Oireachtas Joint and Select Committees

Wednesday, 26 September 2018

Joint Oireachtas Committee on Transport, Tourism and Sport

Irish Aviation Authority: Chair Designate

9:30 am

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Before we begin the meeting I ask members to turn off their mobile phones completely as they interfere with the recording equipment. We now turn to our engagement with the Chairman designate of the Irish Aviation Authority, Mr. Michael McGrail. He is very welcome to the meeting. The purpose of today's meeting is to hear from Mr. McGrail about his approach to his role as chairman, and his vision for the company.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l)of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on 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 or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

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 House or an official either by name or in such a way as to make him or her identifiable.

Mr. Michael McGrail:

I am delighted to have been appointed Chair designate of the Irish Aviation Authority, IAA, three weeks ago by the Minister for Transport, Tourism and Sport, Deputy Shane Ross. I thank the committee for the invitation to provide an overview of my professional background to set out the challenges facing the Irish Aviation Authority as I see them and how I hope to support the chief executive, management and staff of IAA in coming years. I look forward to answering members' questions after my short presentation.

I have included a CV with the documentation sent to members. I was born in Belfast but have lived most of my life in Dublin. Following school, I obtained a commerce degree from UCD and then joined Coopers & Lybrand, now PwC, and qualified as a chartered accountant. In 1986, I was appointed a partner in the Irish firm with responsibility for establishing a corporate finance service. I then subsequently became partner in charge of the firm’s management consultancy service. In 1998, on the merger of Coopers & Lybrand and Pricewaterhouse to form PwC, I was appointed to lead the firms’ combined consultancy services. In these roles, I acted for many clients in the transport, telecommunications, financial services and food industry, including public and private corporates, State enterprises, Government Departments and bodies. In 2006, I retired as a partner in PwC. In 2010, I joined the Royal College of Surgeons in Ireland, RCSI, as director of corporate strategy. My responsibilities in RCSI include banking relationships here and in overseas locations, major infrastructure projects, investments, assessment of new education markets and the commercial aspects of overseas operations.

I have a passionate and continuing interest in aviation, which I believe can be a key enabler for social and economic betterment. This is particularly true for Ireland as an island with an open economy on the periphery of Europe where connectivity is crucial. It is this interest and belief that led me to apply for this position. I will spend a little time outlining Ireland’s role in the global aviation industry, in particular its significance to the Irish economy, the role of the Irish Aviation Authority within this industry, and where I see its current challenges.

As an island, we are far more dependent on aviation than many of our continental neighbours and trading partners. A recent report commissioned by the DAA indicates that the sector contributes €8.3 billion to our GDP, including aviation supply chain industries. The sector supports almost 30,000 jobs directly and a further 16,000 in the aviation supply chain, before considering retail jobs at airports and retail supply chain jobs. Jobs in the aviation sector tend to be highly skilled jobs, including engineers, pilots, air traffic controllers and financial services, but more than this, aviation is an enabling industry. Tourism is heavily dependent upon aviation, while reliable and efficient connectivity to the UK, Europe, North America and indeed Asia is now imperative for Irish business in the global economy. Aviation is therefore one of the vital cogs in the Irish economy – and this is one of the key reasons I was interested in this position.

Within this global industry, Ireland’s role is significant. Fourteen of the world’s 15 largest aircraft leasing companies are located in Ireland, with approximately 50% of the world's leased fleet being managed from Ireland, equivalent to 4,300 aircraft. This equates to a total value of US$125 billion. An Irish managed aircraft departs every two seconds across the globe. Europe’s largest airline, Ryanair, with 446 aircraft, is based in Ireland, while Aer Lingus, is growing as a transatlantic and European airline, as are Norwegian, Cityjet and Stobart Air.

All of our airports are important. Dublin Airport is now becoming an internationally significant hub - it handled 30 million passengers for the first time in 2017 and 216,000 commercial flight movements. Cork, Shannon and Knock international airports are also increasing passenger numbers, albeit at a slower rate. Ireland also has a strategic prominence in the North Atlantic in terms of air traffic management - 90% of all the air traffic to and from the US travels through our airspace, the busiest oceanic airspace in the world. Ireland’s significance in the aviation sector has been achieved through a combination of the appropriate regulatory and financial environment, Government policy which supports aviation, a highly skilled workforce, visionary thinking and strong aviation leadership. The challenge is to maintain this position while ensuring we continue to grow the industry and grow jobs while never compromising on our standards of excellence.

The IAA fills a key role across all of the sectors just mentioned. It is responsible for the management of Irish controlled airspace, the safety regulation of Irish civil aviation and the oversight of civil aviation security in Ireland. The IAA’s remit is to always act in the interest of public safety. The IAA manages Irish controlled airspace covering some 451,000 square km. Its air traffic management role includes the provision of operational services, engineering and communications in this airspace and the provision of the related air traffic technological infrastructure. The IAA is among the most efficient service provider in Europe and, despite the challenges of a significant growth in air traffic levels in the past three to four years, the IAA continues to offer a competitively priced, high quality service to its airline customers. The IAA had a record breaking year in 2017, handling upwards of 1.13 million flights. This includes flights taking off or landing at Irish airports, aircraft over-flying Ireland, and our north Atlantic communications service for transatlantic flights. This is an additional and important service that IAA provides to aircraft in the region of the north Atlantic called Shanwick, west of Irish airspace.

We are also responsible for the safety regulation of the civil aviation industry in Ireland. Safety is at the very heart of IAA’s operations; it is in essence our corporate mission and underpins everything that we do. The board and executive management foster a culture throughout the organisation where safety is paramount. At the end of August 2018, there were 1,422 aircraft on the Irish register of which 957 are large aircraft, overseen by the IAA’s inspectors. These aircraft are located around the world, from Ireland to Italy, Mexico to Mongolia and Russia. We licence 11,500 flight crew, 1,700 aircraft maintenance engineers, as well as air traffic controllers, training organisations, maintenance and parts companies.

Through its 689 staff across six locations, the authority ensures that Irish civil aviation operates to international and European safety standards and systems, in accordance with international agreements and protocols. In 2017, Ireland was ranked among the best in the world for overall civil aviation safety oversight in an annual ICAO, International Civil Aviation Organization, and EASA, European Aviation Safety Agency, ranking process – Ireland ranked second in Europe and fifth in the world, ahead of countries such as the UK, USA, Germany and the Netherlands. Indeed our air traffic management safety was ranked joint first among European states in 2017 in an annual CANSO, Civil Air Navigation Services Organisation, benchmarking process. Safety is an ongoing process, requiring continual monitoring and improvement. Continuing to improve safety standards and performance will be a key priority of mine as Chair.

The IAA is also responsible for security oversight. We audit and inspect civil aviation installations in terms of their compliance with national and international security requirements. This is also a high priority area; the IAA works closely with the Government, national security agencies and the airports to ensure the appropriate level of security is in place to protect passengers and cargo freight.

Although owned by the State, the IAA receives no funding directly aside from its initial share capital. Our revenues are generated through charges and fees raised from our regulatory clients and airline customers in respect of their regulatory and operating activities. The IAA is a profitable company. In 2017, it generated an operating profit of €33.5 million on a turnover of €193.4 million and paid a dividend to the State of €19.5 million from after-tax profits. The IAA has no debt and, assuming continued profitability, it has adequate cash to service its planned expenditure on our critical technological needs over the next five years. There are, however, financial challenges, in particular those charging structures which will require close monitoring.

I will discuss some of those challenges briefly, but first I will highlight some of the wider challenges which the aviation sector in Ireland faces. Aviation is a highly competitive and very mobile industry and must continually adapt and innovate to stay competitive. Dublin Airport, in particular, is competing with other international hubs, including London Heathrow, Amsterdam, Paris and Manchester, yet Dublin Airport is operating at near capacity. The timely development and optimal operation of the new parallel north runway is a crucial element to allow Dublin be competitive and maintain growth in the sector. Our leasing industry also faces competitive threats from emerging leasing hubs such as Amsterdam and Hong Kong. We must continue to offer an attractive location for aircraft leasing by ensuring that Government policy continues to support this sector of our economy as an attractive location for the type of skilled employees needed.

I will turn now to the specific challenges for the IAA. The first of these is the Government's reform of aviation in Ireland. This project will see the commercial air traffic management functions of the IAA separated from the safety and regulatory functions with the expansion of the existing aviation regulatory body. The separation process will present challenges for the IAA and our staff, but we are committed to delivering the project and are actively working with the Department of Transport, Tourism and Sport and the Commission for Aviation Regulation. Our focus is to ensure a smooth separation in accordance with Government policy.

Moving to Brexit, and given the apparent impasse between the UK and the EU, a satisfactory withdrawal agreement, transition period and future relationship is in doubt. Apart from the disruption for aviation and the travelling public, a hard Brexit would have a significant negative impact on our wider economy. The Department is carrying out scenario planning to ensure the minimisation of any negative consequences, and the IAA is working in close collaboration with the Department and other agencies on this. Innovation and technology play a key role in safe and efficient air traffic management, ATM. We are developing a new visual control tower and associated infrastructure at Dublin Airport. This investment of €55 million will be a state-of-the-art aircraft traffic management facility necessary to operate Dublin Airport when the new north runway is built.

Dublin Airport reached capacity levels this summer. There is an urgent need for the new north runway to be built to allow for traffic levels to grow with passenger demand. The IAA has been successful in keeping delays at Dublin Airport to a minimum, but I cannot overstate the importance and necessity of the new infrastructure. The IAA’s staff expertly manages up to 50 flight movements per hour on the single runway at Dublin Airport, almost one per minute at peak times. During August alone, the IAA safely managed 21,452 arrivals and departures at Dublin Airport, an average of 692 per day. Aside from Dublin, our en routecentre at Ballycasey Cross in Shannon has managed 233,000 flights to the end of August, with our North Atlantic communications centre managing 340,000 flights so far this year.We are on course for a record year, exceeding the 1.13 million flights managed by the IAA in 2017.

Up to 85% of the IAA’s revenue is subject to strict economic regulation under the requirements of the single European sky performance and charging scheme. Our revenues and costs are subject to detailed review by a variety of parties, including the national supervisory authority, the airlines, the European Commission's performance review body and the European Commission itself. We are nearing the end of a five-year regulatory control period for the years 2015 to 2019, referred to as reference period 2, RP2, while preparations for the next five-year period, reference period 3, RP3, from 2020 to 2024, are intensifying. The IAA has been one of the best performers across Europe in recent years, meeting and exceeding our targets in the key performance areas of safety, environment, capacity and cost. In practical terms, this means that aircraft flying in Irish airspace receive a high-quality service, with no delays and at one of the lowest prices in Europe.

We are concerned at the broad thrust of the European Commission's planning for the next regulatory phase, RP3. The focus of the European Commission, and its supporting bodies, is for lower costs. While this may be appropriate for some of the higher cost regions in Europe, this one-size-fits-all approach would be damaging for Ireland. If the European Commission pushes a cost reduction policy onto the IAA for the next five years, the quality of service and efficiency that the IAA offers its customers will suffer. The IAA’s costs are among the lowest in Europe. It will not be possible to go any lower. Given the significant increase in air traffic in recent years and the need to reinvest continually in technology and high-quality people, a cost increase for the IAA is required. Safety will always be our number one priority, but an appropriate cost allowance is needed to ensure that we can continue to be flexible, dynamic and efficient in the way we manage Irish airspace for the benefit of our airline customers. We are calling on the Government to support us in this area and to ensure that European policy does not punish those already best in class, as it were.

The IAA plays a key role in the management of air traffic in the strategically significant area of North Atlantic airspace known as Shanwick, west of Irish and UK airspace. Some 90% of transatlantic flights fly through this area and are managed jointly by the UK and Ireland under an agreement that dates back to 1966. The IAA is responsible for the high frequency, HF, communications to the aircraft while the UK carries out the air traffic management service. It is important that Ireland maintains its position of influence on the North Atlantic in the years to come. With changes in technology, the IAA needs to adapt and ensure the services we offer remain in demand. HF is in decline and it is important that the IAA replaces this service in the years to come with additional services to customers on the North Atlantic. In addition, there is a need to review and revise the 1966 agreement to ensure that the principle of joint service provision between the UK and Ireland remains intact.

The IAA has always stood for innovation and excellence, and this will not change under my stewardship. I have mentioned the new air traffic control tower at Dublin Airport. This is a very visual example of the IAA’s ambitions for the future. The IAA is also at the cutting edge of remote tower technology, and we are developing a state-of-the-art facility for the operation of Shannon Airport remotely in the coming years. We continue to work with our partners in Aireon, our satellite based surveillance company. Recently, the Aireon aircraft locating and emergency response tracking, ALERT, service commenced the registration of aircraft. This new service allows for the global tracking of aircraft registered with the service, something which has not been possible to date. This global service will be based in our centre in Ballygirreen, County Clare.

I must address the Aerospace Qualified Entity, AQE, report on aviation search and rescue oversight, the review of oversight of search and rescue aviation operations in Ireland, which the Minister for Transport, Tourism and Sport published last week. There are a number of recommendations in the report for the IAA to implement. We welcome all of the recommendations and look forward to working with the Department and the other stakeholders to deliver improvements to the regulatory oversight of search and rescue in the State. Continual improvement is a core philosophy in aviation safety management, and the IAA is committed to playing its part to deliver a robust oversight regime for search and rescue. The Minister has made it clear that he wishes all of the recommendations contained in the report to be implemented as soon as possible. This is now a priority for the IAA. An important priority for me will be corporate governance, including ensuring the proper functioning of the board. As the board evolves through reappointments and new members, it will be crucial to have the right balance of skills, views and diversity to support the chief executive, management and staff. We will work with the Department and the Public Appointments Service to deliver the appropriate balance.

As chair of the IAA, my role is to lead and support the board and the executive in their efforts to deal properly with all of the challenges ahead and in their aspirations to achieve and exceed the organisation’s goals. It is my strongly held view that Ireland should continue to support and encourage the aviation sector, exceed normal expectations, and position Ireland as a true centre of excellence for aviation. Through this approach, the aviation industry will be able to provide more high-quality jobs, taxes and wealth in the economy, and to maintain and grow Ireland’s positive reputation in the aviation sector.

The IAA will remain a central element of our success. It is committed to continuing to drive high standards across the sector, working always in the interests of public safety. As chairman of the IAA, I will prioritise this effort and hope to make a contribution to the aviation success story in Ireland.

I thank committee members very much for their attention and I am happy to take questions.

Photo of John O'MahonyJohn O'Mahony (Fine Gael)
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I thank for Mr. McGrail for this thorough presentation. He seems to be eminently qualified for the task he has been asked to take up. I realise he does not yet have his feet under the table, but there a few topics on which I would like him to expand.

Mr. McGrail mentioned the phenomenal growth of Dublin Airport, with record numbers of 30 million passengers last year. Connectivity and tourism are hugely important and the figures have been very good. There is a suggestion Dublin Airport is becoming more of a hub, as projected and expected, but is there a need for an analysis of the number of passengers passing through it who are not coming into the country but just passing through the hub? Is this responsible for the huge growth in numbers, rather than boosts to the domestic economy? Mr. McGrail might expand on that suggestion.

There are huge concerns about the implications of Brexit. Mr. McGrail mentioned the negative disruption for the aviation sector and the travelling public a hard Brexit would bring. What are the practical, short-term implications if there is no deal? Will the open skies policy come to an abrupt end? Mr. McGrail might also expand on that issue.

Mr. McGrail referred to reform of aviation regulation in Ireland and the separation of commercial air traffic management from the safety regulatory functions and the challenges that would bring. He might expand on that point.

Mr. McGrail also mentioned the search and rescue service report published by the Minister last week. On a brief reading, it is suggesting the Irish Aviation Authority take control of all safety decisions in the area of search and rescue. Up until now, I understand the Department of Transport, Tourism and Sport, the Irish Coast Guard and other statutory bodies have been involved. Will Mr. McGrail expand on the issue? I note that the Minister wants the report to be implemented in full. What challenges does this present? Does the IAA have the resources to take on that function?

Mr. Michael McGrail:

I will try to answer the Senator's questions in order.

The IAA is passive when it comes to the passenger numbers that pass through Dublin Airport. That it a priority and responsibility of the Dublin Airport Authority. Having said that, I think passenger numbers have been increasing, particularly since the acquisition by IAG of Aer Lingus. Numbers passing through the airport in transit have been increasing. I do not have the exact numbers, but I would think it represents less than 10% of the 30-odd million passengers who pass through the airport. It is certainly something I can provide for the committee.

Photo of John O'MahonyJohn O'Mahony (Fine Gael)
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I thank Mr. McGrail.

Mr. Michael McGrail:

If there was to be a hard Brexit, the United Kingdom would becomed a third country and both the air traffic management and air safety regulations that govern not only the United Kingdom but also Ireland and the rest of Europe would fall away. There would be immediate practical issues from midnight on 29 March. Having said that, we know that the Department is working on practical solutions and looking at a number of scenarios. The IAA is working closely with it to see how these scenarios would work out. However, neither the IAA nor the Government can control this. It is very much up to the European Union and the United Kingdom.

Photo of John O'MahonyJohn O'Mahony (Fine Gael)
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Is there a practical danger that, from 29 March, flights to the United Kingdom would halt?

Mr. Michael McGrail:

There is a danger that would happen. The Senator might have read the publications from the UK Government on Monday which indicated that would be the case. That is the factual position, but a lot will be done between now and then and it would not be in anybody's interest for it to happen.

Photo of John O'MahonyJohn O'Mahony (Fine Gael)
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I am also thinking about this issue as a member of the public. I understand a lot is happening behind the scenes and that that is a worst case scenario.

Mr. Michael McGrail:

There is general passporting of traffic and safety within Europe. If a member leaves the European Union, it leaves the passporting approval process.

When the IAA states the separation of commercial air traffic management from the safety regulatory functions will pose a challenge, the process of separation is simple. There will be a need to establish a new company which will take on the air traffic management business. There will be a need to ensure the terms and conditions of all staff will be retained, as the Government wishes. The policy is clear. The challenge will be getting it done in a way that will ensure the separation will run smoothly. Everybody is clear on what has to be done; it is just a question of getting it done.

The IAA wishes to have recorded its condolences to the four families who lost loved ones in the helicopter accident mentioned in the Aerospace Qualified Entity, AQE, report. The report lookis at the current situation and looks forward. It highlights some confusion, as the media reported, although that might be a slightly strong word to use, but there was uncertainty about the roles among a variety of agencies and the report suggests the IAA would assume overall oversight of search and rescue operations. The IAA is working with the Department and would be happy to do so. On the Senator's point, the IAA would need additional resources to ensure it could carry out that role.

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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I welcome Mr. McGrail before the committee. He seems to have more than adequate experience of financial and corporate governance for the role and says he is passionate about and has a continuing interest in the aviation sector. Does he have any relevant experience in aviation? He is to be chairman of a board. How many vacancies are there on the board?

Does the board contain the relevant expertise in corporate governance, finance and accountancy? Health and safety and aviation expertise are also very relevant to this board. As the incoming chair of the board, does Mr. McGrail believe that all expertise requirements are being met?

One question concerned the separation of the functions of the Irish Aviation Authority, IAA. Mr. McGrail replied to my colleague on the challenge this poses. This issue will require legislation. Has there been any indication in Mr. McGrail's engagement with the Department of what stage this legislation is at or when we can expect it to come before the Oireachtas? I understand that construction of the visual control tower needed for the second runway at Dublin Airport has commenced. When does Mr. McGrail envisage its completion? We are still awaiting legislation on the appointment of the independent competent noise regulator.

Mr. McGrail stated that Dublin Airport is operating at capacity. How will we meet the demands on Dublin Airport over the next three years and more? Given the time it will take to get legislation through and for the Dublin Airport Authority, DAA, to appeal the noise conditions, we are looking at a window of two to three years. How can the IAA, working with the DAA, ensure that we can manage the increase in passenger numbers that is expected and likely over the coming years?

Mr. McGrail referred to the ongoing review concerning the third reference period, RP3, and revenue generation. He says there is no room for improvement because the IAA is the best in the class. I suppose it is always welcome to be the best in the class. He calls on the Government to support the IAA in regard to European policy. Will that come down to the Minister for Transport, Tourism and Sport, Deputy Shane Ross, engaging with his ministerial counterparts at the Council of Ministers? Given that the Minister is certainly not the best in the class for attendance at Council meetings or engagement with his counterparts, is Mr. McGrail confident that the Government will be able to support the IAA in pursuing its objectives?

Mr. McGrail alluded to search and rescue services in reply to the previous speaker and he is right. The report identified a lack of clarity around who has the designated responsibility for search and rescue. I am conscious that the report did not concern a recent awful tragedy and loss of life. We remember the families who were bereaved by that awful loss of life this morning. We need to ensure that there is clear demarcation in the future. From reading the report, my understanding is that it is the responsibility of the Department of Transport, Tourism and Sport to ensure that the necessary legislation is put in place to remove any ambiguity and uncertainty. The Minister talks about making sure the recommendations of the report are implemented as soon as possible. I am glad that is a priority for the IAA, but it is also a priority for the Department of Transport, Tourism and Sport. That Department needs to be forthcoming on when it will publish the necessary legislation. Has it given any indication on when that legislation will be published for this committee to scrutinise and implement?

Brexit is the key issue in aviation. We are all well aware that we are currently working under the open skies policy which has enabled significant growth in the aviation sector. This is contributing to economic growth and the growth in tourism in recent years. As Mr. McGrail noted, Brexit is worrying. The British papers this week demonstrated the challenges we will face if the UK leaves the open skies arrangement. I understand that earlier this year project 2050 referred to the International Civil Aviation Organization, ICAO, freedoms, specifically the third and fourth freedoms which would enable freedom of movement and ensure connectivity between the UK and the EU 27. To Mr. McGrail's knowledge, how near are we to ensuring that those freedoms will be implemented in order that we retain connectivity post Brexit?

I wish to raise the issue of safety standards, a matter of which I was not overly aware. A large proportion of critical parts of aircraft are sourced from the UK. Components of key importance to keeping planes in the sky can be used until 29 March. If there is no agreement on safety recognition and quality, those components will no longer be useable. Is Mr. McGrail aware of intensive ongoing negotiations to ensure that recognition of safety and quality control standards is dealt with before Brexit?

Mr. Michael McGrail:

I will try to answer all of those questions in turn.

Aer Lingus and other European airlines were my clients as a partner in PricewaterhouseCoopers. I was also involved in the establishment of Shannon Aerospace at Shannon Airport. I did a lot of work in the air maintenance and airline sectors. I believe I have the expertise to assess what is happening in the aviation sector. Having said that, it is a very specialised sector and I will be using the expertise of the IAA and the Department to ensure that I understand the issues. I am not sure if that answers the Deputy's question, but I do have experience in the sector. I am happy to provide the committee with details of my work in the aviation sector if that would help.

The memorandum and articles of the board require nine board members. At the moment there are four, plus me as a designate. Subject to the committee, I would be the fifth board member. We are short four board members.

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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How long have those positions been vacant? Mr. McGrail may not be aware.

Mr. Michael McGrail:

I am not fully aware. I would say they became vacant during 2018. I know that a process is ongoing with the Public Appointments Service, and an appeal for recruits has been made. The closing date for applications for board membership could be this week. As in other State boards it is the role of the Department of Transport, Tourism and Sport to appoint these people, but the Department will work with me in looking at the applications. In answer to Deputy Troy's question on whether we have sufficient competencies, there is a certain limit when a board only has five members out of nine.

I would hope, as I said in my statement, that we would have additional competencies, especially in safety. That would be really important. That process is ongoing and I am assured - and was assured by the Minister on Monday - that the process will be dealt with in the coming months.

On the issue of the separation, I cannot tell the committee exactly when the Department hopes to introduce legislation. From my discussions with officials, they view this as something to be moved on quickly but I do not have a date. I should also say I have not asked on what date legislation will be brought forward.

With regard to the construction of a new control tower in Dublin Airport, the tower will be handed over to the Irish Aviation Authority, IAA, in 2020. It will then take approximately two years to make sure it is totally functional. The existing tower will remain and will be a backup tower. During that process, there will be dual operation between the two towers to ensure the new tower is operational.

On the larger question on what will happen in the next three years or so, the new runway is a DAA rather than an IAA project. I understand requests for tender for the runway contract will be issued imminently. I believe the runway will be operational within three years or so. Obviously, there are restrictions on the runway, to which Deputy Troy alluded. However, notwithstanding those restrictions, the presence of an additional runway will increase capacity for take-off and landing within Dublin Airport.

Deputy Troy raised RP3, which is the third reference period. I do not know if members have read the 2017 annual report of the Irish Aviation Authority. It contains a graph that shows the IAA's charges by reference to other countries. It is interesting that our charges are quite keen and lower than those applied in adjoining countries with similar labour environments, for example, the UK, France and Germany. Our issue is that while we can understand why the European Commission wants to control costs, the IAA and the Department believe we are doing well in that regard.

With regard to the negotiations that will take place in the European Commission, the IAA will be a part of that. The authority also has a strong relationship with the Department and joins with the Department in many of these discussions. From my discussions with the Department, I believe we will secure the support we need to put forward a strong case that Ireland is doing well but we need to be able to invest in all of our technology over a period. This means it would be difficult for us to sustain a reduction in our charges.

I will now turn to the issue of search and rescue and the Aeropace Qualified Entity, AQE, review of oversight of search and rescue aviation operations in Ireland. When I met Department officials on Monday, we spoke about that. Perhaps I should have asked the direct question, but I did not ask when legislation would be introduced. I know it is a priority for the Department. Prior to the legislation the IAA will work with the Department to ensure that we begin to get the resources required to fulfil the changed mandate for the IAA.

On Brexit, the Deputy is correct that there are two aspects to the process. There is the traffic management aspect within Europe. When the UK becomes a third country it obviously leaves that process. There is also the air safety aspect. The Department and the IAA are particularly aware of the importance of the UK, especially because Airbus, Rolls-Royce and Boeing have substantial facilities there, which at the moment are passported into Europe with parts coming into aircraft. We are all very much aware of that and it will form part of the discussions we will have with the Department in, hopefully, avoiding a hard Brexit. Was that the final issue the Deputy raised?

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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Yes. My point is that we need to have relevant expertise on the board of the Irish Aviation Authority. Mr. McGrail needs to hammer home to the Department and the relevant Minister that he is amply qualified in terms of financial corporate governance. However, from an aviation safety aspect, we need to have the right mix on the IAA board.

Mr. Michael McGrail:

Yes.

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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It is regrettable that the number of board members has been allowed to fall to such a low level. It is now a priority to ensure it reaches its full complement, including from a competency point of view.

Mr. Michael McGrail:

I thank the Deputy for that. I look at the four vacant places on the board as an opportunity. I fully accept that our task , working with the Department, is to ensure that we get the expertise we need.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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When was Mr. McGrail appointed to the board?

Mr. Michael McGrail:

I was appointed on 4 September.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Did he serve on the board before that?

Mr. Michael McGrail:

No.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I thank Mr. McGrail for his presentation in which he stated he had a passionate interest in aviation. What practical experience does he have in aviation? Deputy Troy asked a similar question. As Mr. McGrail did not outline his experience in the sector in his presentation or curriculum vitae, I ask him to furnish the committee with information in that regard.

Mr. McGrail stated that Ireland is ranked among the best in the world for overall civil aviation oversight. Has the IAA or anybody else produced reports on safety concerns raised by Ryanair pilots? When the pilots attempted to raise those concerns at the committee, they were prevented from doing so. Will Mr. McGrail outline what investigation or steps have been taken to examine this serious issue?

Mr. McGrail referred to the separation of the IAA but did not provide specific details. How will this process work exactly? Is there a timeline for achieving this?

Mr. McGrail may have answered my next question. Has it been confirmed that the IAA will assume responsibility for oversight of the search and rescue service? Is that what the meeting with the Department was about? Will Mr. McGrail provide details of those discussions? He also mentioned that additional resources will be needed. Did the Department give a commitment to provide additional funding in the event that the IAA takes over oversight of the search and rescue service? I would like further detail on that.

Mr. Michael McGrail:

I will supply details of my aviation experience to the committee. In terms of the rankings, in the footnotes to my presentation, I set out the sources of the rankings, which are independent. On the Deputy's specific question - she must accept that I have only been in this role for three weeks - from my discussions with the IAA, I believe that every complaint received by the IAA is assessed.

I understand there have been specific complaints from Ryanair and that they have been assessed. I do not have the detail of that at this stage but as chair I believe it would be critical that all complaints received in regard to aviation safety will be properly assessed and discussed. As I said, I do not have the specific details of that. I know complaints have been received but, as I understand it, they have been dealt with.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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That was precisely my point. Ryanair pilots were very much aggrieved that the safety concerns they had raised were not addressed. In his opening statement, Mr. McGrail said safety was a priority for him.

Mr. Michael McGrail:

Yes.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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That is why I am putting this question to him. Will he look into those complaints? If safety is a priority, will he consider meeting with the Ryanair pilots on the serious issues they have raised? The purpose of them trying to bring them forward to the Joint Committee on Transport, Tourism and Sport was because they felt they were getting nowhere with the IAA. If Mr. McGrail said in his opening statement that safety was a priority for him, and it ought to be, I am asking if he will investigate the concerns raised by Ryanair pilots and revert to us with a report on it.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Is the Deputy in order to ask for that?

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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Why would we not be allowed ask for an investigative report on safety issues raised by pilots?

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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I am not saying that. Is the Deputy in order to ask for it through this committee?

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I am not aware of anything that would block me from doing that. Is the Vice Chairman aware of anything that would specifically block me from asking for that?

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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I thought the Deputy might be pre-empting an issue for the chairman designate. Mr. McGrail may know more about this than I do. Is he prepared to handle this question?

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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Can I come in? I believe this is an unfair question for a chair designate. I have been involved in the aviation industry for more than 25 years. I have dealt with many Government agencies and Departments and in my experience there are hardly any, bar none, at the professional level of the Irish Aviation Authority, and I have been at the other end of the stick. The Irish Aviation Authority has a process through which it deals with all complaints from any pilot, and they go through that rigorously. In addition, the European Aviation Safety Agency, EASA, which is the European governing body for aviation that regulates the aviation authorities, audits the Irish Aviation Authority on a regular basis. If anybody has complaints about safety of aviation, they go to the Irish Aviation Authority. There is a process there that is internationally audited and checked out, but it is done from EASA. With respect, it is not for the chair designate to delve into that area. The question should be put in writing directly to the Irish Aviation Authority with a view to getting a reply from it. The Deputy would look to follow up on that then directly with the Irish Aviation Authority. That is my view.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I thank the Senator for his contribution but it is not for him to say either whether Mr. McGrail should investigate or be interested. Mr. McGrail said safety was a priority. I would not be raising the issue with him but for the fact that the Ryanair pilots feel aggrieved about their safety concerns. If there is any issue with safety, it should be thoroughly investigated and a report carried out. It would be remiss not to do so.

Mr. Michael McGrail:

I appreciate that. My only response is that, as I understand it, every complaint is investigated, reviewed and reported on within the IAA.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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We might have to look at inviting IALPA and others in again because if there is not a willingness to investigate the matter, that raises even more concerns.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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That is not true. There is an investigation of the matter. The Deputy is being very unreasonable and unfair. There is a process-----

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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The Senator does not speak on behalf of Ryanair pilots-----

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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I am not speaking on behalf of anybody.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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-----so do not attempt to say that they do not have concerns when clearly they do. He does not represent them.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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Absolutely I do not, and neither does the Deputy.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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If they have serious concerns, I am interested in hearing their concerns because it is a public safety issue.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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There is a process for that.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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If the Senator is not interested, that is another matter but I am.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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How dare the Deputy make assumptions about me.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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The member is out of order.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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The Senator does not represent Ryanair pilots.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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I never said I did.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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They stood before this committee. They were blocked from raising their concerns. They are entitled to raise their concerns. It is a public safety issue and there is an onus on us as members of a transport committee to hear them. That is precisely why I brought it up with Mr. McGrail, who said in his opening statement that safety is a priority. My question was-----

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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And he is right; safety is a priority.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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Yes, that is why I asked if any reports were conducted. It seems there were not any reports conducted. I also asked whether any steps were taken by the Irish Aviation Authority to examine these issues.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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The Deputy must understand that the chairperson designate has been in situfor less than a month.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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He is here to answer questions. I am sure he is quite happy to do that.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Yes, going forward, but today is not the day to expect "Yes" or "No" answers on a case study.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I have said I am quite happy for him to revert to me.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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Can I remind the Vice Chairman that the Irish Aviation Authority representatives were in here a couple of months ago and they answered those questions fully.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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Not at all. The Senator must not have been at the meeting.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Is Deputy Munster finished?

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I am finished now; tá mé críochnaithe.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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Mr. McGrail is very welcome. It is not my style to jump in the way I did but I felt quite concerned about some of the points raised and the attempt to put him in a particular position, which in my view was unfair. I wish Mr. McGrail well in his role as chairperson designate. If Deputy Munster leaves, I will wait until she leaves.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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Yes, I am. Continue.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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Good. I just do not want to be interrupted. I wish Mr. McGrail well in his new role, which is a challenging one. In my experience, the Irish Aviation Authority has been exemplary and is a stand out Irish authority in worldwide aviation. I said that publicly here in the past.

I have a couple of questions. Deputy Troy made a point about the board having only five out of nine members. That is a serious issue. I note from his curriculum vitae that this is an area in which Mr. McGrail has significant experience. It could bring into question some corporate governance issues when the board has just over 50% of its members. I urge, through the committee and Mr. McGrail, that those positions be filled as soon as possible. I am aware one person on the board, Geoffrey O'Byrne White, died suddenly in Cork a couple of months ago.

Mr. Michael McGrail:

Yes.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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That is very unfortunate. The late Mr. O'Byrne White used to be CEO of CityJet. He was a great guy.

I would like the committee to write a letter of congratulations to Eamonn Brennan, the former chief executive officer of the Irish Aviation Authority, who held that position for 15 or 16 years. He has been appointed director general of Eurocontrol, which is an incredibly significant position. That is an indication of the quality and calibre of people in the Irish Aviation Authority and that what they are doing on behalf of the country is recognised worldwide. Eurocontrol is one of the main aviation structures worldwide and, if it were appropriate for the Vice Chairman to propose it, it would be fitting if the committee would do that.

To get into some of the detail, Shanwick air space in the north Atlantic was negotiated during the time Eamonn Brennan was CEO of the IAA. It covers 90% of transatlantic flights and is very important air space for Ireland and the aviation authority for a host of reasons.

I understand that Mr. McGrail does not have his feet under the table yet, but when he does, will he provide us with some written feedback on the status of that? I ask him to outline some of the issues that could arise in the context of Brexit. This was previously British air space but was transferred to Irish air space a number of years ago. To call a spade a spade, it is a significant income earner for the IAA. In 2017, the authority contributed almost €20 million by means of a dividend to the Exchequer.

On Dublin Airport, I appreciate Mr. McGrail making the point about supporting the north runway at the airport. That is crucially important. I would urge all Teachtaí Dáil and Seanadóirí in Leinster House to move forward with the legislation as quickly as possible because the lack of same is holding everything up at the moment. We should push for that and get it through the Houses quickly. Obviously, we must debate it but we must not procrastinate. This is one of the key issues for Dublin Airport in terms of moving on with its plans, tendering for construction and so on.

Passenger numbers at Dublin Airport are expected to reach 31.5 million this year. Eight years ago, passenger numbers at the airport were approximately 20 million but, at the height of the Celtic tiger, the figure was between 24 million and 25 million. The current level of passenger traffic gives rise to safety concerns. Mr. McGrail may not be in a position to answer this question now but it is important to draw attention to the issue. Will Dublin Airport need to be slot restricted, as is the case in Gatwick, Heathrow and several other airports? Another issue is the fact that Aer Lingus and Ryanair account for approximately 80% of all passengers going through Dublin Airport and both are part of the European Aviation Safety Agency, EASA. With regard to the other 20%, airlines such as Etihad Airways are outside the Brexit space. I may be wrong but Brexit is not going to be such a significant issue. Flights between Ireland and the UK will not be grounded. Having said that, I would appreciate it if the Department would outline to the public, the airlines and all of those involved in aviation its scenario planning for Brexit. The airlines will have to make appropriate plans themselves but if they do not know the position of the Department, it will be difficult for them to do so.

I would value the view of the IAA on considering Baldonnel as a second airport for Dublin. There are two airports in Belfast and Glasgow. London has seven or eight airports although admittedly, London is at least six times bigger than Dublin. There are two airports in Brussels and we must at least start a debate on whether Dublin should have a second airport. Baldonnel is in south Dublin and is just off the M50. There is a Luas stop within five minutes of Baldonnel and the State owns the site. The possibility of Baldonnel being a second airport for Dublin, primarily for flights to and from the UK, was discussed as far back as 1999.

I ask Mr. McGrail to clarify the relationship between the IAA, AAIU, CAR and EASA. Where does the IAA fit into the overall picture? I have more questions but I have taken up too much time already.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Does Senator Ó Céidigh have more questions?

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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I have a couple of comments but I will leave it at that for now.

Mr. Michael McGrail:

I thank the Senator for his questions. As I mentioned to Deputy Troy, it is positive that four places are available on the board. I have been assured by the Department that they will be filled. Regarding the Shanwick, what is critically important is that under the 1996 agreement, British Air Traffic Control looks after the air traffic control in that space and the IAA looks after communication. While I would not be technically competent in the area, I understand that communication is based on high frequency systems, which are now being replaced by other systems. As the Senator suggested, the IAA needs to ensure we continue to own that communications aspect of the Shanwick. Given the short period I have been with the authority, I do not have a great volume of detail on that but I know that the relationship between the IAA and its British equivalent is good. I also know that both the IAA and the Department are anxious to ensure that if a new agreement is required, it will solidify the current situation in terms of our role in the Shanwick.

The Senator mentioned Dublin Airport and the north runway. I believe what he said was directed at the committee-----

Mr. Michael McGrail:

Senator Ó Céidigh's point about growth at Dublin Airport is important. More airlines outside of the traditional British airlines are coming into the airport. We are collaborating with the Department on scenario planning in the context of Brexit. Ultimately, it is up to the Department but I will certainly pass on the Senator's comments to the effect that it would be useful for the Department to outline to the airlines how it sees Brexit playing out from 29 March 2019 onwards.

The question of Baldonnel as a second airport for Dublin is not one for me. That would be a major policy and investment decision. I have no doubt that the Department of Defence would have a view on it as well.

The Senator asked about the IAA's relationship with the AAIU and other organisations. Again, I must point out that I have only been in this role for about three weeks but, as I understand it, the relationship with EASA is very good. EASA conducts regular independent audits of the IAA, which are taken seriously by the authority. Representatives of EASA spend several days within the IAA assessing operations. I understand that our relationship with CAR is good. Discussions have been ongoing with regard to the separation.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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There were some discussions a number of years ago about the CAR becoming part of the IAA. What is the position in that regard?

Mr. Michael McGrail:

As I understand it, the separation would involve the traffic navigation aspects of the work of the IAA being moved to a new company. The safety and regulation aspects would remain and would fall under the remit of the CAR. That is my understanding of it. Legally, and from a process point of view, there would be many issues to resolve but that is my understanding of the proposal.

The AAIU is very much an independent body.

In regard to R116 in particular, the IAA has co-operated with the AAIU. I do not have further knowledge on the relationship with it.

Photo of Pádraig Ó CéidighPádraig Ó Céidigh (Independent)
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Go raibh maith agat.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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I have one or two comments and a question. We have to acknowledge that the IAA is a profitable organisation and it turned out to be a bit of a cash cow for the Minister for Transport, Tourism and Sport lately, when he started to use its dividends to fund the Irish hockey team, which has to be welcomed. Perhaps it will make him more aware it exists seeing he does not know how to appoint the board members.

With regard to the separation of the IAA, it will lose the aviation regulatory body. Have the two bodies come to an agreement as to how that will be funded? Although it is early days, Mr. McGrail might give us some idea.

Mr. Michael McGrail:

Within the three weeks, I would have to say the answer is "No". That said, some 70% of revenue comes from what we would call the air traffic management business, with the balance coming from the other areas. We want, as I mentioned, to achieve a smooth separation. We certainly want the IAA NewCo to be well funded but, equally, we want to ensure the safety and regulatory body that remains would also be well funded. We think we have the resources to do that. Again, it is complex and we have not gone into it in great detail.

Photo of Kevin O'KeeffeKevin O'Keeffe (Cork East, Fianna Fail)
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Very good. I thank Mr. McGrail for his time. We wish him all the best.

The joint committee adjourned at 10.50 a.m. until 1.30 p.m. on Wednesday, 3 October 2018.