Pat Breen (Clare, Fine Gael) | Oireachtas source

I welcome the opportunity to contribute to the debate. It is a parochial issue for me. I was disappointed that Deputy Pringle criticised US military traffic through Shannon Airport. This business has passed through the airport since the Second World War and has generated significant revenue for the people of the region and I am supportive of this. The United States and the airport have developed a strong relationship over the years and it is important to acknowledge the contribution that has been made by that country.

Deputy Patrick O'Donovan, my good colleague from Limerick, suggested the airport should be rebranded as Limerick international airport. The Shannon brand is famous all over the world and changing the name would be a bad idea at this stage because this is a good brand. No matter where one goes, people have heard of Shannon Airport, and it is important to build on the brand, which has given so much to the region over the years.

I pay tribute to the Minister and his commitment to developing the aviation industry. The industry is worth €4.1 billion annually and it supports 26,000 direct jobs and 16,000 jobs in the supply chain. It is significantly important in generating economic activity, particularly given the fact we are an island nation. Having well connected air access is critical, particularly in boosting inward investment and tourism. For the first time in 20 years, the Minister has published a draft aviation policy and this will play a major role in ensuring we maximise the benefits of the industry and the role it can play in our economic recovery over the next number of years. He is presiding over the most radical overhaul of our airport infrastructure, which is in stark contrast to his predecessors. The indecision of the previous Government regarding the enactment of the State Airports Bill 2004 stymied the industry. This was particularly true in the case of Shannon Airport.

The establishment of Shannon Group will facilitate the development of core and non-core aviation business at the airport and adjacent to the airport, where there is a substantial land bank which can be utilised to generate more aviation-related activity. Setting the airport free from the control of the DAA has allowed for the rebirth of the innovative and enterprising spirit that marked the early years of its development and, in only 15 months, the transformation has been remarkable. An air of confidence has returned and the airport's international credibility has been restored. The pro-tourism budgetary measures introduced by this Government, especially the abolition of the travel tax, have contributed significantly to the airport's return to profitability. I commend both Ryanair and Aer Lingus on their positive response to the abolition of this tax. The airport's traffic has increased significantly over the past number of years and it returned to profit in its first year of independence, which is remarkable.

Historically, Shannon Airport had a strong share of the transatlantic market, but when the open skies policy was introduced it lost a significant share of the market. I am delighted that the new airport authority is working hard to win back this business. Last year transatlantic traffic increased by 18% and new routes to Chicago and Philadelphia were introduced. This growth will accelerate this year, given the return of year-round Aer Lingus services to New York and Boston using new narrow-bodied Boeing 757 aircraft. This will increase capacity and tourist numbers in the country, particularly from the east coast of the United States. United Airlines, in particular, and Delta Airlines should also be commended as they provide a year-round service, with United Airlines increasing the number of flights into the airport by 90 this year.

I was delighted to represent the Government in the absence of the Minister at the launch of the Boston service earlier this year and I have not witnessed such confidence at the airport among staff and tourists for a number of years. One will notice this confidence every morning in the airport. Airport management is also making significant strides in expanding its short-haul network. The addition of eight Ryanair routes was a major boost, and five of these routes - to Berlin, Fuerteventura, Krakow, Paris and Warsaw - will be retained this winter, which will double the airport's capacity during that season. Aer Lingus Regional has also bolstered its commitment to the airport, and a new route to Bristol will bring in 200,000 passengers before the end of the year.

I expect management to continue to build on the growth it achieved last year. There is a dynamic board under the chairman, Ms Rose Hynes, and we are fortunate to have secured the services of Mr. Neil Pakey as chief executive officer. He has huge experience, as he has transformed Liverpool and other airports. He is an asset to the Shannon Group. The most important people at the airport are the staff, because they are determined to make it succeed, and their efforts must be commended. What the management and staff have achieved in only one year as an independent airport is remarkable, especially when this is benchmarked against other European airports. According to Airports Council International, almost half of Europe's airports were loss-making last year, at a time when the numbers using air travel had increased. Airports in countries that have been hit hardest by the recession, such as Ireland, Greece, Portugal, Spain and Cyprus, are enjoying the greatest recovery in the aviation sector. I suspect the reason for the increased demand is that low-cost operators are using these countries. Ryanair is a model in this regard.

It is important, therefore, that Shannon Airport continues to expand its short-haul network and to pursue a two-airline strategy, which is important. Competition between Ryanair and Aer Lingus is the key to ensuring the airport does not become over-reliant on one airline, and I am pleased that one of the key proposals in the aviation policy is that the State will continue to pursue such a strategy, which is important. A scenario cannot arise again similar to that which occurred in early 2010, when the airport was deserted because it was over-exposed to one airline. Thankfully, that has changed, and the mood is different.

The advantage of the formation of the Shannon Group is that it will allow the region to refocus on maximising its potential. In the early years of the airport's development, the late Mr. Brendan O'Regan recognised the need to expand the infrastructure around the airport, and the pioneering initiatives undertaken at that time included the setting up of an industrial estate, a model that has been replicated in many other countries, such as China. I visited such a development in Shenzhen. Most Chinese delegations that travel to Ireland want to visit County Clare, not because of its beauty but to see how the Shannon free zone worked. They also take in the Cliffs of Moher, which is important for tourism. Shannon Development was set up to manage the world's first industrial free zone. It was the only regional economic development agency and it would be remiss of me not to acknowledge the contribution made by the management and staff of Shannon Development down through the years. They pioneered and delivered a number of significant initiatives and their contribution to the development of our region should never be forgotten.

The Shannon Group will have access to the property assets and strategic lands, including the land banks, adjacent to the airport. This is important because it will allow the group to push ahead with the development of an international aviation centre of excellence. The Shannon region has a strong international reputation for aviation-related business, with up to 30 companies involved in aviation-related industries located there. Two of our largest maintenance, repair and overhaul, MRO, companies are based at Shannon Airport - Shannon Aerospace and Transaero - and the University of Limerick provides an aeronautical engineering degree course, which ensures a stream of highly qualified graduates is available. International students have also been attracted to the region, given its reputation for excellence.

We also have a strong international reputation in aviation leasing and Ireland is one of the leading players in the industry, on which we want to build at Shannon. With nine of the world's largest aircraft leasing companies based in Ireland, it is estimated that 3,000 aircraft - 50% of the entire global fleet of leased aircraft - are managed here. Avolon which in four years has become one of the top global leasing companies was founded by a Clare man, Mr. Domhnal Slattery, in 2010. I hope we can further exploit opportunities in this area and hope the Minister of Finance will create more opportunities in the budget in this regard.

In my capacity as Chairman of the Oireachtas Joint Committee on Foreign Affairs and Trade, opportunities often arise to meet CEOs of airlines and aviation companies in general and I am aware that many airlines are discussing developing routes to Shannon Airport. Airlines make money when their aircraft are in the air. They can avoid long inspection delays at US international hubs by using the US pre-clearance facilities available at Shannon Airport, which means that when flights arrive in the United States, they are classified as domestic airline flights and land at domestic terminals. This is a very attractive option for airlines from the Middle East and Asia, in particular. There is potential to develop further business, especially on the cargo side, at Shannon Airport if the US pre-clearance facility were extended to cater for freight. If the airport were in a position to provide cargo pre-clearance facilities, it would be in a stronger position to compete for this business. I ask the Minister to pursue this possibility with his US counterparts when he is next in Washington DC.

Like many speakers, I am concerned about the existing, retired and deferred pensioners of the Irish airlines superannuation scheme, IASS, under section 33 of the Bill, now section 43. While the expert panel has published its recommendations, including that Aer Lingus and the DAA make additional contributions to plug the €780 million shortfall in the scheme, there remains considerable concern among the scheme's members that, without an amendment to this section, their future benefits will be undermined. Many speakers have raised this matter. There are approximately 5,000 deferred members of the scheme, workers who left Aer Lingus and the DAA under the various redundancy schemes and spent 20 to 30 years working for these companies but who have not yet reached retirement age. They would have reasonably expected that when they reached retirement age, they would have receive the pension deferred for them when they left the company. They are very concerned that this may not be the case.

This section has been designed to facilitate implementation of proposals that emerge from the negotiating process to resolve the funding issue. The main contention is that, without amendment, the section could give wide-ranging powers to employers to transfer members, without consultation, to a new scheme. Concerns have also been expressed by many in the Shannon region and County Clare that the trustees of the scheme could make amendments to provide for the cessation of benefits and contributions by all members and their employers. The staff and pensioners have told me that their pensions have already been depleted owing to a number of factors. They fear that if total power is transferred to the IASS employers and trustees, their situation will deteriorate even further. Like other speakers, I ask the Minister to amend the section to address these concerns in order that there will be no confusion about the intent of the section and to clarify that it is not being introduced to undermine the members of the scheme.

As Chairman of the foreign affairs and trade committee, I meet airline CEOs, particularly from non-EU countries, and the issue of fifth freedom of the air rights is regularly raised with me. Fifth freedom rights would apply where non-EU airlines were allowed to pick up and drop off passengers at Irish airports en routeto the United States. I very much support the recent call by Professor Jim Deegan, head of the department of economics and director of the national centre for tourism policy studies at the University of Limerick. In response to the publication of the national aviation strategy, he prepared a paper on behalf of the Shannon Airport marketing consultative committee proposing that the Government prioritise the awarding of fifth freedom rights to Shannon Airport. The airport is well placed, has the facilities, is not overcrowded and would be a great hub for many long-haul carriers to land there, use the pre-clearance facilities and travel on to the United States. Professor Deegan's contention is that it would help to redress the economic imbalance between Dublin and the remainder of the country and complement the development of international aviation services at Shannon Airport. I concur with his views and ask the Minister to consider them.

The liberalisation of rights should not be extended to all Irish airports because extending fifth freedom rights to Dublin Airport would probably undermine the operations of the national carrier, Aer Lingus, in Dublin. It is important that we stimulate business at the other airports. Dublin Airport does not need these rights because it has sufficient business and is operating close to capacity. However, if these rights were transferred to other Irish airports, including Shannon Airport, it would benefit the national economy and play a significant role in assisting the new airport group at Shannon to grow its transatlantic business, both passenger and cargo.

Today marks a very important day for Shannon Airport. The passage of the legislation will end the uncertainty that hindered the airport's development from 2004 until 2011. Shannon Airport is strategically the most important piece of infrastructure in the region, underpinning thousands of jobs in its industrial and tourism hinterland. We have seen the positive impact of Ryanair's increased service from Shannon Airport and how busy the airport is in the mornings. There has been an impact on tourism in County Clare. Tourist numbers have increased in Kilkee, at Loop Head, Spanish Point, Ballyvaughan and Killaloe and this is directly attributable to the increased connectivity with Shannon Airport. The Wild Atlantic Way has been a great success for the west coast and was a very cheap project because the route along the beautiful coastline was already there. All it meant was the commitment to erect additional signs and have various points along the route to attract tourists to the entire region. Last year 18,000 people visited the newly opened Loop Head Lighthouse which this year, with the Cliffs of Moher, is one of the strategic points along the Wild Atlantic Way. It is a tremendous success for tourism on the west coast from County Donegal to County Cork.

Cork Airport also has a very important role to play and it is important that the two airports work together, although they must also compete. We are very lucky to have two transatlantic gateways into Ireland, a small country of 4 million people. I visited the Czech Republic this year and Prague, one of the most beautiful cities in Europe, does not have a year-round transatlantic service. Our two direct transatlantic links, through Dublin and Shannon airports, are extremely important. We should preserve them and hold onto what we have, ensure Irish carriers serve both airports and attract other airlines from the United States and the Middle East to use the pre-clearance facilities available here.

Given the determination of the management of Shannon Group, I have no doubt that the region has a bright future. I wish it well. I thank the Minister for his commitment to the region. Without it and were it not for the fact that he was direct, straight and got the business done, we would still be in limbo.

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