Pat Breen (Clare, Fine Gael)
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Question 86: To ask the Minister for Transport the transition period he envisages for Shannon Airport maintaining its stopover arrangement following the introduction of any open skies agreement between the EU and the US. [29498/05]

Martin Cullen (Waterford, Fianna Fail)
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In 2003, the Transport Council gave the European Commission a mandate to commence open skies negotiations with the USA. It had been hoped that a deal could be reached by June 2004 and Ireland clearly indicated that the current Shannon stop requirement should be phased out over a period of years. As it happened, it was not possible to reach agreement in 2004.

Following a series of technical discussions, the recent EU Transport Council authorised the Commission to resume formal negotiations with the US authorities with a view to concluding a first stage EU-US open skies agreement by the end of this year. I have strongly supported the resumption of the EU-US negotiations. An EU-US agreement will be good for Irish aviation, tourism and business generally. It will also be good for consumers who can avail of greater access to the US and the lower prices that the increased competition should bring.

If the talks succeed and if an agreement is ready to be approved by the Transport Council in December this year, it is my clear intention to ensure that it contains an appropriate transitional arrangement for Shannon. The details of the transition arrangement will be a matter for negotiation with the US in the lead-up to the conclusion of the EU-US deal. I do not propose to compromise my negotiating position by giving details of what I might seek at this stage. However, I can confirm that I will seek a transition period of a number of years.

Pat Breen (Clare, Fine Gael)
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The Minister spoke about speculation. There is speculation that he has already done a deal for a three-year lead-in period. Will that be the lead-in period? Why has the Minister decided to sell out on Shannon? He is going against the EU and the US because they were happy to have an agreement in place. What advantage would it be to Shannon to have an open skies policy? Experience has shown that where there is an open skies policy, the capital city benefits to the tune of 90% to 95%. With 50% of US industry located in Shannon, can the Minister guarantee there will be year round transatlantic services? A transition period of three years has been mentioned in the mid-west but there should be a greater transition period because the infrastructure in the area is not ready. Will the Minister opt for a longer lead-in period?

Martin Cullen (Waterford, Fianna Fail)
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I do not know whether the Deputy is enunciating policy on his own behalf or whether it is Fine Gael policy that Ireland should not take advantage of a huge open skies policy to seek out 22 new destinations in America which would result in considerable tourism business to the benefit of this country. These are routes we would have dreamed about a few years ago but which we cannot access because we have an agreement in place.

Pat Breen (Clare, Fine Gael)
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The national carrier is dropping routes, including Orlando.

Martin Cullen (Waterford, Fianna Fail)
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No deal has been done between me and the US. There was unanimous agreement at EU level about the conclusion of a deal. The Deputy is wrong to suggest we are somehow alone in this. Agreement to close a deal was unanimous between all 25 countries.

Pat Breen (Clare, Fine Gael)
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Did that include the UK?

Martin Cullen (Waterford, Fianna Fail)
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Yes. The UK is in the chair; it holds the EU Presidency. In fact, I think I am going to the UK to meet the British transport minister next week. I have already had a number of meetings with him at Council level and I have met the European Commissioner on a number of occasions. My officials have gone to the US. Meetings were again held this week. The US is no doubt about Ireland's position. However, the US is not in the mood for messing about. It wants an open skies deal with Europe and is not interested in side bar deals. We will have to work very hard to get a transition deal on Shannon but we have kept communications with the US open and it knows the Government's position in this regard. We want to give Shannon opportunities but the real challenge for Shannon will be Cork Airport. Cork is not prohibited from opening up a range of new transatlantic routes.

Pat Breen (Clare, Fine Gael)
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The Minister is moving away from the issue.

Martin Cullen (Waterford, Fianna Fail)
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The Deputy is talking about protectionism which is over. Cork could open up a range of transatlantic services to the US tomorrow. It is in no way prohibited from so doing under the deal. People like the Deputy who have a leadership role in their region must look at developing Shannon into the future and should not stick their heads in the sand and cause damage to Shannon.

Pat Breen (Clare, Fine Gael)
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We are not sticking our heads in the sand.

Martin Cullen (Waterford, Fianna Fail)
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That is the type of policy the Deputy enunciated.

Pat Breen (Clare, Fine Gael)
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The Minister is selling out on Shannon.

Martin Cullen (Waterford, Fianna Fail)
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I would be interested to know if that is Fine Gael policy, which I hope is fundamentally different.

Olivia Mitchell (Dublin South, Fine Gael)
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The Minister said he is negotiating a transition deal for Shannon. A transition deal is not only one for Shannon but is one for Ireland. Is it in Ireland's interest in the context of an open skies policy, given that new destinations are being sought by airlines on both sides of the Atlantic, throughout Europe and America? New routes, destinations, airports and countries are being sought. If that consolidation takes place and these new routes are sought out within the transition period, will we not be effectively putting ourselves off the pitch for three years and hugely disadvantaging Ireland? Is the Minister satisfied that will not happen?

Martin Cullen (Waterford, Fianna Fail)
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The analysis from Deputy Olivia Mitchell is a very interesting and totally contradicts what her colleague said.

Olivia Mitchell (Dublin South, Fine Gael)
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I asked the Minister a question. It was not an analysis.

Martin Cullen (Waterford, Fianna Fail)
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I agree a delicate balance must be struck. I want to ensure Shannon has an opportunity given its new mandate and regime. For the first time in its history, it is doing extremely well with 3 million passengers this year.

Pat Breen (Clare, Fine Gael)
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That is a European issue.

Martin Cullen (Waterford, Fianna Fail)
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It is a great compliment to the new board, management, staff and unions in Shannon that it is happening.

A delicate balance must be struck. Deputy Olivia Mitchell is right about an immediate open skies policy with America and the major benefits which would accrue. However, we are trying to manage a transition for Shannon. I think with an EU-US open skies deal that one will see quick, incremental growth in a short number of years. I want to marry that incremental, natural growth on both sides with the transition. If an open skies policy were to be in place from tomorrow, I do not think one would necessarily see immediate change, rather it would be incremental.

However, we must position Ireland and Aer Lingus to ensure they have the opportunity to win many of those new routes for the benefit of Shannon, Cork and Dublin. The opportunities are immense. The focus should be on maximising the opportunity of open skies.

What is forgotten in this debate is that 15 of the 25 EU member states already have open skies with America and are well ahead of us.

Pat Breen (Clare, Fine Gael)
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Where do all the flights go?

Martin Cullen (Waterford, Fianna Fail)
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We are one of ten caught in this particular arrangement, which needs to be resolved.

James Breen (Clare, Independent)
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The Minister and the Government gave us an umbrella when the sun was shining. Now that it has started to rain, they have taken it away. Why has the Minister refused to carry out an impact study on the bilateral agreement for Shannon Airport? Before telling us everything is so rosy in the garden, why will he not have an impact study done on the abolition of the bilateral status of Shannon Airport? It will do much damage to Shannon and the mid-west region. Will the Minister guarantee transatlantic flights to Shannon Airport for 12 months of the year? I do not believe he can. The Government has sold out on the mid-west region. When we had the benefit of the Celtic tiger, the Government did nothing for the west. I am surprised the Minister, coming from the south, supports the Dublin lobby against the rest of Ireland. He can shake his head but it is so.

Martin Cullen (Waterford, Fianna Fail)
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This is a new accusation. I have been accused of many things but not this.

James Breen (Clare, Independent)
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It is sticking out. Why has the Minister refused the impact study for Shannon Airport? What is he afraid of?

Martin Cullen (Waterford, Fianna Fail)
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I am not afraid of anything.

James Breen (Clare, Independent)
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So why will he not do the study? What guarantees will he give if he does the study?

Martin Cullen (Waterford, Fianna Fail)
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I am ensuring a future for Shannon Airport. There is no question of this, particularly on the transatlantic routes. The future is to go and get new business. Unfortunately, with all due respect to Deputy James Breen, if one follows the logic of what he and others are saying, they will crucify and kill Shannon Airport, ending its future. They are trying to hold on to some form of protectionism which is over and done with. They must have confidence in Shannon, working with me to get a deal and encourage the airport to get into new American city routes. The opportunities are there to expand into America. Are Deputies telling me that Knock Airport is in a better position to expand into America? The Deputy would want to get into the programme and come into the future. He should stop trying to crucify Shannon on an issue that will finish it.

Pat Breen (Clare, Fine Gael)
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Aer Lingus cannot last. It has already dropped the Orlando route.

James Breen (Clare, Independent)
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Why has the impact study not been done?

Pat Breen (Clare, Fine Gael)
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Yesterday Delta Airlines announced more seats on its US routes to Dublin and Shannon in the summer. Many US carriers have noted their domestic market is slack and are examining transatlantic routes. More US carriers will come into Dublin Airport and Aer Lingus, because it is a small airline, will be gobbled up by them. Orlando has been dropped as a route by Aer Lingus. The international agreement is there to protect Shannon Airport and Aer Lingus.

Martin Cullen (Waterford, Fianna Fail)
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That is the difference between the Fianna Fáil and the Fine Gael attitude to Government. To me the glass is always half full, to Deputy Pat Breen it is always half empty. The opportunities for Aer Lingus are huge. It has one of the finest chief executives any airline in the world would have been happy to get.

Pat Breen (Clare, Fine Gael)
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I do not doubt that.

Martin Cullen (Waterford, Fianna Fail)
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It is an important point. He is charged with expanding Aer Lingus. I am certain the airline will expand into the US. The Deputy was right on his initial assessment. All airlines now realise the profitable routes are long haul.

Pat Breen (Clare, Fine Gael)
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They will only be going to capital cities.

Martin Cullen (Waterford, Fianna Fail)
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It is clear that future long haul routes for Aer Lingus will be not just to the United States, but to the Middle East, South Africa, the Far East and Australia. If Aer Lingus is to survive and be a larger airline, it must be done. A hub can be created in Dublin Airport to develop a redistribution of long haul passengers into Europe to enhance Aer Lingus and other airlines in that network.

Pat Breen (Clare, Fine Gael)
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What about a hub for Shannon Airport?

Martin Cullen (Waterford, Fianna Fail)
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The opportunities are there. We must take them and stop prevaricating.

James Breen (Clare, Independent)
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What about the impact study?

Pat Breen (Clare, Fine Gael)
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The Minister is just evading answers.

Olivia Mitchell (Dublin South, Fine Gael)
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That is not the case for Aer Lingus.

Séamus Pattison (Carlow-Kilkenny, Labour)
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That concludes questions for today.

Pat Breen (Clare, Fine Gael)
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The Minister does not want a hub in Shannon Airport.

James Breen (Clare, Independent)
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Give us an impact study.

Séamus Pattison (Carlow-Kilkenny, Labour)
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That concludes questions for today.