Noel Dempsey (Meath West, Fianna Fail)

I move:

That Dáil Éireann:

—shares the Government's deep disappointment at the Aer Lingus decision to end the Shannon-London Heathrow service;

—agrees with Government that this decision is contrary to Government regional and aviation policy;

—recognises the importance of the international connectivity of Shannon airport as a means of facilitating the wider region to develop further its business and tourism activities;

—notes and approves the Government's commitment to regional development through the National Spatial Strategy;

—notes the considerable support for the mid-west region through the National Spatial Strategy and the National Development Plan;

—endorses the commitment in the Programme for Government to a linked metropolitan corridor from Waterford through Cork, Limerick/Shannon to Galway — complemented by direct links between Waterford and Limerick — with a view to developing a national counterpoint to Dublin;

—endorses the Government's support for the efforts of the Shannon Airport Authority to secure enhanced air access to/from Shannon including a connection to London Heathrow Airport;

—notes that the comprehensive transport infrastructure development programme being implemented under Transport 21 addresses the key surface transport links to Shannon airport; notes that €2 billion has been committed to roads projects in the Shannon region which are already in construction or at an advanced stage in planning and notes that the Limerick Tunnel and connecting roads are in construction and that construction is due to commence on the Ennis-Athenry section of the N18 early in 2008. Funding has also been approved for the first phase of the western rail corridor from Ennis to Athenry and €10 million has been allocated to Iarnród Éireann this year to commence this work. Funding in principle has been approved for phase 2 of the corridor between Athenry and Tuam;

—supports the intention to position Shannon Airport Authority on a financially sustainable basis with a growth oriented business plan and enhanced pre-clearance facilities for transatlantic traffic;

—notes the continued delivery of the enterprise agencies' support programmes and activities, including the achievement of the targets set out in the new Shannon Development Corporate Plan; and

—welcomes the Government's intention to establish a focused tourism marketing programme to promote the wider Shannon catchment area in addition to the ongoing roll-out of existing programmes by Tourism Ireland, Fáilte Ireland and Shannon Development.

I congratulate the Leas-Cheann Comhairle on my first occasion in the House since his elevation. I am delighted to have the opportunity to address the House on an important motion on the withdrawal of Aer Lingus services between Shannon and London Heathrow. The importance of the issue for the House, the Government and the people of the mid-west and west is the reason I put the motion before the House for discussion. I propose to outline the events surrounding the Aer Lingus decision, the rationale given by Aer Lingus for it, the issues that arise on foot of it and the actions taken by Government since it was made. I will also deal with questions on the 25% Government shareholding and the Aer Lingus initial public offering.

At a short meeting with the chairman and chief executive of Aer Lingus on 3 August, I was informed that the company intended to open a hub in Belfast and to transfer the Shannon-Heathrow slots to the new route. While I conveyed my support for the move to establish the Belfast hub, I expressed concern and disagreement with the decision on the reallocation of the Shannon-Heathrow slots. I reiterated that view directly and indirectly to the company on my behalf and on behalf of the Taoiseach and Government on several occasions over the following weeks. At a more formal meeting with the chairman and chief executive on 28 August, I emphasised again the Government's extreme disappointment with their decision. I set out, in particular, that the decision ran counter to public policy in a number of respects, including the national spatial strategy, regional development and aviation policy, and while it was recognised that Aer Lingus was not an instrument of Government policy, there was an expectation that it would take these wider policy issues into account in making commercial decisions. I also made the point that Aer Lingus should have engaged more with its customers and wider stakeholders before announcing its decision.

The chairman said the decision was taken to establish a new base at Belfast International Airport, following extensive evaluation of growth opportunities throughout Europe. He said the decision in this case was commercially robust and the company was not proposing to reconsider it. Aer Lingus has set out the basis for the decision to withdraw its Shannon-Heathrow service with effect from next January as follows. First, even though the Shannon-Heathrow route was profitable, it underperformed when compared to the routes between Cork-Heathrow and Dublin-Heathrow and the projected Belfast-Heathrow route. Second, the chairman said that there was a valuable commercial opportunity to be exploited at Belfast and the company could achieve a better return on the utilisation of aircraft and Heathrow slots for the purposes of a Belfast base rather than continuing with the Shannon-Heathrow service. Third, according to the company, Belfast average fares, load factors and costs are expected to be more attractive than Shannon. In addition, Belfast is expected to benefit from economies of scale as it grows.

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