Oireachtas Joint and Select Committees
Thursday, 11 May 2017
Seanad Committee on the Withdrawal of the United Kingdom from the European Union
Engagement with Representatives of the Transport Sector
I remind members to ensure that their mobile phones are switched off. We are delighted to welcome today's panel of speakers. On behalf of the committee, I welcome all of those who have come today: Ms Anne Graham, chief executive of the National Transport Authority; Mr. Barry Kenny, from Irish Rail, and all the way from Washington DC, Mr. Sean Kennedy, senior vice president of Airlines for America, which represents a range of airlines, both freight and passenger across the US. They are all very welcome. We have conducted a number of meetings to date and we will have many more across a range of sectors.
This morning we will focus mainly on transport issues and the impact Brexit will have on the transport sector. What we say to everyone who appears before the committee is that we are keen to hear practical, imaginative solutions that we can put into place and include in the final report, which is coming down the tracks ever so quickly, and I am starting to get a little nervous that someone will want me to be involved in writing it.
Before I invite the witnesses to speak, I must read a short note on privilege and I ask them to bear with me for a few moments. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make them identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her, or it identifiable.
As those present are aware, we will have to suspend this session on time today due to the address by former Commissioner Barnier to the Joint Houses of the Oireachtas. This is a momentous day in the entire Brexit process so it is an appropriate one on which to have such an important session starting off the day. I have decided to take the three witnesses in the alphabetical order of the organisations they represent so I will go first to Airlines for America. I invite Mr. Kennedy to make his opening remarks.
Mr. Sean Kennedy:
I thank the Chairman and committee members for inviting me to participate at this hearing. My name is Sean Kennedy and I am the senior vice president of global government affairs at Airlines for America, A4A. A4A is the trade association representing the leading US-based passenger and cargo airlines. Our members carry approximately 90% of all US passenger and cargo traffic and include American Airlines, United Airlines, FedEx, UPS, and Atlas Air.
I will begin by expressing my appreciation for the opportunity to address this committee. I have worked in both Houses of Congress in Washington, as well in the White House under President Barack Obama. I thought health care was a challenging issue, but Brexit puts health care in the halfpenny place. This committee is tackling the implementation of an incredibly complicated and comprehensive issue that will affect all of Ireland. The range of hearings the committee has held and the countless hours of preparation involved in the work are impressive and are a testament to the committee's solutions-based approach to governing.
Discussion of airlines and air traffic has become a pretty straightforward topic. This is largely because virtually everyone has travelled by air, and at this point takes for granted that it is available to them. My father was 27 years old before he took his first flight. My first flight was when I was five years old. It was a transatlantic flight. Each of my children flew within months of their birth. Air travel is now akin to mobile telephone service, something that was initially a luxury, but is now something woven into our culture and relied upon every day.
My written testimony offers data on the economic impact of commercial aviation for Ireland. Some key statistics are that aviation drives €4 billion of economic activity in Ireland, 4% of its gross national product. Ireland receives 12 million passengers each year from the United Kingdom, and almost three million passengers from the United States. Each day, 30 flights leave the US bound for Ireland. Those travellers have seen their fares - adjusted for inflation - go down 26% since 2000. It is no wonder that Dublin Airport broke another record for transatlantic passenger volume last year.
I do not need to spend much time characterising the significance of air travel between Ireland and the United Kingdom. Multiple carriers in both countries serve the market, offering a wide array of flights. The air bridge between the Ireland and the UK is a critical aspect of their cultural, business, and family ties.
Air services are exchanged globally through hundreds of bilateral and multilateral international aviation agreements, without which airlines would not have the legal authority to operate. This system for exchanging aviation rights internationally has been the status quo for decades. In light of this unique system, Governments have historically carved out air services from trade agreements, like the WTO General Agreement on Trade in Services, GATS, agreement. Air services between the US and the EU are based on the 2007 US-EU open skies agreement, which liberalised the transatlantic aviation market, meaning no restrictions on the number of flights, capacity, pricing or market entrants for flights between the US and Europe. This agreement provides the legal foundation for airline alliances, such as Star, SkyTeam, and oneworld, which includes Aer Lingus. The vast majority of our travellers fly on one of these alliances, either directly from the US to continental Europe, or from the US to the UK and then on to other countries, including Ireland. Airlines within an alliance coordinate - with government approval - on routes, schedules, and capacity. This yields more frequent flights spread throughout the day, with better-timed connections for travellers. Competition between alliances keeps fares low.
The United Kingdom is critical to international air transport. Each year, 14 million passengers fly between the US and the UK, representing a third of total US-EU traffic. Over half of those passengers, some 7 million, are flying to or from other member states, using the UK as a stopover. When the UK formally leaves the EU in March 2019, it will no longer be part of the US-EU open skies agreement or the European single aviation market. So on the first day of Brexit, US airlines will no longer have the authority to fly to the UK, or fly through the UK to the EU 27. The same will hold true for Irish airlines.
I noted earlier that other industries, such as agriculture, telecom, or financial services, have a WTO fallback position that allows them to operate in the absence of a bilateral agreement. Airlines do not. Air services are specifically carved out of the WTO. The industry would have to dust off bilateral aviation agreements dating as far back as the 1940s and operate under outdated restrictions which would include limitations on the number of flights and the number of carriers. This would trigger cuts in air services between the US and the UK, and the UK and Ireland. In short, these antiquated agreements do not reflect the reality of what the aviation market represents today. Additionally, the US-EU open skies agreement facilitated the emergence of transatlantic airline alliances, which offer greater connectivity. Government approval of these alliances hinges on a fully open transatlantic market, one that will no longer exist on day one of Brexit. Another complication is that airlines generally sell tickets about a year in advance. The industry needs confidence that it can continue selling tickets to the European market, to the Irish and to the UK, starting in March 2018.
Where does this leave us? At the start of my remarks, I noted that air travel has become akin to cell phone service. I suspect that all of the Senators' constituents assume that, on day one of Brexit, they will still be able to make calls to and from the UK without interruption. By the same token, they will assume the same for air transport. They will assume that they can still fly to the UK and that passengers from the UK can still come to Ireland. This begs for Government and the Senators here to take action now to provide legal certainty for their constituents.
There are two necessary steps to maintain international connectivity between the US, the UK, and the EU. The first is an open skies agreement between the US and the UK, which Airlines for America, A4A, is actively pursuing with both countries. The second step is an EU-UK agreement that will allow access and connectivity between the UK and Europe. This would lead to the continuation of an aviation market that allows continued competition and avoids unnecessary regulation of commercial decisions.
I recognise that Senators have much to do in a very short period of time in finding agreement across industry sectors and with other Governments about Brexit. A major disruption in airline service between the US, the UK, and the EU would wreak havoc for all sides. As an island nation with a critical air bridge to the UK, Ireland is uniquely exposed. As Senators know, there is increased discussion of transitional arrangements to limit the immediate impact on member states by the exit of the UK from the European Union while a future arrangement is being defined. These arrangements will be targeted at those industries most severely impacted. Aviation falls squarely within those goals, and we urge the Irish Government to make this industry a priority.
The severe disruption of air travel from the UK to Ireland should be a disturbing thought to all the Senators. A transitional arrangement between the EU and UK would ensure that the air bridge between the UK and Ireland remains in place and that US airlines can continue to provide the vital link between Ireland and the United States. The US airline industry appreciates the Seanad's leadership in tackling these issues and working on behalf of the Irish people, and we appreciate the opportunity to speak here today. I look forward to the Senators' questions.
Ms Anne Graham:
I thank the committee for the invitation to attend. I understand that the committee wishes to focus today upon the impact on transport of the withdrawal of the United Kingdom from the European Union. To assist me in dealing with the committee's subsequent questions, I am joined by Ms Anneliese Jones, public transport regulation manager with the National Transport Authority.
Before dealing with the specific area of focus, I would like to set the context by providing a brief overview of the remit of the National Transport Authority in the provision of public transport services. The remit of the National Transport Authority is to regulate and develop the provision of integrated public transport services - bus, rail, light rail and taxi - by public and private operators in the State, to secure the development and implementation of an integrated transport system within the greater Dublin area, and to contribute to the effective integration of transport and land use planning across the State. In addition to its statutory responsibilities, the National Transport Authority has various arrangements with the Department of Transport, Tourism and Sport to discharge functions on its behalf. This includes the assignment of responsibility to the National Transport Authority for integrated local and rural transport, including provision of the rural transport programme. The National Transport Authority is therefore an agency that implements Government and departmental policy in line with its legislation. The Department of Transport, Tourism and Sport will play a key role in managing any change in legislation or regulation required for the management of cross-Border public transport services.
The National Transport Authority is responsible for securing the provision of public transport services through two specified mechanisms, public service contracts, where services cannot be provided on a commercial basis, and the licensing of public bus services, which are operated on a commercial basis. The main relevant legislation is the Dublin Transport Authority Act 2008 and the Public Transport Regulation Act 2009, as amended by the Vehicle Clamping Act 2015 and the Public Transport Act 2016.
I would like to now deal with the specific areas of focus raised by the committee. On cross-Border Rail services, Northern Ireland Railways, operates the Dublin to Belfast service in partnership with Iarnród Éireann. There are currently eight services per day from Monday to Saturday in each direction, with five services in each direction on Sundays. The distribution of the revenue and costs of the service are agreed between both parties. This arrangement can continue post-withdrawal of the UK from the EU.
Cross-Border bus services are regulated at an EU level under Regulation (EC) No 1073/2009. The National Transport Authority is the designated competent authority to issue authorisations and control documents - journey form books, formerly known as waybills - and to authorise cabotage operations under this regulation. The Department for Infrastructure in Northern Ireland is the competent authority for Northern Ireland. Currently all bus and coach traffic to and from the UK is regulated by Regulation (EC) No. 1073 2009, on the common rules for access to the international market for coach and bus services. This regulation sets out the categories, applicable circumstances, requirements, and procedures to issue authorisations and control documents to enable international travel within the EU. As part of the procedure to evaluate an authorisation, explicit protections are given regarding competition between such a service and any comparable service provided under one or more public service contracts.
The regulation also sets out the circumstances under which cabotage services are permitted. These are limited, as cabotage is only permitted as part of an international service, provided that cabotage is not the principal purpose of the service and cannot be first, a transport service meeting the needs of an urban centre or conurbation or, second, a transport service meeting needs between urban centre or conurbation and the surrounding areas.
The Interbus Agreement has been suggested by the UK as a possible replacement for EU Regulation 1073. It applies to international carriage of passengers by road by means of authorisation, occasional services and unladen journeys of the buses and coaches concerned with these services between a non-EU member state and an EU member state. It does not apply to national services, the use of buses and coaches designed to carry passengers for the transport of goods for commercial purposes or to own-account occasional services. The following provisions within the Interbus Agreement would require clarification, if it was agreed as the proposed replacement agreement: the evidenced-based rational for granting or refusing an application; inclusion of own-account transport and the grounds upon which an operator could temporarily be denied access to a territory and the maximum duration of such a suspension. The authority would have serious concerns regarding the imposition of the Interbus model on the domestic market as that would render the PTR Act defunct, with the result that the authority could not regulate competition between commercial providers in the public interest based on the demand or potential demand for services, as is currently the case. The PTR Act 2009 has created a level playing field where a diverse and vibrant commercial bus sector, with a growing number of commercial operators holding route public bus passenger licences.
On the impact of a hard border, the introduction of a hard border between Northern Ireland and the Republic of Ireland would have a very significant impact on cross-Border public transport services as it would be impossible to deliver reliable journey times for passengers. The growth in cross-Border bus and rail services would be significantly curtailed if not reversed following the imposition of custom checks at the Border.
On taxi regulation, the regulation of the small public service vehicle industry is Ireland is covered by the Taxi Regulation Act 2013 and the Small Public Service Vehicle (Consolidation and Reform) Regulations 2014. There is currently no provision for a licensed taxi driver in the Republic of Ireland to pick up passengers in their own jurisdiction and drop a passenger within Northern Ireland and vice versa. There is a requirement for primary legislation to provide for cross-Border taxi services.
On free travel, in April 2007 the all-Ireland free travel scheme for seniors resident in all parts of the island was introduced. The scheme enables seniors, 66 and over, resident in the republic to travel free of charge on all bus and rail services in Northern Ireland. Likewise, seniors, 65 and over, in the North can travel free of charge on bus, rail, air and ferry services participating in the free travel scheme in this State. The Northern Ireland authorities require that DSP customers wishing to avail of free travel in Northern Ireland should do so using a similar smartpass as used by their Northern counterparts.
I trust we will be able to answer any queries that arise.
Mr. Barry Kenny:
I thank the committee for the invitation to attend today to discuss the topic of the impact on transport of the withdrawal of the United Kingdom from the European Union as it relates to Iarnród Éireann. Our chief executive, Mr. David Franks, apologises that he is unavailable to be here today.
The chief executive of the NTA has detailed the regulatory environment for cross-Border transport services, including for the Belfast-Dublin Enterprise service. As detailed, Iarnród Éireann operates the Enterprise on a joint-basis with Translink, Northern Ireland Railways, and the agreements between the two companies are expected to be unaffected by Brexit. European regulations for passenger rights for international services, EC 1371/2007, govern Enterprise services under a number of categories, including compensation for delays, information, sales channels and assistance. As the Enterprise passenger charter agreed between the two companies predates these regulations, and the current charter exceeds the minimum standards set out in EC 1371/2007, customers will be unaffected should Brexit impact on the applicability of these standards. However, there exists the potential for very real and negative impacts on the operations and future of the Enterprise subject to the model of Brexit the UK chooses to pursue. As detailed by Ms Graham, a hard border impacts on journey time and service reliability negatively. As well as the weekend, leisure or business traveller or tourist, this impacts also on daily commuters. Iarnród Éireann operates a daily commuter service from Newry to Dublin, in addition to the Enterprise service, and demand for such cross-Border travel has increased in recent years.
Looking at hard border arrangements internationally is instructive. At the EU frontier between Bulgaria and Turkey, passengers are required to exit the train and visit the passport office for entry into Bulgaria and vice versa. Passport control is then conducted on board the train, following which there is a customs inspection. Russia to Finland sees passport control and custom checks carried out while the train is moving, although the return leg sees the train stop at the Finnish passport control and customs station. Passengers cannot leave the train until they have cleared customs. In North America, Amtrak services which cross the US-Canadian border are subject to inspection by US and Canadian law enforcement officials. Delays can occur due to customs and immigration procedures. Inevitably, therefore, a hard border will lead to a worsening in journey time, service uncertainty and restrictions which will impact on cross-Border travel and commuting and the all-island economy. There is also the potential for a requirement for station modifications to accommodate any customs or immigration activity.
A second consideration is the ambition of Iarnród Éireann and Translink to continue to improve the Enterprise service and the role European Union funding could potentially play. The decision in the 1990s to invest in the Enterprise service by both Governments, and supported generously by the European Union, predated the Good Friday Agreement, but represented a statement of intent by the EU and Irish and UK Governments in the strengthening of cross-Border links. Over the past two years, the mid-life refurbishment of the original Enterprise fleet and the upgrade of the Boyne Viaduct in Drogheda were both financed through the European Union’s INTERREG IVA programme, which was managed by the Special EU Programmes Body, SEUPB, with support from the Department of Transport, Tourism and Sport, DTTAS, in Ireland and Northern Ireland’s Department for Regional Development. Both Iarnród Éireann and Translink have ambitions to enhance the Enterprise service further, through fleet expansion to increase the service from every two hours to hourly, and by investing in infrastructure to improve journey times. The EU’s INTERREG and PEACE funds have supported cross-Border programmes in the past and it was anticipated that support would be sought from the EU for further enhancement of the Enterprise. While a hard border does not automatically imply that the UK could not continue to support such programmes, it would be complacent not to be aware of, and to alert the committee to, the potential risk to our ambitions for the Enterprise.
While there will be one land border between the EU and the UK post-Brexit, there will of course be two railway land borders, with the Channel Tunnel also providing a land link. At a European level, there are also technical considerations on interoperability, market access and technical standards, as well as passenger rights and funding, governed by EU regulations. We have liaised, and will continue to do so, with European colleagues to understand and address areas of common concern as the model of Brexit emerges.
I would also draw the committee’s attention to the fact that Iarnród Éireann is the port authority for Rosslare Europort. Rosslare Europort is the closest point from the southern part of Ireland to the UK and the European Mainland. The port is a hub for all the major RORO passenger and freight services operating in the southern Irish Sea and continental routes. Rosslare Europort is Ireland’s second busiest in terms of ship visits and unitised freight and is designated as one of only five ports of national significance in the national ports policy. A hard Brexit will impact on the operation of the port. It is likely that dwell times in ports will be longer for both passenger and freight traffic. We expect we will need to redesign port layout and traffic flows to deal with longer queues. For example, the distance between the berth and the immigration and customs post for incoming traffic is crucial. It is likely they will have to be moved further away so that traffic backed up onto the ship does not prevent us from loading the ship as quickly as possible to facilitate a quick turnaround for shipping customers. Funding is essential for any physical changes. There is concern that under current TEN-T designations, Rosslare Europort may not qualify for infrastructure funding. We would hope that given the unique circumstances arising from Brexit provision could be made to support affected European ports requiring modifications, including Rosslare. There is also the potential for an impact on traffic flows, with an increase in freight movements direct to-from continental Europe, rather than via the UK land bridge. This may result in changes to ferry service patterns to-from Rosslare Europort and we would work with our ferry customers to provide for this.
My presentation is a brief overview of the issues we in Iarnród Éireann are facing and considering in the context of Brexit and I welcome any queries members have on these matters.
I thank Mr. Kenny for his opening statement. I commend all three witnesses on their detailed and informative presentations. I feel enlightened but I know there will be some questions from my colleagues. As the list of members wishing to ask questions is lengthy I ask members for brevity and clarity in terms of their questions and to confine their contributions to less than one minute.
We have to be out of here at 11.15 a.m. at the absolute latest. I appeal for questions, not statements. If I ask a member to stop, please heed me. Unlike other days, I will have to be much stricter than I like. I call Senator Mark Daly.
Will the witnesses clarify that the free travel scheme will not be affected by Brexit directly? We might note in our report the requirement for primary legislation on the cross-Border taxi issue. I thank the witnesses for their presentation on the cross-Border bus service but that needs a detailed explanation as to what we can do for our report. All of the issues raised by that were concerning.
Regarding the open skies policy, the US-UK agreement is a concern to us. However, the UK-EU agreement is our main concern. I realise Frankfurt and Paris will try to steal Heathrow’s economic benefits. We need to press that because of the air-bridge issue. The committee needs to include in its final recommendations a draft of what is required in this regard. When the European Union says Ireland needs to be supported first before it moves on to the next element, air travel needs to be part of that because of the air-bridge between Dublin and London. I would suggest the committee writes directly to the Minister for Transport, Tourism and Sport after this meeting calling on this to be done. It is of such a pressing nature that we need to make sure it is on the agenda.
There is the issue of rail services and the amount of money the EU has put into that area. The Good Friday committee, of which I am a member, has made a draft recommendation on Brexit that all current and future EU funding should continue to be provided for Northern Ireland in the absence of an alternative agreement by the UK. That may be of assistance to the issue of rail services.
Are there details of any proposals the French rail service has suggested should be put in place for the channel tunnel? It would allow us to refer to it for Dublin-Belfast rail services.
As someone who uses the Enterprise rail service regularly to travel to and from work here, the report is stark when one looks at the potential implications for cross-Border rail services. There is significant demand for it to upgrade to an hourly service. This was re-affirmed by the Minister for Foreign Affairs and Trade recently in an interview with the Irish Independent. Belfast City Council has agreed on a motion for the adoption of an hourly and improved rail service between both of the main cities on the island. Will Ms Anne Graham and Mr. Barry Kenny elaborate on the engagement between Iarnród Éireann, Translink, the Department of Transport, Tourism and Sport and Department for Infrastructure in the North for offsetting some of those direct negative implications for workers, commuters, tourists and students who avail of this service? We are reaching a point where we need to hear at mid-government and Civil Service level of what exchanges are taking place to offset some of these negative implications?
I thank Mr. Sean Kennedy for his detailed presentation. He actually shocked me with the implications of Brexit for air services. I fly regularly into Heathrow Airport to get back to Dublin from Chicago. I am concerned by it as I use air miles. One can be re-routed by the airline because of what seats are available. The implications that there is no agreement when Brexit comes in are frightening. I am available anytime to meet with Mr. Sean Kennedy’s association, whether here or in Chicago.
There has been a 13% increase in traffic every year from the US since The Gathering. The tourism industry is vital to the country but we are in uncertain times with Brexit. However, Mr. Sean Kennedy said the open skies policy will stop. It is critical we have an open skies policy between Ireland, the US and Britain. I would be prepared any time to meet with Mr. Sean Kennedy’s people.
I thank the witnesses for attending today, particularly Mr. Sean Kennedy who flew in for this meeting.
Open skies exist between the European Union and the United States. Should the United Kingdom decide it does not want to be part of that, is there an opportunity for Ireland to become the European hub for transatlantic flights? There is a suggestion that British Airways has been examining that option with the development of the new runway in Dublin Airport and the availability of US preclearance facilities? If the UK is not subject to the legislation to compensate for delays, etc., that might also be an opportunity for this country.
It was said that legislation would be required for taxis to allow them to pick up and drop off across the Border. Will that require joint legislation between the UK and Ireland?
Expansion of Rosslare Europort is limited because of the amount of space available there. It was mentioned at a meeting in Brussels with Mr. Michel Barnier that there is an opportunity to develop a ro-ro port to bypass the UK because of the problem of tariffs in and out. Is there room in Rosslare for such a development or has the National Transport Authority looked at alternative ports? Has it looked at capital funding options from the European Investment Bank to develop much larger ro-ro and passenger services to mainland Europe from Ireland to squeeze the UK out of it?
What contingency plans have been put in place for public transport services which must go through the North, such as the Dublin-Donegal bus service? Every guest speaker has said we must hope for the best but prepare for the worst. I am assuming the worst-case scenario of a hard Border in this regard.
Mr. Sean Kennedy referred to landing slots. What about actual air space? In a worst-case scenario, could flight paths be affected by Brexit?
I welcome the witnesses. My comments are directed to Mr. Kennedy. The situation which could obtain and which Airlines for America is fearful of is shocking. Most people would be taken aback to hear this could happen. We take air travel for granted to a great extent in the western world. It just confirms the notion that there is nothing good about Brexit, even for the British who are landing themselves in a backward position. Everything seems to be going backward. It has been suggested that they are going back to the old empire, which hardly represents progress.
Mr. Kennedy has set out his case and concerns. What engagement has he had with our negotiators here, including the Minister for Transport, Tourism and Sport, Deputy Shane Ross, and other personnel? What level of response has there been in terms of where this lies in the pecking order? Significantly, Mr. Kennedy points out that timing is important and things will need to be clear by March next year if airlines are to sell tickets. It is not like this can go to the end of the process. It is a cliffhanger situation a year earlier than in other business sectors. What is being said at European Commission level? It sounds shocking, but then again this is so critical for the UK and Europe that common sense might prevail and something will be sorted out notwithstanding the current posturing, frayed nerves and high emotions. One imagines that this should be looked after in normal business.
I thank the three speakers for their contributions this morning. I differ from some here in that I believe the common travel area is almost certain to survive completely unchanged by the Brexit process. While I agree that we have to look at the worst-case scenario in respect of North-South and east-west transport and movement of people, I do not believe there will be immigration checks on the Border or across the Irish Sea. The Government of the United Kingdom will continue to have visa-free access for EU citizens, which will include Irish citizens. The common travel area will be made the subject of a special carve out. As such, I am slightly more relaxed than others here on that subject.
In respect of Mr. Kennedy's airline analysis, he is absolutely right to signal to us the consequences of a hard Brexit were Article 50 to mean the United Kingdom was leaving the European Union after two calendar years. However, we must remember that Article 50 provides that the actual departure date from the United Kingdom can be altered by an agreement negotiated within that time. I emphasise strongly that while Ireland would be especially affected by the collapse or evaporation of the European and US-EU air transport arrangements, I do not believe others are blind to that. As such, transitional arrangements will be negotiated on a front-loaded basis to preserve the air travel market which, as Mr. Kennedy says, is so important.
On the regulation of public transport, bus services probably constitute an issue. I do not predict that there will be a problem with rail services as long as the absence of INTERREG funding does not cause a major disruption to plans to expand the Enterprise service. However, there are serious implications for bus transport of having two jurisdictions not operating at least a co-ordinated system as happens within the EU. I would be very interested to hear whether negotiations, or at least discussions, have taken place North-South on an all-Ireland approach to this matter. Under the Good Friday Agreement, these are the kinds of things that can be dealt with by cross-Border institutions. Given that everyone is agreed that the Good Friday Agreement is going to continue, I see no reason we should not at least explore using cross-Border institutions, existing or new, to deal with these kinds of issues.
I thank the witnesses for attending. Having regard to what Senator McDowell said, I feel we have to prepare for all scenarios, including a hard Brexit. At what speed are the witnesses working on these issues with the Departments and other stakeholders? To be prepared, we must communicate and plan. What scenarios are being planned for and with whom are the witnesses engaging? Aside from discussions, what is being prepared in writing for what is coming down the line?
I welcome our guests. Is there not such a commercial imperative to maintain the status quoand is that not so important financially to stakeholders on all sides of the Irish Sea that it is what will happen? Is the commercial logic not such that it will happen? While I understand where Senator O'Sullivan is coming from and that Mr. Kennedy referred to planning for the worst case, I share Senator McDowell's optimism. Leaving that aside, will the desire to maintain commerce, business and jobs be so overwhelming and imperative that none of these things will be allowed to happen in the end?
One of the witnesses said in relation to Border posts that it might be necessary to alter railway stations. Is that a contingency plan that is in place now? Hard or soft, once there is a Border, immigration plans can be implemented at any time.
I think we all do. There were general questions as well as questions directed to specific individuals. I ask the witnesses to address the individual questions first and then to move to the general points. I will begin with Mr. Kennedy.
Mr. Sean Kennedy:
Some of the questions overlapped, so with the permission of the Chair, I will put some of the answers together. Senator Paul Daly raised a very good point in respect of technical issues. While we are happy to provide whatever technical assistance we can, this is less a technical challenge than a challenge of will. The underlying agreement is pretty simple and the Senator has probably seen what the text looks like. There are 121 countries with an open skies agreement and they all use pretty much the same text. The Senator can find that and has probably read it. The question is whether there is a will within the EU to take on the task as part of a transitional agreement. That is the biggest problem we have seen.
A few Senators asked how other countries were reacting and whether commercial logic would prevail, with everyone recognising we cannot go to the brink when it comes to commercial air transport. What gives us pause on our side is that Airlines for America has met representatives of member states and of the EU itself.
As one would expect there is a range of emotions in statements we have had. People from certain countries have said quite clearly that there will be no transitional arrangement and that aviation will be lumped in with pharmaceuticals, agriculture and automobiles. That gives us pause for the reasons I said earlier. Those industries can still operate in the absence of a law - in the absence of an agreement. Airlines cannot operate in the absence of a law or agreement.
I believe Senator O'Reilly asked if a rational reaction would occur. We are very concerned that the raw emotions that underlie Brexit may lead to the exact opposite of that. We have had very positive meetings with Irish officials. The reaction has been very consistent with what we have heard from members of the committee today. The notion of the air bridge is vital as everybody has recognised. Leaders continue to ask very smart questions; they are keeping us on our toes. There is a strong willingness to work with all sides.
Senator Craughwell asked if airlines would relocate operations to Dublin or to other countries. The challenge with that is that Heathrow is one of the largest airports in the world by volume. Given the billions of US dollars we have invested, they could be transferred overnight - I do not even think it would be over time. On day one of Brexit, what will the operations be? I assure the committee that the operations cannot move over at the flick of a switch, which is a challenge.
Senator Paul Daly asked about the impact on flight paths and plans in airspace. We do not anticipate Brexit will have any impact on things like over-flights. Flights could still go over Ireland; it is service to the country that would be implicated.
Senator Grace O'Sullivan asked what the remaining back-up plans were. We are not at the point to make commercial plans. We are still selling tickets and still encouraging travellers to buy with confidence. We do not want to be put in a position where we can tell customers that they should, perhaps, postpone their trip to Dublin or any point in Europe. We do not have a lot of contingency plans right now because we are still in an advocacy position urging the EU and the UK to reach an agreement.
I believe those are all the major points that have been raised. The Chairman might let me know if I have missed any.
Ms Anne Graham:
Senator Mark Daly asked about the free travel scheme. We do not believe it will be impacted by Brexit; the arrangements can continue. Regarding what the committee can recommend on bus services in particular, we would like to see whatever replacement agreement is put in place reflect EU Regulation 1073. That regulation works well and we would like to see the replacement agreement reflecting those requirements.
For commercial bus services, such as the Dublin to Donegal bus service, it will be up to the operator to put in whatever contingency plans are required based on whatever delays might occur on those services. If there are delays to their journey times, they would have to apply for amendments to their licences with the authority. Obviously, if there are changes to journey times for contracted services that may cross the Border, we may have to put in additional services that are more frequent and cover the services during the day. I believe the Department of Transport, Tourism and Sport is engaged in discussions about a replacement for EU Regulation 1073 for cross-Border bus services.
There was a question about taxis. Legislation from both sides of the Border would be required to allow for cross-Border taxi services.
From a regulatory point of view, we just have to manage whatever the agreed scenario is, including a hard border. Iarnród Éireann would be having more discussions directly with Translink on the hourly service than we would.
I think that covers the main issues that were raised for the authority.
Mr. Barry Kenny:
There are some interesting differences between the French-British Channel Tunnel operation and our own. It is, of course, a Schengen to non-Schengen country operation and as such there are existing border controls there. They take place before boarding the train at either end because it is essentially a single operation. The complication we have is that there are 36 stations along the Dublin to Belfast corridor, six of which are served by the Enterprise. As it stands today, a passenger can hop on a DART or a commuter train at a station such as Raheny or Skerries and get off that train at the same platform the enterprise calls at. There are complications there. While we sincerely hope that Senator McDowell is correct in his beliefs on a hard border, that it adds to the complexity of how this would impact.
At a European level much of the concern relates to the interoperability, the technical standards and the market access provisions that have been built up over the years to allow for a single European area for rail transport. Certain European companies operate and own rail franchises in Britain and vice versa. The concern there is obviously to maintain that type of market and to understand how the technical models would apply post-Brexit.
Regarding our engagement with Translink and other agencies, we have a regular Enterprise board, involving the chief executives of Iarnród Éireann and Translink, which addresses all strategic issues, including this. The Department of Transport, Tourism and Sport has also been very proactive in its approach. Earlier this year it hosted an all-island transport forum at which all sectors were able to contribute and directly feed into the Government's overall approach to Brexit. That has been reflected in the reports published in recent weeks. We will continue to do that. We will not be spending in terms of contingency at this point in railway station provision. We will await the ultimate decisions that are made. Through that joint enterprise board we will feed directly to our parent departments and very much have that common approach. Obviously the common travel area is at the heart of that.
We are working with the Department of Transport, Tourism and Sport on models which would allow a boost to investment in Rosslare Europort. Effectively all surpluses generated over the past 20 years have been reinvested there, but that has been relatively limited overall. We want to be able to expand and deepen berths so that we can develop the port further. The main option we are examining is to establish a private concession to operate the port over a long-term period. It would remain in our ownership, which would allow the concession to get the finance to invest further without impacting on the wider CIE group debt levels. In either a hard Brexit or a soft Brexit we will take that approach to expanding the operations at Rosslare.
On contingency, it is about timetabling for border checks. However, the examples I gave show that even where that happens, delays can occur depending on the situations that operators will encounter and that the customs and immigration officials will encounter.
I believe that covers the questions I was asked.
I thank the witnesses and the members for the efficiency in testimony and questioning this morning. We have covered a great deal. I am very grateful to all witnesses who have attended, particularly those who have travelled a considerable distance to be here. As we have said to previous witnesses this is very much a live process. The committee will continue to be active for the next six weeks. If the witnesses come across things that they believe are really relevant to our work, we would welcome submissions written directly to the clerk or to me, which will obviously be circulated to members and discussed in our subsequent meetings.
We will resume at 2.30 p.m. when we will hear from the former Tánaiste, Mr. Eamon Gilmore. I appeal to members to be here at 2.30 p.m. sharp.