Tommy Broughan (Dublin North East, Labour)

I commend my colleague, Deputy Upton, on introducing this motion to the House and for highlighting the escalating crisis in the travel and tourism industries. I would also like to commend her warmly on her outstanding recent policy document, published on behalf of our party, entitled, Extending the Welcome: Labour's Proposals to Sustain and Develop the Tourism Industry. Deputy Upton's document lays out a comprehensive, credible and innovative programme of actions to address the alarming difficulties in the travel, tourism and transport industries, which are so important for Irish jobs.

A key issue that Labour's motion and recent policy document highlight and address is the haemorrhaging of passengers and tourists into Ireland. The number of overseas visitors dropped by 1 million, or 11.6%, in 2009. Report after report on passenger figures in the aviation sector is equally grim. One of the latest reports is before me. It shows that the number of airline seats into Ireland this month is down approximately 1 million on a similar period last year. In an earlier Dáil debate on this matter in March, I highlighted the declining passenger volumes between Ireland and our closest neighbour and most important tourism market, the UK. Between February 2009 and February 2010, there was a decline in air passenger numbers between the two countries of 700,000. During that period, there was an astonishing 54% decline in traffic at a number of smaller airports, for example, on the Kerry-Stansted route. If these trends in passenger numbers continue throughout 2010, it has been estimated that air traffic between Ireland and the UK will hit its lowest levels since 1999.

That fewer passengers are coming through our airports and buying seats on Irish airlines is putting jobs at risk not just at the airlines and airports themselves, but across the wider economy and throughout Irish tourism. I represent a north-side Dublin constituency and Dublin Airport is probably the most critical economic dynamo for the whole north and west sides of Dublin as well as for the mid-Leinster region. Shannon Airport performs a similar role for the mid-west, which the Acting Chairman knows, as do Cork Airport in the Cork and south Munster region and the regional airports in Galway, Waterford, Kerry, Knock, Sligo and Donegal, which have similar functions in their hinterlands.

The 1,200 SRT job losses at Dublin Airport last year were accompanied by significant job losses at Ryanair and the Dublin Airport Authority, DAA. For example, Ryanair announced in November that it was to axe 150 jobs at Shannon Airport because 17 routes were being cancelled. It is unclear how many jobs in total have been lost at Ryanair in the past 18 months, but I estimate the figure to be over 500, a catastrophic loss of jobs that will have considerable consequences for our tourism industry. A few days ago, Aer Lingus made the appalling decision without reference to its board to cut its winter schedule for direct flights between New York, Chicago and Boston and Shannon with a consequential serious impact on mid-west tourism and business.

Airports such as Dublin, Shannon and Cork also support thousands of lower skilled but highly valuable and quality jobs, including drivers, cleaners, canteen staff, maintenance workers, administration staff, etc. The profile is similar to the jobs found throughout the tourism industry. This week, there was an alarming report in the Financial Times on the rising unemployment rate by job type in the UK. The UK Government has analysis to hand that we do not. The report stresses that low and middle income earners, especially sales assistants, office workers, van drivers and cleaners, are bearing the brunt of the economic downturn. Workers in these vital, lower skilled jobs in transport and tourism are being disproportionately hammered by job losses. It is about these that we are expressing most concern tonight.

Since the travel tax was introduced by the Ministers for Finance and Transport, I have consistently opposed it on behalf of the Labour Party and asked the Government to publish the cost-benefit analysis drawn up before its implementation. Only a few days ago, the Minister for Finance, Deputy Brian Lenihan, sent me another short answer to a parliamentary question in which he refused to give me the cost-benefit figures. This is not the way to manage taxation policy. The only economic analysis provided by the Government in budget 2009 vaguely estimated that the travel tax would yield €95 million in 2009 and €150 million in a full year, but there was no estimation of its costs in terms of passenger numbers, aviation jobs and employment in the tourism and hotel sectors. Even a cursory cost-benefit analysis of the tax, such as the one I did during the budget, would make clear that the cost would definitely be far higher than its yield. I would again urge the Ministers to place a full cost-benefit analysis of the tax before the Oireachtas.

It is astonishing that the travel tax is the one issue that has strongly united Aer Lingus, Ryanair and CityJet, which account for approximately 83% of the total number of passengers who leave and visit Ireland each year. A report for the three airlines by Amsterdam Aviation Economics concluded that the introduction of the air travel tax will cause estimated revenue losses of up to €482 million, lead to up to 3,000 direct job losses and, in a full year of operation, cause a reduction of up to 1.2 million in the Irish aviation industry's departing passenger numbers. These figures balance against a net contribution to the Exchequer of just €116 million. The report states:

If airline capacity in 2009 had been maintained at 2008 levels and the ATT was to be passed on in full to passengers in the form of higher fares, it is estimated that the total resulting demand reduction would be between 0.5 and 1.2 million departing passengers over the first full year based on a price elasticity range of between -0.5 and -1.5. On this basis ... ATT revenue would be between €117 million and €124 million but total revenue losses for airlines, airports and the tourist sector would range from a minimum of €210 million up to €465 million, dependent on the elasticities assumed.

The report's figures for air travel tax revenue are pretty accurate. This ludicrous tax is damaging the transport economy and our tourism industry. As my colleague stated, the Netherlands, Spain and Belgium withdrew similar taxes after introducing them.

As I have often stated, the airlines should get their houses in order and address what is, at times, a pervasive rip-off culture across the industry that sometimes damages the passenger numbers visiting Ireland. For example, low cost tickets on sale at all airlines are often accompanied by a range of extra and unjustified charges on basic passenger services, including the use of the check-in desk, boarding cards, baggage, insurance, seating arrangements and carrying a duty free bag onto the flight. Air passengers were fleeced yet again when, in April, Ryanair proposed an increased charge in the cost of checking in baggage from €15 to €20 for the summer months. Under EU law, air passengers have the right to either reimbursement or rerouting of a cancelled flight, the right to information and the right to care - accommodation, food, etc. - as appropriate, but it is often difficult for passengers affected in this way to access a reimbursement, as we saw recently during the volcano crisis.

The eruption of the Icelandic volcano Eyjafjallajökull could not have occurred at a worse time for Irish airlines and our tourism industry. The volcanic ash emergency has cost the air travel sector an estimated €2.5 billion in total. I am unsure of the exact figures in the tourism industry, but the situation has been damaging. During the whole of the volcanic ash crisis, the overriding concern of the Labour Party and myself was the safety of all air passengers and aviation workers. I understand that the Minister for Transport, Deputy Dempsey, was relying on information from the UK Met Office's Volcanic Ash Advisory Centres. The Acting Chairman might remember a number of debates on the issue in the House. Early on, many people were critical of the sluggish response of the Government and governments across the EU to the crisis. Captain Evan Cullen, the head of the Irish Airline Pilots Association, IALPA, indicated that, in parts of the world with frequent volcano activity, there is not the same complete closing down of the aviation industry.

The Government should consider establishing an Irish expert unit, perhaps in the Department of Transport, or use the expertise in one of our university departments to monitor and assess the impact of volcanic ash. European Commission President Barroso and the transport Commissioner, Siim Kallas, indicated in the midst of the crisis that an initiative would be developed at EU level to support airlines similar to the initiative undertaken after 9-11. However, the Government has not changed its mind on this initiative, which it initially seemed to oppose.

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