Wednesday, 19 October 2005
Dáil Éireann Debate
79. Ms O. Mitchell asked the Minister for Transport if he has received the business plans from three State airports to date; if not, if he views the immediate completion of such plans as a priority; his views on whether the airports cannot adequately respond to future demands and adapt to changes within the aviation industry in the absence of such plans; and if he will make a statement on the matter. [29709/05]
Minister for Transport (Mr. Cullen): In keeping with the provisions of the State Airports Act 2004, the board of the Dublin Airport Authority, DAA, 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 September last year and in line with the framework provided by the 2004 Act, these two authorities will, in due course and subject to operational and financial readiness, own and operate their respective airports, once sufficient distributable reserves are available to transfer the relevant assets.
Both the Minister for Finance and I must be satisfied as to the sate of operational and financial readiness of the Shannon and Cork Airport Authorities before the assets of the airports are vested in those bodies. The formulation of comprehensive business plans by the boards will be a key aspect in evaluating operational and financial readiness. The three airport authorities are continuing to work on preparing their business plans, with the DAA co-ordinating the process. In this context, a range of issues needs to be considered, including the unsustainable cost base at Shannon Airport, the recently announced charges determination for Dublin Airport by the Commission for Aviation Regulation and the optimum mechanisms for the financing of the new terminal in Cork.
These are complex issues which the airport authorities must consider carefully and I have not imposed any artificial deadlines on the business planning process. Since the establishment of the new authorities last year, all three airports anticipate record traffic this year, with passenger numbers likely to exceed 18 million and 2.6 million at Dublin and Cork, respectively, while Shannon is expected to reach the 3 million figure for the first time. Even in advance of full autonomy, it is clear that the new boards for Shannon and Cork, in conjunction with the DAA, are bringing a new impetus to developing and growing their airports, with growth this year expected to be over 30% at Shannon and close to 20% at Cork. Both these airports have the potential to build further on this success in the light of what is best for their particular business and their regions.
Ms O. Mitchell: I thank the Minister for his reply. Will he agree that we are now at an absolutely critical juncture as far as aviation is concerned? There is a complete lacuna as regards the restructuring of the various State airports. The Minister says he is not placing a deadline on the business plans. Will not this just allow the type of drift we have at the moment to continue? I am sure the Minister recognises that the Dublin Airport Authority does not know at this time the type of debt it will have to carry forward, either from Cork or Shannon. It does not know whether it will have to carry the debt from the hotels. Already, it has admitted that it cannot build a terminal because the increase in the charges allowed will be less than what it asked for.
Is the Minister going to look for another bidder to provide the terminal, given that he has picked one that cannot guarantee delivery? Will be insist on business plans being produced by the airports? Is he going to make a decision on the hotels? In short, is he going to make any decision in respect of Dublin Airport, which is at a complete disadvantage now that it faces an open skies policy?
Mr. Cullen: I agree with the Deputy that there are complex issues surrounding the three State airports. However, we must not lose sight of the important fact that all of the airports are showing record growth at the moment. That is fundamental to their futures, particularly for Cork and Shannon, with Shannon due to reach the 3 million passengers mark for the first time, while Cork will show a throughput of more than 2.6 million this year.
As regards the Deputy’s second last question, it does not necessarily follow that if somebody else is building the terminal, he or she is in a better position. The Commission for Aviation Regulation still determines the charging regime. No private person interested in constructing a terminal at Dublin Airport can do so unless it is profitable. He or she is in it for business reasons and this is significant.
Mr. Cullen: I assure the Deputy that no one has given me any indication that the current rate of charges at Dublin Airport can be sustained. We now have the determination by the Commission for Aviation Regulation. That clearly has implications and is being studied by the board of the Dublin Airport Authority in conjunction with officials from my Department. The process of the airports separating is well under way.
I cannot make a decision before the proposals are submitted to me for consultation with the Minister for Finance. I am aware of the issues that Dublin Airport Authority is dealing with and it is working extremely well. That should be put on record.
As regards the new boards in both Cork and Dublin, the three boards share a high degree of confidence that the outcomes will be very good. Importantly, the progress they have made this year on the core issue indicates that they are growing enormously in traffic throughput numbers, which justifies confidence that the projections for the future will be more than sustainable when we are in a position to separate.
Ms O. Mitchell: I accept that Dublin Airport is working well and that the new board is trying to work well but it is faces unbelievable disadvantages. I forgot to mention the fact that the authority now faces the possible re-evaluation of its credit rating, which will further disadvantage it. Will the Minister not accept that aviation in Europe faces a new open skies policy, with airports, airlines and all aviation authorities looking at new routes and new airports? The only country not in a position to do that is Ireland. All our airports are in the position that they literally do not know what the future has in store for them. It appears that no one is making decisions. It is very unfair, particularly for Dublin Airport, which is the national airport, to be disadvantaged in such a way.
The DAA is not supposed to make policy. It is supposed to be given direction by the Minister, who should govern and decide on an aviation policy. The authority is expected to operate at the moment in a vacuum and this is completely unfair. It is absurd to say that the authority is doing a good job when it cannot make any decision.
Mr. Cullen: I reject absolutely what the Deputy has said. Having attended a couple of European Council meetings on transport, with Ireland being very much to the forefront, I can confirm that this is one of the few countries with an absolutely clear view on open skies. That is led by the decision that I made in office——
Mr. Cullen: I did not interrupt the Deputy. In less than 12 months in office, I made a decision on aviation, in conjunction with the Government, that no previous Ministers in 20 years had made. The Deputy might disagree with some of the decisions. That is her right. However, the decisions have been made with absolute clarity on the development of the airports and the structure of Aer Lingus for the future. There is no question about this. These matters are all in play and are being worked on.
Mr. Cullen: ——and that is why Ireland is best positioned to capture open skies with the transatlantic routes. We do not even have to look just to the transatlantic routes, we should also be looking at the Middle East——
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