Written Answers. - Air Services.

Wednesday, 9 October 2002

Dáil Eireann Debate
Vol. 554 No. 5

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  1260.  Mr. Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for Transport  Information on Seamus Brennan  Zoom on Seamus Brennan   the progress to date on the rescue plan for Aer Lingus; his plans for the future ownership of the company; and if he will make a statement on the matter. [16677/02]

  1261.  Mr. Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for Transport  Information on Seamus Brennan  Zoom on Seamus Brennan   if he has satisfied himself that steps taken to date sufficiently safeguard the future of Aer Lingus, with particular reference to routes available, passenger carrying capacity and overheads; and if he will make a statement on the matter. [16678/02]

  1288.  Mr. Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for Transport  Information on Seamus Brennan  Zoom on Seamus Brennan   the progress which has been made to date in identifying an investor for Aer Lingus and the restriction in the shareholding which he is imposing on a new investor and in the longer-term future; and if he will make a statement on the matter. [16705/02]

Minister for Transport (Mr. Brennan): Information on Seamus Brennan  Zoom on Seamus Brennan  I propose to take Questions Nos. 1260, 1261 and 1288 together.

I am pleased to note that, barring some unforeseen events, Aer Lingus is on track to make a profit of around €40 million this year compared with its original projection of losses of €27 million in the survival plan. This is a reflection of the significant progress made to date in implementing a wide range of measures designed to return the company to profitability. It also reflects the clear and committed efforts of the board, management and staff in addressing the serious situation which faced the airline in 2001. I want to put on record my appreciation of all their efforts.

However, I must stress that the competitive and changing nature of this industry require the airline to continue to focus on cost reductions and efficiency improvements. In this regard, the airline is embarked on a further series of cost cutting measures which are essential to its future performance potential. Unless this effort continues [1314] unabated and the airline builds up its reserves, it will remain vulnerable to market forces and particularly to unexpected economic and other external shocks.

There has been considerable pain for staff in adapting to the new situation. I am optimistic, however, given the new focus in the airline combined with the lower cost base and greater flexibility, that the airline will be in a better position to respond to market opportunities which may arise. We have seen clear evidence of this in the fact that despite the difficulties of the past year, Aer Lingus has commenced operations on five new routes with a further four planned to commence from the end of October 2002, all from within existing resources. I am assured that the company will continue to monitor opportunities for new and profitable services going forward.

In addition to lowering fares for the leisure market, the airline has recently announced a further major reduction in the cost of air travel to benefit business travellers to the tune of €65 million. Aer Lingus advises that this will involve the provision of a product to its customers at a price they are prepared to pay for a service better than its competitors in terms of quality, punctuality and airport locations.

With regard to the future ownership of Aer Lingus, the Deputy will be aware of the previous Government's decision in October 2001 to facilitate private sector and staff investment in the company to support its future development provided the survival plan was fully implemented. In the context of the survival plan, a framework was agreed between all parties last December in relation to an increased staff shareholding. I am hopeful that talks in relation to an ESOP term sheet can be successfully concluded in the near future.

My primary concern in recent months has been to see a viable flexible Aer Lingus taking shape which is able to compete in the volatile and changing aviation market. In the near future, I will be looking at the funding requirements of the airline taking account of the Government decision on investment in the company. I will be meeting the board later this month to review the airline's performance.

  1262.  Mr. Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for Transport  Information on Seamus Brennan  Zoom on Seamus Brennan   when it is expected the second terminal will be constructed at Dublin Airport; if a decision has been taken on the management of the terminal; the total estimated cost of the project; and if he will make a statement on the matter. [16679/02]

Minister for Transport (Mr. Brennan): Information on Seamus Brennan  Zoom on Seamus Brennan  The concept of a second, independent or competing terminal at Dublin Airport has been mooted by a number of interests in recent years and the new programme for Government provides for an examination of such a proposal and to progress it if the evidence suggests that it would deliver significant benefits.

[1315]I believe that the most practical way forward at this point is to explore the pros and cons involved and to test the viability of the concept by canvassing the market to which end my Department has already made a widely publicised call for expressions of interest from interested parties. This call for expressions of interest provides an opportunity for proponents of the concept of a second, independent terminal at Dublin Airport to outline what precisely they have in mind, how it would work in practice, and possible approaches to addressing the regulatory implications for the transparent pricing of airfield facilities.

We have asked for these ideas and proposals to be submitted by 31 October and I intend to have the responses professionally accessed and make recommendations to the Government on this issue before the end of the year. The current exercise is not a tender process but rather an informal canvass of the market for ideas which will assist me in determining if the concept of a second independent or competing terminal would deliver significant benefits. The responses received will also enable me to determine what further actions I may need to take to allow this concept to be further progressed, including the possible initiation in due course of a formal public tendering process for the provision of such a facility.

  1263.  Mr. Naughten  Information on Denis Naughten  Zoom on Denis Naughten   asked the Minister for Transport  Information on Seamus Brennan  Zoom on Seamus Brennan   if he has satisfied himself regarding the adequacy of Dublin Airport to meet passenger requirements and at the same time maintain adequate safety standards; and if he will make a statement on the matter. [16680/02]

Minister for Transport (Mr. Brennan): Information on Seamus Brennan  Zoom on Seamus Brennan  Following the completion earlier this year of the new terminal extension, Dublin Airport now has capacity to handle up to 20 million passengers per annum. This compares with an estimated throughput of just more than 15 million passengers for this year. This expanded capacity will ensure that not only will adequate safety standards be maintained but also that passengers using Dublin Airport will enjoy a higher degree of comfort than heretofore.

In the area of safety, Aer Rianta informs me that a sub-committee of the board of the company is specifically responsible for safety standards at each of the three State airports and the company operates to all prescribed safety standards as set out by the Irish Aviation Authority.


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