Noel Dempsey (Meath West, Fianna Fail)

Tourism Ireland, at the request of the Department of Arts, Sport and Tourism, prepared an analysis of air capacity as an input to the senior officials group. It noted that the withdrawal of the Aer Lingus Heathrow service, together with the reduction in direct services from North America to Shannon due to "Open Skies", could have an adverse impact on the profile of overseas visitors to the west of Ireland. It also has implications for high-yield business customers interlining to Shannon via Heathrow from North America, continental Europe and other long-haul markets.

The potential loss or displacement of this valuable business to other parts of Ireland is a matter of serious concern. However, the analysis also took account of Ryanair's intention to increase its capacity from London to Shannon in response to the Aer Lingus withdrawal. As a consequence of this additional capacity, the consultants considered that the result of these changes will be a small net increase in the level of direct air capacity from London to Shannon.

The senior officials group has drawn a number of conclusions in relation to the impact of the withdrawal of the Shannon Heathrow service on the Shannon region. These conclusions acknowledge both the challenges facing the region but also the opportunities arising through investment and the various regional development initiatives.

As a next step the group has proposed the following:

Taking account of these factors and the other issues addressed in this report, it is suggested that the relevant Ministers, following consultation with the four Mid-West planning authorities, together with the Mid-West Regional Authority, report back to Government as soon as possible on strategies for unlocking the further development potential of the Limerick-Shannon Gateway and its wider region, in light of the substantial investment planned under the NDP and Transport 21 to create an integrated infrastructure underpinning the region's competitive position.

Under the State Airports Act 2004, Shannon Airport Authority has now been mandated to produce a business plan to assess the viability of an independently owned and run airport. A draft of the Shannon Airport plan is expected to be prepared during October, which will be submitted to the Ministers for Transport and Finance, for their approval.

The Shannon Airport Authority has been actively engaging with airlines with a view to securing new services that would redress the reduction in connectivity that will follow from withdrawal of the Aer Lingus service to Heathrow. I commend the Shannon Airport Authority for its positive response to the present difficulties and wish it well in its efforts to promote the development of new services.

The authority has specifically identified airline services to the key European hub airports of London-Heathrow, Paris, Amsterdam and Frankfurt as being of key strategic importance to its ongoing development. The airport recently published a European hub airport incentive scheme for services to come into operation in 2008, which provides for significant discounts in airport charges and for the possibility of marketing support to be provided by Shannon Airport for new services.

While the loss of any passengers can affect airport revenues, the Shannon Airport Authority expects that many current Shannon to Heathrow passengers will be accommodated on other airlines serving the London market and the impact on revenues should be relatively modest. I look forward to receiving their business plan in the near future.

Before I conclude, I want to address some of the more extreme and politically motivated statements made on foot of this Aer Lingus decision——

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