Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank Deputies Joe Carey, Kieran O'Donnell and others for their kind words about my role in respect of the Shannon Airport project in the past couple of years. I also thank my officials and advisers in the Department who made an enormous effort to get us to this point. I further thank the staff, board members and others at Shannon Airport.

Deputy Timmy Dooley and others referred to the viability of Shannon Airport. It is important to point out that since Shannon Airport gained independence from the DAA 18 months ago, it has shown that it is able to stand alone. It has halted the decline in passenger numbers and there is going to be renewed growth this year, both in the numbers of routes and passengers. The latter is very much normal growth brought about by airlines in increasing the numbers of passengers into the airport. The number of military flights has actually been falling in recent years. While it is true that the airport will not reach the passenger levels forecast in the 2012 business plan, these forecasts were very ambitious, rightly so. Factors which contribute to this are lower than anticipated transit traffic such as that of a military nature and a delay in concluding an agreement with Ryanair on new services. The agreement to which I refer has now been concluded. However, post-2014, the Shannon Airport Authority, SAA, expects terminal traffic levels to catch up with the business plan estimates, albeit military traffic is likely to remain on a downward trajectory. In effect, the airport is lagging just one year behind the traffic estimates in the business plan.

Under the corporate structure outlined in the Bill, the SAA and Shannon Development will be wholly-owned subsidiaries of Shannon Group. That is deliberate and one of the reasons is to ensure there will not be cross-subsidisation between these two entities. While this structure has many advantages, my Department worked closely with the Attorney General's office to ensure state aid rules would not be breached. I have no doubt but that Shannon Airport can and will prosper in its own right under the board and management now in place.

Aside from halting the disastrous fall in passenger numbers last year, the airport also broke even financially. It had been making losses since 2008. There has not really been a negative impact on the airport as a result of the delay in establishing Shannon Group in legislation. Last year was about stabilising the airport which had previously been in free-fall and the board, management and staff are to be congratulated on their success in this regard.

On the IAS scheme, some time ago I heard Ms Ingrid Miley, RTE's industry and employment correspondent, refer to the scheme as the most complex industrial relations matter she had covered for some time. The issues relating to the scheme are complex, partly because the scheme is complex, inflexible and involves multiple employers. The issues relating to the scheme have been ongoing for a number of years and a resolution is urgently required. We will serve no one's interests by kicking it even further down the road. The objective of the Bill is to facilitate implementation of whatever solution we all hope will emerge from the parties to the scheme. The report the expert panel brought forward last week is extremely important in this regard. As stated in my opening contribution, I will be tabling amendments to the Bill on Committee Stage. These will include removal of the provisions to which Deputy Dessie Ellis and others referred and which would have permitted the employers to withdraw from the scheme. I reiterate that these provisions were intended to be used only in a fall-back, as an alternative to a forced wind-up of the scheme by the Pensions Authority. We are taking the steps to which I refer in order to ensure that where such a wind-up occurred, there would be a better outcome for members.

It is important to point out that Aer Rianta International was not referenced in the 2004 State Airports Act. That was because it was never intended to move it from the ownership of the DAA - previously, Aer Rianta - to which it had always belonged. It was always the intention that while the debts associated with Shannon Airport would remain with the DAA, Aer Rianta International would also remain with it. Aer Rianta International operates in a rapidly-changing, highly competitive market and needs to adapt in order to survive and prosper. The global travel retail market is large, growing and profitable. Aer Rianta International can maximise its potential within DAA ownership, benefiting from the latter's funding, borrowing and balance sheet capacity.

A number of Deputies referred to civil servants at Shannon and Cork who transferred to Aer Rianta in 1970s. I understand this issue was reviewed during the years on a number of occasions by a number of my predecessors, the Department's legal adviser and the Office of the Attorney General. The position remains that Aer Rianta - now the DAA - complied with its obligations to this group of people on retirement in accordance with the terms agreed to at the time. The individuals in question accepted a contract of employment with Aer Rianta in 1974. However, in response to the concerns raised by Deputies about this matter - much has changed in the interim - and without making any commitment, I will ask my officials to examine the matter afresh and make a formal submission to me on it.

There are no plans to change the current arrangements for the use of Shannon Airport by the US military which involve a long-standing practice in place for well over 50 years. Deputies will be aware that the transit of foreign military aircraft through Shannon Airport is subject to strict conditions. Permission to land is only given on the condition that aircraft are unarmed, carry no arms, ammunition or explosives and do not engage in intelligence gathering and that the flights in question do not form part of any military exercise or operation. As stated, the volume of these flights has been decreasing in recent years. Rather than being part of what was referred to as an American imperialist scheme in the Middle East, in many instances, the military aircraft in question carry soldiers who are transiting to and from bases in countries such as Germany where they are present at the invitation and request of host governments. I was somewhat confused when one Deputy suggested Hezbollah was very disappointed by us. Neither I, the Government, my party, nor the country has ever really sought the approval of Hezbollah. Perhaps the Deputy meant something else.

Deputy Timmy Dooley suggested Shannon Heritage remain part of the group. I have no difficulty with this. If it is not broken, one should not fix it. However, it is intended to carry out a proper review in due course in order to determine what other options are available.

Deputy Dessie Ellis and several other Members suggested it might be sinister that we had included several other provisions in the Bill. It is the State Airports (Shannon Group) Bill, not the Shannon Group Bill, and includes a variety of measures pertaining to State airports. Shannon Airport simply happens to form the main part of it.

Deputy Dessie Ellis suggested deferred members had been granted a meeting only four days before the expert panel published its report. It is important to indicate that it was actually the second meeting they had had with the panel.

Deputy Finian McGrath pointed out that he represented many airport staff and former staff. He told me with some passion that we should listen to people on the ground. I agree with him - I imagine every politician does - but we must also have regard to the fact that we represent others. We also represent the 1,000 people working at Dublin, Cork and Shannon airports who do not have the benefit of any pension scheme. We represent in all of our constituencies tens of thousands of taxpayers and ordinary citizens. Whoever is responsible for the deficit in the scheme, it is certainly not these taxpayers and ordinary citizens. We must ensure any solutions to these problems recognise the fact that the tens of thousands of taxpayers and ordinary citizens who live in our constituencies have their own debts, deficits and problems and should not be held responsible for the deficit in the scheme.

Deputy Clare Daly made a valid point in respect of deferred members not having access to the industrial relations machinery. I gather that in the past they had access to the Labour Relations Commission and the Labour Court, but that access was removed. The Deputy makes a good point in that regard, but it is beyond the scope of this legislation to change the way the Labour Court and the LRC work. It is something that should perhaps be considered elsewhere and could involve me and, more particularly, the Minister for Social Protection, Deputy Joan Burton, and the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, who are responsible for pensions and industrial relations policy.

Deputy Clare Daly also suggested I was somehow blaming the workers for the deficit in the pension scheme. That is certainly not the case and very much misrepresents anything I have said on the record or elsewhere. What I said was that the reason there was a deficit in the scheme was during the years the companies and members had not made the contributions that might have been necessary to meet the promises given or their expectations. That is different from suggesting the workers are to blame and, certainly, I do not take that view.

Deputy Clare Daly pointed out that the Irish airlines superannuation scheme had made some poor investment decisions. That is the case, but it is a private pension scheme. Many pension schemes make investment decisions that work out, while many make investment decisions that do not. That is in the nature of financial investment, private sector investment in particular. I do not believe the public and taxpayers should be responsible for the investment decisions of others from which they would never have benefited had they gone the other way.

While it is absolutely the case that many in Aer Lingus, in particular, were encouraged to retire or take early retirement, it is also worth pointing out that these packages were agreed to with the trade unions at the time. Those who left the companies often received generous exit packages and, furthermore, some, in fact, returned. There are deferred pensioners from an airline who now work for the airport and vice versa. That should be taken into account also. I was accused of double standards at one point, but that is happening to a fair degree all around.

Deputy Kieran O'Donnell and others raised the issue of fifth freedom air traffic rights for Shannon Airport. What is envisaged under aviation policy is that Ireland as a whole would take a more liberal approach in respect of fifth freedom air traffic rights such that if airlines wished to fly in and out of Irish airports, they would be allowed to do so. We are going to try to minimise the restrictions when it comes to fifth freedom air trafic rights. It will not be a free-for-all, but we are going to take a liberal approach using a case by case assessment. It is suggested that we extend these rights to all airports, not only Shannon Airport. The idea is that the airports in Dublin, Cork and Knock or any international airport would be included.

Some Deputies made good points about regional development. I agree with Deputy Catherine Murphy on the matter. We should never see regional development being confined to Dublin and the east coast. That is a flawed way of looking at it. In reality, when the greater Dublin area competes for investment, it tends to compete not with other parts of Ireland but with Tel Aviv, San Francisco, Amsterdam and Luxembourg. When we compete for tourists, we compete not with the west of Ireland - the experience of a city break in Dublin is very different from a holiday in the west - but with Copenhagen, Edinburgh, Amsterdam and such places. Often it is the case that when something is lost to Dublin, it is lost to Ireland. We should consider regional development differently and ask what each region can do best and most competitively and then support it to do this. This could mean, for example, promoting pharmaceuticals and maritime activities in Cork, tourism in the west or food production in the south east. However, the view that somehow it is possible to move investment, spending and development from Dublin to other parts of the country by Government fiat is simply mistaken in what is a globalised environment. This also applies when it comes to fifth freedom air traffic rights. If we only gave such rights to the airport at Shannon and not Dublin, what would we do in the case of an airline that only wished to fly to Dublin? Would we indicate we did not want it to fly Ireland at all? There could be such a scenario, which would be a mistake.

Deputies Dara Murphy and Jerry Buttimer spoke eloquently about Cork Airport. They have pointed out, rightly, that it is the busiest airport in the State after Dublin; that although passenger numbers may be down this year, the airport has a new management team; that it is well run; that it serves over 50 destinations; that it scores highly in terms of customer service, which is a tribute to the quality of its staff; and that it is pursuing various opportunities in respect of new routes, particularly to places without many connections to Cork Airport, for example, northern Germany, the Nordic countries and Spain.

One issue stands out in Cork which makes it different from the airports at Shannon and in Dublin. At Shannon and in Dublin the split is roughly 50:50 in terms of inbound and outbound passengers. Cork Airport is different. Fully 70% of passengers are leaving, while only 30% are coming to visit Cork. That is why we need to have a broader approach to the airport, rather than one based solely on aviation. It should take into account tourism, in particular. Cork has a considerable amount to offer tourists and I am keen to see far more people flying to Cork Airport for holidays, whether in the city or other parts of Munster.

Deputy Róisín Shortall referred to some legal agreements in place for deferred pensioners. If there are such legal agreements, ultimately decisions will be made in the courts, not in Parliament. We cannot adjudicate on legal disputes.

Deputy Catherine Murphy asked if it was intended that Shannon Airport would remain 100% in State ownership. I can confirm that this is the case, but obviously it is for future Governments to decide for themselves. Certainly, it is the decision of the Government that it will remain in State ownership in its entirety.

Deputy Catherine Murphy also asked about the laying of orders. The orders that would be made directly by the Minister would be under sections 28 and 38 transferring ownership of the Shannon Airport Authority and Shannon Commercial Enterprises to Shannon Group and ownership of the land at Shannon Airport which Shannon Development currently operates from the Minister to the company. These orders will implement the parts of the legislation that have been debated and decided on by both Houses. Therefore, there is no reason for the House to consider them a second time.

Deputy Thomas P. Broughan raised the matter of travel agents. An updated package travel directive is at an advanced stage of consideration in the European Parliament. Its implementation will allow us to update all related legislation in Irish law such that Irish travel agents and tour operators will be able to compete on a level playing field with their counterparts in other European countries. The current amendment is simply a temporary holding measure until such time as the new directive comes into force and a comprehensive revision of the legislation can take place.

Reference was made to deferred members. It is important to point out that the expert panel made recommendations in this respect. It recommended that the trustees and employers engage under agreed principles in respect of the deferred members. I understand these discussions are ongoing. I hope whatever outcome is reached in the process, the deferred members will be treated no less favourably than other groups affected by the pensions dispute.

Forfás is not a commercial body, unlike the Dublin Airport Authority or Aer Lingus, and is completely different in this context. The IAS scheme is a private one and has serious solvency issues.

The amendments included in the Bill are designed to facilitate a resolution of these issues and nothing more.

I have probably covered everything raised by Deputies. I thank everyone for what has been an interesting and pertinent debate.

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