Pat Breen (Clare, Fine Gael)
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I thank the Leas-Cheann Comhairle for the opportunity to raise the important issue of open skies. I am delighted my colleague from Limerick East, Deputy O'Sullivan, is also raising the issue. Only last week, I spoke on the Adjournment about the crisis in the catering services at Shannon Airport. The airport is facing a critical period in the coming months and years in an era of open skies. People in the region are very concerned about the airport and the Government's commitment to it. Obviously, there will be some opposition to the open skies agreement among the transport Ministers — I understand the UK has some reservations — but it is expected it will be ratified at a US-EU summit on 30 April next.

The Minister for Transport, Deputy Cullen, talks up open skies and claims significant economic benefits will flow from such an agreement. That may be so, but if that is to happen, Shannon Airport must be prepared for it. I have always argued that while open skies are good for Dublin, they may not be good for Shannon. When the Minister, Deputy Cullen, negotiated the amendment to the current bilateral agreement in November 2005, it was a bad deal for Shannon. He negotiated an 18-month transitional period for the airport when it should have got three to five years to prepare for open skies. Unfortunately, that did not happen.

We were of the opinion that an 18-month transitional period would come into place once an agreement between the EU and the US was signed. It now appears the Minster has backtracked once again and that this transitional period has applied since last October. If the open skies agreement is signed off in April, Shannon Airport will only have a 12-month transitional period, which is a very short time — just one season. The Minister has sold out the mid-west and has done a very bad job in preparing Shannon Airport for open skies. I wonder how his colleagues in the European Commission feel on this issue because they never had any problem with Shannon Airport having its own agreement in preparation for full open skies.

The Minister went on local radio yesterday to defend his transitional period and open skies. As I said, we now know the transitional period is for 12 months. He claims the Government has put the necessary infrastructure in place in the mid-west region to prepare it for open skies but that is not the case — it is not in place. The Minister will argue the Ennis bypass has opened but that is only part of the solution, and only part of the bypass is open at present. We need to have full infrastructure in place and a full bypass through all towns, particularly Gort and Crusheen, to open the west to Shannon Airport. This will not be in place for some years.

I am sure Deputy O'Sullivan will have similar to say in regard to the Shannon tunnel, which will not open for a few years yet. Anyone travelling through Limerick city at peak morning work times will see the problems people must endure, such as a travel time of one hour. Passengers who travel to Shannon Airport via Limerick city are also facing a critical problem. The infrastructure is not in place. Neither is the western rail corridor, which the Minister promised to improve with rail infrastructure for the airport. That will not happen until 2008 at the earliest, and only from Athenry. For the Minister to say the Government has delivered the infrastructure in preparation for open skies is entirely untrue. I hope some of that infrastructure can be fast-tracked in preparation for this agreement.

I would also like to know what will happen for the 2007 season at Shannon Airport. We were told a tourism and development plan would be in place to prepare for open skies but we are now told by the Minister, in another U-turn, that this plan is currently being prepared and that it will come into place when the open skies policy begins to operate. That is not good enough from the Minister and his officials. This tourism and development plan should have been in place 12 months before open skies. I am disappointed this has happened.

The Minister has made a solo run and has let down the west. I hope the Government will do something to bring forward the infrastructure and the tourism and development plan so Shannon Airport is prepared for open skies and can compete with the other airports in Ireland, particularly Dublin Airport.

Jan O'Sullivan (Limerick East, Labour)
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I am happy to raise this issue with Deputy Pat Breen. The news that agreement on an open skies transatlantic deal is imminent and likely to be put in place in 2008 has sent shock waves through the mid-west. It is not that we did not know it was coming but that commitments on transitional arrangements for Shannon are so blatantly being thrown aside by the Government.

This is the biggest change in the history of Shannon Airport, which has known many changes over the years. Its consequences cannot simply be left to chance. I want to quote from the reply to my Adjournment matter of 8 November 2005 and to my written parliamentary question tabled on 27 June 2006. In November 2005, I was told: "I want to assure the Deputy that it has been the consistent policy of this Government that any change in transatlantic arrangements will be accompanied by an appropriate transitional arrangement to enable a smooth phasing in of open skies with the US in the future." Last June, the Minister, Deputy Cullen, stated:

In announcing the agreement reached with the US authorities last November, I indicated that I would prepare, in consultation with my colleagues, the Minister for Arts, Sport and Tourism and the Minister for Enterprise, Trade and Employment, a tourism and economic development plan for Shannon and the West of Ireland. Preparation of this plan is at an advanced stage.

I was told that last June but, nine months later, the plan is nowhere to be seen and the lead-in time for open skies has been reduced to one year. How can the Government renege on promises that are vital to the continued prosperity of the mid-west and west?

I call on the Minister of State to ask his colleague to publish the tourism and economic development plan without further delay and to begin its implementation immediately. An estimated €44 million is required over a five-year period to sustain the marketing and tourism product and the 75 American companies, employing 29,000 people between Donegal and north Kerry, must be assured that they will continue to have regular flights, winter as well as summer, for their business needs.

I emphasise the reference to winter because there is a real concern there will be summer but not winter flights. Without it, the job losses in Limerick and potential job losses in Nenagh that are in the news today will be followed by many more. This is not idle speculation. It is based on what has happened in other countries where airlines have consolidated their business into and out of the capital city. In particular, we need an assurance that the national airline, Aer Lingus, will not renege on the commitment made two years ago by its CEO, Mr. Dermot Mannion, that it would maintain regular winter flights. There is real scepticism in the Shannon region about Aer Lingus's commitment to Shannon and we need to see a commitment to maintaining flights into and out of Shannon all year round when open skies becomes a reality.

The national development plan and Transport 21 are delivering huge infrastructural projects to the eastern part of the country but the western road and rail corridor has a much longer timeframe and there is no commitment to funding a rail link to Shannon, even though a feasibility study has now been completed. Road links to Dublin are given a far higher priority than links from a wider hinterland to Shannon. How can the airport compete unless a critical mass of the population can get to it easily? I refer to people in the west midlands who go to Dublin at the moment but who would, if the roads were decent, travel to Shannon.

While attaching no priority or urgency to Shannon, the Minister for Transport, Deputy Cullen, had no problem in finding €22 million for Waterford Regional Airport. That is significant and it is about time the Government party representatives for the mid-west stood up and insisted their region be looked after as well. The wide web of industry and tourism that has been built up on the strength of the access provided by Shannon Airport could fade away unless it is sustained and developed at this critical time. We want clear answers and commitments on these issues and we want Government Deputies and Senators who represent the people of the mid-west to wake up and fight for their constituents.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I thank Deputies Pat Breen and O'Sullivan for raising this matter on the Adjournment.

The Government is committed to the liberalisation of air transport services between Ireland and the US and it is my firm belief that the introduction of an EU-US open skies regime will be good for Irish tourism, good for the country's business links and good for the economy generally. A number of reports, such as the Brattle report for the European Commission, the report of the tourism policy review group and the Air Transport Users Council, ATUC, of the Chambers of Commerce of Ireland, all support moving to open skies with the US as soon as possible.

As experience at European level shows, liberalisation leads to strong growth and decreased prices in the aviation market. Freedom of access leads to many more destinations being served. A liberalised EU-US open skies environment could lead to similar growth across the Atlantic and will also mean more business opportunities for Irish airlines, particularly Aer Lingus. The Government's main objective in selling a majority of its shareholding in Aer Lingus last year was to provide the company with access to new equity to enable it to compete effectively and to grow its business on short-haul and long-haul routes. As a result of the proceeds generated by the IPO, Aer Lingus will, under the proposed open skies regime, have a unique opportunity to fulfil its potential and to contribute in a positive way to the country's economic development through the expansion of its transatlantic operations. It is noted that the head of the Irish Hotels Federation recently commented that open skies with the US could double the number of US visitors to 2 million within seven years, generating an extra €1 billion for the Irish economy.

In November 2005, EU and US negotiators concluded work on the text of a first phase EU-US open skies agreement that included a transitional arrangement for Ireland, relating to the phasing out of the Shannon stop. During the transition period, the ratio of Dublin to Shannon flights would move from 1:1 to 3:1, so that for every one flight to or from Shannon, a carrier could provide three flights to or from Dublin. The draft agreement was unanimously endorsed at the December 2005 Transport Council subject to sufficient progress by the US side on opening up ownership and control of US airlines to EU investors.

In December 2006, following opposition from Congress, the US authorities withdrew the rule-making proposal concerning control and ownership of US airlines. The rule-making provision has been a key demand for a number of member states and its withdrawal by the US side is a significant barrier to concluding the EU-US open skies agreement. Negotiations at EU-US level resumed in January 2007, with both sides reaffirming their commitment to the goal of concluding an EU-US agreement that would open access to markets and maximise benefits on both sides of the Atlantic.

Following intensive negotiations over recent weeks a draft open skies agreement between the EU and US was finalised last week and the text will be presented to Transport Ministers for decision at the next Council meeting on 22 March 2007. As the transitional arrangements were incorporated in the proposed EU-US aviation agreement, their implementation was conditional on the conclusion of that agreement. It has been agreed with the US and the EU that these transitional arrangements will stand and will enter into effect immediately following approval of the draft agreement by the Council of Ministers. It is not true to say that a reduced transition period has been negotiated. The original transitional provisions, as negotiated in November 2005, still stand.

The Minister is confident that the liberalisation of air transport services will deliver major benefits for Ireland's economy. The additional access to the US, as well as the increased numbers of US tourists into Ireland, will greatly benefit Irish tourism, aviation and business links generally in all parts of the country, including Shannon and the wider mid-west region. With a view to assisting Shannon Airport and the wider region to adapt to the proposed new arrangements under an open skies regime, the Department of Transport is currently finalising an economic and tourism development plan for Shannon. This plan was initiated in the context of the ongoing EU-US negotiations on open skies when negotiators concluded work on the text of a first phase EU-US agreement in November 2005, which included a transitional arrangement for Ireland relating to the phasing out of the Shannon stop.

In preparing the plan, the Department of Transport has consulted with the Department of Arts, Sport and Tourism, the Department of Enterprise Trade and Employment and the Department of Finance. A liaison group, established by the Mid-West Regional Authority, has separately prepared a report on the future development of the Shannon region as an input to the plan. The Minister intends to bring the economic and tourism development plan to fruition in the context of the formal agreement of the EU-US open skies proposals.

The aviation industry has experienced dramatic change in recent years and the future development and growth of all international and regional airports in the State will depend largely on how each airport responds to the new challenges and the extent to which emerging opportunities, such as open skies, can be exploited. If Shannon Airport is to develop as a successful and sustainable business it is clear that one of the issues that must be addressed in its business plan is the airport's uncompetitive cost base. When that obstacle is overcome the airport has a real opportunity to develop new markets and to attract the airline customers that it needs for its commercial future, the area's tourism and other industry.