Martin Cullen (Waterford, Fianna Fail)

I want to see the slots being retained at Heathrow, regardless of the ownership structure of the national airline. I am very aware of the concerns raised about specific strategic issues in the context of any proposal to reduce the State's shareholding in Aer Lingus. These relate not only to the slots at Heathrow but to the Aer Lingus brand and direct services on the transatlantic routes.

Ireland does not own any Heathrow slots. Aer Lingus holds these slots on the basis of "grandfather rights", which are rights of historic precedence. Aer Lingus has around 4% of Heathrow slots — the fourth largest after BA, BMI and Lufthansa and operates in the region of 25 round trips daily in peak season. Apart from Aer Lingus, BMI is the only other operator on the Heathrow-Dublin route and there is no other operator to Heathrow from Cork or Shannon. It should be pointed out that Heathrow services are a key element in the Aer Lingus product and a key contributor to profits. I have no reason to believe this will not be the position into the future, whatever the ownership status of Aer Lingus.

However, as direct services increase to European and other points, the importance of Heathrow for international connectivity is diminishing. Also, the other major European hubs in Paris, Frankfurt and Amsterdam are continuing to grow and have good direct connections from Ireland with a range of airlines.

EU Regulation 95/93, as amended by Regulation 793/2004 governs the allocation of slots at congested airports such as Heathrow. The current regulation allows for the retention of grandfather slots. It also allows for the exchange of slots but is silent on the issue of the sale of slots. However, this has not prevented the development of a "grey market" in slots where the practice of exchanging slots for cash has developed.

The Commission published a study last year on potential mechanisms to develop market-orientated slot allocation schemes. A consultation paper later in the year was the follow-up to this study. The Commission is now developing its thinking on the potential mechanisms that could be included in draft legislation. My Department will continue to monitor developments at EU level regarding any proposed changes to the regulatory regime for slots.

The current EU regulatory regime may change in the future. Accordingly, there is not an absolute guarantee that access to the current level of grandfather slots at Heathrow can be maintained indefinitely, even if the current ownership status of Aer Lingus remains the same.

However, I assure the House that in the context of any decision to reduce State ownership in Aer Lingus, all the options available within the regulatory framework will be examined to ensure adequate ongoing access to Heathrow for Irish consumers.

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