Pat Gallagher (Donegal South West, Fianna Fail)

I thank Deputy Pat Breen for raising this matter on the Adjournment and thereby giving me the opportunity to outline the current situation.

Transitional arrangements for Shannon were agreed with the US authorities in November last year in the context of the impending implementation of the EU and US open skies agreement. This provided that the 1:1 Shannon stop requirement would change to 1:3 for the period November 2006 to the end of March 2008, after which the Shannon stopover requirement would end. During the transition period, Irish airlines would have access to three additional US destinations. Ireland was the only European country to secure transitional arrangements in the proposed EU and US agreement.

The transitional arrangements were intended to allow time for a smooth transition to full open skies, which would allow the Shannon Airport Authority to explore and exploit the opportunities arising from the agreement while allowing Irish airlines access to additional destinations in the US.

A number of reports — the Brattle report for the European Commission, the report of the tourism policy review group to the Minister of Arts, Sport and Tourism, and the Air Transport Users Council of the Chambers of Commerce of Ireland report into open skies — all support moving to open skies with the US, and they emphasise the significant benefits to Ireland when this happens.

In the context of the agreement on transitional arrangements, Aer Lingus confirmed that subject to market conditions and in the context of a level playing field between the airline and its competitors, it would maintain the current level of transatlantic capacity. Following the very positive approach by our European colleagues and the US authorities to providing for an orderly change to the Shannon stopover arrangements, it is very disappointing that the EU and US open skies deal still has not been finalised due to difficulties about relaxing US ownership and control restrictions for airlines. It is understood that more time is required on the US side to take account of the concerns of Congress, which can only now be properly addressed following the US mid-term elections.

The Minister has publicly stated his commitment to the view that the liberalisation of air transport services between Ireland and the US will deliver major benefits for Irish business and tourism. The conclusion of an open skies agreement would have particular benefits for Ireland compared to the 15 of 25 EU member states that already have open skies agreements with the US. These member states already enjoy an advantage in unrestricted access to route rights for the development of air services to and from the US.

In this context, the Minister informed Government last month that he proposed to continue to pursue all possible avenues through contacts with the European Commission, ministerial colleagues in other member states and the US to provide for the entry into force at the earliest possible date of the EU and US open skies agreement, including the transitional arrangements relating to Ireland already agreed between the EU and the US. He also proposed that, to the extent that agreement at the level of the European Union is not achievable within a reasonable timeframe, to seek to implement, in accordance with the applicable community law, the essential elements of the transitional arrangements by way of an amendment to the Ireland-US bilateral air services agreement. Finally, he proposed to issue a letter to Aer Lingus setting out these intentions.

The prospectus relating to the sale of shares in the company reflects this commitment. Specifically, it states:

The Minister for Transport has assured the company that he remains confident that an EU-US open skies agreement can be reached within a reasonable timeframe, and that he intends to pursue the earliest possible implementation of the transitional agreement. The Minister for Transport has confirmed to Aer Lingus that, in the event that an EU-US agreement is not achievable within a reasonable timeframe, he intends to seek to implement, in accordance with applicable Community law, the essential elements of the transitional agreement by way of an amendment to the Ireland-United States bilateral treaty.

In announcing the agreement reached with the US authorities on a transitional arrangement for Shannon Airport in the context of the proposed EU-US open skies agreement, the Minister gave an undertaking to prepare, in consultation with the Minister for Arts, Sport and Tourism and the Minister for Enterprise, Trade and Employment, a tourism and economic development plan for Shannon and the west of Ireland. The draft plan is nearing completion.

Under the aegis of the Mid-West Regional Authority, an open skies liaison group has been established to work with the Departments to ensure that Shannon Airport and the west receive adequate investment and compensatory measures when open skies is finally approved.

An official from the Department of Transport attended meetings of that open skies liaison group in an information-sharing capacity. The group recently presented its report and key recommendations.

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