Adjournment Matters. - Shannon Airport Transatlantic Status.

Thursday, 11 November 1993

Seanad Éireann Debate
Vol. 138 No. 4

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Mrs. Taylor-Quinn: Information on Madeleine Taylor-Quinn  Zoom on Madeleine Taylor-Quinn  A Chathaoirligh, I appreciate that you have many calls and claims on the time allocated to the Adjournment and I am pleased you recognised that this is a matter of such significant importance that it may be raised this evening.

The situation in Shannon as a result of the Government's decision to change the transatlantic status of the airport is significant and there is much concern in County Clare and in the mid-west region regarding the fallout of that decision. I am pleased that the Minister is here this evening to answer a number of questions I will be raising in relation to the issue.

Since the decision there has been an examination locally in relation to the fallout in the region. There is particular concern with regard to the effect this decision will have on industrial development and industries in the area, not only in County Clare but as far south as County Kerry, as far as County Tipperary and indeed up to Loughrea in County Galway. There is concern in relation to the effects lack of direct flights around the entire year may have on the industries in these areas because they have relied in the past on the New York flight in the morning arriving [474] at Shannon to provide them with material. What is the future for those factories and similar industries who might have decided to set up industry in the region if the transatlantic status had remained?

Will the Minister and his colleagues in Government undertake an impact study on the economic and social fallout of this decision in County Clare and in the entire region? I am seriously concerned about this matter, that the Government undertook this decision solely in respect of the criteria relating to Aer Lingus and did not consider the overall situation in the region. The economics of the region were not considered in coming to a decision in relation to the status of Shannon. Arriving at the decision the Government was severely handicapped, as it had not considered the overall problem when it decided to change the status. That is unfortunate and it now behoves the Government to undertake an impact study on the potential fallout of its decision.

Another matter that arises is the overall impact of the change in the system occasioned by the 50/50 proposal under the amended bilateral agreement. Under this agreement, 50 per cent of scheduled flights are supposed to operate direct to Dublin and 50 per cent to Shannon and similarly with charters. There is concern in relation to this issue because automatically there will be an immediate loss to Shannon when this agreement is implemented. I gather the agreement can be operative immediately and will definitely be operative from the beginning of the next season commencing in April 1994.

Shannon has been getting direct flights, termed international flights. The airport and Aer Rianta, on arrival of a plane at Shannon, were paid international charges or international dues. As a result of the change, many of the flights now coming back through Shannon will be classified as domestic flights and there will be a reduction in the landing fees of over 80 per cent on 50 per cent of them. That will mean substantial loss of revenue [475] to the airport resulting in deep concern in relation to the revenue accruing to it.

In addition there is grave concern in relation to the catering services and the flight kitchens in Shannon which have been providing the catering facilities for transatlantic flights. There is now a question mark over their future, where they stand and what the situation is for those working in flight catering kitchens. Equally there is much concern in relation to the reduction in transit passengers in the shops at Shannon. There is a fear that there will be a serious fallout for these shops. On a general note, therefore, there is great concern in the airport regarding potential job losses in the immediate area of catering, shops and in baggage handling by Aer Lingus staff on the ground.

Regarding the flights themselves the Minister must clarify a number of issues, I especially refer to the bilateral agreement. A flight operating directly to Dublin, then to Shannon and from there to Boston or New York or wherever is known as a round robin system. Could the half leg from Shannon on to the USA be classified as a direct scheduled flight and could that half leg fall into the category of the 50 per cent? There is need for urgent clarification of this issue.

The biggest charter airline operating into Ireland last year brought in approximately 27,000 people, 20,000 of whom were brought to Shannon and 7,000 to Dublin Airport. If that airline charter facility is to continue it will operate under the new system and there would have to be 50/50 throughput between both airports, 13,500 people to Shannon and 13,500 to Dublin. Huge difficulties can arise in the charter business if this situation is implemented. Is the Minister in contact with the authorities in the USA to further review the system, especially in relation to charters, because I do not believe that the present proposal is viable? Furthermore, I do not believe that even Aer Lingus is happy that charter flights are getting this same facility or that this is being directed as a 50/50 operation. Effectively, by allowing charters [476] the 50/50 facility there will be further competition against Aer Lingus to the Dublin route and that is highly unsatisfactory. The situation needs to be clarified. We must know, for instance, if there will be a 30 per cent reduction in the number of people who will arrive into the mid-west region under the current proposal.

One of the issues of serious concern to the people in the mid-west is what type of monitoring system will be introduced by the Minister and his Department to ensure that there is a fair crack of the whip in relation to the arrival of flights. This matter has been raised with the Minister at a number of meetings, and I am raising it again this evening. The mid-west region does not rely on — and cannot depend on — the type of system that currently operates. There is a need for the Minister to establish an independent body to operate and monitor the type of scheduled and chartered flights that arrive in Dublin and Shannon to see that there is a fair crack of the whip. We are especially concerned that a promotional programme will be engaged in which could result in Shannon being bypassed. This is of great concern in the mid-west region. The Minister, in conjunction with the Minister for Tourism and Trade, should specially direct Bord Fáilte to undertake an active and strong promotion in relation to tourism to the west. It would be unfortunate if semi-State operations, such as Bord Fáilte and Aer Lingus promoted Dublin and the Dublin region to the diminution of the mid-west and the County Clare region. That is a matter of great concern and I ask the Minister to give an assurance that a special tourism promotion will be undertaken and that he will exhort Bord Fáilte and Aer Lingus to implement an active promotion. It is also incumbent on the Minister, with the Minister for Employment and Enterprise, Deputy Quinn, to ensure that there is active industrial promotion of this region.

There is great concern in the mid-west region and there is now an opportunity for the Minister to assure people they are not forgotten and that constructive steps [477] for active tourism and industrial promotion of the region will be taken to ensure no further jobs are lost. Further investment that would have been made should go ahead and there should not be a huge economic fall out from the Government's decision to change the transatlantic status of Shannon Airport.

Minister for Transport, Energy and Communications (Mr. Cowen): Information on Brian Cowen  Zoom on Brian Cowen  I do not accept that the social and economic implications for the Shannon region of the total package Aer Lingus and the Government intend to implement for Shannon are negative. I believe this is so for the change in the Shannon stop policy and I am certain it is so when other elements of the package are taken into consideration. If the energy and commitment of the people in the region are now channelled towards taking advantage of the opportunities for growth available to the airport under the total Shannon package, the implications will be positive, not only for wealth creation but also for jobs in the region.

I am equally certain the social and economic implications for Ireland and for Shannon would have been disastrous if the Government had not taken a decision earlier this year to rescue our national airline. That was the context in which the negotiations to change the Shannon stop policy took place. I will not repeat all the arguments why the Aer Lingus strategy had to be adopted in full by the Government. We have already had an extensive debate on this issue in both Houses of the Oireachtas and elsewhere. However I will put some relevant facts before the House.

Aer Lingus lost £12.9 million on its transatlantic operations last year. Without the changes proposed in its strategy for the future it would have lost £20 million this year. This was clearly unsustainable. Aer Lingus accounts for 70 per cent of north Atlantic scheduled services through Shannon. Without Aer Lingus the future of Shannon would be bleak. Let it also be said that without Shannon the future of Aer Lingus on the transatlantic route would be bleak. Aer Lingus [478] needs Shannon just as much as Shannon needs Aer Lingus.

With full Government support and approval Aer Lingus have put together an imaginative and progressive package for Shannon. For the first time Shannon will have its own transatlantic operation, based in and managed from Shannon. All Aer Lingus transatlantic services will stop and start at Shannon. The number of Aer Lingus transatlantic services will increase by 13 per cent from next year. There will be a year round daily New York service and a dedicated Shannon/New York service in the peak summer season. There will be no change in the current Boston service.

Pick-up rights for US carriers at Shannon to all points in Europe and beyond are guaranteed. US carriers have pick-up rights at Dublin to only one point in Europe which is outside the EC. Aer Lingus is examining ways of developing new business, including significantly lowering fares from the US in order to extend the peak summer season. It will work closely with local travel and tourism groups in the Shannon region. In addition other opportunities for the new low cost airline operation at Shannon will be exploited for other business in all markets, particularly in the off peak season.

Aer Lingus will base an extra aircraft at Shannon to operate a new early morning Shannon/Dublin service, greatly improving the service out of Shannon by providing new connections to six European and three provincial UK destinations. The Aer Lingus strategy for the future envisages replacement of the transatlantic fleet in 1995 or 1996. However because of the positive response from tourism interests in particular to the Aer Lingus plan, the company is now examining the possibility of accelerating its fleet replacement plans.

The renegotiation deal we made was excellent and is recognised as such by all fair minded people. The President of the Irish Airlines Pilots' Association wrote to compliment me and my officials on achieving the difficult task of reconciling the requirement to protect the survival and development of the Shannon area [479] with that of ensuring the viability of Aer Lingus. He went on to say:

We believe that the formula reached will prove the best foundation for controlled growth in both the tourism and business traffic markets on the north Atlantic for the foreseeable future. This provides the best solution for the Irish economy while protecting the ongoing viability of the Irish air transport industry.

It was no easy task to persuade the US authorities to forego the rights they automatically had under the old bilateral agreement. I travelled to Washington to meet the US Secretary for Transportation to impress upon him the importance for this Government of a vibrant Shannon Airport for the mid-west region. Following my intervention we obtained an early resumption of talks despite the heavy schedule of the US negotiators. What is more, we made a deal of which we are proud. Under it any US airline operating a direct flight into Dublin must also put one into Shannon.

In the plain terms used by one operator based in Shannon, there is a “kicker” in the revised bilateral agreement for Shannon. I am confident tourism and business interests in the region will avail of this to obtain the extra business Shannon not only deserves but needs to get a return on the huge investment in tourism plant which has been made in the region over the past few years. This investment was grant aided by the Government. We too have a stake in ensuring the future prosperity of the airport and the region.

In conclusion, I place on the record of this House my sincere appreciation to the staff of Aer Lingus for their sacrifices and commitment to ensuring the future viability of the national airline and Shannon Airport. I also thank the many tourism representatives who co-operated with Aer Lingus in finding new business opportunities for Shannon. Many more in the region could make a similar contribution and commitment. I appeal to them to do so now.

[480] Mar a deir an seanfhocal: “Gur ar scáth a chéile a mhaireann na daoine”. I am confident we can and will prove this for Shannon.

I will take the specific points made by the Senators and consider them in detail. I will respond to them all.

Mrs. Taylor-Quinn: Information on Madeleine Taylor-Quinn  Zoom on Madeleine Taylor-Quinn  Is the “half-leg” considered a transatlantic flight for the purposes of the books and for numbers? There is concern about that issue.

Mr. Cowen: Information on Brian Cowen  Zoom on Brian Cowen  I will get full details for the Senator.

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