested nature of the existing facilities at the airport is the principal reason for this situation. However, we are also mindful that we must bring continued focus to the quality of services provided by our staff and that of our concessionaires.

I will turn now to the issue of airport separation. The State Airports Act 2004 provides the legislative basis for the restructuring of the DAA and the establishment of Cork and Shannon airports as self-sustaining independent business entities. The Act stipulated that separation of the airports would only take place following completion of separate business plans for each airport which would satisfy the Ministers for Finance and Transport as to the state of each airport's operational and financial readiness.

This business planning process has proved complex and protracted, principally because key issues affecting one airport had implications for the other airports' business plans and needed to be addressed before all three plans could be completed and submitted. I am pleased to confirm to the committee that in December 2007 the DAA forwarded business plans in respect of Dublin, Shannon and Cork airports to the Department of Transport. These business plans provide the basis for the initiation of discussions with the Department on the critical issues affecting the separation of Cork and Shannon airports. While I appreciate that confirmation of the completion of these plans may generate many questions on the part of committee members as to their content, the DAA believes it would not be appropriate to elaborate on them pending their consideration by the Department and its advisers. I remind the committee that until the separation of Cork and Shannon airports takes place, the DAA has ultimate responsibility for their employees, assets and business contracts.

All three airports continue to perform well. I have referred to Dublin Airport's continued strong growth. Last year was the first full year of operations at the new Cork Airport terminal with a record 3.2 million passengers availing of an increased number of flight options from the southern gateway. Shannon Airport had a record year in terms of international business growth in 2007, with almost 3.1 million passengers. When domestic traffic volumes are added, Shannon Airport achieved a total passenger throughput last year of 3.6 million. Furthermore, in securing the CityJet-Air France service to the Paris Charles de Gaulle hub, global connectivity from Shannon Airport has been retained.

I thank the Chairman and members of the committee for their time and courteous attention. We are happy to help them with any questions they may have.

Chairman

I put it to Mr. Collier that the Dublin Airport Authority is a bloated bureaucracy in which high and ever increasing costs abound, not least in respect of car parking charges. Why is it necessary for some of the airlines operating from the airport such as CityJet and, more recently, Aer Arann to relocate their offices elsewhere on grounds of costs?

The DAA's projection of 30 million passengers is likely to be reached in the next ten years. Therefore, it is necessary to proceed as quickly as possible with the next phase of terminal development. What plans are in place for this?

In view of the changing circumstances in fuel prices which are ever increasing and emissions which are ever decreasing and given the very crowded skies to the east and south east, what proposals does the DAA have to develop Dublin Airport as a hub, particularly for larger aircraft such as the Airbus A350?

Deputy Fergus O’Dowd

I welcome the chief executive and his staff. Having met them in Dublin Airport, I am impressed with their development plans and the way they articulated them to me. I respect Mr. Collier's professionalism and the integrity of his staff.

No reference was made in Mr. Collier's presentation to a key issue of national concern in which he was involved, namely, his advance knowledge of the removal of the Shannon to Heathrow link. Why did he not inform the management of Shannon Airport about the request he had received? I understand the executive chairman of Shannon Airport resigned as a result, although he continues as chairman. Until the airport is independent, the DAA will continue to be the dominant partner. Will Mr. Collier clarify the relationship between the DAA and the management of Shannon Airport? It is clear that if the airport's management had been given the information Mr. Collier had received, even if it was in confidence between parts of the same organisation, it could have articulated its political and economic arguments more strongly to all those who knew about it at the time, including the Department of Transport.

Deputy Thomas P. Broughan

I welcome Mr. Collier and his delegation. A couple of years ago on behalf of Portmarnock which was not then in my constituency but is now I opposed the planning application for a second runway at Dublin Airport because of the implications for the area. However, I applaud and congratulate Mr. Collier in general terms for the way he and his predecessors have developed and expanded the airport, the primary economic driver in my region. It is the hub of 50,000 to 100,000 jobs. Therefore, Mr. Collier's role is critical for my region, Dublin as a whole and the country. In general terms he must be commended on the development of Pier D and T2.

With the second runway, we are heading in the same direction as Heathrow Airport. The most recent planning permission capped development at 32 million passengers. Am I correct? The Dublin Airport Authority will have to apply for planning permission for any further development if passenger numbers exceed 32 million. Vis-à-vis what the Chairman said about the hub, how does Mr. Collier see Dublin Airport eventually being developed? We may be entering a recession and may not continue to experience exponential growth. However, with the vision the Chairman outlined, one could imagine passenger numbers exceeding 32 million. I remember when passenger numbers at Heathrow Airport reached 35 million or 40 million and people were very excited. Heathrow Airport has only two major runways and has opened its fifth terminal. On the locality and the downside of environmental pollution, noise and flights passing over houses every two or three minutes at night, to which we are used and which we now see as part of life, where does Mr. Collier see us going?

Yesterday the European Parliament voted on the directive on airport charges to support pre-financing of infrastructure. The Dublin Airport Authority did not have that luxury. Shannon and Cork Airports will be excluded from the directive because to be included airports must have a throughput of 5 million passengers. How will the directive impact on the DAA's future financial performance?

We still read about Aer Rianta, for example, it won a contract from Moscow's Sheremetyevo Airport to manage its third terminal. Are Aer Rianta and the DAA the same organisation?

Mr. Declan Collier

Aer Rianta is a subsidiary of the DAA.

Deputy Thomas P. Broughan

What other activities is the DAA engaged in abroad? That was a successful initiative and Aer Rianta has a great tradition of working abroad. It owned Birmingham Airport. To what extent will such initiatives continue?

Ryanair CEO Mr. Michael O'Leary complains bitterly about airport charges. When the committee meets him first that will be his theme. On the list of 67 major airports where does Dublin Airport stand on current charges? The first thing Mr. O'Leary will say is that the DAA is living off the fat of the land and his exertions in getting 13 million people on and off of this island.

My party, the Opposition generally and the Shannon region feel bitterly betrayed on the transfer of the Heathrow Airport slots to Belfast. What was the DAA's role in the matter? I echo the point made by my Fine Gael colleague, Deputy O'Dowd. Could the DAA have given Shannon Airport six or seven more weeks or longer to present a plan to the Minister?

Mr. Declan Collier

Regarding the Chairman's references to bloated bureaucracy and inefficiency, I believe they are part of widely circulated myth about Dublin Airport and the Dublin Airport Authority in general. The civil aviation regulator commissioned an independent study of Dublin Airport, as part of his 2005 determination, that was conducted by Booz Allen Hamilton and it clearly showed that the airport was some 40% more efficient than the average European airport and it came second in Europe only to Copenhagen, which is deemed to be one of the most efficient airports in the world. Dublin Airport is far from an inefficient, bloated bureaucracy and, in fact, we are constantly striving to reduce costs and improve efficiency. Efficiency per passenger at the airport is among the best in Europe.

Chairman

Then why are there such high prices for food, parking and simple things the customer must pay for?

Mr. Declan Collier

We are talking about two separate things. One is the cost of operating the airport and how that feeds through and the other relates to charges we apply in commercial activities. To understand this one must understand how Dublin Airport charges are regulated; we operate on a single till basis. The regulator expects us to put all of the income we generate into a pot and he decides on airport charges on this basis. We generate more than 75% of our total revenue from commercial activities including shops, retailing, catering and car parks. In refusing to grant airport charge increases the regulator has told us to drive up the price of our commercial activities. If we do not do this we will not make ends meet.

I am aware that car parking is an emotive issue and charges in this regard are a concern for passengers. We recently raised the charge at the short-term car parks to €40 per day because short-term parking close to the terminal building is a scarce commodity; people must pay for scarce commodities. We benchmark parking charges against those that apply in the centre of Dublin and against those at European airports and we are more than competitive in that price scale. We did not change the price of parking for one hour or less at the short-term car parks so more than one third of passengers using the airport have not been affected by parking price increases. We have no other means of generating extra revenue if we do not do so in this way; the regulatory system is forcing us to do this.

CityJet and Aer Arann have moved from Dublin Airport to other locations because of the increased size of their operations. We were not able to cater for them on the airport campus because we did not have the space or buildings necessary to allow them grow their operations. Both airlines outgrew the space available and had to move outside the campus.

Regarding Dublin Airport's potential growth as a hub, it is uniquely positioned in the context of European airports and airports globally. It is the only European airport that, thanks to the foresight of Aer Rianta planners, reserved land to provide a second, parallel runway and provided for the future expansion of the airport to the west through extra terminals. These plans have been on the books of local authorities for more than thirty years and are well known. Dublin Airport has the potential to grow by more than 40 million to 50 million passengers and also has the potential to grow in terms of hub operations. We are constantly attracting new passengers and airlines on long-haul routes.

The development of customs and border protection, CBP, facilities will provide a unique opportunity for passengers to pre-clear US immigration, customs and other trade and agricultural requirements and this will give us the chance to grow business in North America, the Gulf and the Middle East. Regarding Dublin Airport's economic role, it is critical that it takes advantage of the opportunity its ability to grow presents and attracts direct services from its key trading blocs. About 100,000 passengers per year connect from Dublin, through other European airports, to Beijing and Shanghai, some 70,000 passengers make connections through European airports to Singapore, and around 55,000 passengers connect to Bangkok. All of these passengers would be better served if we could provide direct services to those countries. Unless we enlarge the facilities at Dublin Airport we will not be able to do that.

Turning to the issue of fuel prices and emissions, there is no doubt that the cost of fuel is rising and that there is increasing debate about emissions and the role of the aviation sector. However, it should be borne in mind that the contribution of the aviation sector towards fuel emissions is relatively small — less than 3% of total greenhouse gas emissions. A far higher proportion of emissions, almost 97%, are due to ground and marine transportation.

When we first received a communication from the Department of Transport that Aer Lingus was considering withdrawing from Shannon, the information was imparted to us in strict confidence. At that time Aer Lingus was the subject of a hostile takeover bid from Ryanair and it was critical that this information was dealt with on a confidential basis. The decision I took at the time was to retain that information confidentially. We were told that Aer Lingus was contemplating this but that no decision had been taken and no decision would be considered within a period of time. It was not until much later on, at the beginning of August, that we were notified directly by Aer Lingus of its intentions.

The EU directive on airport charges was recently voted on by the European Parliament. Dublin Airport Authority has played a key role in terms of lobbying the European Directorate General for Energy and Transport to remove some of the more onerous elements of the proposed legislation, particularly that which would require airports with under 5 million passengers per year to be heavily regulated. The cost of regulation for Dublin Airport since its inception in Ireland has been in the region of €31 million. Regulation is an important process where it takes the place of competition, but it can also be onerous, time consuming and costly. We were particularly keen to ensure that the regional and smaller airports would not have to bear some of these costs, and we are pleased to see that some of our lobbying effort has proved successful. For Dublin Airport, this new legislation on airport charging will have little impact. It will continue to be regulated in a similar fashion. Already, the objectives of the civil aviation regulator include a requirement to support the funding of future infrastructure. Thus, it will have no impact in that area, but it will potentially relieve the burden on Cork, Shannon, Knock, Farranfore, Galway and other regional airports.

Everybody is well aware of the business model operated by Ryanair. It is one of the most successful and efficient airlines currently operating. It will complain bitterly at every possible opportunity that it is being charged too much. However, as I said earlier, Dublin Airport has the lowest charges among major European airports. Our current prices are some 45% of the European average price. We also have the fourth lowest charges among major global airports, according to information produced recently by the AEA as part of work being done by the European Commission. By no means does Dublin Airport have high charges. It has extremely low charges. Even if we were to achieve the level of increase in charges that we have been seeking to support future investment in infrastructure in Dublin, the charges would still be no more than 50% to 55% of the current European average.

Aer Rianta International is a wholly owned subsidiary of the DAA and I am pleased to say it is one of the unsung success stories of the State sector. The company has been in operation for 20 years this year and we will celebrate our 20th anniversary in Russia, in which market it is one of the longest serving foreign multinationals. Last year we were very successful in securing the operation in the retail sector in the third terminal in Sheremetyevo Airport in Moscow which will act as a significant springboard for activities in the future. Aer Rianta International is in the top ten of airport retailers worldwide. It operates in the United States, Canada, the Caribbean, Russia, Ukraine and the Balkans and is one of the most successful operators in the Gulf, the Middle East and north Africa.

Deputy Fergus O’Dowd

I sought this meeting following our discussion with the Secretary General of the Department of Transport on the Shannon Airport issue. I asked that the DAA appear before the committee. I am not satisfied with the explanation I have received about the decision on Shannon Airport and would like to pursue the matter further.

Chairman

We will.

Deputy Fergus O’Dowd

We should set the ground rules.

Chairman

I would like other members to ask questions. We will, inevitably, return to the Shannon Airport issue.

Deputy Fergus O’Dowd

My job and that of the Chairman is to articulate the views of the public. I am not happy with the response I received and want to be clear that I will have an opportunity during this meeting to fully pursue the issues involved.

Chairman

The Deputy will be able to forensically question the delegates but I would like to give other members an opportunity to put their questions.

Deputy Paul Connaughton

I welcome the delegation. One must be proud of what the authority has done at Dublin Airport because it is good for the nation. However, I am extremely unhappy with how the authority handled the information it received on Shannon Airport because there seemed to be a cartel involving the DAA, Aer Lingus and the Government. At the end of the day the idea was to ensure the decision was a fait accompli. The show was over and no one could do anything about it when the news broke over the August bank holiday weekend. If I live to be 100 years old, I will be sore about it. The decision smacked of unfair trading and insider knowledge to ensure the issue was handled in such a way that there was no hope for Shannon Airport. It was national sabotage. The DAA representatives did not come out of it with clean hands because, as the bosses of Shannon Airport, they had the information. The staff told us they knew nothing about what was happening but the authority did. As the authority’s staff, it is the first thing they should have been told but at a meeting in Shannon a few months ago they told us they had not been informed. I would like to hear what Mr. Collier has to say about this.

I refer to charges. A few days before Christmas I had occasion to use Dublin Airport. If the charges are as low as Mr. Collier says, the authority is not winning the propaganda war. As an ordinary user of the airport, I had to fork out €80 for car parking for two days. It would take a great deal to convince me that the authority's charges are low. It is a big fish in a relatively small pool and has a captive market with no competition. It is hugely important in the national interest that Dublin Airport is well run but at the same time if there was competition in the market, when I walked into the car park to collect my car three weeks ago, I would not have had to pay €80. It is probable that I would have paid half that amount. This highlights the lack of competition and the fact that we will experience more of this. Can we have some indication of the subheads and charges? For example, what are the exact sums involved in landing charges at Dublin Airport?

Deputy Timmy Dooley

I join in welcoming the delegation and compliment the Dublin Airport Authority on what it has succeeded in doing at Dublin Airport recently. Anybody who passes through the airport regularly will have noticed the improvements being made. I must, however, turn to the more parochial Shannon Airport issue.

In his presentation Mr. Collier indicated that, pending separation, he had ultimate responsibility for both Shannon and Cork airports as a result of the State Airports Act 2004. I accept and understand he received information in strict confidence and may not be in a position to impart that information, but given his responsibility, did he not have a duty to make every effort to protect revenue at Shannon Airport? Will he expand further on this matter, as it is not enough to say he sat on the issue because the information had been received in confidence? Did his fiduciary duties to the Dublin Airport Authority which has responsibility for the revenues generated at Shannon Airport not mean he had a duty to make contact with Aer Lingus to seek to protect revenue at Shannon Airport and ensure continuation of the service?

I have sympathy for Mr. Collier. Perhaps when he was appointed to run Dublin Airport, it appeared the separation might happen more quickly and his focus and that of the chairman and other members of the board was on that airport. The separation did not happen as quickly as expected for the reasons outlined. Therefore, the Dublin Airport Authority had a broader role and responsibility which it failed abysmally to recognise and respect. It has failed in another manner also, namely, it has failed to make the required investment in both Shannon and Cork airports, specifically Shannon Airport, since 2004. What significant investment has the DAA made infrastructural development at Shannon Airport in that three-year period? I have complimented it on the investment made at Dublin Airport during that time. It seems that while it has responsibility for Shannon and Cork Airports, it continues to focus almost exclusively on the development of Dublin Airport.

Deputy Michael McGrath

I welcome Mr. Collier and the delegation from the Dublin Airport Authority. I am disappointed that the Cork Airport Authority was not invited to attend. I understood that when this meeting was first mooted, it was in the context of the fallout from the Aer Lingus-Shannon Airport issue.

Chairman

Representatives from Cork will be invited to attend, with representatives from the other regional airports.

Deputy Michael McGrath

I want to ensure that will happen. The submissions of the DAA and the Shannon Airport Authority demonstrate the issues involved are broad and relate to separation, in respect of which Cork Airport is a key stakeholder. I would, therefore, appreciate it if Cork representatives were involved as soon as possible.

I wish to touch on a number of issues relating to Cork Airport. The airport has done well in recent years. Last year passenger numbers grew to 3.2 million, breaking the 3 million barrier for the first time. We welcome the investment in the new terminal facility, which has proved successful. A number of issues arise in the context of the State Airports Act 2004 and the separation of the Cork and Shannon Airport authorities from the Dublin Airport Authority, an issue to which I will return.

As Mr. Collier will know, Cork Airport passenger charges are expensive vis-à-vis those charged at other airports. This must be considered a key factor in the separation process in terms of the competitive position of Cork Airport. What is the total passenger capacity of the new terminal? While it is new, I am concerned it does not have the capacity to cater for the growth in demand it is hoped the airport will experience in the next number of years. Is the DAA actively attempting to source transatlantic business for Cork Airport in the context of the open skies policy? I note that in its presentation the Shannon Airport Authority refers to an open skies tourism marketing fund, on which I ask for elaboration. What is the source of that fund? How much funding is available and how will it be distributed between the respective airports?

I appreciate Mr. Collier's comment that he will not answer questions about the respective business plans but I will ask them nonetheless. There seems to be a significant issue as to the fairness of the treatment of the constituent airports of the DAA. I ask Mr. Collier if the business plans submitted to the Department on behalf of the DAA, Shannon Airport and Cork Airport have been left unamended. Have the plans submitted by Shannon and Cork airports to the DAA been forwarded to the Department in unamended form or have modifications and changes been made?

There is a significant issue outstanding in respect of the debt at Cork Airport. Like Shannon and Dublin airports, Cork Airport is facing a need for further major capital investment in the next few years up to 2018, estimated at a minimum of €150 million, in additional stands, runway overlay, extra car parking spaces and so forth.

I wish Shannon Airport all the very best in its negotiations and hope it gets the best deal possible but according to its presentation, it appears that its business plan is based on being debt-free and a significant capital investment by the DAA prior to separation. These issues need to be discussed by the committee.

Chairman

I ask members to keep their contributions brief.

Deputy Bernard Allen

I will be unashamedly parochial; my questions are to do with Cork Airport. I wish to nail the fallacy that Cork Airport is doing well. It is struggling. Some of the figures are artificially inflated because of the immigrant issue. Flights to Polish cities have caused the figures to be inflated. I note that Czech Airlines has pulled out of Cork Airport, as has Malév Hungarian Airlines. Aer Lingus has terminated its flights from the airport to Madrid and Warsaw, while Aer Arann has curtailed its flights in recent times. These are the facts behind the figures.

I wish to ask Mr. Collier about the final cost of the Cork Airport terminal which is in excess of €200 million. His organisation managed the project. Is it true the initial cost was in the region of €140 million to €150 million? The DAA expects Cork Airport which had no hand, act or part in the planning or management of the project to pay the piper and meet the outstanding debt. The political promise made has been reneged upon, both by the Minister and the DAA.

I put it to Mr. Collier that the DAA is in competition with Cork Airport and that its heavy hand is suppressing or depressing the growth of Cork Airport. I ask him to explain the reason the political commitment made to Cork Airport, with which I presume the DAA agreed, has not been honoured. There is a debt of a minimum of €100 million outstanding. How does the DAA propose to manage this debt on which, with a conservative estimated interest rate of 6%, interest comes to €6 million per year? I would like to get Mr. Collier's figure in that regard. How does he propose to allow Cork Airport to manage its initial burden? The attempt to dispose of some of Cork Airport's assets, such as part of its land bank, will stunt the growth of the airport. It will prevent Cork Airport from having an opportunity to develop a second lengthy runway which would be able to take additional services and more modern aircraft.

Can Mr. Collier assure the committee that Dublin Airport Authority will not dispose of such assets, as it apparently attempted to do in the past? Perhaps Deputy Michael McGrath can answer these questions. Has the Cork business plan been submitted without amendment, just as it was presented to the board of Cork Airport? When does Mr. Collier expect to give the green light to the airport to start operating on an even keel with its competitors in Dublin? I am sorry that I do not have more time to ask further questions.

Mr. Declan Collier

I will deal with the matter of Cork Airport before coming back to the issues of car parking and Shannon Airport. We should get the facts right. A number of accusations have been made. The capacity of the terminal in Cork Airport is in excess of 5 million passengers a year. Cork Airport has more than enough capacity to handle its existing passenger numbers and its projected growth. We are constantly looking for opportunities to increase Cork Airport's transatlantic business under the open skies agreement. We are working closely with the airport's management to that end. It is a matter for airlines to decide whether they wish to operate from Cork Airport. If they have other opportunities, they may wish to avail of them. I am sure Cork Airport will attract transatlantic business as it continues to grow.

I would like to respond to some of the other statements which were made. The cost of the new terminal at Cork Airport was nowhere near €200 million. The Dublin Airport Authority has invested approximately €180 million in building what is practically a new airport at Cork. Approximately 50% of that money was used to construct the terminal. The rest of the money was spent on improving other amenities, such as the hardstanding area, the internal road network, the car parking facilities, the new energy centre and the fire station. A great deal of money has been invested in Cork Airport.

The business plan for Cork Airport has been submitted without amendment to the Minister for Transport. Decisions on the disposal of assets are made by companies on an ongoing basis, following consideration of commercial factors. No decision has been taken to dispose of assets in Cork or Shannon airports. Any decision to do so in the future will be a commercial one. I am not prepared at this point to say whether such a decision currently forms part of the business plan that has been submitted by Cork Airport.

Deputy Bernard Allen

The authority has attempted to dispose of some of Cork Airport's assets — Mr. Collier should not suggest otherwise.

Mr. Declan Collier

No attempt has been made to dispose of any assets. If such a decision had been taken, however, it would have been a commercial one. I can state categorically that no attempt has been made at any time to dispose of land at Cork Airport.

Deputy Bernard Allen

I do not accept that. I will put that on record too.

Chairman

Okay.

Mr. Declan Collier

The assertion that Cork Airport requires future investment of more than €150 million represents a wild exaggeration. New investment of approximately €180 million has been made in Cork Airport in the recent past. Further investment will be required in the future. More money will certainly have to be invested over the next ten years, but it will be nowhere near the figure mentioned by Deputy McGrath.

Deputy Michael McGrath

I understand the figure in question is mentioned in the business plan. There have been many media reports on this issue, as Mr. Collier is aware. I can only go by them. That figure has been mentioned publicly. If it is inaccurate, perhaps Mr. Collier can confirm the precise figure.

Mr. Declan Collier

I assure the Deputy that the amount of money that has been mentioned is more than exaggerated. I would like to comment on airport charges and car parking charges.

Deputy Bernard Allen

Mr. Collier is splitting hairs when he speaks about the cost of the terminal. Further infrastructure was needed as a consequence of the construction of the terminal. One cannot put a new building in place without providing for access roads and other complementary facilities. What was the initial projected cost of the overall project? What was the final cost? I would like to get those two figures. This development took place under the management of the Dublin Airport Authority, by the way.

Mr. Declan Collier

The decision to invest in Cork Airport was taken by Aer Rianta. The project was delivered under the management of the Dublin Airport Authority. That is absolutely correct. I do not have the figures to hand.

Deputy Bernard Allen

Would the initial cost be €100 million, with a final cost of approximately €180 million?

Mr. Declan Collier

No, the figures would not be anything close to that sum.

Deputy Bernard Allen

Mr. Collier, as the chief executive, should have the figures.

Mr. Declan Collier

I do not have them in front of me but I assure the Deputy that the cost is in no way--

Deputy Bernard Allen

It is amazing that Mr. Collier does not have the initial or final figures for a major infrastructural project.

Chairman

Perhaps it will be possible to obtain them as the meeting progresses.

Deputy Bernard Allen

This is incredible; it is a cover-up. Mr. Collier, the chief executive of the Dublin Airport Authority, does not have the figures for a major project.

Deputy Thomas P. Broughan

I heard the chief executive give us the price of the terminal.

Chairman

I am not disagreeing with Deputy Allen; I am simply asking him to allow the speaker to continue. It may be possible to obtain the specific figures as the meeting progresses.

Deputy Bernard Allen

This is akin to building a house in the middle of a field without providing services.

Deputy Michael McGrath

I have a final question arising from Mr. Collier's reply. Given that the Dublin Airport Authority has submitted a business plan unamended, may we assume that it supports its contents?

Mr. Declan Collier

The DAA has submitted the business plan for Cork Airport to the Minister for Transport, as it is required to do.

Deputy Michael McGrath

Does the DAA support the business plan?

Mr. Declan Collier

It has submitted the plan. While it is clear there are elements in it that we do not support, that also applies to the plans for the other airports.

Deputy Michael McGrath

The submission of the business plan without changes cannot be viewed as support.

Mr. Declan Collier

It is not a question of support. The DAA's role in this matter is to take the business plans for Cork and Shannon airports, add them to the business plan for Dublin Airport and submit them to the Minister for his decision regarding the separation of the three airports.

Deputy Michael McGrath

The DAA, as an organisation, is not taking a corporate view of the constituent business plans being submitted by Shannon and Cork airports but submitting three mutually exclusive, unco-ordinated business plans and allowing the Minister to take a decision in the matter.

Mr. Declan Collier

No, that is not what I am not saying. We have submitted business plans for the three airports, as we are required to do by the Minister. We have made our comments associated with the plans. As it is in process with the Department, I am not in a position to outline those views publicly.

Deputy Bernard Allen

It is unacceptable for Mr. Collier to appear before the joint committee without knowing the initial cost projections or final figures for a major project in Cork. It is also unacceptable for him to walk away from this meeting without having supplied--

Chairman

As I indicated, we will give Mr. Collier a chance to obtain the figures. He is answering a series of questions.

Deputy Bernard Allen

Surely the DAA could obtain the figures for the joint committee.

Chairman

We hope the figures will be provided as the meeting progresses. If not, we will ask Mr. Collier to submit them to the joint committee afterwards.

Mr. Declan Collier

On the questions raised on car parking, we are subject to intense competition with regard to car parking charges. A number of opportunities are available for passengers using Dublin Airport to use locations other than the airport for car parking. These include the QuickPark facilities, Bewleys Hotel and a number of other hotels.

Deputy Paul Connaughton

Are they near the airport?

Mr. Declan Collier

They are close to it. They are advertising them publicly as airport parking facilities. Bewleys Hotel is a good example in this regard. A car parking facility is also available at Lissenhall in Swords. There is, therefore, any number of competitive opportunities for car parking.

Deputy Paul Connaughton

The capacity of the facilities in question is not comparable with the capacity available to the Dublin Airport Authority. The available car park spaces not owned by the DAA account for only a fraction of the number available to the DAA.

Mr. Declan Collier

The number of car parking spaces is a factor of the planning permissions given by the local authority. I reiterate that the short-term car parking charges for two thirds of the passengers who use Dublin Airport remain unchanged and that the charges for long-term car parking are very competitive compared to the other options available to passengers to park at Dublin Airport.

Deputy Paul Connaughton

God help the--

Chairman

Allow Mr. Collier to continue without interruption, please.

Mr. Declan Collier

I recognise the sensitivity, interest and concerns of members with regard to Shannon Airport. No cartel was involved in the decision taken by Aer Lingus to remove its services from Shannon Airport. To go back over the circumstances in which the Dublin Airport Authority learned of this decision, in mid-June we were contacted by the Department of Transport to seek information on Aer Lingus routes out of Shannon Airport. The information we were given at the time was that Aer Lingus was considering removing services from Shannon but no decision had been taken and no decision would be taken without reverting to the airport authorities. That information was given to us in confidence and we were asked to treat it as such. It was particularly important that we treated the information in confidence because Aer Lingus was dealing with a hostile take-over bid. Legally, because we are part of a Government organisation, we were requested by Aer Lingus to have no direct contact with it on anything other than day-to-day operational issues.

Deputy Timmy Dooley

In what way was that information imparted to Mr. Collier by Aer Lingus?

Mr. Declan Collier

It was not imparted by Aer Lingus. We were contacted through the Department of Transport, not through Aer Lingus. We had no direct contact with Aer Lingus at all.

Deputy Timmy Dooley

What kind of action would Mr. Collier take if he became aware that somebody was giving consideration to terminating a service if the situation related to an airline other than Aer Lingus and to Dublin Airport?

Mr. Declan Collier

If I was given the information in the same circumstances as I received the information on Aer Lingus I would have treated it in exactly the same way.

Deputy Timmy Dooley

Did Mr. Collier not think he needed to do anything to change the mind of the company's management to protect the revenue base, leaving sentiment in regard to whether it was the east or the west out of the equation?

Mr. Declan Collier

No sentiment was involved in this. The information imparted was that Aer Lingus was considering this option but no decision had been taken. What action would the Deputy suggest we should have taken, on the basis that contact with Aer Lingus was restricted during this time, that we were told no decision had been taken, and that we would be contacted before a decision was taken?

Deputy Timmy Dooley

I would have thought lines of communication would have been open, albeit that they may not have been official, and that it would have been possible for Mr. Collier to put in place some kind of communication to see whether something could be done in terms of the cost base or that an incentive package could be put in place to assist the company in a positive way at a time when it was making a decision in regard to a commercial activity.

I do not think it is fair to view it on the basis that the DAA is part of a large State organisation and that a hostile bid was in place. There are lines of demarcation. The Dublin Airport Authority is responsible for developing business at the airports. This was a commercial airline in a privatised environment and surely the lines of demarcation would not have put Mr. Collier in that position?

Did Mr. Collier seek any legal advice as to whether it was appropriate for him to make contact through the commercial channels rather than through the legal channels? Surely it would have been right and proper for him to do so on a commercial basis?

Mr. Declan Collier

Ordinarily, we have contact with our customers on an ongoing basis. There was much interaction with Aer Lingus prior to the take-over bid on all aspects of its operation out of Shannon, including its cost base and so on. There was no indication from Aer Lingus at any stage that it was unhappy with the situation that pertained in Shannon but it was very clear that it was aware that we were prepared to do whatever was required to maintain the business we had with Aer Lingus in Shannon. From a legal point of view we were precluded from having direct contact with Aer Lingus during this take-over period.

Deputy Timmy Dooley

Does Mr. Collier think--

Senator Shane Ross

Can I ask--

Chairman

If Senator Ross does not mind, I will allow a question on this specific matter and then he will have an opportunity to ask a question.

Mr. Declan Collier

I wish to make a final point on the issue raised by Deputy Dooley. There is a view that the DAA is focused completely on Dublin and not focused on Cork and Shannon. In the past 12 years some €125 million has been spent in Shannon. In the past three years €40 million has been spent on capital investment in Shannon and another €40 million has been spent on the restructuring programme in Shannon. In addition to that, route support schemes and rebate and incentive schemes have been put in place to attract new business, including the Ryanair business which is currently operating out of Shannon.

More than €180 million has been spent in the same period developing Cork Airport. Route support and incentive schemes have been put in place to retain the business. Passenger numbers at Cork Airport have grown from below 3 million to in excess of 3 million per annum in the period in question. It is untrue to state a very significant effort has not been made by the Dublin Airport Authority to attract business to both Shannon and Cork airports.

Deputy Timmy Dooley

Will Mr. Collier state whether the Dublin Airport Authority sought legal advice on what appropriate contact could have been made regarding the commercial aspect of an impending decision by Aer Lingus?

Mr. Declan Collier

We had legal advice to the effect that we were precluded as a concert party to the proposed takeover.

On the commercial aspect, we received information that Aer Lingus was considering withdrawing services from Shannon but had not made a decision to do so, and that we would be informed before any such decision was contemplated.

Deputy Timmy Dooley

I have a problem with that. If one tries--

Chairman

I call Deputy Lowry.

Deputy Michael Lowry

I will confine my remarks to the decision on Shannon. Having read the reports, particularly the contribution of the Secretary General of the Department of Transport, and having heard the chief executive's views, I am astounded. There was a serious error of judgment in respect of both the Department and the chief executive. Mr. Collier's responsibility, as a representative of the parent company, was to the Shannon Airport Authority. I am baffled over how the secretary general of the Department and her officials could sit on their hands. The Dublin Airport Authority sang dumb and left Shannon Airport to blow in the wind in full knowledge that Aer Lingus had communicated its intention to review its operation from Shannon. Mr. Collier knew the negative consequences for Shannon but neither he, the Department nor anybody else made any effort to persuade Aer Lingus to change its stance. Effectively the parties concerned reneged on their responsibility to the management, workforce and people of the mid-west and protected the interests of Aer Lingus; it is as simple as that.

Mr. Declan Collier

I disagree completely with the Deputy on that. We did not renege on our commitment to the airport, the region or the staff. A very significant commitment has been made to Shannon Airport over the three years during which the Dublin Airport Authority has been in existence. A capital investment of €40 million has been made and a very major restructuring plan has been carried out at a cost of approximately €40 million, which plan will ensure the future viability of the airport in terms of its cost efficiencies and operating practices. Very substantial incentive schemes have been put in place to attract business to Shannon. We have seen Shannon grow its business very successfully on the back of these.

Aer Lingus was approached when we were informed it was contemplating withdrawing its service from Shannon Airport and it was offered various inducements to remain.

Senator Shane Ross

On Shannon Airport, I agree completely with what most speakers have said, particularly Deputy Lowry. It is quite obvious to me that the Dublin Airport Authority did not give two hoots about Shannon. A babe in arms would be able to tell one this. It is quite obvious that not only did it not give two hoots about it, but that it regarded it as a future competitor. The news that Aer Lingus was withdrawing its service was music to the authority's ears because it would land Shannon further in the manure and put a potential competitor in a more vulnerable position. I do not blame the authority in that, under such circumstances, nobody would tell anyone about such a matter and hope the worst would happen. However, the authority had a duty to do so at the time.

I cannot understand why the Aer Lingus takeover would prevent the Dublin Airport Authority from telling the officials at Shannon what was going on. There may be reasons for secrecy in a takeover but I do not understand why they could not tell Mr. Shanahan what was happening so that he could take measures to protect the commercial interests of Shannon. There was no reason not to do that unless there was a clear conflict of interests. The explanation we have received is totally unsatisfactory. If the Department had telephoned Mr. Collier and said Aer Lingus was thinking of pulling out of Dublin he would not have sat on his hands for six weeks but would have moved heaven and earth to do something about it.

Chairman

How many slots out of Dublin does Aer Lingus have each day?

Mr. Declan Collier

It has approximately 13 to 15 slots.

Chairman

The information from Shannon suggested that there was spare capacity in the morning when there are several flights out of Dublin. Would it not have been appropriate, when the authority was given this information, to offer up one or two of the slots from Dublin instead of leaving Shannon high and dry?

Mr. Declan Collier

It is up to the airline. We do not own the slots, the airline does and it decides where it wants to allocate them. We have no power over them.

Chairman

If the authority was becoming aware that there was a complete pull-out from Shannon, even accepting Mr. Collier's point that no decision was made, surely if he had Shannon's best interests at heart it would have been possible for him to suggest that instead of taking its slots out of Shannon Aer Lingus could take two out of Dublin and leave one in Shannon. There is a belief that Dublin Airport, which has 13 slots a day, is acting the big brother and saying to hell with Cork and Shannon which had two or three slots a day.

Mr. Collier

Aer Lingus told us in early August that it was thinking of removing the slots from Shannon. We made several proposals as to how it might avoid doing this.

Chairman

Was there not a question of making those proposals before this? Aer Lingus was paying higher landing charges than Ryanair in Shannon. Would it not have been appropriate to make offers to Aer Lingus before it became evident that it was pulling out?

Mr. Collier

There had been several discussions with Aer Lingus prior to this about the cost of landing slots and it was made clear that we were open to discussion about landing charges for its Heathrow slots. The shareholder who contacted us in mid-June insisted that the information it conveyed was strictly confidential. There was a legal problem about direct contacts with Aer Lingus. We were informed that no decision had been made and the first we heard about the slots being removed was when Aer Lingus officially informed us in early August. We moved swiftly to offer every possible inducement to Aer Lingus to retain the slots.

Chairman

Will the improved road infrastructure, particularly the opening of the Atlantic corridor, offer a better opportunity for Shannon to increase its passenger throughput, and if Mr. Collier is so keen to ensure that Shannon gets a fair break, would he be prepared to compromise, through negotiation with Aer Lingus, to put one or two of the Dublin slots into Shannon? He has 13 slots a day to Heathrow in Dublin, while the west and south west have been left high and dry. Can he give us any indication that he would be prepared to use the clout that he undoubtedly has to get Aer Lingus to consider returning to Shannon on the basis that it can become commercially viable for it to fly from Shannon to Heathrow again?

Mr. Declan Collier

As I said before, the decision as to what happens with the slots is entirely a matter for Aer Lingus, which is a completely commercial entity at this stage.

Chairman

I do not accept that. The Dublin Airport Authority is in an extremely powerful position as regards Aer Lingus. It is in a solid position to try to negotiate with Aer Lingus to the effect that, perhaps by using different or larger aircraft, Aer Lingus could give, perhaps, one slot per day to Shannon in order to create the Heathrow service from there.

Mr. Declan Collier

Every possible option was offered to Aer Lingus at the time. As regards the slots, the airline itself makes that decision, and that was always open to Aer Lingus. Aer Lingus is the entity that controls and uses those slots. It is the entity that made the decision to remove its service from Shannon. It could have made a decision to move slots from Dublin to Shannon. We have no control over that. However, I can assure the committee that every possible opportunity, option and incentive was offered to Aer Lingus at the time to encourage it to retain the slots for Shannon.

Chairman

The DAA should go back to the drawing board with Aer Lingus. I am not suggesting that Aer Lingus will come back into Shannon, but I put it to Mr. Collier that the improved road network, with a motorway from Tullamore, which will link direct to Shannon, as well as one from Sligo and one from Galway, will improve that airport's capacity to generate more traffic into Heathrow. A crucial aspect for the west of Ireland is that we want to create a situation whereby people within an arc from Sligo to west of Mullingar, Tullamore and Clonmel should be coming west. We will be expecting the DAA to examine the possibilities as regards the transfer of slots from Dublin to Shannon. The authority should try to influence Aer Lingus in that regard. My belief is that the DAA has a very strong influence over Aer Lingus.

Mr. Declan Collier

We shall certainly take that on board and do what we can. However, I must repeat that the airline controls the slots at the airport. We will certainly ensure that Aer Lingus is aware of this. Once again, however, I can assure the committee that at the time we were informed that Aer Lingus was removing its service from Shannon, a range of opportunities and incentives were offered to the airline to get it to change its mind.

Senator Shane Ross

What Mr. Collier is saying stretches credibility. I cannot accept the excuse of the takeover and believe that is just camouflage. I cannot accept the excuse that no decision was made in June. That is the time to move, when no decision is being made. The wrong time to move is when the decision is being made. In effect Mr. Collier is saying, "No decision was made, but we were warned this might happen, and we sat on our hands. Once the decision was made, however, we moved." That is crazy. The DAA is acting exactly as a State monopoly always does, namely, with two hats. It has a commercial hat when it suits and a State monopoly hat when that suits. It plays footsie with the State Department when it suits and with the punter when it suits.

I want to ask Mr. Collier a couple of things in a more general way. How much is he paid? According to the report here, he was paid €688,000 last year and €331,000 the year before. The €331,000 has to be adjusted upwards, I believe, because it represents only three quarters of the year. How much was he paid in 2007, since the most recent annual report obviously is for 2006? What did he get his performance related bonus of nearly €200,000 for in that particular period? Maybe he could explain that. I am sorry that Mr. McGann is not here since he is chairman of the remuneration committee, but Mr. Collier obviously will know, as the recipient.

I believe the type of experience he has described for the committee utterly underlines the sort of world DAA lives in. Unfortunately, a non-executive director is not here, who should answer questions. I am sorry Mr. McGann did not send somebody else along, from the non-executive director side. The DAA is living in a non-commercial world from where it can rip off the public at will and get paid incredibly well for it. We have seen examples of this, particularly from what Deputy Connaughton has said. The experience Mr. Collier described is not what any of us are accustomed to at Dublin Airport. One goes to Dublin Airport and gets ripped off in the short-term car park. Deputy Connaughton was kind to the delegation when he said it was only €80 for two days. It is only €80 if one stays for 48 hours exactly. I paid €100 for just over two days. One also gets ripped off at the foreign exchange desk in the airport. The DAA gives the foreign exchange operators the lease and makes agreements with them on what they can charge. One queues at the check-in and security for hours and then one gets ripped off in restaurants which are not properly looked after.

What we have here is a monopoly that dictates exactly what it wants to charge. Nobody was going to stop the DAA on the car parking issue. It charges much more than QuickPark down the road. The comparisons made by the witnesses simply are not viable and they do not work. They said that they compared well with car parks in the city centre and some car park out in Swords. The QuickPark is the nearest competitor and it is miles away. The DAA has all the ground and all the advantages and it rips off the public left, right and centre.

I would like to see measures that the DAA is prepared to take to guarantee that there is competition and that rates are charged which can be justified, not by comparison with the wrong type of benchmark but with competitive benchmarks which would carry some kind of credibility. The DAA can charge what it likes, gets paid vast sums of money and is a monopoly with a monopolistic attitude. Why is the foreign exchange at the airport the most expensive in Ireland? The DAA traps the customers because they have nowhere else to go.

Deputy Frank Feighan

I do not wish to go over ground that has been covered. It seems that the DAA heard nothing, saw nothing and said nothing to the Department of Transport in regard to Shannon. That is what suited and that is what I am hearing from this meeting.

I come from Roscommon and Knock Airport is our regional airport. I am quite sure that if the DAA is prepared to put the boot into its regional partners in Cork and Shannon, then God help the smaller regional airports. Knock Airport is a major regional airport and I pay tribute to the management team there. People in the west have to pay a €10 departure fee, which is not in any other area, and we do so because we believe in the management team and in Knock Airport.

Dublin Airport is the national airport and there are times when I must use it. Perhaps it is time for the DAA to look at how QuickPark operates, because that service is far superior and much cheaper than the service operated by the DAA. The management of the DAA should look to franchising the car parking services in Dublin Airport to independent firms such as QuickPark. That firm certainly has shown up the DAA.

I had to park at Belfast Airport over Christmas. I could park my car for €12 a day and walk to the terminal. I appreciate it is a different airport, but its charges will be a much bigger threat to Dublin Airport if the latter does not get its act together. There are two car parks at Belfast Airport and I parked for €12 per day. A parking space can be booked in advance and a discount can be obtained. I appreciate it is a different service, but if the DAA does not get its act together on car parking service, Belfast Airport will be a threat.

The witnesses spoke about benchmarking car parking charges against those in the city centre. Dublin Airport is a national airport. I can park in the centre of Roscommon for nothing, but if I have to drive to Dublin Airport, I am fleeced. I find this totally wrong and unfair.

The Citylink service operates from Galway to Dublin but no Citylink service operates directly to Dublin Airport from the north west. What is the DAA doing to foster these services? Is it or the Government paying any contribution towards Citylink, which is taking drivers off the roads and reducing the level of car parking in Dublin?

The DAA stated that the Ryanair fees are cheapest. What price does the DAA charge Ryanair or any other airline compared with the charge at Knock, Shannon and Cork airports? Is the price the same, higher or lower?

Senator Paschal Donohoe

It is my contention that when one walks into Dublin Airport, one walks into a completely different world. The experiences that characterise one's ability to live and work in the city of Dublin reflect choice, competition, variety and frequently good value. However, when one enters the environment of Dublin Airport, all those normal forces are suspended. My colleagues have already touched on one example of this, parking, to which I will return. I would like to have the DAA's response on two other issues, namely, the bag pick-up zone and the condition and operation of many of the franchises in the airport, particularly those providing food and services.

Mr. Declan Collier

The bag pick-up---

Senator Paschal Donohoe

I am sorry, I meant the luggage pick-up zone. Many people will be familiar with the experience there. One walks through many of the corridors and piers that have benefitted from the investment the DAA has outlined but, unless matters have changed very recently, when one walks into the luggage pick-up area, the ceiling is exposed, wires and pipes are hanging from the ceiling and televisions are repetitively showing advertisements for Dublin city centre pubs. It is a grubby environment.

Perhaps this has changed in the weeks or months since I have been in the airport but the explanation that it is caused by the congestion in the zone is one I completely reject. It is caused by an attitude. If there was a real focus on ensuring consumer satisfaction and that the passenger environment is as good as possible, surely the DAA would spend small sums of money to create that environment. I do not accept that crowding is the cause of these issues; it is a matter of management. For those arriving in the airport, in particular those arriving for the first time, their last experience before leaving the airport is of waiting for luggage in an environment that is nothing short of grubby.

For the period in which those conditions pertained, was the DAA proud of what was happening? As the chief executive responsible for that environment, was Mr. Collier proud of it? What was he doing to try to fix the problem? Commitments have been made to ensure that consumer satisfaction is not completely destroyed during periods of future construction. How will these be delivered when the space in which passengers spend most of their time as they exit the airport is in a deplorable condition?

I wish to refer to the franchise experience, particularly the restaurants and cafes.

Chairman

The Senator should be brief as we---

Senator Paschal Donohoe

I want to make one point. It is clear the DAA earns a huge amount of revenue from the franchise operations. However, the conditions where passengers must spend time are awful. They cannot find a clean table because they all contain empty cups or dirty plates. Given how important this revenue is to the DAA, what is it doing to ensure that those operating the franchises are providing a quality service for customers, who pay ridiculously high prices in the first place?

My third point concerns the comparison with the Dublin city benchmarks. I seek clarity on this particular point. In many car parks in the city centre, if one leaves one's car overnight, one can avail of reduced charges and thus pay far less than €40 per event. What possible benchmark is Mr. Collier using to claim the airport parking fee is good value?

Chairman

I will allow Deputies Dooley and Lowry each a brief supplementary question.

Deputy Timmy Dooley

Will Mr. Collier explain why he did not take action on the information available to him? He has said the reason is the legal advice he received, but that is not clear to me. I accept that he cannot provide the information today but I ask that he submit this legal advice to the committee.

Deputy Michael Lowry

One assumes the overall business plan sets out the current position, targets and objectives. We have a serious difficulty in this State in that there is a regional imbalance, and this can be seen in the underutilised capacity at Cork and Shannon airports. There must be ministerial direction with a view to providing whatever financial incentives and supports are necessary to ensure that capacity is utilised rather than relying to such an extent on an already congested airport. It is a nightmare even to get to Dublin Airport because one cannot be sure how long it will take to travel along the M50 and get through the toll bridge. At the airport itself, one has no idea how long it will take to get through security.

Chairman

Does the Deputy have a question?

Deputy Michael Lowry

Under the business plan — which, ridiculously, we are not allowed to discuss today — what timescale is envisaged in terms of both Shannon and Cork airports becoming entirely independent?

Chairman

In fairness to Mr. Collier, it is hardly appropriate that we discuss the business plan in detail while it is being considered by the Department.

Deputy Michael Lowry

Maybe.

Chairman

We certainly intend to discuss it when it becomes available.

Deputy Michael Lowry

In general terms, when does Mr. Collier envisage Shannon and Cork airports attaining autonomy?

Chairman

I will bring this discussion to a conclusion shortly so we can hear from the delegation from the Shannon Airport Authority.

Mr. Declan Collier

The decision on separation is one entirely for the Ministers for Transport and Finance. We have done what we are required to do, which is submit the plans. They were submitted to the Department before Christmas and we are awaiting its appraisal.

It is important to understand how Dublin Airport is financed. The Dublin Airport Authority is a regulated monopoly. We are required to generate revenues either through airport charges, which are decided by the Commission for Aviation Regulation, and-or commercial revenues. The charges we are allowed to levy relate to airport services such as passenger screening for security, maintenance, cleaning, parking of aircraft and use of runways and air bridges. We charge slightly more than €6 per passenger to cover all these. I have already said that the aviation regulator has independently reviewed the efficiency of our operation and found that we are not an inefficient airport.

The balance of revenues required to run the airport must be generated from other activities, such as car parking. More than 27% of passengers travel to Dublin Airport on public transport, namely, by bus. Another 20% travel via taxi. There are options, therefore, for passengers who do not wish to pay the car parking charge.

Deputy Frank Feighan

Those options are only available to passengers in the greater Dublin area.

Chairman

Allow Mr. Collier to continue without interruption.

Mr. Declan Collier

Passengers who wish to travel to the airport by car have options in terms of where they park, either with competitors or using our facilities.

In terms of how our charges compare to those in other countries, short-term parking at Belfast Airport, for example, costs £3 per hour, while we charge €3 per hour. The same pertains in Manchester and Glasgow airports, while significantly higher charges are levied in Heathrow, Gatwick and other major European airports.

Deputy Frank Feighan

That is not correct. It costs £3 per hour in the car park closest to the terminal. However, if one travels a further 20 yards, the charge is £1 per hour.

Chairman

Mr. Collier, without interruption.

Deputy Frank Feighan

That charge applies 20 yards away and one can walk through to the car park. That is not strictly correct.

Chairman

Mr. Collier should move on to the other issues raised.

Mr. Declan Collier

The other issue raised pertained to investment in Cork Airport. The original budget for Cork Airport was in the region of €160 million. At present, we are approximately 10% above that in respect of the investment cost plus the fees. As the fees were not included in the first €160 million, the cost of Cork amounts to approximately €180 million.

As for the comments on the baggage hall, the issue in this regard relates to the amount of money the authority is allowed to invest in the airport. When the authority reverted to the regulator in 2001, almost 80% of the total investment plan proposed by Aer Rianta was refused by the regulator. It would not give permission to the authority to spend the money. Before we carry out any refurbishment of or investment in the airport, we must go through an extensive consultation process with the users, including the airlines. We are constantly frustrated and held back by at least one of those airlines with regard to expenditure on refurbishments. However, refurbishment of the baggage hall is about to take place in terms of painting it, smartening it up and making it better in general. As part of the overall €2 billion investment programme in Dublin Airport, terminal 1 will receive an overhaul as soon as terminal 2 is operational.

With regard to my salary, it is determined by the Government, is implemented by the remuneration committee and is disclosed in the annual reports.

Senator Shane Ross

I refer to 2007, which has not been disclosed.

Mr. Declan Collier

The annual report for 2007 has not yet been published.

Senator Shane Ross

No. However, Mr. Collier can tell members how much he is being paid.

Mr. Declan Collier

I can publish the figure, as required, in the annual report. It is within the Government guidelines and will be produced in the annual report.

Senator Shane Ross

Mr. Collier will not disclose the amount to members now.

Mr. Declan Collier

Not in advance of the annual report.

Senator Shane Ross

Why not?

Mr. Declan Collier

Because it is not appropriate prior to--

Senator Shane Ross

Of course it is appropriate. It is public money.

Chairman

In fairness, were the figure to appear in the annual report, that should be satisfactory. If further questions are to be asked at that stage, well and good. However, it may be unfair to Mr. Collier to ask that question of him in advance of the publication of the annual report.

Senator Shane Ross

It will not be published for another six months. I fail to see what is the big secret. Is there a secret in respect of what Mr. Collier was paid in 2007?

Chairman

No, but this is a personal issue.

Senator Shane Ross

It is not a personal issue. This is a public issue and the figure will be published.

Chairman

Let us await the publication of the annual report. It will not make much difference in that respect. Are other questions outstanding?

Senator Shane Ross

Yes, I want to ask about performance-related bonuses. Mr. Collier did not explain its purpose.

Mr. Declan Collier

Can the Senator rephrase the question?

Senator Shane Ross

I refer to the performance-related bonus that Mr. Collier received last year. What was it for? The figure, which I believe was €178,000, was included in the annual report.

Mr. Declan Collier

That amount constitutes two years' worth of bonuses.

Senator Shane Ross

It is down for one year. What is it for?

Mr. Declan Collier

While it was paid in 2006, I was not paid a bonus in 2005.

Senator Shane Ross

Very well. What is it for?

Mr. Declan Collier

It is for achievement of targets that were laid down and agreed by the board and subsequently adjudicated on by the remuneration committee, which comprises a representative from the shareholder with the Department of Transport.

Senator Shane Ross

What were the targets?

Mr. Declan Collier

We certainly can circulate that information to members.

Senator Shane Ross

Can Mr. Collier tell members what were the targets?

Mr. Declan Collier

There is a range of targets.

Senator Shane Ross

Can Mr. Collier tell members what they are?

Chairman

Were the targets circulated to members, it would be satisfactory. In addition, it might be possible to circulate to members the restrictions the regulator has put on the authority regarding what it can or cannot charge. Obviously, members must talk to the regulator about the restrictions placed on the authority. I will come back to--

Senator Shane Ross

While I am satisfied with that suggestion, perhaps members can be given an assurance that they will be told what were the targets, what was achieved and what the payments were for. Is that fair enough?

Chairman

Yes. Mr. Collier will forward them to the joint committee.

Deputy Timmy Dooley

If I may comment, this matter is more relevant to the board than to the joint committee.

Chairman

Deputy Breen has not yet contributed. He has one question, after which I will come back to Deputy O'Dowd.

Deputy Frank Feighan

On the issue of charges, does the Chairman know what are the landing fees per person in the other airports? I refer to Shannon and Knock airports. Are they lower or higher?

Deputy Thomas P. Broughan

I have an addendum in respect of parking charges. At least one proposal to create a massive car park at Dublin Airport has been brought forward by the developer, Mr. Gerry Gannon. It was one of a number of such proposals. Does the DAA oppose this planning application? As far as I recall, the one I am thinking of, which was for 4,000, 6,000 or 10,000 parking places, was not approved by Fingal County Council. Was the DAA actively involved in trying to prevent that? Mr. Collier mentioned that there are a number of private operators in the airport region where, for example, one can park a truck for €25 for the week. Was the DAA actively involved in preventing competition in the airport territory for parking?

Deputy Pat Breen

I apologise for having to leave but I had a radio interview to do. For a change, this interview did not have anything to do with Shannon. I had a number of questions but I presume that many of them have been asked. My question relates to the state of the company's finances for the second half of 2007, particularly in respect of Shannon Airport and its performance in 2007.

Chairman

I call on Deputy O'Dowd. This is the last question.

Deputy Fergus O’Dowd

It might be a three-parter.

Chairman

I must bring it to a conclusion.

Deputy Fergus O’Dowd

I will put it in a constructive way to Mr. Collier, whose past and current work I appreciate. Can he explain to me again whether the information he was asked to provide initially to the Department on the initial query in respect of the withdrawal of services simply concerned Shannon or did it include Cork?

Mr. Declan Collier

The information related only to Shannon.

Deputy Fergus O’Dowd

Accepting the premise that Mr. Collier could not give anybody this information, he could have effected policy changes or approaches within his organisation to Aer Lingus or other people without telling people what he knew. Why did he not do so?

If it were to happen again, for example, to Cork, Shannon or Dublin airports, what steps would Mr. Collier take or how would he protect significant economic links such as the Shannon-Heathrow route, which is gone?

Deputy Michael McGrath

My question about the open skies fund was not answered. The director of finance is present. As of today, what is the current level of debt attached to Shannon and Cork?

Chairman

As an addendum to Deputy O'Dowd's question, I take it that the DAA did not offer Aer Lingus any of the Dublin slots when it was indicated to the DAA that Aer Lingus might leave Shannon.

Deputy Fergus O’Dowd

Or the Cork slots.

Mr. Declan Collier

As I said earlier, we indicated that there was a range of possible opportunities. Once again, the slots are not in our power but we indicated that there were a number of things it could have done.

Chairman

The DAA did not talk to Aer Lingus about the possibility of taking a slot or two off Dublin instead of taking it off Shannon.

Mr. Declan Collier

We talked to Aer Lingus about whether it could consider taking slots out of Dublin and putting them into Shannon.

Chairman

No, I meant instead of taking them from Shannon. In other words, when it became evident to the DAA confidentially that Aer Lingus was pulling out of Shannon, did it make any offer to Aer Lingus at that stage that perhaps it would be less of a crisis to take one or two slots out of Dublin or that instead of taking all of them out of Shannon, it would take one out of Dublin, one out of Cork and perhaps one out of Shannon? Was any specific offer of that nature made to Aer Lingus?

Mr. Declan Collier

We cannot offer to give Aer Lingus something it owns. We indicated to it that there were opportunities for it to do just that.

Chairman

Did the DAA specifically--

Mr. Declan Collier

We specifically pointed out to Aer Lingus that there were opportunities for it to do that.

Deputy Fergus O’Dowd

When did the DAA do that?

Chairman

To reduce the Dublin slots and leave Shannon?

Mr. Declan Collier

We pointed out that there were opportunities to take slots out of Dublin or other airports and maintain services at Shannon.

Chairman

What would happen if Aer Lingus were to inform the DAA in the morning that it was much more profitable to operate the JFK to Heathrow route and that it was taking four slots out of Dublin? How would the DAA respond to that because that is the same logic that applies to the decision by Aer Lingus to take four slots out of Shannon for commercial reasons? If it could make more profit by operating extra slots from JFK to Heathrow, we would expect the same logic to apply. How would Mr. Collier respond to that?

Mr. Declan Collier

The decision would be entirely up to the airline, in this case Aer Lingus, whether it would do so. Were Aer Lingus to come to us in the morning and say it wanted to cease a service from Dublin, we would go to it with a range of incentives and inducements, as we did when we learned it was removing services from Shannon.

Chairman

The DAA has no power. The logical continuation of Aer Lingus's policy to be commercial is that it will switch slots from Dublin or Cork to JFK, for example, if it can make more money, which it can clearly. This is the only commercial reason for switching from Shannon that we have been given. The DAA is high and dry and the Department has admitted to the committee that it could do nothing were Aer Lingus to take such a decision.

Mr. Declan Collier

That is the reality of the world in which we operate. If Ryanair--

Deputy Thomas P. Broughan

It is ironic--

Mr. Declan Collier

May I answer?

Deputy Thomas P. Broughan

- -that the Cathaoirleach and people such as Senator Ross, who voted to privatise the airline and strongly supported its privatisation, are crying over spilt milk a number of months later. We knew this would be the case. The Chairman walked through the lobby.

Chairman

We would do the exact same thing again but there is an important issue in this.

Deputy Thomas P. Broughan

What are you talking about?

Chairman

If Aer Lingus is all-powerful in this way, the Dublin Airport Authority and the Department of Transport must re-examine who rules the show. I do not accept that Aer Lingus should be all-powerful because it is commercial.

Deputy Fergus O’Dowd

Will Mr. Collier answer the questions the Chairman allowed me to ask?

Mr. Declan Collier

That is the nature of the business and the relationship between airports and airlines. Airlines have the absolute decision whether they operate in an airport. They can decide when they want to go, a good example of which was given this week when Ryanair cancelled services between Shannon and Dublin. It can decide to remove those slots. We have no control other than by offering the airlines incentives and inducements.

Chairman

If necessary, could the DAA make it difficult for them to operate?

Mr. Declan Collier

No.

Chairman

Could the DAA increase the charges? Who needs Aer Lingus if it decides that its business is to take care of its commercial interests and nothing else?

Deputy Timmy Dooley

We should send some eco-warriors from Shannon to Dublin.

Mr. Declan Collier

The DAA has no power to increase charges. They are regulated by the regulator and set at a maximum level. We can only reduce the charges.

Chairman

Will Mr. Collier finish on Deputy O'Dowd's point?

Deputy Timmy Dooley

Could Mr. Collier circulate to the committee his clarification on my point regarding legal advice?

Mr. Declan Collier

Certainly. I have covered a number of points regarding our involvement in the removal and I am sorry Deputy O'Dowd was not in the room at the time. The Department contacted us and told us that there was consideration of Aer Lingus removing the slots, no decision had been made and no decision would be made before we were given an opportunity to respond. We were told also by the shareholder that this information was given in strict confidence.

Deputy Fergus O’Dowd

Did the DAA do anything between being told and the formal announcement from Aer Lingus?

Mr. Declan Collier

Nothing was done between the time we were approached by the Department and the time of the formal announcement.

Deputy Fergus O’Dowd

May I read into the record the note for the Minister's information, which falls under the Freedom of Information Act and was included in Ms Julie O'Neill's report? The last point states: "The DAA are in contact with Aer Lingus to see if it is possible to incentivise the continuation of at least one daily Shannon-Heathrow service". Is this true or false?

Mr. Declan Collier

Is the Deputy asking whether we were in touch with Aer Lingus?

Deputy Fergus O’Dowd

Mr. Collier stated that the DAA did nothing, but the Minister's note states that it was in contact with Aer Lingus. Which is the case?

Mr. Declan Collier

Aer Lingus was aware that incentives were available to maintain the service in Shannon.

Deputy Fergus O’Dowd

Mr. Collier is the chief executive and acts in an executive capacity. This is a major issue for an airport under his direct control, but he is stating that the DAA did nothing after being told until the formal announcement whereas the Minister was told that the DAA was actively negotiating with Aer Lingus at the time.

Mr. Declan Collier

We were not actively negotiating with Aer Lingus. As far as we were concerned, no decision had been made to remove the slots from Shannon.

Deputy Fergus O’Dowd

The point I am trying to get at is that the DAA was in contact with Aer Lingus to see if it is possible to incentivise the continuation of at least one daily Shannon-Heathrow flight. Did that happen or not? Is it a lie?

Mr. Declan Collier

I am sorry. I do not understand the context.

Deputy Fergus O’Dowd

After the chief executive was asked by the Department for the information on Aer Lingus numbers from Shannon, Mr. Collier stated he did nothing until he was formally notified of the Aer Lingus decision in August. This information contradicts what Mr. Collier is saying.

Mr. Declan Collier

Prior to the DAA being contacted by the Department with this query, the DAA discussed with Aer Lingus the retention of services from Shannon — a normal commercial discussion. This relates to the issue of Ryanair and Aer Lingus charges. We discussed any issues Aer Lingus may have had regarding costs at Shannon. The company was aware the DAA was prepared to offer incentives to retain the service in Shannon.

Deputy Fergus O’Dowd

However, Mr. Collier did not discuss that with his chief executive or the executive chairman? That is why the latter resigned. I am trying to understand the process.

Mr. Declan Collier

The Deputy will have the opportunity to ask the executive chairman why he resigned.

Deputy Fergus O’Dowd

I am asking Mr. Collier.

Mr. Declan Collier

I did not discuss anything with the executive chairman or management at Shannon at that time.

Deputy Fergus O’Dowd

There were negotiations going on to retain at least one of the flights.

Mr. Declan Collier

No, there had been discussions with Aer Lingus, part of normal commercial activity, in the period leading up to this about charges for routes to Heathrow and other issues.

Deputy Fergus O’Dowd

The way this note is worded suggests that it was possible to incentivise the continuation of at least one daily flight. The implication is that Mr. Collier was aware Aer Lingus was going. This was not normal.

Mr. Declan Collier

No, I was not aware of that. I was aware Aer Lingus was contemplating it but not that it had made a decision. I was told no decision had been made.

Chairman

That is also what the Department was told.

Deputy Michael McGrath

I asked the director of finance about the current debt at Shannon and Cork and the Open Skies fund.

Mr. Ray Gray

I will respond on the current debt at Shannon and Cork. In the case of Cork it is in excess of €200 million and in the case of Shannon it is approximately €70 million.

Deputy Michael McGrath

What are the passenger charges for the airports?

Mr. Ray Gray

The passenger charges are in excess of €6 per passenger at Dublin Airport, €5 at Shannon and €7.75 at Cork.

Chairman

There was a question about transparency in landing charges. Can the DAA tell us what various airlines are paying in landing charges?

Mr. Declan Collier

That is entirely commercial information that we cannot disclose in open fora.

Chairman

If it is a competitive issue there must be some transparency with regard to competition.

Mr. Declan Collier

Incentive schemes and route support schemes are published on the websites of the airports and the information is available to anyone.

Deputy Frank Feighan

There are economies of scale with 30 million passengers. At airports such as Cork, Shannon and Knock there must be screening and other incentives. The DAA has 30 million passengers, a captive market. Knock Airport must have security even though it is on a smaller scale. I do not understand why Dublin Airport cannot manage on 30 million passengers multiplied by €5, giving €150 million, without additional revenue from shops.

Mr. Declan Collier

It is very simple. We have to fund a €2 billion investment programme at Dublin Airport. The airport must spend that money if it is to take advantage of the opportunities presented on a global scale, to support the economy, jobs and national income. Debt at Dublin Airport will rise to €1.2 billion before the investment is finished and we need income to remunerate the investment.

Deputy Thomas P. Broughan

What is the current Dublin Airport debt?

Deputy Pat Breen

I asked a question on the state of the finances in the latter half of the year, particularly at Shannon Airport, and Mr. Collier did not answer it.

Mr. Declan Collier

In the second half of last year Shannon Airport performed better and the impact of the restructuring programme began to feed through. It has seen a reduction in the cost base.

Chairman

We will hold at that.

Deputy Fergus O’Dowd

On a point of order, when Ms Julie O'Neill from the Department of Transport appeared before the committee, the Chairman properly allowed a full debate on this issue. I requested that the DAA come before the committee to discuss it. I asked questions which have not been answered. I am deeply concerned about this issue. I asked three questions and received an answer to one which was in two parts. We now have received further information on this critical issue.

Chairman

I will ask the chief executive to take away the further information provided by Deputy O'Dowd.

Deputy Fergus O’Dowd

No, that is not acceptable.

Chairman

With all due respect, Mr. Collier answered the question and the committee will not receive any further information.

Deputy Fergus O’Dowd

We are members of the Oireachtas and entitled to ask these questions. If the Chairman is closing down the discussion, he should state that is what he is doing. I am entitled to ask these questions.

Chairman

I am simply stating--

Deputy Fergus O’Dowd

I have been elected to sit here and ask these questions. The question is--

Chairman

That is fine. I will provide Mr. Collier with an opportunity to further answer Deputy O'Dowd's question.

Deputy Fergus O’Dowd

I have a copy of the note written by the assistant principal officer in the Department of Transport. It has been published and I am sure everybody has a copy. We were told this note was never shown to the Minister who never knew. Today Mr. Collier is trying to tell me that when he was told how serious the issue was, he did nothing until August. If this note is correct, Mr. Collier was extremely active — properly so — in trying to retain at least one of the aeroplanes flying from Shannon Airport to Heathrow Airport. Will he explain what exactly he did and when he did it? The note was written on 14 June, on which date Mr. Collier was extremely active on this issue.

Mr. Declan Collier

I was not on the telephone to anybody. I was not in direct contact with Aer Lingus on 14 June.

Deputy Fergus O’Dowd

The Department was on the telephone to Mr. Collier. We know he was also in e-mail contact because we have information that e-mails were passed between the DAA and the Department.

Mr. Declan Collier

E-mails were passed between officials in the DAA and the Department relating to the operation of the Aer Lingus service out of Shannon Airport. This is correct.

Deputy Pat Breen

Did Mr. Collier contact the Shannon Airport Authority to obtain statistics?

Mr. Declan Collier

No, we did not need to do so.

Deputy Pat Breen

Did officials in the Department contact the DAA?

Mr. Declan Collier

The Department contacted officials in the DAA and sought information on Aer Lingus services from Shannon Airport. This information was provided for the Department on the basis--

Deputy Pat Breen

Did the DAA contact Shannon Airport which has its own independent statistic unit to obtain up-to-date statistics, given the seriousness of the situation?

Mr. Declan Collier

No, we did not need to. We already had the information required by the Department and we provided it. We were told it was provided in the strictest of confidence and that is where we left it.

Senator Shane Ross

Was the board informed?

Mr. Declan Collier

Was the board informed of what?

Senator Shane Ross

Of the information Mr. Collier received on Shannon Airport being examined.

Mr. Declan Collier

The board of the DAA was not informed.

Senator Shane Ross

Why not? Did the confidentiality aspect exclude the board?

Mr. Declan Collier

No, it was not confidential from the board. There was no need to inform it. I would need to check the dates of board meetings at the time. At this stage, it was purely a query from the Department of Transport stating Aer Lingus was considering moving services from Shannon Airport but no decision had been or would be taken until we had an opportunity to respond. There was no reason to inform the board of this.

Senator Shane Ross

The chairman was not informed either.

Mr. Declan Collier

No.

Chairman

I will conclude by thanking Mr. Collier for his presentation and answering questions.

Deputy Fergus O’Dowd

One point completely contradicts what Mr. Collier stated. According to the note, the Minister's officials stated to the DAA that while a decision had not yet been made, recent media reports from the North had led to an acceleration of the decision making process in Aer Lingus and that the decision could be finalised within a short time. It seems Mr. Collier acted as best he could at the time, given the constraints on him, as did the Department. However, apparently, the Minister knew nothing about this. I find it incredible that the only person who did not know--

Deputy Michael McGrath

On a point of information, is the Cork debt €200 million or €220 million?

Mr. Ray Gray

I will clarify the two figures to which the Deputy refers. One figure is the value of the assets of Cork Airport, which is approximately €220 million. Those assets are the subject of the separation arrangements proposed in the State Airports Act. The second figure is the amount of the inter-group indebtedness or the extent to which the assets have been funded by moneys made available by Dublin Airport Authority and not by earnings made at Cork.

Chairman

We will invite various airlines to come before the committee--

Deputy Thomas P. Broughan

Just one point--

Chairman

No, I am not taking any more comments from members. We have completed the discussion. We will invite various airlines to come--

Deputy Thomas P. Broughan

Dublin is destined to carry debt. We are talking about debt--

Chairman

Sorry, Deputy, we have concluded the discussions and I will not open them up again.

Deputy Thomas P. Broughan

What is the total debt of the company?

Chairman

Deputy, you are out of order. We have concluded the discussion.

Deputy Thomas P. Broughan

We are entitled to talk about Dublin Airport at this committee.

Chairman

We have had two hours of discussion--

Deputy Thomas P. Broughan

It is relevant. It is the Dublin Airport Authority.

Chairman

We will invite the various airlines to come before the committee, including Aer Lingus.

Deputy Thomas P. Broughan

I asked this question already. It is important information.

Chairman

You are out of order. We have concluded the discussion. We will invite the various airlines to come before the committee, including Aer Lingus. They do not have to come. An important point made in today's discussion is that Aer Lingus appears to be divine in its power over everybody, including the airport authorities. We look forward to the response to our request to talk to Aer Lingus again about moving some of the Dublin slots to Shannon Airport.

I thank the witnesses for appearing before the committee.

Sitting suspended at 5.57 p.m. and resumed at 5.58 p.m.

Chairman

I welcome Mr. Pat Shanahan, executive chairman, and Mr. Patrick Blaney, director, of the Shannon Airport Authority. I draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against any person outside the House or an official, either by name or in such a way as to make him or her identifiable. The witnesses are very welcome and I ask that they deliver a short presentation. In the context of our previous discussion, I also ask them to comment on Aer Lingus's removal of the Heathrow slots from Shannon Airport. While we understand that the witnesses cannot give us the detail of the business plan submitted to the Department, we are anxious to determine their plans for the development of Shannon Airport and in particular, their plans to become more successful in encouraging people from the west of Ireland to fly out of Shannon rather than Dublin. In the past, Shannon Airport was a profit generator for itself, rather than a commercially-oriented airport and an economic development agency, as the key international airport for the western region. It could be as much to blame as any other party for the withdrawal by Aer Lingus of the Heathrow slots. From a commercial point of view, what plans does the airport's management have to make the airport attractive once again for Aer Lingus to restore the Shannon-Heathrow slots?

Mr. Pat Shanahan

I thank the Chairman and members of the committee for giving us the opportunity to discuss Shannon Airport. In my brief presentation I will outline the current state of Shannon Airport and its readiness for independence. The board of the Shannon Airport Authority believes the State Airports Act 2004 should be fully implemented, to allow for the break-up of the Dublin Airport Authority, formerly known as Aer Rianta, into three separate entities. Shannon Airport's maximum potential can only be achieved as an independent commercial State enterprise.

During the period 2000-04 traffic growth at the airport stagnated, while costs escalated, but since the appointment of the board of the authority in September 2004 and with the active support of and investment by the Dublin Airport Authority, traffic has grown by 50%, a major restructuring programme has been implemented, annual cost savings of over €10 million have been secured and the airport is now trading profitably. Thus, even with limited autonomy, major progress has been achieved at Shannon Airport. We believe that if the airport is transferred debt-free and with finance to meet the initial capital infrastructure deficit, it will be able to operate profitably and cover its ongoing capital requirements from cash flow. This means the airport will be financially viable as an independent entity.

The Shannon Airport business plan was finalised in November and, as the Dublin Airport Authority stated, all three business plans have been submitted to the Department of Transport. The key elements of the Shannon Airport plan have been independently validated and clearly demonstrate that the airport will be viable and profitable as a stand-alone business in the next ten years and beyond.

Short-haul traffic has doubled in the past three years due to a number of factors, including the establishment in 2005 of the Ryanair base. Ryanair has exceeded its targets for Shannon Airport and will carry approximately 2 million passengers this year. We believe, therefore, that the airline will become a long-term and valued customer.

The loss of the Aer Lingus Heathrow service was a major disappointment but the CityJet-Air France service to Charles de Gaulle Airport will re-establish connectivity to a major European hub which serves an even greater number of destinations than Heathrow Airport. There are seven daily flights from Shannon Airport to the greater London area, including Gatwick, Stansted and Luton Airports. We believe the traffic loss from Heathrow Airport will be redistributed between Charles de Gaulle Airport for connectivity among the business community and other London airports for point-to-point traffic. We are pleased to secure the CityJet-Air France service and hope to further develop that business. We plan to continue to enhance routes to key destinations and other European hubs.

We believe transatlantic traffic will decrease by 10% this year with fully open skies in April. However, we believe traffic will grow from that level and have been proactive in trying to retain transatlantic carriers. A number of significant factors will help us to achieve our aims. We have introduced a winter incentive 50% discount scheme on landing charges which has been well received by our year-round carriers. This winter there are four direct transatlantic services, as well as a fifth through Dublin Airport. We hope to continue these services into next winter with the incentive scheme. Shannon Airport's marketing role is to attract airlines, but we work closely with the tourism agencies in the west and Tourism Ireland. We expect the Open Skies tourism marketing fund will help the marketing activities of those agencies to make it attractive for US customers to travel to the west of Ireland. Another factor that will help us is full implementation of the US customs and border protection, CBP, facility in Shannon, which provides immigration and customs clearance. It will attract more airlines to use Shannon because it will allow airlines to more effectively fly directly to US regional airports and go to domestic terminals in US hub airports. This will reduce costs, increase turnaround time and make it more attractive for airlines to use that facility. CBP will require a legislation agreement with the US authorities and the Irish Government and we hope that can be secured in a reasonable timeframe. The continued roll-out of infrastructure under the national development plan will expand the Shannon catchment area of people within an hour and a half's drive from approximately 600,000 to more than a million. There is a dual carriageway to Galway and south of Limerick and connecting Galway, Limerick and Dublin.

The level of military traffic in our business plan has been significantly reduced to minimal levels because it is unpredictable. Our cost base has been reduced by €10 million in the past year and this was achieved with the co-operation and support of the staff. Although the restructuring took place during a busy summer period, it demonstrates that employees are interested in the future of Shannon and they focused on ensuring it went well. As an independent commercial State company, employees' terms and conditions will continue as they are today.

Key capital investments in Shannon are required over the coming years. I have already mentioned the CBP facility, which we are about to get under way. The airport also needs immediate investment in core infrastructure such as runway overlay, taxiways and apron facilities. Once these investments are funded, the business plan demonstrates that the airport can generate enough cash on an ongoing basis for ongoing capital requirements.

Shannon Airport is ready for full independence. It would be best served by a dedicated board, management team and employees all focused on maximising the potential of the airport with the resulting knock-on benefit to the region. A debt-free airport funded for initial capital projects will be financially viable and able to compete aggressively for future business as an independent entity. Shannon Airport has a bright future and we look forward to an early decision from the Ministers for Transport and Finance to implement the break-up of the Dublin Airport Authority following a review of the business plans as envisaged in the State Airports Act. I thank the members for their time and attention.

Deputy Fergus O’Dowd

I welcome Mr. Shanahan and Mr. Blaney. Could Mr. Shanahan tell us why he resigned as executive chairman of the Shannon Airport Authority, what happened and give an account of his relationship with the Dublin Airport Authority? Clearly he was not informed on the Shannon-Heathrow proposal.

Deputy Thomas P. Broughan

I welcome Mr. Shanahan and Mr. Blaney. I echo my Fine Gael colleague's comments on the despicable decision to remove the Heathrow slots from Shannon Airport. Mr. Shanahan made a convincing case for a stand-alone airport, and this is supported by much documentation we received from him and the business and general community in the Shannon region and mid-west. The events of the summer suggest the airport needs to be stand-alone. Does Mr. Shanahan ever wonder if it would have been better to have stayed together? What would the issues have been if the Government had pursued a different policy? My own party was originally very supportive of Aer Rianta remaining as a body with a national remit.

An amazing job has been done with regard to cost savings as outlined by the witnesses, but what is the total number of job losses? A figure of 45 was given in some material sent to us but what are the total job losses arising from the Aer Lingus decision and its consequences?

The delegation made the very good point that it expects the wages and conditions in a State agency in the mid-west to remain at a positive level. Some concerns have nonetheless been expressed to me by some representatives of Shannon workers and workers themselves that they could be squeezed as the years go on because of the reprehensible decision in this regard and concerns over the open skies agreement. I support the airport being debt-free as it is the least that could be expected. The Government has a significant obligation to ensure that comes to pass.

Was the delegation upset with or surprised by Ryanair's immediate decision to drop the Dublin link yesterday, given the arrangement that exists with the airline?

Deputy Timmy Dooley

I welcome the presentation from Mr. Shanahan and Mr. Blaney. I compliment the efforts of the board and management at Shannon in dealing with a very significant blow to commercial activity. In a short time they encouraged CityJet to provide key access for business customers to an international hub and allow onward connectivity. That is vital to the region.

There is an outstanding gap in the tourism sector and interests in the region have contacted us as public representatives and perhaps also members of the delegation. They are concerned about the mid-west region not being able to gain access to Heathrow, which is a link to passengers from tour operators. Is there any light at the end of the tunnel with regard to providing connectivity for that sector? What benefits can come from the connection between Aer Lingus and JetBlue in the US and will this provide significant tourism potential in the region?

Will the witnesses tell us how a co-ordinated programme could be put together to utilise the requested funds, which I hope will be delivered shortly? How will the nuts and bolts of such a programme be put in place to attract people to the region? There is little doubt that unless demand develops, a supporting service will not be there.

Mr. Collier seemed to suggest there has been significant investment in Shannon recently, which is news to me. He spoke about €40 million in infrastructure investment but am I correct in thinking this was prior to the emergence of the Shannon Airport Authority? Were these funds put in place since 2004 and, if this is so, in what way were they spent? Will the witnesses clearly identify the type of financial investment now needed to bring Shannon Airport to a point where it can operate more efficiently?

Mr. Pat Shanahan

For years, Shannon has been perceived as a poor mouth, resistant to change, trying to feather its own nest in trying to hold on to a regulated environment and the Open Skies agreement. I believe the opposite is the case because Shannon Airport has a long history of aviation innovation, international duty free originated in Shannon and Aer Rianta International is still based at Shannon. Shannon Airport was involved in fuel bartering in the early days and started a technical transit business that is unique in Ireland. There is a lot of innovation at Shannon Airport and the employees and unions there were proactive in trying to resolve the cost base issues. The airport is now a lean machine focused on commercial matters rather than regulation that we want to move forward in a competitive world. This is why we believe it must be independent.

Regarding my resignation, my role as executive chairman at Shannon Airport was to help the executive and I was fully responsible for the airport while holding that job. I worked closely with the director of the airport to execute restructuring and do some deals involving airlines. When I realised information that had been known to the DAA for six or seven weeks had not been brought to my attention and that I could do nothing about it I felt my position was untenable. Had I known that the information existed I would have approached Aer Lingus and its competitors in advance of the company going public with its decision because once the decision was made public it was difficult to change minds. I felt it was necessary for me to step down from my role and focus my energy on what was in the best interests of Shannon Airport in the long term.

Regarding job losses at Shannon Airport, Aer Lingus has announced it is restructuring there and that is a matter for that company. We also restructured at Shannon Airport and this led to more than 80 voluntary redundancies but a significant number of these people are now working at the airport in other catering roles; we ceased our involvement in some businesses but the businesses still exist at the airport.

Mr. Patrick Blaney

Quite a few of the catering services are now being provided by specialist companies and they have hired employees who have replaced those originally employed by Aer Rianta.

Mr. Pat Shanahan

Regarding the long term for employees, if Shannon Airport were to separate it would remain a State enterprise and terms and conditions affecting employees would be similar to those in any State enterprise. On business plan funding, we believe Shannon Airport can generate enough cash over the ten year period to invest in its own infrastructure.

Ryanair operated the Shannon to Dublin route for two months, November and December, but the yields were extremely low as were the load factors. One issue affecting Shannon Airport is that there is a lot of capacity on the Shannon to Dublin route in the morning when Aer Lingus bodies enter from the United States and fly on to Dublin. It is difficult to make a Shannon to Dublin service work in such a scenario and this mitigates against carriers operating frequent rotations to Dublin. Limerick is closer to Dublin than Cork and there are regular flights to Dublin from Galway and Kerry, though some of those flights are public service obligations. Shannon does not qualify for public service obligations.

Shannon has a number of gateways and Charles de Gaulle Airport is a major gateway for tourism from Europe; some American traffic back-hauls through that airport but not as much as through Heathrow Airport. Shannon has regular, year-round connections to New York and Boston. Aer Lingus is hubbing with JetBlue, which will provide a major network out of the USA — from JFK Airport in particular — to many destinations. In addition, Continental Airlines has a hub in Newark, which presents a major hub opportunity. Delta Airlines flies to JFK and, during the summer, to Atlanta. Thus, there are many opportunities for the tourism organisations to get people travelling into the west of Ireland. The tourism marketing fund being discussed will help Tourism Ireland, Shannon Development and Fáilte Ireland to attract visitors from the US. Along with these organisations, we are working closely with the transatlantic airlines to try to stimulate the market in the US, particularly in the off-peak periods.

Deputy Fergus O’Dowd

Just on a point--

Chairman

Please allow the other three Deputies--

Deputy Fergus O’Dowd

I just want to clarify that the same ground rules apply.

Mr. Pat Shanahan

On the matter of the €40 million investment, that figure includes the potential investment for this year. We are expecting to commence the development of customs and border protection this year. In the previous three years it was €16.9 million.

A Member

In which areas?

Deputy Michael Lowry

I welcome the representatives. We conveyed at an earlier meeting our displeasure at the manner in which the decision to terminate connectivity with Heathrow was handled by Aer Lingus and, in particular, by the Dublin Airport Authority. I am not at all surprised at the stance that was taken by Mr. Shanahan on the basis that he was treated shamefully by one of his own colleagues. The DAA failed to take into account that its first responsibility was to the Shannon executive, to the workforce and to the people of that region.

I support the efforts that are being made to conclude and implement this legislation, which gives autonomy to Shannon Airport. I understand from the submissions and comments made today that there is an initial requirement to eliminate the debt of roughly €70 million that is currently being carried, after which there is to be a further investment of €40 million in capital infrastructure to compensate for the deficit that currently exists. Thus, we are talking about €120 million. This committee has a role to play in emphasising to the Department of Transport that we cannot rely on the DAA to push the case for independence for Shannon or to make available the necessary resources on the basis that it will protect its own interests — those of Dublin Airport — and not promote the interests of Shannon or contribute to its future. We need to get that message across.

It must also be acknowledged that in getting to the current position, while the Shannon Airport executive has done an excellent job, there has also been considerable pain and sacrifice on the part of the diligent and committed workforce. We need to build on what has been achieved and the sooner we get a decision on the autonomy of Shannon, the better.

Deputy Pat Breen

Mr. Shanahan and Mr. Blaney have had a lot of patience waiting around for us this afternoon. I did not get to ask questions earlier as I had to leave the meeting.

I attended a briefing of Oireachtas Members by Mr. Sharman and Mr. Mannion after Aer Lingus announced its decision to discontinue the Shannon-Heathrow route. I think Deputy Dooley was also at the meeting. Mr. Mannion and Mr. Sharman told us they had informed the Shannon Airport authorities that due to the high cost of doing business on the Shannon-Heathrow route, they would seriously consider terminating the route if the costs were not reviewed. This was soon after Ryanair had got a special deal. When did Mr. Shanahan hear of the Aer Lingus decision? Before that, had he made any contact with Aer Lingus about retaining the Shannon-Heathrow service? Mr. Fintan Towey told us at a previous meeting that he made contact with the Shannon Airport Authority in regard to the statistics for the airport. When did that happen? When did Mr. Shanahan, as chairman, become aware that Aer Lingus proposed to cease operations between Shannon and Heathrow?

We have seen the statistics for the Shannon-Heathrow route in 2007. Approximately 330,000 people moved through the airport in 2007, an increase of 10,000. Aer Lingus is now advertising flights from Belfast to Heathrow. I looked at the website the other night and flights are advertised at £1 each way from Belfast to Heathrow right up to May and June. Obviously the load factors which they were expecting on the route have not materialised.

I would like to know whether the chairman continues to make contact with Aer Lingus with regard to reintroducing the Shannon-Heathrow route? Looking at the statistics for 2007 and the load factors in Belfast, it would make economic sense for Aer Lingus to come back to Shannon.

Looking to the future, and I want to be positive about this, is it Shannon Airport Authority's desire, given its close connection with Shannon, that Aer Rianta International should remain in the authority in the interest of the airport's future viability?

In his presentation, Mr. Shanahan mentioned the US customs and border protection facility. When is it hoped to put that facility in place? Is financing the project a problem? We hear it could be a problem and perhaps Mr. Shanahan could elaborate on that aspect. Perhaps he could also brief the committee today on any new ideas for developing new business opportunities at the airport.

Mr. Pat Shanahan

In regard to contacts with Aer Lingus, we have had a long relationship with Aer Lingus. When the board was first established, Aer Lingus was one of the first customers to whom we went. We offered Aer Lingus the same deal that we offered Ryanair. Aer Lingus chose not to go in that direction for various reasons. It did not have enough equipment in terms of aircraft and its priorities might have been elsewhere at that time.

Chairman

The same deal was offered to Aer Lingus that was given to Ryanair?

Mr. Pat Shanahan

Yes. We set up an aircraft-based incentive scheme in 2004. We spoke to Aer Lingus and to Ryanair about it.

Chairman

Why did Aer Lingus not accept?

Mr. Pat Shanahan

The reason Aer Lingus was not interested at that stage was that it did not have the number of aircraft it would require to expand its network that quickly into Shannon.

Deputy Pat Breen

Was any incentive offered after the Ryanair deal?

Mr. Pat Shanahan

Yes. We have had ongoing discussions with Aer Lingus. As Mr. Declan Collier mentioned, the DAA and ourselves have had several meetings with Aer Lingus. We had discussions with the airline and we made it aware that, on the basis of our restructuring programme in particular, our costs would decrease. Aer Lingus was aware of that but never engaged with us on a detailed level about it.

Chairman

We understand the Ryanair deal is a very good one. The same deal was offered to Aer Lingus as was offered to Ryanair. Is that correct?

Mr. Pat Shanahan

Yes. It was an aircraft-based route incentive scheme that we launched in 2004. Aer Lingus was offered the same terms.

Chairman

How many passengers is Ryanair carrying at Shannon Airport as a result of that deal?

Mr. Pat Shanahan

It will carry 2 million passengers this year.

Deputy Pat Breen

My question related specifically to the Shannon-Heathrow route because as Mr. Mannion said on the day, they were not happy with the arrangements with the Shannon Airport Authority, particularly given the high costs. Did Mr. Shanahan smell a rat, so to speak, at any stage?

Mr. Pat Shanahan

They never discussed the Heathrow route in detail with me or gave me any indication that they were considering removing the Heathrow slots but they were aware that we were capable of offering incentives. However, there was no engagement. As to when I heard about it, I heard about it on the Sunday or the bank holiday Monday and immediately contacted Aer Lingus. We also contacted other airlines to try to recover the situation. That led to the recent CityJet announcement.

Aer Lingus is and continues to be a very good customer of ours. We are working closely with it on the transatlantic route. We want to incentivise it and all the transatlantic carriers to offer year round services in the long term. We are also making sure it understands the short-haul business opportunities at Shannon Airport and will continue to keep it abreast of developments. It is a commercial company which makes commercial decisions. It is up to it to decide when is a good time to re-engage with Shannon Airport on short-haul routes. We have moved on as an airport. We are focused on accessibility to other European hubs. The Charles de Gaulle service is a solid one that will grow in the coming years as it is supported.

Deputy Pat Breen

Will there be a marketing of that route?

Mr. Pat Shanahan

Yes. We will be supporting CityJet in marketing the route both locally and internationally. We will ensure the marketing is strong both in France and internationally.

Chairman

To follow up on Deputy Breen's question, what other new initiatives are being examined, particularly in terms of the challenge presented by the open skies policy and in attracting other airlines from the United States?

Mr. Pat Shanahan

We have the customs and border protection facility which has been improved and will be financed once agreement is reached between the United States and the Irish authorities on the legislation.

Mr. Patrick Blaney

And we have planning permission.

Deputy Pat Breen

Does Mr. Shanahan expect the legislation to be in place in early or late 2008?

Mr. Pat Shanahan

It is a function of how quickly the legislation can be agreed. We are ready to push the buttons, so to speak, on construction.

Deputy Pat Breen

What about Aer Rianta International?

Mr. Pat Shanahan

In terms of new business, about which Mr. Blaney might speak, the customs and border protection facility offers us an opportunity to develop new business where airlines want to travel directly to cheaper low cost US hubs.

Mr. Patrick Blaney

Domestic rather than international hubs, which offer much lower costs for US carriers. Having customs and border protection facilities based at Shannon Airport means a passenger being able to get on an aeroplane flying from Shannon Airport as if he or she was already in the United States. Rather than having to use a very expensive JFK International Airport connection, they can fly to a domestic airport in Michigan, Iowa, California or other locations. Charges in the big domestic airports in the United States are much cheaper than at the big international airports.

Chairman

That would be for people coming from Europe and using Shannon Airport as a--

Mr. Patrick Blaney

It could be a new type of technical transit point. Given that the Ryanair model is to fly between two low cost airports, this is an ideal connection for it.

Chairman

That is good news.

Deputy Timmy Dooley

Obviously, there is a competitive advantage for Shannon Airport in that regard. What is the stress test in terms of the time it will take until other airports in Ireland or Europe offer the same service?

Mr. Patrick Blaney

That is one of the odd aspects. Ireland is the only country, apart from those countries contiguous to the United States, that has pre-clearance immigration facilities. That is the advantage that does not pertain to the United Kingdom--

Deputy Pat Breen

Would others quickly follow Shannon Airport?

Mr. Patrick Blaney

One has to expect that other countries would regard this as a marketing advantage. However, France, Germany and the United Kingdom have made no efforts to have pre-clearance immigration facilities prior to this. Customs and border protection facilities are a further step along that route and I do not see them doing this in the next five years. It is a major advantage in the short term.

Chairman

Are there any other initiatives?

Mr. Pat Shanahan

We are also looking at the possibility of growing our cargo base at Shannon Airport which accounts for approximately 25% of the Irish market. There is an opportunity to expand this activity.

Chairman

What about Aer Rianta International?

Mr. Pat Shanahan

Aer Rianta International was formed in Shannon Airport. Obviously, it now forms part of the assets of the DAA and will be factored in in the asset split to be determined by the Departments of Transport and Finance and the respective Ministers.

Deputy Pat Breen

Will it be part--

Mr. Patrick Blaney

It is a double-edged sword. If Aer Rianta International was only in place to support a loss-making Shannon Airport, that would be bad for both. If it supports a viable Shannon Airport, potentially, it is good for both businesses.

Chairman

Obviously, we do not want it to be in place to support the airport. Given that it is based and was founded in Shannon Airport, we expect it will continue to operate from there and that Dublin Airport will have nothing to do with it.

Mr. Patrick Blaney

It will continue to operate from Shannon Airport. I am not sure--

Deputy Pat Breen

It is a very profitable company.

Mr. Pat Shanahan

While it will continue to operate from Shannon Airport, it is an asset of the Dublin Airport Authority. Under the State Airports Acts, the Dublin Airport Authority will be divided into three separate entities. Therefore, decisions will probably be made in the future.

Deputy Pat Breen

Has the Shannon Airport Authority looked for it to form part of its business plan, given that it is a successful company and that one could say it was born at Shannon Airport?

Mr. Pat Shanahan

Our business plan is focused on what it would take to make Shannon Airport viable. It identifies precisely--

Deputy Pat Breen

Does that include Aer Rianta International?

Mr. Pat Shanahan

It is focused more on the viability of Shannon Airport in the long term and what funding the airport will require.

Deputy Pat Breen

Mr. Shanahan is not answering my question.

Deputy Fergus O’Dowd

Perhaps he is.

Mr. Pat Shanahan

It is one of the possible outcomes.

Deputy Michael McGrath

I welcome Mr. Shanahan and Mr. Blaney and commend them on restoring connectivity to Shannon Airport through the CityJet Charles de Gaulle service in difficult circumstances. It is critically important for the region. Those of us in Cork have always looked on Shannon Airport with a degree of envy because of its achievements. We have seen the success of Ryanair at the airport, at which many of us arrive from the United States at 7 a.m. and then face a two hour trip to Cork on a bad road.

It appears from the documents we have seen that Shannon Airport will get a better deal from the DAA than Cork Airport. I respect that. Deputy Lowry is right that we need to be very conscious that the DAA has a vested interest in the negotiating process. Shannon and Cork Airports will have to flex their muscles to get the best deal possible. Has Shannon Airport reached a deal with the DAA on its debt? What level of capital investment does it require? Is it in the region of €40 million to €50 million, as has been suggested?

Mr. Pat Shanahan

I do not want to get into the question of whether it is a better deal for Cork Airport than Shannon Airport. Deputy McGrath is making assumptions and we do not have the answers. I do not necessarily want to get into the details of the business plan either. There is a funding requirement at Shannon Airport, while a business case has been presented for Cork Airport. When all of these are placed in the mix, with the huge investment required by Dublin Airport, the Ministers for Finance and Transport will have to ensure all three airports are viable and have a long-term future. We believe the business plan we presented sets us up to be viable and have a long-term future.

Deputy Michael McGrath

There is no deal with the DAA.

Mr. Pat Shanahan

There is no deal with the DAA. We have worked well with it and there is an understanding of what is required. From what I can see, there are no fundamental differences between Shannon Airport and the DAA.

Deputy Fergus O’Dowd

I have a few questions related to the initial question I asked Mr. Shanahan. Did his role as executive chairman mean that he was working on it seven days a week? It is not a full-time job and he has other interests. What is the difference between his role as executive chairman and as chairman?

Mr. Pat Shanahan

The executive chairman role was approximately two to three days a week depending on the level of activity. It was focused on the day-to-day operations of the airport, and particularly the strategic operations such as the restructuring programme and negotiating with major carriers.

Deputy Fergus O’Dowd

Mr. Shanahan was doing this job and on 14 June the Department had been in touch with the DAA, and he was not informed at all about that. That is clear because of his resignation. I am trying to understand how, if the authority does not contact Mr. Shanahan, on that date the DAA can state to the Department that it was in contact with Aer Lingus to see if it was possible to provide incentives for the continuation of at least one daily Shannon-Heathrow service. Given the data that the authority would need and the fine detail, how would the authority do that without contacting Mr. Shanahan? How would they exclude him completely from that?

Mr. Pat Shanahan

I do not know. I have had regular discussions with Aer Lingus and that did not come up. In my role with the DAA--

Deputy Fergus O’Dowd

The point is it was going on.

Mr. Pat Shanahan

Yes. In my role as executive chairman of the DAA, I was effectively a DAA employee and I was reporting to the chief executive of the DAA.

Deputy Fergus O’Dowd

The point I am trying to get at is that Mr. Shanahan was executive chairman and there were ongoing discussions with Aer Lingus on how they could provide incentives for holding on to at least one flight in his area of influence in Shannon. How could they do that? Mr. Shanahan states he was in contact with Aer Lingus but the DAA was separately in contact with it. I am trying to understand the process.

Mr. Pat Shanahan

During the period from June to August, I was not aware that the DAA was involved in discussions with Aer Lingus about a Shannon-Heathrow route and I was not in discussions with Aer Lingus in that period either.

Deputy Fergus O’Dowd

Therefore, Mr. Shanahan did not know.

Mr. Pat Shanahan

I did not know about that.

Deputy Fergus O’Dowd

How could the DAA proceed? What data is needed? Some data is kept in Dublin by the DAA.

Mr. Pat Shanahan

All of our numbers are available to the Dublin Airport Authority. Our regular numbers on a monthly basis would be.

Deputy Fergus O’Dowd

This comment for the information of the Minister states that the DAA has certain information, although it does not have passenger yield information. Therefore, the DAA did not have that information when it was talking to Aer Lingus. The DAA could not have had it.

Mr. Pat Shanahan

Passenger yield information would be owned by the airline. The airport would not have any information about passenger yields, which is basically the price charged to passengers.

Deputy Fergus O’Dowd

Would Mr. Shanahan have recorded that?

Mr. Pat Shanahan

No. The airports would not have information on passenger yields.

Deputy Fergus O’Dowd

Therefore, the entire administration in Shannon knew nothing about this at all and yet it was the most important decision affecting Mr. Shanahan's airport. I find that incredible. When Mr. Shanahan was informed, what political contact did he make with the local Minister, Deputy O'Dea, the Minister for Transport or the Taoiseach? That August weekend, when it came into the public domain, what did Mr. Shanahan do about it in terms of contacting the political, as opposed to the administrative, players? Clearly it was dynamite for Mr. Shanahan.

Mr. Pat Shanahan

My first port of call was Aer Lingus. My second port of call was to the other airlines that might potentially fill that route. Within a number of days — I do not know exactly how many — I also spoke to the Minister for Transport.

Deputy Fergus O’Dowd

Did Mr. Shanahan speak to the Minister, Deputy O'Dea, or attempt to contact him at all, or did Deputy O'Dea contact Mr. Shanahan or the airport authority?

Mr. Pat Shanahan

I would have spoken to the Minister, Deputy O'Dea, around that time.

Deputy Fergus O’Dowd

Was that after the decision was announced?

Mr. Pat Shanahan

Yes.

Deputy Fergus O’Dowd

I find it incredible. Mr. Shanahan's airport is practically--

Deputy Timmy Dooley

Is not Deputy O'Dowd lucky he is not in the constituency or he would feel much worse?

Deputy Fergus O’Dowd

How can the DAA be trusted now? That is the problem.

Mr. Pat Shanahan

Separation. We firmly believe Shannon Airport would be more prosperous in a separated mode.

Deputy Fergus O’Dowd

I accept that but how can the airport take this blow, having been left completely in the dark? That is not sustainable. Mr. Shanahan's resignation clearly indicates that but it does not make sense that the Minister or Mr. Shanahan did not know about the decision.

Chairman

The Deputy is going back over old ground.

Deputy Fergus O’Dowd

I am going over the true ground. It is impossible to accept that the Minister did not know about this.

Chairman

We dealt with that issue with the Department.

Deputy Fergus O’Dowd

The DAA chief executive said he did nothing between 14 June and the August bank holiday weekend. However, we now know on 14 June the authority was actively in contact with Aer Lingus with a view to retaining one of the slots. How could the authority negotiate with Aer Lingus without telling management at Shannon Airport?

Deputy Timmy Dooley

We must be careful regarding what is on the record.

Chairman

The chief executive did not say that.

Deputy Fergus O’Dowd

He said that. It is on the record in the Minister's office in a note which states, "The DAA are in contact with Aer Lingus to see if it is possible to incentivise--

Chairman

The chief executive of the DAA stated earlier he was not in contact with Aer Lingus.

Deputy Fergus O’Dowd

The contact was only with the chairperson. He was the only person who was told.

Deputy Timmy Dooley

On a point of order, if we are to debate this properly, the principal officer who drafted that note should appear before the committee. It is unfair to make charges against Mr. Collier, with whom I have a problem, or anybody else regarding this matter.

Deputy Fergus O’Dowd

We must understand the issue. Nobody can say it did not happen. We have a duty of care to go through every aspect of this issue to understand what was going on. That is my job and it also the Deputy's job.

Chairman

It is clear from both submissions what exactly was the story. Mr. Shanahan resigned as a result of the way he felt he was treated. He says independence is key. The new N18 and N6 roads through Tullamore, County Offaly, will mean it will be faster to reach Shannon Airport than Dublin Airport at peak departure times. It will take time but is it realistic that it will become commercially viable for Aer Lingus to return to Shannon Airport? As a result of the new motorway system, it is easier and faster for people from Sligo, Castlebar, Tullamore or Galway to access the airport. Its car park charges are also much cheaper. Is it not the challenge for everybody in the west and Mr. Shanahan, in particular, to redouble our efforts to make it viable for Aer Lingus to return to the airport? If that means taking a few slots from Dublin Airport, then so be it. Will he comment on that?

Deputy Áine Brady

I thank the representatives from Shannon Airport for their positive contribution. Given they have been dealt a severe blow, their positive submission must be praised. I represent Kildare North but I have used Shannon Airport because it is easier to access than Dublin Airport from Kildare. The initiative proposed by the Chairman should not be limited to west of Tullamore or Mullingar. Even when the Heathrow slots were taken from the airport, I was asked by tourism interests in Kildare to make the case to retain the slots because it meant a great deal to them. People entering the country via Belfast or Dublin Airports often pass through Kildare. This should be borne in mind when Shannon Airport is being marketed, as it caters for more than the west.

Mr. Pat Shanahan

As the road infrastructure improves, the catchment area will expand and the airport will be capable of handling more passengers. It is already capable of handling more than 5 million passengers. It is a stress-free, easy access airport and we want to keep it that way. The greater is the catchment area and population, the greater the chance of being able to fill aircraft.

Heathrow is a particular situation. Slots there are very expensive and a major sought-after commodity. Many airlines use the slots on long haul routes because of the larger profits on those routes. It will be difficult for us to find an airline that will sacrifice slots to fly to--

Chairman

The unions in Shannon checked the passenger loads out of Dublin to Heathrow and gave us the figures. They discovered significant capacity available with a significant number of slots, particularly in the morning. Their figures showed there was plenty of spare capacity in Dublin which could still be offered to Shannon, provided we can improve the commercial viability of the route from Shannon. That is the challenge and I have no doubt Shannon can prove equal to it, particularly within the next two and a half years when the road network will be upgraded to motorway standard. We will have a direct motorway then from Tullamore to Shannon Airport.

Mr. Pat Shanahan

We will continue to build our network out of Shannon. Our CityJet relationship will develop and grow and we are talking to CityJet about London City Airport also. We will always consider Heathrow, but the answer for Shannon is to have connections to multiple European hubs. The big four include Heathrow, Paris, Amsterdam and Frankfurt. If Shannon has one, two or three connections to those airports, that will help develop and grow our network.

Chairman

We wish you well in your endeavours and thank you for attending this committee meeting. We thank the delegates waiting to speak on quality bus corridors for their patience and invite them to take their seats.