Pat Breen (Clare, Fine Gael)
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Question 4: To ask the Minister for Transport the progress to date in the negotiations between Irish and US officials on completing a new bilateral aviation agreement or amending the existing agreement between Ireland and the US; the proposed details of this agreement, particularly on the status of the Shannon gateway; when these negotiations will reach completion; his views on the European Commission's perspective on such negotiations; and if he will make a statement on the matter. [9801/05]

Martin Cullen (Waterford, Fianna Fail)
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My officials are in contact with the US authorities to explore what adjustments to the Ireland-US arrangements are possible. An informal meeting took place on 7 February when senior US officials were in Dublin for a seminar on aviation regulation organised by the Institute of European Affairs. No conclusions were reached at that meeting.

It would not be appropriate to disclose Ireland's position during the course of these discussions. However, I am aware the new board of Shannon Airport is required to produce a business plan for the airport. The clarity on the open skies issue will be helpful to that business planning process. I am also aware that Irish airlines are restricted in the routes they can serve under the existing bilateral arrangement. Expanding scheduled transatlantic services is of great importance to the growth of Irish airlines and tourism.

Whatever new arrangements are agreed, Shannon Airport must remain an attractive destination in America, particularly on the east coast of the US. Aer Lingus has said there is a strong transatlantic market for Shannon and it will continue to serve that market. Any change in Ireland-US arrangements will open up new destinations in the US for Aer Lingus, presenting new opportunities for Shannon. I am convinced that Shannon, with the right cost base for the airport and with the proper competitive environment, can maintain and grow its transatlantic business.

European Regulation 847/2004 permits member states to negotiate with third countries, including the USA, after informing the European Commission of the intended negotiations. The European Commission was informed of Ireland's contacts with the US, and a Commission representative was present during previous Ireland-US discussions in May 2004.

On 16 March 2005 the European Commission sent infringement letters to 20 EU member states, including Ireland, that have bilateral air transport agreements with the US. The letter was received by Ireland on 21 March 2005. While this letter does not relate to current discussions with the US, the Commission expresses the view that due to certain aspects of its bilateral aviation agreement with the US, Ireland has failed to fulfil its obligations under the treaty establishing the European Community. The Commission has asked for a response within two months of receipt of the letter. This is a complex matter that must be carefully examined before a reply can be issued.

Pat Breen (Clare, Fine Gael)
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I am astonished to hear the Minister claim that Aer Lingus believes Shannon has a strong transatlantic market. When Mr. Walsh was with Aer Lingus he removed many transatlantic services from the airport, particularly on the EI 111 route, from which a percentage of seats were transferred to Dublin Airport.

What is the Minister doing to protect Shannon Airport? Government policy is to encourage balanced regional development, yet the Minister is doing nothing to protect this regional airport. The European Commission has sent letters to 20 EU member states regarding their bilateral air transport agreements with the US. However, the former European Commissioner for Transport, Loyola de Palacio, and her successor, Jacques Barrot, did not see a problem with Ireland having its own bilateral agreement with the US.

Martin Cullen (Waterford, Fianna Fail)
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Why then did the Commission send us a letter on the matter?

Pat Breen (Clare, Fine Gael)
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That is a different story to do with competition. It is on the record that Mr. Barrot has no problem with Ireland having its own bilateral agreement. The Minister has done nothing to protect Shannon Airport.

In a recent report, Tourism Ireland stated that an open skies policy would result in Shannon's transatlantic business becoming seasonal. The chambers of commerce report, by Mr. Dukes and Mr. Sørensen, stated that Shannon would lose up to 40% of business under an open skies system. While the Government is good at producing reports and policy documents, it still has not carried out an impact study on the open skies policy. As it will be important to understand the effects an open skies policy will have on the mid-west region, will the Minister carry out an impact study?

Martin Cullen (Waterford, Fianna Fail)
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I reject the Deputy's claims.

Pat Breen (Clare, Fine Gael)
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The Minister would do so.

Martin Cullen (Waterford, Fianna Fail)
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The Government is heavily involved in this matter which is why I initiated discussions with the US. It is inevitable the EU and the US will reach agreement on an open skies into Europe policy, which will be in the best interest of all consumers. I have been charged by the Government to ensure the best possible deal for the future of Shannon Airport. The Deputy claimed the Government has done nothing. We have given the airport its autonomy to chart its own development. The board is doing tremendous work. The recent announcement by Ryanair on further services in Shannon Airport show it has a future in the European market. From my contacts in the US and elsewhere, I have learned that Shannon Airport has a future.

The Deputy should contrast the attitude in Shannon with that in Cork Airport. As there is no restriction on Cork Airport entering transatlantic services, it will soon do so. The real threat to the future of Shannon Airport is Cork Airport. As the Deputy presents it, Shannon simply wants to stick its head in the sand and not go after the large opportunities available. Shannon is a marquee name in the US. If I was a member of the Shannon Airport board, I would be looking at the new market opportunities as its competitors are already doing so.

It is important that statements are not made in the House that will undermine Shannon on the international stage. It is in a strong market position. The Government is committed to its future and wants it to develop both its European and US routes. I will ensure that Shannon has a good transition phase before the European open skies policy comes into force.

Pat Breen (Clare, Fine Gael)
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The Minister's claims are typical of his Government colleagues' attempts to drive a wedge between the people of Shannon and Cork. This will not happen because the people of Cork and Shannon will bond on this issue.

Martin Cullen (Waterford, Fianna Fail)
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That will not be the case because they are both independent airports.

Pat Breen (Clare, Fine Gael)
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The chambers of commerce report stated that Cork and Shannon airports would be the big losers in an open skies agreement. A bilateral agreement is there not just to protect Shannon but also Aer Lingus as it is a small carrier.

Martin Cullen (Waterford, Fianna Fail)
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It is crippling Aer Lingus.

Pat Breen (Clare, Fine Gael)
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It is not. I welcome Ryanair's developments in the airport. However, it is important that we do not put all our eggs in the one basket. Shannon accounts for 44% of the transatlantic business. This will be eroded in an open skies system as the large transatlantic carriers will concentrate on where the big business is, namely, Dublin Airport. I agree marketing is important. However, if the national carrier does not favour Shannon Airport, resulting in the loss of an all-year-round transatlantic service, tourism and industry in the region will suffer.

US chambers of commerce have stated they want a direct daily service into Shannon Airport. The Minister is not doing enough to protect this service even though the European Commission has no problem with such an arrangement.

Martin Cullen (Waterford, Fianna Fail)
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I reject these claims. They are grossly unfair and do a disservice to all the work the good people at Shannon Airport are doing in developing the airport. The Deputy should acknowledge their efforts. There are many opportunities to ensure Shannon has an all-round daily service to the US. There is potential to do a great deal more and Shannon Airport should grasp that opportunity. I am confident that the board and the workers in Shannon see this and are looking to the future.

Pat Breen (Clare, Fine Gael)
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Why not arrange for an environmental impact statement?

Pat Carey (Dublin North West, Fianna Fail)
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The time for Priority Questions is concluded. We must proceed to other questions.