Dáil Éireann Debate, Thursday - 12 May 2005
6 Mr. Wall asked the Minister for Transport if, in view of concerns expressed regarding the future of the Great Southern Hotels group, he has had any discussions with the Dublin Airport Authority given the role of these hotels as flagships of the tourism and hotel industry; and if he will make a statement on the matter. [15009/05]
Amharc ar fhreagra17 Mr. Bruton asked the Minister for Transport if he has received the three business plans from each of the three State airports; if he will publish these plans; if and when he envisages the break-up of Aer Rianta being sanctioned; and if he will make a statement on the matter. [15488/05]
Amharc ar fhreagra57 Mr. Ferris asked the Minister for Transport if the promised business plans for Shannon and Cork airports have been furnished to his Department; and if he will make a statement on the matter. [15586/05]
Amharc ar fhreagra65 Mr. Bruton asked the Minister for Transport if he has taken a decision on the distribution of Aer Rianta’s assets between the three State airports; and if he will make a statement on the matter. [15489/05]
Amharc ar fhreagra72 Mr. Hogan asked the Minister for Transport his views on the removal of the Great Southern hotels from the control of the Dublin Airport Authority; his further views on the sale of the Great Southern hotels to the private sector; and if he will make a statement on the matter. [15490/05]
Amharc ar fhreagraI propose to take Questions Nos. 6, 17, 57, 65 and 72 together.
In keeping with the provisions of the State Airports Act 2004, the board of the Dublin Airport Authority has a statutory mandate to do everything necessary to give effect to the restructuring of the State airports. The Shannon and Cork airport authorities were incorporated in October 2004 and in line with the framework provided by the State Airports Act 2004, these two new authorities will in due course own and operate their respective airports once sufficient distributable reserves are available to transfer the relevant assets.
Prior to the assets of Shannon and Cork airports being vested in their respective authorities, their boards are charged with preparing to assume full responsibility for the management and development of their airports. They are also empowered to undertake functions delegated to them on an agreed basis by the Dublin Airport Authority. Each of the airport authorities is also required to prepare comprehensive business plans for their airports. As part of this process, the Dublin Airport Authority will consider the future direction of its business, including the position of its subsidiaries.
In accordance with the 2004 Act, the transfer of assets to Shannon and Cork airport authorities cannot take place earlier than 30 April 2005 and, thereafter, a phased approach will allow one of the new airport authorities to be vested first, that is, Shannon Airport, while Cork Airport will be vested once sufficient distributable reserves have been built up within the Dublin Airport Authority.
The Minister for Finance and I must be satisfied as to the state of operational and financial readiness of the Shannon and Cork airport authorities before the assets of the airports are vested in those authorities. The formulation of comprehensive business plans by the new boards will be a key aspect of achieving operational and financial readiness. The three airport authorities are preparing comprehensive business plans with the Dublin Airport Authority co-ordinating the process. Finalised business plans have not yet been submitted.
As part of its business plan, the Dublin Airport Authority will be putting forward its proposals for the future of the Great Southern Hotels group. I have had discussions with the Minister for Arts, Sport and Tourism about the Great Southern Hotels group and I am aware of their importance to Irish tourism. I will consider the DAA's proposals in consultation with the Minister for Finance in the overall context of the business plans as provided for under the State Airports Act 2004.
Does the Minister accept that the break-up of Aer Rianta is not quite as simple as his predecessor suggested and we are a long way from disentangling that company? I am sure he is grateful to him for the legacy he has left him.
On the Great Southern hotels chain, does the Minister accept that clarity is needed for the staff of the hotels, given the role they have played in the tourism industry and that it has been a flagship company which has made a significant contribution to raising standards and providing very high quality training opportunities for staff in the industry? Does he agree that the staff need some clarity in respect of their future? Last month the chairman of the airport authority indicated clearly that it was his intention to dispose of the hotels, yet the Minister is giving staff reassurances that this will not happen and, as long as the Government is in power, the chain will remain in public ownership. These are two diametrically opposed positions.
Has the Deputy a question?
Will the Minister clarify for the staff of the Great Southern Hotels group what exactly lies ahead of them in terms of their job security and job prospects for the future?
I fully understand the importance of the Great Southern Hotels group, about which I have spoken to the Minister for Arts, Sport and Tourism. While I do not wish to pre-empt the business plans, I have met the people in Cork, Shannon and Dublin and there is great enthusiasm for what is happening. The opportunities that independence will bring to Shannon and Cork have been well greeted and they are up for the challenges.
The redistribution of the assets is a complex process. All the issues that filter into that must be dealt with. People have different perspectives on different aspects. I am anxious that the Great Southern Hotels group has a major future.
There are many factors that can make that happen, including the management and staff in the hotels. One of the difficulties at present is that the hotel group is losing substantial amounts of money. This is not sustainable for anybody, including the staff. It is not good from its perspective. Clearly, the restructuring process must involve a consideration of how we can maximise the benefit of the Great Southern Hotels group and return it to profit.
There has been considerable investment in tourism and hotels in recent years and there is no reason, therefore, that Great Southern Hotels should not be very profitable and to the fore in the industry. I would like to see this happen.
Does the Minister consider it fair, either to the hotels or the fledgeling Dublin Airport Authority, to leave the hotels in the care of an organisation that admits it does not have the interest, finance or ability necessary to run hotels? Running hotels is not what the authority does or what it is good at. Does it not have enough to do in running airports? Does it not behove the Minister to remove the hotels from the care of the authority for the sake of both the hotels and the airport?
It does not seem to be in anybody's interest to allow these circumstances to persist. The annual loss of €2.2 million represents a drain not just on the hotels but on the airport. It has considerable implications for the fledgeling airport authority.
One of the benefits of our current position is that we engage in serious business planning. It is difficult to answer the Deputy's question in that I have not got the business plan. However, Dublin Airport Authority has made is absolutely clear that, in the business planning process, all the issues concerning the subsidiaries of the authority, which formerly existed in the guise of Aer Rianta, must be dealt with. I am waiting to see what these issues are. The chairman has enunciated fairly some of the issues that must be grappled with.
Having considered the tourism market and the history of the Great Southern Hotels and the contribution they have made, I know of no reason the hotels could not and should not be very profitable. The hotel business is largely profitable. There are issues for management and staff in the Great Southern Hotels group to reconcile. If this reconciliation is achieved, it will help to return the hotels to profitability. The Minister for Arts, Sport and Tourism and I have discussed this issue informally and I share his views.
I accept that the Minister must see the business plans. As of now, does he have an inkling as to whether the hotels should or could be kept in public ownership? He stated he had discussions with the Minister for Arts, Sport and Tourism. Had he any communications with the Taoiseach on this issue? In any such communications, has the Taoiseach expressed a view on whether the assets should be kept in State ownership?
The history of the Great Southern Hotels group is clear. I have no objection to maintaining Great Southern Hotels in State ownership, if it remains profitable. However, the hotels must be run efficiently and well in terms of the mix in the tourism market and the hotel business, which is very competitive. There is no reason the group should not remain in State ownership.
I am in the difficult position of having to proceed without the business plans. I do not want to pre-empt or speculate on what might be in them. It is fair to those who are putting them together that I wait until the Minister for Finance and I receive them. In light of the viability of all the entities the Minister for Finance and I must approve the entire process in which we are engaged and the completion of the business plans.
Has the Minister had any indication from the Taoiseach?
There has been much general discussion. The Government, including the Taoiseach, is anxious to see the business plans produced. The Taoiseach has been very clear that he believes the Great Southern Hotels group is an important element in the public sector and would like to see it remain in that sector.
Has the Taoiseach made that view known to the Minister?
He said that publicly on numerous occasions.
On airports generally, rather than hotels, comfort was offered to both Cork and Shannon airports in respect of the financial status of their respective authorities, as the Minister is aware. When the State Airports Bill was passed, everybody understood the authorities would be free of debt, if established. There is great concern in Cork that this position may have changed, as I am sure the Minister is aware. There are indications that the Minister is of a different view to the people in Cork. This may be because of overruns associated with the terminal or losses pertaining to some of the assets of the former Aer Rianta.
In fairness to Cork people generally, and to allow the authority to prepare its plan, it is important that those concerned know precisely what they are facing. Has the Minister changed his mind? Has the Government changed its mind regarding the setting up of Cork and Shannon airport authorities without debt? Is the corollary such that any outstanding debt would remain with Dublin Airport?
The transfer of assets to Shannon and Cork airport authorities could not have taken place earlier than April of this year. For the company to distribute its assets, it must have the cash reserves to match the distributive value of those assets. The early indications were that Shannon Airport would be dealt with first and that it might take some time to deal with Cork Airport. However, it is absolutely clear that Cork, Shannon and Dublin airports will have to be viable on foot of the business plans. There is no point in proceeding if they cannot be made viable.
If they are set up with debt, how can they be viable?
Allow the Minister to contribute without interruption. The Deputy cannot rise without being called by the Chair.
The whole point was that they would be set up without debt.
I know of no business that does not have some debt attaching to it. There were many interpretations of some of the comments made at an early phase. I had meetings with representatives of Cork, Shannon and Dublin airports and there is no question but that everybody wants the airports to become independent as quickly as possible. People want Cork and Shannon airports to operate on the most viable and commercially sound grounds. I will wait for the business plans before demonstrating how this is to be achieved.
I call on Deputy Shortall to make a brief final question.
My question was not answered.
I appreciate that but I have called Deputy Shortall. We are rapidly running out of time.
Is the Minister aware of the comments made by Gary McGann to the members of the Joint Committee on Transport to the effect that the three business plans were far from finalised and that there were major problems associated with agreeing them?
What of the former Minister's talk of Cork and Shannon airports starting off on a clean slate? Does the Minister, Deputy Cullen, accept that a political decision needs to be taken on the future of Aer Rianta International and the Great Southern Hotels group before the business plans can be finalised?
Deputies Shortall and Olivia Mitchell are making my point for me. I am being asked to answer quite legitimate questions, with which I have no issue, but I cannot do so in advance of seeing the business plans. The plans must contain the answers to the questions the Deputies have raised.
They are political decisions.
Let us produce the business plans first. We are often accused of trying to shoot in the dark without obtaining the facts. The Deputy should allow me to obtain the facts on the business plans. We will have to make decisions on foot of them.
They are based on the availability of facts.
How can that be done when the authorities do not know the future of the money-making facet of the business?
Deputy Shortall should allow the Minister to contribute without interruption.
What was Deputy Shortall's question?
How can any of the airport authorities decide on its future without knowing what will happen to the money-making facet of the business, Aer Rianta International? The Minister's predecessor gave very clear signals of his intentions in this regard. Does the Minister not have to make what is ultimately a political decision on what is to happen to Aer Rianta International?
Before the Minister replies, I will allow a brief question from Deputy Olivia Mitchell.
My question is similar to that of Deputy Shortall. The business plans are predicated on the availability of certain facts. Cork Airport Authority, for instance, began planning on the basis that it would start off without debt. Now it does not know. How can it prepare the business plans without that information? Deputy Shortall is right, political decisions must be made so that the business plans can be realistic.
There is no disagreement between the three of us on this matter. The discussions between Cork, Shannon and Dublin airports deal with those issues. They are making decisions based on the hard facts of what is profitable and what is not, and the best structure for the future. Some political decisions may need to be taken as an outcome of that business plan.
I have given these sound business people a strategic mandate to operate the three State airports successfully, commercially and profitably. They are discussing the issues in that mandate and will make the division on that sound basis.
Which airport will get Aer Rianta?
I would not like to mislead the House. Business planning is going on between the three airports under the direction of Dublin Airport Authority. The three airports are working out with the authority how these business plans stack up. One cannot make a business plan unless one possesses all the facts. They have the commercial facts. I am waiting for the business plans to come back, which may require us to make some political decisions.
7 Mr. Boyle asked the Minister for Transport the number of passenger diversions from Cork Airport to other airports to date in 2005. [15657/05]
Amharc ar fhreagraThe movement of aircraft at Cork Airport is an operational matter for the airport authorities and the airlines concerned, subject to compliance with aviation safety requirements. However, I am informed by the Dublin Airport Authority that for the first four months of this year, 1.8% of planned arrivals at Cork Airport were diverted or cancelled, compared to an average annual diversion rate of approximately 1%. The main reason for this excess above the norm was a particularly bad spell of bad weather during March when the diversion rate reached 3.8%. Overall, I am informed that the rate of diversions at Cork Airport is in line with international statistics. Ultimately, a decision to land or divert an aircraft is a matter for the pilot, having regard to all safety requirements.
It is interesting in our new divided world to hear a response to a question regarding Cork Airport coming from Dublin Airport. It seems the business plans must come from Dublin Airport before we can hear them. Does the Minister agree that for lack of a small investment, in the order of €15 million, Cork Airport could have a navigational system which would allow planes to land even during fogbound periods? The lack of that investment hampers Cork Airport in its competition with Shannon or Dublin airports, if the three airports truly compete. Who makes such a decision? Does Dublin Airport make the decision, given that the Minister said all three airports must get together to discuss their business plans? Is it left to Cork Airport alone? If Cork Airport has no cash, assets or certainty about the source of its money, how can it decide on a practical measure——
The Deputy has gone well outside the limits of his colleague's question, which was purely statistical. We have heard several questions about developments in Cork Airport.
I beg the Ceann Comhairle's leave to ask the Minister to reply to the questions I have asked.
I have been more than open with the Deputies this afternoon. I am disappointed that Deputy Ryan is trying to trivialise the matter.
I am not trivialising the matter.
This is a case of serious business planning to split one organisation into three. The three parts must be party to the discussions. That is reasonable and sound. I do not have the answer to the Deputy's technical question and am not going to guess it. In my response to the initial question I said that the diversion rate of 1% at Cork Airport is well in line with international norms.
