Noel Dempsey (Meath West, Fianna Fail)

As the Deputy will be aware, the air services market in the European Community was fully liberalised in 1992. The operation of the market is governed by common rules which were recently updated and are set out in a European Regulation No. 1008/2008. This regulation entered into force in November last year and has direct application in all member states. Under the common rules set out in the EU regulation, airlines can freely set fares for air services offered within the Community and this has been the case since 1992 when the market was first opened up.

The EU regulation introduces new provisions requiring greater pricing transparency. When publishing or advertising air fares, airlines must now include all applicable conditions and all applicable taxes and charges which are unavoidable and foreseeable at the time of publication. These pricing transparency provisions were introduced because the fare structure in the industry in recent years has changed significantly with many airlines now having differentiated pricing structures consisting of a basic fare with a number of optional pricing elements. The new rules require greater transparency in pricing information but airlines still have full pricing freedom. This will ensure that consumers have fuller information available to them in making their travel choices.

Side by side with the opening up of the market, a number of other consumer protection measures have been introduced at European level in recent years. These include compensation in the event of denied boarding and the rights of passengers with reduced mobility when travelling by air. The opening up of the market for air services has completely transformed air travel in Europe and has brought enormous benefits to the European economy and particularly to the Irish economy.

As an island nation Ireland is particularly reliant on air services for the maintenance and creation of business and tourism links with Europe and the rest of the world. The benefits of liberalisation are clear to see both in the context of the European market and the EU-US market which was liberalised more recently. The number of routes available into and out of Ireland has increased dramatically in the period since the market was opened up. The increased choice of destinations available to consumers and the significant decrease in fares in the years since the market was opened up clearly demonstrates the benefits that competition brings to consumers and to the wider economy.

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