Dáil debates
Wednesday, 3 May 2006
Other Questions.
Air Services.
3:00 pm
Pat Breen (Clare, Fine Gael)
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Question 69: To ask the Minister for Transport the guarantees or undertaking he will give to employees of Aer Lingus at Shannon Airport post-privatisation, in view of the fact that Aer Lingus has not signed an agreement with Shannon Airport for the retention of transatlantic services post-open skies and has failed to develop new routes to the US or Europe from Shannon; and if he will make a statement on the matter. [16085/06]
Martin Cullen (Waterford, Fianna Fail)
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In recent meetings with the Aer Lingus trade unions on the future of the company, they raised a number of concerns of staff in respect of the planned IPO, including job security and pensions. I have mandated Aer Lingus management to engage with the trade unions to seek to address those concerns. Decisions on new routes are a commercial matter for the company. Late last year, I secured agreement with the US authorities on transitional arrangements for Shannon Airport in the context of proposals for an EU-US "open skies"' agreement. At that time, I sought and received assurances from Aer Lingus that in the context of a level playing field for the airline and its competitors, it would maintain the current level of transatlantic traffic — approximately 400,000 passengers per annum — with regular year-round scheduled services between Shannon and Boston and New York. As everyone can see, the numbers travelling through Shannon, Cork and Dublin Airports have risen substantially in the past 12 months.
Pat Breen (Clare, Fine Gael)
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The Minister's reply is very short and lacks detail. How will the pension shortfall of €120 million be made up in the event of the privatisation of Aer Lingus and how much does the Government propose to invest in the pensions? I ask this question in the context of Shannon Airport because I represent that area and I am very concerned about developments in it, particularly the gradual erosion of services in the airport by Aer Lingus in recent years. Does the Minister know how many direct flights Aer Lingus operates to the US out of Shannon Airport? He does not know.
Martin Cullen (Waterford, Fianna Fail)
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I will answer the Deputy's question when he has concluded.
Pat Breen (Clare, Fine Gael)
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Aer Lingus only operates two direct flights to the US. In his reply to an earlier question, the Minister stated that Aer Lingus hopes to increase its flights to the US but that these flights would only operate from Dublin Airport. He did not mention Shannon Airport. Aer Lingus operates one flight to Boston four days a week and one flight to Heathrow Airport. These are the only direct services to the US which it operates out of Shannon Airport. There has been a considerable erosion in Aer Lingus's commitment to Shannon Airport in the past few years. In addition, why has Aer Lingus not appointed a manager in Shannon Airport?
Is Aer Lingus not flying in the face of other carriers which have increased their capacity out of Shannon Airport? These airlines are very happy with business in the airport yet our national airline is cutting services every day. Why have no new services operating out of Shannon Airport been introduced since the events of 11 September 2001? What will happen in a post-open skies sector? Most importantly, why has Aer Lingus not signed an agreement with the Shannon Airport Authority regarding transatlantic services after the introduction of the open skies policy when other airlines have no problem signing such an agreement with the authority?
Martin Cullen (Waterford, Fianna Fail)
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The pensions issue is being resolved. Proposals have been communicated to the company, the unions and the employee share ownership trust. The company's scheme is a private pension scheme operated by the trustees of the company, rather than a State pension scheme. Very effective solutions, involving a combination of increased staff, employer contributions and a possible upfront payment arising out of the sale of Aer Lingus, are in place. These details are being worked out.
The Deputy is aware and might acknowledge that Aer Lingus is by far the largest carrier on the transatlantic route out of Shannon Airport. The company carries more than 400,000 passengers per annum.
Martin Cullen (Waterford, Fianna Fail)
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Aer Lingus operates direct flights from Shannon Airport to the US.
Pat Breen (Clare, Fine Gael)
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These flights travel via Dublin Airport.
Martin Cullen (Waterford, Fianna Fail)
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Aer Lingus operates direct flights from Shannon Airport to the US every day.
Martin Cullen (Waterford, Fianna Fail)
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These flights go to the US.
Pat Breen (Clare, Fine Gael)
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These flights travel via Dublin Airport. I wish to give the Minister the facts before he attends a lunch tomorrow hosted by Shannon and District Chamber of Commerce.
Martin Cullen (Waterford, Fianna Fail)
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The Deputy need not worry. I have the facts, which are very clear. The Deputy seems to suggest that a plane should fly out of Shannon Airport even if there is no one to get on it.
Pat Breen (Clare, Fine Gael)
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US carriers are getting tremendous business out of Shannon Airport yet our State airline is neglected at the airport.
Séamus Pattison (Carlow-Kilkenny, Labour)
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The Deputy will be allowed to respond. He should not interrupt when the Minister is replying.
Pat Breen (Clare, Fine Gael)
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I am sorry, but I want answers from the Minister.
Martin Cullen (Waterford, Fianna Fail)
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As the Deputy knows, there are increased opportunities to many destinations in the United States. We only have access to five cities at present.
Martin Cullen (Waterford, Fianna Fail)
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We want to substantially increase the number of cities. There are 22 other destinations in America that are interested in having direct connections with Ireland, in light of which Shannon has considerable potential. It is the restriction of Shannon Airport that has affected it and Ireland in terms of our access to the United States of America. It is nonsense that we can only have direct flights to four destinations in America because of our historical agreement. We are crucifying ourselves despite the significant opportunities that exist.
When I met the Secretary of Transportation, Mr. Norman Mineta, in America, he understood and agreed with our requirement for a transition period for Shannon Airport to move to an open skies basis. The opportunities for Shannon, Dublin, Cork and Ireland are considerable in an open skies arrangement, which would undoubtedly see capacity from Shannon Airport increase, new services from Cork Airport and increased capacity and flights from Dublin Airport.
Pat Breen (Clare, Fine Gael)
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The Minister is living in cuckoo land. US carriers are increasing their services out of Shannon Airport yet our State airline is not. What will happen when Aer Lingus is privatised? It flies in the face of Government policy by centralising everything in Dublin. It is not operating in the interests of balanced regional development and the Minister is standing by it. In an open skies scenario, carriers will fly to the capital city. That is the record in Europe. In fact, 92% of airlines in Europe fly into capital cities, not regional areas. This will happen in Ireland unless the Minister protects Aer Lingus, Shannon Airport and the people of the mid-west. It is the best area through which to enter Ireland but is not being marketed enough. The Minister is standing by and letting this happen.
Martin Cullen (Waterford, Fianna Fail)
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I have strongly advised people in the Shannon region to focus on the future. The Deputy is correct in that there is a significant opportunity to go to America to look for new markets instead of having an argument with me about the past. The world has changed. An open skies agreement is the reality. Shannon Airport's objective should be to accommodate many airlines and not just Aer Lingus, which is by far the largest carrier of passengers on the transatlantic route from Shannon. There is no question about that, but we should try to expand on US destinations from Shannon and vice versa. This is what the future will hold.
Pat Breen (Clare, Fine Gael)
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The Minister knows there is only one direct flight from Shannon Airport to the US, that is, to Boston.
Olivia Mitchell (Dublin South, Fine Gael)
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On the open skies agreement, today, I read in the International Herald Tribunethat the US Government is responding to the demands of Congress and the agreement cannot go ahead. We do not know for how long this will be the case but the agreement will definitely be delayed. Previously, the Minister mentioned that there would be an interim agreement if that occurred. Is the interim agreement contingent on open skies or can it proceed? The Minister said that he would go to America to secure the interim agreement of three extra destination airports and the three-for-one rule rather than the one-for-one rule. If Aer Lingus is not to use Shannon Airport, it is important that other airlines can. It is also important for the sale of Aer Lingus that investors are certain about its potential markets.
Martin Cullen (Waterford, Fianna Fail)
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In case there are any misunderstandings, Aer Lingus is very keen to use Shannon Airport. It is the largest carrier of passengers from Shannon to the United States.
Olivia Mitchell (Dublin South, Fine Gael)
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A bit of competition would not do it any harm.
Martin Cullen (Waterford, Fianna Fail)
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Deputy Breen might believe that he is making a point to me but he is talking to a wide audience. The people in Shannon Airport should stop sending out such a negative, depressing image about it.
Pat Breen (Clare, Fine Gael)
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We are not sending out a negative image. Why has Aer Lingus not appointed a manager at Shannon?
Martin Cullen (Waterford, Fianna Fail)
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The Deputy is damaging his region by continuing in this way.
Martin Cullen (Waterford, Fianna Fail)
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I was with the Deputy's colleagues in the United States less than a month ago.
Pat Breen (Clare, Fine Gael)
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The Minister should go to the mid-west and see what is happening there.
Séamus Pattison (Carlow-Kilkenny, Labour)
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Order. We will move on to the next question.
Martin Cullen (Waterford, Fianna Fail)
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The Deputy certainly has no interest in promoting Shannon Airport. He is here knocking his own region and it is very sad.
Pat Breen (Clare, Fine Gael)
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I am not talking nonsense. I am stating the facts.
Martin Cullen (Waterford, Fianna Fail)
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The Deputy should be a bit grown up and start saying positive things about his airport.
Pat Breen (Clare, Fine Gael)
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I live in and represent the constituency. I am stating the facts.
Séamus Pattison (Carlow-Kilkenny, Labour)
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The Chair has called Question No. 70.
Olivia Mitchell (Dublin South, Fine Gael)
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The Minister has not answered my question about the interim agreement.
Martin Cullen (Waterford, Fianna Fail)
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One way or the other, that arrangement is crucial for Ireland in regard to open skies. The open skies agreement will be in place before the end of the year.
Olivia Mitchell (Dublin South, Fine Gael)
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Today, it was announced that the agreement would not be in place.
Martin Cullen (Waterford, Fianna Fail)
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I was aware of the issues in Congress a week ago.