Sean Barrett (Independent) | Oireachtas source

I welcome Mr. Ó Ríordáin to the meeting. I will try not to overlap with the questions raised by my colleague Senator Darragh O'Brien. While I acknowledge the difficulties around security the current arrangements in this regard from the customer point of view are a hassle. While the staff are very courteous security arrangements are making travel an ordeal. I believe security is in part responsible for the decline of Cork Airport. Previously, approximately ten flights a day operated between Dublin and Cork. Now, because of increased security at either end such travel is no longer worth the hassle.

I support what the daa is doing in relation to travel to the US.

I know US immigration must satisfy itself to its standards, but it seems strange to the passenger to go through the same procedures with Mr. Ó Ríordáin's people first and then when they go downstairs it starts all over again. Perhaps it could be harmonised a bit better.

On both projects that were mentioned, the chief executive's pay and the metro, that is just the way this country is. Like daa's chief executive, whom I applaud for his work, I had more as a graduate student in Canada than when I came to work here. It is a bankrupt county that we are trying to rescue and everyone from the Taoiseach down has taken cuts in pay. That must be explained to chief executives. We are not ready to move to a different situation.

Regarding the metro, the access to the airport from the west side, through the M50, is more efficient than people from that area going into St. Stephen's Green at vast expense, going through an underground thing and out to the airport. On the east side, the time from the Point Depot, as we used to call it, to the airport is 15 to 17 minutes away through the port tunnel. We have the access. According to the figures I see, the time from St. Stephen's Green to the airport is 17 minutes. One can do that substantially from both the west of the city and the centre. One must question a plan that involves running up vast amounts of debt to build a metro without proper cost-benefit analysis. We are in a country that is still borrowing and still has a heavy debt-to-GDP ratio. Those projects must be looked at much more stringently.

That is also part of Cork's problem. It built a terminal at the wrong time. I do not know whether it can be sublet or sub-contracted to anybody, but having two terminals in an airport that is declining in passenger numbers is the burden of debt on Cork. I wish Mr. Ó Ríordáin success in his efforts. However, I proposed in the Seanad that Cork should go the same way as Shannon and try to develop itself, but I found remarkably little interest in it in Cork. I imagine daa is trying to drum up interest for its committee. Do Cork people want to promote the airport as actively as people in the west do with Knock? Cork must make that decision itself.

On pensions, I note Mr. Ó Ríordáin's expertise in restructuring AIB, Bank of Ireland and so on. We said when the Governor was here that there seemed to be a tradition in Ireland that trustees could operate with impunity, giving added years and early retirements, as Mr. Ó Ríordáin has said. I do not know whether the same lax standards in banking and accountancy influence the way pension trustees carried on, but as Senator O'Brien said, given the massive increase in debt in a recent two-year or three-year period, we should have been on notice that the pension fund was in trouble. Some accountability by pension fund trustees, wearing their wider financial services hat, is a significant part of that.

The other point Mr. Ó Ríordáin mentioned was the regulation of the airport charges. I like what he is doing now rather than what happened in the past, because I recall academic conferences where the previous regulator, Cathal Guiomard, would give papers and so on. He was a pretty popular fellow among economists. His determination was previously overturned by ministerial order. One can imagine he is trying to referee a contest between daa and the airlines and somebody outside says, "I wish to award all the proceeds to one of the parties". In economics there is a serious fear that the producers always win and consumers never do. It is called regulatory capture. There was about a 40% increase a number of years ago. That has to do with the construction of the terminal. Some studies were done about the number of square feet per passenger, the amount of terminal space and so on. daa is working on those now to get them out of the system so that it can have a more harmonious relationship with the airlines. That is to everyone's credit at present because substantially low-cost airlines, which both Ryanair and Aer Lingus are now, can do deals in airports and there is one airport per million people all through Europe, which are not comparable with the ones in capital cities. Perhaps what daa has now is a low-cost terminal and people want more services.

It was being said that the Dublin charges were lower than any other capital city, while the airlines were saying they were higher than what they paid anywhere else as they negotiated deals and so on. It was the way the airport business changed. That was what Professor Alfred E. Khan questioned during Mr. Ó Ríordáin's term in Harvard, namely, why was it twice as expensive to fly from Boston to Washington as it was from Los Angeles to San Francisco? The second route is in the state of California, which had a low-cost aviation policy, as distinct from the feds, which did not at the time. That has also been changed.

Holding down the costs, as Mr. Ó Ríordáin says, is important. I would be more concerned at what the daa has said about the takeover of Aer Lingus. There is probably the expertise within the daa. What it has done in the north Atlantic and elsewhere is spectacular by comparison with Manchester, Birmingham, Edinburgh, Glasgow and Belfast. I see British Airways as never developing transatlantic routes except in Heathrow. It is a gesture of great faith and trust to say that if it got control of Aer Lingus it would not also divert the business into Heathrow. When I first started to write about this, Heathrow traffic was 35 million. It is now 72 million. There is always enough capacity at Heathrow for British Airways, but everybody else gets kept out through the slots system.

Mr. Ó Ríordáin mentioned the importance of the Aer Rianta International brands. Aer Lingus is one of those brands and what has been done in San Francisco and Washington is huge. I estimate that for a country larger than us, 5.3 million would be impressive. Scotland is doing about 400,000 passengers on the north Atlantic and Ireland is over 2 million. I would hold on to Aer Lingus rather than accept any guarantees regarding what British Airways would do. It is a brand worth having and an airline that has been performing very well. We were saying last week it carried 11 million passengers. That is about what Ryanair and easyJet had at the turn of the century. One has gone on to carry 65 million, the other is heading towards carrying 100 million. It is more difficult to do it now because the other two operators have vastly increased their capacity but it is not out of all bounds of possibility for Aer Lingus to develop well beyond 11 million as the two other airlines have done. I would strongly favour not having the British Airways takeover.

I do not know what IAG brings to the party. Its British end - its home market - is significantly overshadowed by easyJet. Iberia, the other part of it, never did much to develop Spain as a tourism destination. The charters were doing 95% of the market between the UK and the Canaries and so on. We should be looking for some dynamism to help the daa as a dynamic company to hold on to the Aer Lingus management brand, rather than selling it for what is a relatively small amount of money. I wish Mr. Ó Ríordáin well in all of his tasks and compliment him on being returned to office. A lot of people around this table will be trying to accomplish that within the next year or so. If Mr. Ó Ríordáin has any hints we will take them.