Seanad Éireann díospóireacht -
Thursday, 7 Jul 1994

Vol. 140 No. 21

Adjournment Matters. - Transfer Rights at Shannon.

Mrs. Taylor-Quinn

I wish Senator Crowley every good wish in the European Parliament and compliment him on the way he has acquitted himself so ably and expertly in the House. I also compliment him on the fine vote he achieved in Munster. This is a reflection of the able, talented young man he is. I am sure we will hear a great deal about him in the future, not just in the European Parliament but in the general political spectrum.

I thank the Cathaoirleach for allowing me to raise the issue of Aeroflot transfer rights at Shannon Airport. With the break up of the Soviet Union a number of republics were formed. A result of this was that Aeroflot was substantially reduced in size and other airlines were created. Many of them are bringing people to Shannon. Aeroflot is seeking from the Government permission to have people transfer from those airlines to Aeroflot flights to New York and Boston. I believe this would be in the interests of Shannon. In effect, Shannon would be a hub for the Commonwealth of Independent States.

The Minister must view this request seriously because the future of Shannon hinges substantially on how the Department handles this issue. There is no point in the Minister closing his eyes and saying this is a matter which will seriously affect Aer Lingus. We are talking about not pick up but transfer rights. I understand that Aeroflot is prepared to have discussions with Aer Lingus on this issue with a view to, perhaps, forming a joint venture.

I am greatly concerned about the future of Shannon Airport. Unless this issue is sympathetically considered, the airport's future will be further hindered and more difficulties could arise. The Minister should look at the history of Aer Lingus and the new services it has provided over the past ten years, in particular to and from Shannon. Recently the Minister made a major announcement about a new cargo flight between Shannon, Dublin and Manchester. Unfortunately, this ceased operating last May.

Let us look at Aer Lingus's proposal to sell its subsidiary, Shannon Rescue Service. The record of Aer Lingus's commitment to Shannon is highly questionable. The Minister must question this record when considering the Aeroflot issue. It is extremely important that he looks seriously at the future of the mid-west region, and Shannon in particular, when he decides on this issue. It is not enough to say that the proposal could affect Aer Lingus and therefore cannot be allowed. It could be of huge benefit to Shannon and the mid-west. There is the potential for Shannon to be a hub for the CIS. Providing this hub facility would create many jobs. The Minister must decide that the future of Aer Lingus is important but of equal if not greater importance is the future of Shannon and the mid-west.

I can see why the Minister may be tempted to say that Aer Lingus should be protected because its problem is obvious whereas the jobs which can be created in a region are not as obvious and cannot be identified as quickly or as readily. This proposal would be beneficial not only to Shannon but also to Aer Lingus because, on the ground in Shannon, it has secured a great deal of employment by providing handling facilities for Aeroflot. The more Aeroflot business which can be done through Shannon, the more handling facilities Aer Lingus will be able to provide and the more jobs will be secured by Aer Lingus. This issue is not simple and the Minister must look at it from all angles.

The Minister said in the Dáil that he will publish the report of the task force. Could he give us the date on which he proposes to publish this report? Is it true that the task force views favourably the involvement of Aeroflot in developing Shannon as a hub for its business? Are some of the rumours true about Aer Lingus and other semi-State bodies putting pressure on the Minister not to publish the full report because of the issues it raises about the future of Shannon?

While I have the utmost respect for the Minister of State, Deputy Treacy, who does a very good job, I think the Minister, Deputy Cowen, should be here to speak about this issue because in the final analysis it is he and not the Minister of State who will deal with the matter. By sending the Minister of State here, the Minister is not taking the Shannon issue as seriously as he should and is treating it with the back of the hand as he has done in the past. I have sympathy for the Minister for State who has come to deal with the issue which will be decided by the Minister and not him.

I hope the task force report will be published and that we will be given a date for its publication because of the Aeroflot issue it raises. The situation in Shannon is serious and its future is in the hands of the Minister. There now exists a window of opportunity for Shannon and the mid-west region. The Minister must seize this opportunity and decide that it is in the region's best interests to provide Aeroflot with transfer rights to New York and Boston. We are not talking about picking up Irish people in Shannon to board Aeroflot flights but transferring people from CIS airlines to Aeroflot flights so that they can travel to New York and Boston. Normally Aeroflot itself flies directly to these places. There is now an opportunity for Shannon which would result in more jobs being generated there. The Minister has the chance to provide this opportunity for the people of Shannon and the mid-west and I ask him to do so.

Minister of State at the Department of Transport, Energy and Communications (Mr. N. Treacy)

I sincerely thank Senator Taylor-Quinn for the sympathy she has shown for me having to come here but it is always a pleasure to come to the Seanad. I share responsibility with my colleague, the Minister, for these matters and I will be saying what he would say if he were here. The fact that he is not here means he is very busy on Government business.

Mrs. Taylor-Quinn

He is in the Phoenix Park.

Mr. N. Treacy

He is not. No Minister was there. We left the park to the people, the players and the nation. We did our job by ensuring the party went ahead and I hope people will appreciate this.

Traffic rights for air services between Ireland and countries outside the European Union are governed by bilateral air service agreements negotiated under the Chicago Convention of 1944. Such agreements regulate principally the conditions for access to routes, the capacity airlines place on a route and the prices charged by airlines of both countries.

Following the break up of the Soviet Union, we were one of the first countries to formally sign an air transport agreement with the Russian Federation in March 1993. In this agreement and subsequently outside the formal agreement, we have given very generous rights to the Russian Federation at Shannon Airport.

Aeroflot Russian International Airlines (ARIA) has full fifth freedom rights at Shannon, that is, rights to pick up all transfer and local traffic for all points in Central and South America, Washington and Miami in the USA and Gander in Canada. On top of this, we have, outside the agreement, given Aeroflot temporary fifth freedom rights to Chicago and Tampa in Florida at Shannon.

Aeroflot recently sought wayport rights at Shannon, i.e., rights to pick up transfer traffic from points in the former USSR states to all points in the United States. Given that Aeroflot already has all these rights to the points I mentioned earlier, what is really at stake here are rights to New York and Boston. These two points are, of course, served by direct Aer Lingus services.

Traffic rights have never been granted by our Department to third country carriers on transatlantic routes served by Irish carriers. I should remind the House that in the aviation world, traffic rights are seen as national assets which are normally traded on the basis of reciprocity and equivalent benefits to both sides. It would, therefore, be highly unusual not to give preference in these matters to one's own carriers.

In examining the Aeroflot request, we had regard to the views of Aer Lingus on the effects on its direct services out of Shannon. Granting rights, either full fifth freedoms or unrestricted transfer rights, to New York could have implications for the continued viability of Aer Lingus' transatlantic operations.

Over the past year, we have been constantly advised by local representatives and interests of the need for a daily year round direct service out of Shannon to New York. Following the acquisition of the new A330 aircraft, Aer Lingus responded to this need with the new service which commenced on 1 June 1994. We have already advised the Dáil that we are anxious to be as helpful to Aeroflot at Shannon as possible, but not in a way which would compromise the daily Shannon/New York service.

Aer Lingus has advised us that existing and potential CIS transfer traffic, as well as additional traffic from other sources, is important to the ongoing commercial success of the Shannon/New York service, particularly in the off peak season. Aeroflot, on the other hand, claims that traffic is being lost to other destinations, for example, Warsaw, Prague and Helsinki, due to the lack of competitiveness of Aer Lingus' prices. It claims that it could entice this traffic to Shannon if it had pick up rights.

Following conflicting claims regarding the importance of CIS transfer traffic at Shannon, our Department convened a meeting of interested parties on 24 May in order to establish certain facts. On the basis of the information provided at that meeting, the following interim — and I stress interim — decision was made by us: Aeroflot would be granted additional approval on an ad hoc basis to operate wayport rights to all destinations, including New York, but only in respect of traffic from the Russian Federation and no fifth freedom or wayport rights for non-Russian Federation traffic would be granted to Aeroflot in respect of points served by Aer Lingus, i.e., Boston and New York, at present.

Our Department has sought further information from the various parties on CIS traffic and comparative prices for such traffic. The matter will be kept under review in the light of this information and future developments in transatlantic traffic to and from former USSR states.

Finally, I should like to put on record the Government's appreciation of Aeroflot's contribution to Shannon Airport over the past 20 years and we hope that this partnership, which has yielded benefits to both sides, will continue to develop well into the future. Our air links with Russia have grown from Shannon Airport being initially an important transit point to it now being an important hub linking the Russian Federation with a whole range of points in the Western hemisphere.

Our Department will continue, where at all possible, to positively examine proposals regarding extra traffic opportunities at Shannon. The importance of Aeroflot at Shannon will not be overlooked in this regard.

In response to some of the points made by Senator Taylor-Quinn, I would not rule out the Manchester operation as yet. We are optimistic that there will be progress in that area in the near future. The Senator can be certain that this Government is very committed to Shannon and to the development and further expansion of all the network of aviation services which can improve links to this island so that our economy can continue to grow with the support of the international traffic which is so vital.

I ndeireadh na dála, ba mhaith liom a rá go bhfuil fonn orm cuidiú leis an rún comhgháirdis atá ag gabháil do Senator Crowley. Ba mhaith liom comhgháirdeas a ghabháil leis féin go pearsanta. Rath Dé a ghuí ar a obair sa tír seo agus go h-áirithe i bParlaimint na hEorpa.