Dáil debates

Tuesday, 24 April 2007

10:00 pm

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I move:

That Dáil Éireann approves under Article 29.5.2 of the Constitution the terms of the air transport agreement between the European Community and its member states of the one part and the United States of America of the other part which it is proposed should be signed by the Minister for Foreign Affairs, or his nominee, a copy of which agreement was laid before Dáil Éireann on 23 April 2007.

The conclusion of the air transport agreement by the European Union and its member states with the United States is a landmark in the development of international aviation relations. The European Commission has already estimated that over the first five years it will yield €12 billion in consumer benefits and lead to the creation of 80,000 new jobs.

As projected by several studies the agreement will lead to considerable economic benefits for Ireland in the business sector, the tourism industry and the air transport industry, where new possibilities have been opened up. Aer Lingus has already moved quickly to capitalise on the new opportunities with the launch of three new services. This demonstrates the disadvantage we have borne and the economic benefits foregone because of the absence of an open skies agreement with the US. A total of 17 of the 27 member states already had open skies agreements with the US on a bilateral basis.

The Commission considers that over the first five years of implementation the agreement will mean more than 25 million additional passengers between the EU and US, up to €12 billion in consumer benefits and the creation of 80,000 new jobs on both sides of the Atlantic.

There are several key benefits of the agreement. It will bring the EU-US relationship into full conformity with Community law following the findings by the European Court of Justice in 2002 that the bilateral agreements of the eight member states taken before the court were not in conformity with Community law. It will remove remaining market access restrictions on flights between the EU and US, thus creating a level playing field between Community carriers. It will serve to introduce new measures relating to ownership, investment and control that will create new opportunities for EU airlines and investors, including the possibility for the percentage of US airlines' equity that EU nationals may hold to exceed 50% of total equity, although ownership of voting equity will continue to be limited to 25%. It will give EU airlines operating to the US greater access to non-EU capital and allow airlines of several third countries operating to the US to be owned and controlled by EU nationals.

New measures will be introduced relating to ownership, investment and control, that will create new opportunities for EU airlines and investors. These will include the possibility for the percentage of US airlines' equity that EU nationals may hold to exceed 50% of total equity although ownership of voting equity will continue to be limited to 25%. EU airlines operating to the US will have greater access to non-EU capital and the airlines of several third countries operating to the US can be owned and controlled by EU nationals.

The agreement clarifies US rules on franchising and branding, which will facilitate EU airlines or undertakings to extend their network presence in the US market. It will ensure that EU airlines are qualified to apply for antitrust immunity for alliances with US airlines, and that applications will be treated expeditiously. It commits both sides to work towards compatible practices and standards and to minimise regulatory divergence in the field of aviation security.

It facilitates the creation of new co-operation arrangements between competition authorities so as to facilitate the joint assessment of alliances between EU and US carriers and allow for the development of compatible approaches. It will improve co-operation and consultation between the EU and the US in the areas of safety, state subsidies and environment, which have occasionally given rise to considerable difficulties between the two sides in recent years. A joint committee is to be established which will be responsible for resolving questions relating to the interpretation or application of this agreement and for putting in place clear procedures for the commencement and conclusion of a second stage agreement.

This agreement is potentially the most important single step in the development of international aviation relations since the Chicago Convention was signed in 1944. It marks a major departure from the bilateral system of exchange of traffic rights and paves the way for new forms of co-operation on a range of issues spanning safety, security, regulatory convergence etc. I have no doubt that it will become a model for a whole new series of multilateral agreements.

The commitments to second stage negotiations provide a basis for an even greater deepening of our relationship with the US. It will enable the Commission on behalf of the European Union to pursue the original objective of an open aviation area set out in the mandate awarded in June 2003.

I now propose to turn more specifically to the implications of the agreement for Ireland. Throughout the process of negotiations with the US an important consideration for Ireland was that the implementation of an open skies agreement would, because it envisaged the removal of all restrictions on traffic rights, mean an immediate termination of the arrangement relating to Shannon — whereby half of the flights between the US and Ireland must serve Shannon. Arising from this concern a number of contacts with the US took place in parallel with the Commission's formal negotiations.

I met with the then US Secretary for Transportation, Mr. Norman Mineta on 9 November 2005 to negotiate transitional arrangements for Shannon which were included in the EU-US text. This provided that the 1:1 Shannon stop requirement — one stop at Shannon for every stop at Dublin — would change to 1:3 for the period November 2006 to end March 2008 after which the Shannon stop requirement would end. During the transitional period Irish airlines would have access to three additional US destinations. Being part of the proposed EU-US Aviation Agreement these were conditional on its conclusion. In the event, some delay arose in the conclusion of the agreement largely because of political difficulties that emerged on the US side and persisted throughout 2006.

It was agreed with the US at the final round of negotiations which concluded on 2 March this year that these transitional arrangements would stand as originally agreed and enter into effect immediately following approval of the draft EU-US agreement by the Council of Ministers.

At the time I negotiated the transitional arrangement relating to Shannon, I sought and obtained assurances from Aer Lingus that, in the context of a level playing field between the airline and its competitors, it will maintain the current level of transatlantic traffic — approximately 400,000 passengers a year — with regular year-round scheduled services between Shannon-Boston and Shannon-New York.

The Brattle report for the European Commission, the report of the tourism policy review group to the Minister for Arts, Sport and Tourism, and the Air Transport Users Council report of the Chambers of Commerce of Ireland all supported moving to open skies with the US, and emphasised the significant benefits to Ireland when this happens.

The proposed Air Transport Agreement between the European Community and its Member States on the one hand, and the United States on the other, is now to be signed at the EU-US Summit on 30 April. While it will not enter into effect until March 2008, the transitional arrangements relating to Ireland are already being applied. From the perspective of air carriers the most immediate benefit is that Irish and other European carriers are permitted to launch services on three new US routes. Aer Lingus has moved quickly to exploit the opportunities presented by the more liberalised arrangements under the transitional arrangements. The airline intends to commence services to and from Dublin as follows: Washington on a four services per week basis from 3 September 2007; San Francisco on a four services per week basis from 28 October; and Orlando on a three services per week basis from 28 October.

The airline has commenced marketing of the new services. From 30 March 2008 it will be possible for Irish and European carriers to provide services between Ireland and any US airport. The benefits for Ireland will be significant in terms of increased tourism and economic activity. The opportunity for increased tourism is obvious. The Irish Hotels Federation has estimated that the open skies deal could double the number of US visitors to 2 million within seven years, generating an extra €1 billion for the Irish economy. From a business perspective new direct connections will open access to new markets and business linkages. This will provide a further impetus to the close economic relations that already exist between Ireland and the US.

I undertook when I announced the transitional arrangements for Shannon to prepare an economic and tourism development plan for it in consultation with the Ministers for Arts, Sport and Tourism and Enterprise, Trade and Employment to ensure that Shannon Airport sustains and grows transatlantic air services. A group under the aegis of the mid-west regional authority and comprising Clare County Council, Shannon Development, Shannon Airport Authority, SIGNAL and IBEC submitted a report in 2006 entitled Mid-West Tourism & Economic Development Plan. The recommendations of the report include infrastructure development, a regional conference centre, a tourism promotion fund and an airline route support fund. These will be taken into account by my Department in finalising the plan.

In conclusion, the EU-US Open Skies Air Transport Agreement is a good deal for Europe and represents the best possible opportunity at this time to reach a deal following several years of negotiations at EU-US level. From Ireland's point of view the new open skies deal creates a level playing field among EU airlines. The benefits for Ireland will be significant in terms of increased tourism and economic activity. It will in particular liberate Irish and other European carriers to inaugurate new services potentially to any city in the US over time. That Aer Lingus has moved with such alacrity to launch three new transatlantic services is indicative of the opportunities that exist in the marketplace and, by implication, the potential economic and tourism benefits. I commend the motion to Dáil Éireann.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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On behalf of Fine Gael I welcome the opportunity to speak on this motion. It will come as no surprise to the Minister that I am in favour of liberalising the market, so it would be inconsistent of me to say anything other than that I support this initiative. Open skies can present enormous opportunities for Ireland. This agreement should be overwhelmingly positive, I hope, for all parts of the island. The European Commission believes it will make an enormous difference to the whole of Europe. By liberalising the market and removing all the restrictions that currently exist in terms of capacity, frequency and pricing, enormous benefits are in prospect for this country.

It is the biggest shake-up in aviation since the 1944 Chicago Convention. Heaven knows, aviation and indeed the whole shape of the world has changed enormously since those times. The restrictions that were placed on aviation then need to be swept away in a very effective manner. As the Minister said, the proposed deal will open up EU destinations, which will offer challenges to us as well. For example, our major competitor is Heathrow in terms of providing services throughout the rest of Europe from America so the new arrangements will bring challenges as well as benefits. Up to this the idea that only Irish airlines could fly out of Irish airports was a major restriction. When that was added to the Shannon stopover, it really meant there was only a limited number of flights out of Ireland. It is only when one tries to book a flight that one realises how restricted we are in terms of choice, to get to the United States. That is fatal for an island country such as ours. To make travel from an island country more difficult is ludicrous. We now know that open skies can bring enormous benefits.

The open skies policy in Europe since 1992 has transformed aviation services and opened up the Continent to many passengers. Some 22 million passengers alone will fly out of Dublin Airport this year. It has transformed the Dublin-London route into the busiest and most competitive air transport market in Europe. The opportunity exists to make the EU-US open skies policy bring similar benefits to Ireland. All EU member states will expect to gain benefits from the policy. For Ireland, the opportunities are greater because of our traditional links with the US which were not fully capitalised because of the restrictive nature of the existing agreement.

The European Commission believes it will affect 60% of world airline traffic, increase transatlantic air travel by 50% and save passengers billions of euro over the next several years. This represents large potential for Irish business, trade, tourism, airlines and airports. For passengers, the extra competition gives choice and brings down prices.

Prior to last week's announcement on transatlantic flights by Ryanair, the open skies policy was expected to pave the way for low-cost carriers to operate on transatlantic routes. It will give greater choice, bring down prices and promote economic growth. It will help attract foreign direct investment and grow our tourism product. An increase in daily scheduled flights between Ireland and the US will benefit our island economy. The opportunities on capitalising on direct flights into the west coast of America will open up markets where traditional Irish links exist. The Irish Hotels Federation has welcomed the policy but it is concerned that we invest in selling Ireland as a tourist product. As well as seeking out new markets to the US, we must also promote our airports to ensure they become popular destinations.

The open skies deal is crucial for Aer Lingus as it sees its future growth in expanding into the profitable American routes. It will soon take possession of two new Airbus planes but I hope it will have the increased capacity to avail of the opportunities that will present themselves. Some European countries have already established good bilateral open skies arrangements. Their airlines will be positioning themselves to grab the lion's share in the remaining months before the full liberalisation of the market. Those ready to move in March will be best placed. I hope Aer Lingus will also be well placed then.

Open skies will mean an end to mandatory stopover at Shannon Airport. It behoves all of us that Shannon Airport benefits from the policy. The airport must embrace change. While the stopover deal was good for Shannon over the years, in recent years it has not been good for it or Dublin Airport.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It held Shannon Airport back.

Photo of Olivia MitchellOlivia Mitchell (Dublin South, Fine Gael)
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It certainly held Ireland back. The environmental impact of a transatlantic plane, designed to travel long haul, having to land at Shannon and then fly within an hour to Dublin is unforgivable.

The recent deal done by Knock Airport shows the potential to circumvent the rules and that people want additional routes to the US. It behoves whoever is in the next Government that Ireland's potential in tourism and foreign direct investment is maximised by this open skies deal. I welcome the agreement.

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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Whereas the agreement may lead to considerable economic benefits for the business and tourism sectors, I have concerns for its implications for Shannon Airport and the western region. Tourism is more important to the western economy than it is to the Dublin economy. Up to 7.5% of all economic activity in the region relates to tourism. A recent survey by the Shannon marketing group showed that Shannon could lose 100,000 transatlantic tourists because of the changes with the open skies deal. From a Kerry perspective, 68% of tourists will have landed at Shannon.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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The Deputy should take the example of Knock Airport. I am not being negative but that airport is having talks with other airports in America. Shannon Airport will have to do the same.

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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From 1999 to 2003, the western region lost 8 million bed-nights. The Minister may not be aware but bed and breakfasts and guesthouses are closing almost every day in the region. Many are finding this year particularly difficult.

Up to 50% of industries based around Shannon are from the US because of the airport's route connections with the US. That edge for the region could be lost because of this agreement as more American industrialists will opt to locate in the greater Dublin area.

The Minister established a committee to produce a Shannon Airport action plan to soften the blow and lessen the opposition from his colleagues in the west, including the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Killeen. The tourism promotion body for the area wants €8 million for five years. We need to promote the airport before the agreement comes into play. Recently, Aer Lingus announced three new US destinations but none will involve Shannon. The signs are ominous. Unless something is done, Shannon and the western seaboard will suffer.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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I am delighted to see the four Clare Deputies in the Chamber for this motion.

Photo of Jimmy DeenihanJimmy Deenihan (Kerry North, Fine Gael)
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They are worried.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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As a Clare Deputy, I take great pride in Shannon international airport. It is our second largest airport and provides European and US access to the west. It is critical to tourism and economic progress in the mid-west and the greater west of Ireland. The opportunities and threats of open skies have been evaluated in an independent study carried out by Dukes and Sorenson and by many other commentators. I have always said the open skies policy will have many benefits for Aer Lingus and particularly for Dublin and the east coast, but it will have few benefits for Shannon. Where open skies policies operate in European countries, evidence shows the majority of airlines fly into capital cities.

We all support balanced regional development and Shannon is an ideally placed airport and is the perfect example of what regional development stands for. Dublin Airport is choked with traffic and anybody who transited through the airport in recent times will have experienced this chaos. It can be a terrible experience for overseas visitors. Shannon still has a spare capacity of 2 million even though passenger numbers were up 35% in 2005 as a result of Ryanair's arrival. Transatlantic business in 2005 was worth €25 million in revenue terms to the region and revenue spent in the region by the North American visitor was worth nearly €300 million.

The year round transatlantic services underpin the regional US industrial investment of over €35 billion to the west. Some 50% of industry in the Shannon free zone is American and it is there because we have a year round direct transatlantic service. Unfortunately, we have a Minister for Transport who cares little for the west and panders to the Dublin business lobby and Aer Lingus.

Aer Lingus has no interest in Shannon Airport or in developing new routes out of the airport. It has no local management and it is managed out of Cork. No sooner had the ink dried following the signing of the EU-US open skies agreement when the airline announced new US routes out of Dublin to San Francisco, Florida and Washington, but no routes out of Shannon. It is very sad to see the route map in the Cara magazine, particularly the European route map with just one service out of Shannon to London Heathrow compared to the huge network out of Cork and Dublin. Even Aer Lingus crews in Shannon face an uncertain future with much chopping and changing in their rosters recently.

We in the mid-west always realised the open skies policy would be implemented but it should be introduced in an ordered way with a three year lead-in period and funding for tourism promotion should be in place to assist the challenges of such a policy. The Minister had a golden opportunity tonight to announce the implementation of the tourism and development plan but he failed to do so. I challenge him when he visits the region on Friday to announce this plan and provide the airport with a level playing pitch. We have had enough of the Minister's photo opportunities. We need action. The Minister has failed the people of the mid-west and has delivered nothing but misery to the region. On "Prime Time" tonight, the Minister's colleague, the Minister for the Environment, Heritage and Local Government, Deputy Roche, was called Pontius Pilate because he washed his hands of the Galway water crisis, but this Minister will go down as the modern day Pontius Pilate who plundered the west.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I am providing motorways and a tunnel through Limerick.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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The tunnel is approximately two years late from the date it was originally promised.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It is under construction.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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It is under construction but it is years late.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Will the Deputy say the same thing in 2012 when going out to fight another election? She will not win elections with that type of rubbish because nobody will listen to it.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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There is no doubt but that the tunnel in Limerick is at least two years late.

Photo of Cecilia KeaveneyCecilia Keaveney (Donegal North East, Fianna Fail)
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The Deputy should address the air transport agreement rather than the tunnel.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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If the Minister was not so disruptive, I would address the air transport issue.

I welcome the opportunity to address this transport agreement. Unfortunately, the Labour Party does not have a Deputy in Clare but this issue affects Limerick East and the entire mid-west region. Platitudes from the Minister are no good to the region. We need constructive action. We cannot stop the open skies policy because it has been agreed between the EU and the US. I accept there will be more than 25 million additional passengers between the two continents as well as the creation of 80,000 new jobs. We will not be able to stop that tide but we want the Minister to seriously take on board the concerns of the mid-west region. There is no evidence those concerns are being taken on board by him.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I just gave €29 million to Kerry Airport but Deputy Deenihan did not even thank me.

(Interruptions).

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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I refer to the two areas in which the Minister gave commitments which he has not yet fulfilled. There was meant to be a reasonable transitional period during which Shannon could adjust to the new regime. The time period allotted is only one year. The Minister signed the agreement in March and the one in three provision will only last for one year, from March 2007 to March 2008. We will then be on our own. It does not appear that the Minister has any concern for the needs of the region. He has made no attempt to publish his economic and tourism development plan. I tabled a parliamentary question on it on 3 April and the Minister stated that following the endorsement of the EU-US air transport agreement by the Council of Transport Ministers on 22 March, he expected to be in a position shortly to finalise the tourism and economic development plan for Shannon. It is now one month later and the Minister is still waffling on. He said he set up this committee and that the Mid-West Regional Authority is leading a group that has made recommendations to him which he will take into account. That is very generous of him, but the original expectation in the mid-west was that the plan would be published with a good lead-in time so that we would have the opportunity to set up the marketing and economic protection we need for jobs.

The concern in the mid-west is that the region will lose jobs. We will lose jobs unless the Minister takes this issue seriously. I note the Minister of State, Deputy Killeen, and the former Minister, Deputy de Valera, are in the House. It is no good to them either if the Minister does not take seriously the needs of the region and that we are genuinely concerned for the industries in the Shannon free zone, for example, and in my constituency which depend on access through Shannon Airport for their executives, the people with whom they do business and for their goods and services. There is no sense that the Minister is taking that seriously. He has given us no date for the publication——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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If one takes that to its logical conclusion, why are there major international American companies in Waterford and Wexford? There is no international access to those——

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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I do not know how well the Minister knows the mid-west, but the strength of the area has been built up around Shannon Airport over a long time. We have been innovative, constructive, flexible and co-operative and have shown the rest of the country how to behave as a region. Shannon was a region when no other area even knew what being a region was about. Now the Minister is just pulling the rug without seriously considering that these jobs have been built up over decades and that they are seriously under threat. I refer not only to tourism jobs but to other jobs in the region. The Minister needs to provide for a decent lead-in time and the type of infrastructural supports we need to make this happen.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I have done all that.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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The Minister has done nothing.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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The Minister has not done all that. Deputy Pat Breen expressed his scepticism in regard to Aer Lingus's commitment to Shannon Airport. The Minister stated that at the time he negotiated the transitional arrangement relating to Shannon, he sought and obtained assurances from Aer Lingus that in the context of a level playing field between the airline and its competitors, it would maintain the current level of transatlantic traffic with a regular year round scheduled service between Shannon and Boston and New York. I wish I could believe that means that Aer Lingus will maintain regular year round flights. I would like the Minister to state whether that means we can be certain Aer Lingus will maintain year round flights because that is what is required by the businesses in the Shannon region which depend on them. What does that agreement mean? Is it in writing? Does the matter of a level playing field mean Aer Lingus can get out of it at the first opportunity?

I also wish to ask the Minister about the feasibility study on the rail link for Shannon because we need the infrastructure.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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He does not give a damn.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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The Deputy is not being fair. I pride myself on being a regional Minister.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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This is all about the Pale and the Dublin region. There is no concern in the Minister's attitude or in his speech about the needs of the mid-west region——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I have been severely criticised from Dublin for being a regional Minister and I am getting criticism from the regions for being a Dublin Minister.

(Interruptions).

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I am probably right when both sides are giving out about me.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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The Minister is a modern-day Cromwell.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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I hate to interrupt my future Government colleagues in Fine Gael but I wish to continue my contribution.

I want to ask the Minister about the rail link for Shannon and the feasibility study. According to a written reply to a question I tabled two months ago on 20 February 2007, the Minister stated that a steering group was established which included a wide range of local interests. He stated that a draft final report had been prepared and was being considered by the steering group and that the final report would be available shortly.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It has not been delivered to me. I am not running the steering group.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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The Minister could have asked for the report and shown a bit of interest.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I am ready and they know where I am.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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Is it because there is no money in Transport 21 for such a rail link that the Minister has not been too concerned about speeding it up? We need a rail link for Shannon Airport and the proper infrastructural connections.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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That is why I am building a motorway for the area.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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The Minister is building a big rail link out to Dublin Airport——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I am building tunnels, motorways, the western rail corridor.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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We need one for Shannon Airport as well.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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What more can I do?

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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Motorways are not the answer. A motorway will not be much use to a tourist flying in from the USA who is not hiring a car and who wants to get to a destination in Deputy Deenihan's constituency or my constituency or the constituency of most of the other Members here tonight. A rail link to the airport is needed for those who do not have their own motorised transport. The Limerick — Ennis rail connection has proved to be very successful——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It has.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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——-and I have no reason to believe the rail link feasibility study would not make a positive recommendation for the region even though I do not know its contents.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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When I receive the report I will inform the Deputy.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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I do not note any huge urgency in his tone and in his manner——

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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There is nothing on the Galway line yet.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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I attended a meeting with the Minister in his Department when he agreed to have a feasibility study for which I thank him. However, a feasibility study will not carry passengers so we need more than a feasibility study. We need the Minister to take an interest in the outcome of that study——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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The Deputy is being unfair; she is being very hard on me tonight.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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——and we need a rail link to Shannon.

I am being as fair as I can be. I do not think the Minister is being very fair to——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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There is the Ennis bypass, I speeded up the Atlantic road corridor and I am building the western rail corridor.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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——the Shannon region. He has let us down in a number of areas and he has not given us——

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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We have ten more weeks.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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——-the appropriate lead-in time in regard to the open skies agreement that everybody in the region was expecting. We were expecting to get at least two years if not three or more years but we are only getting one year. We were expecting to have the economic and tourism development plan in place well before open skies would come into effect so that the support structures for the region, as recommended by the body, could be set up under the mid-west regional authority. We were also expecting that the Minister would produce this feasibility study on the rail link within some reasonable length of time and not on the eve of a general election but I do not know whether he will publish it before the election.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I would not do that because the Deputy would accuse me of pulling a rabbit out of a hat.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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He is coming to County Clare.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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If we can get good announcements from the Minister when he comes down I will be the first to welcome them but from his attitude here tonight I do not see that he is taking seriously the concerns expressed by Deputy Deenihan that we could lose 100,000 transatlantic tourists as estimated by the Shannon marketing body. That body wants to market Shannon but we need the support of Government to do so and we need the Minister to publish his plan.

The region's strength has been built on the international airport in the heart of the region.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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The Minister of State, Deputy Killeen, will be proved right; it will be a huge success.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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It was once said that only the rabbits would run around Rineanna but it has turned out to be very different because of the commitment, the flexibility and the innovative approach in the region. We want to work with the Minister but we want to see some kind of commitment from him to show he is serious about developing the strengths of the region.

I hope the fact he has two Government colleagues from County Clare beside him will ensure that the Minister takes the issue seriously because I can tell him that we are taking it seriously in the mid-west and on a cross-party basis. We are standing with the interests of industry, of tourism, of the trade unions and IBEC. The mid-west is standing together on this issue but we need proper Government reaction.

The policy of open skies cannot be stopped but the Minister can do what is necessary in order to support the region so that it can compete with a huge capital city and its hinterland. It is inevitable that airlines will seek to fly into capital cities so Shannon is up against it. We are up against a very strong Dublin lobby and against a very strong intention on the part of Aer Lingus to develop its flights in and out of Dublin.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I do not wish to be argumentative but I have tried to say to Deputy Pat Breen and to people in Shannon that Shannon's competition is not Dublin but rather similar regional airports in Europe and that the Deputy is focusing on the wrong issue.

(Interruptions).

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Already, similar and smaller and more isolated airports than Shannon are in the United States talking to airports. I would hope that Shannon is already doing the same because Knock Airport is doing so.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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How many technical stops could be made at Knock?

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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There are millions of Americans with Irish connections who want to come here on holidays.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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They want to come to the west.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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We are not competing with Frankfurt and some town in the south of France for those tourists——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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There can only be so many routes——

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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We are competing with Dublin.

Photo of Dinny McGinleyDinny McGinley (Donegal South West, Fine Gael)
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Is Deputy O'Sullivan prepared to give way to the Minister?

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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I am not sure I want to give way because the Minister——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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There are only so many routes to be given from the United States into Europe and this is the point I am trying to make. No airport will have unlimited numbers of routes to unlimited destinations. Shannon Airport will have to compete with countries for particular destinations out of the United States. European destinations are already competing for those slots in American airports.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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We are not stupid.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Shannon should be doing the same and that is the issue.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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We are competing with Dublin. If the Minister does not take this seriously, we will be in a position where practically all of the transatlantic flights in and out of Ireland will be going in and out of Dublin. We want the opportunity to keep the strength of Shannon to be supported in comparison to Dublin. This is needed to ensure the economic wellbeing of the region. It is ridiculous to say that we are competing with airports in other parts of Europe for that particular traffic. We are competing within Ireland and we want the opportunity to compete fairly.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Those who think small stay small.

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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I wish to share my time with Deputies Pat Breen and Aengus Ó Snodaigh.

The Minister is in good form tonight. It is like the last days of the Raj over there. There is a certain giddiness in the air——

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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One must always be optimistic when one faces the electorate.

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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One must be very optimistic.

Photo of Dinny McGinleyDinny McGinley (Donegal South West, Fine Gael)
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One must also allow Deputy Eamon Ryan the opportunity to speak.

11:00 pm

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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I worked as a tourism operator for ten or 12 years prior to the decision of the electorate at the last election. We brought many tourists to the west and south-west and many came through Shannon Airport. One of the telephone calls I always dreaded was someone asking how they could get to Killarney or Westport. I had to tell them they could not get there on the same day because there was no public transport connection between Shannon and Killarney or Westport to allow travel on the same day. This was the reality for a tour operator trying to develop high value good product tourism in the west.

The representatives of the people of Shannon and the mid-west region are right to be worried about the changes. Shannon is not just competing with Frankfurt or other European airports but it is also competing with Dublin and Cork because the Government made a strategic decision to set those airports in competition against each other. There is a real question about the future viability of a lot of the industries in the regions and the long-term development of Shannon Airport if the direct connections are lost.

What can be done to save that? For a tour operator the first thing needed is proper public transport connections so that people flying into the region can travel from Shannon to their destination, be it Killarney, Galway, Clare or wherever. I would commence by putting in place a high-speed, high-quality rail connection from Dublin to Shannon. Dublin Deputies might then be in a position to state that Dublin Airport is not working properly, that it is overcrowded and that rather than expanding it further, people who live in reasonably close proximity to Shannon should be encouraged to access Shannon Airport via a high-speed, high-quality rail link that will enable them to get in and out of Ireland quickly. With its over-capacity, Shannon Airport could be a good location if we had a high speed rail connection right to the door.

I agree with Deputy O'Sullivan that the Minister's attitude is to attempt to trivialise the issue of providing proper connections.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I thought Deputies O'Sullivan and James Breen would thank me for obtaining a transition agreement but they have not done so.

Photo of Eamon RyanEamon Ryan (Dublin South, Green Party)
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The transatlantic open skies agreement is a positive development and the Minister is correct that the local tourism industry should try to provide connections. However, this cannot be done without proper infrastructure in place. Shannon will not compete with Cork or Dublin unless an infrastructure is developed that will provide passengers arriving there with a first-class experience. Tour operators such as I would then be in a position to use Shannon because we would be confident they could transfer customers from the airport to their destination. Without a rail connection, we will not be successful in this regard. I am concerned about the future viability of the airport under the competitive open skies agreement if the proper infrastructure is not put in place.

I am sure our candidate in the constituency, Councillor Brian Meaney, will play a vital role in providing such a high quality and top class infrastructure so that the airport might survive and thrive.

James Breen (Clare, Independent)
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The lack of firm commitment on the part of the Government to the long-term future of Shannon Airport and the importance of the latter to the future of the mid-west region was highlighted by the personal crusade of the Minister, Deputy Cullen, to fast track the open skies agreement. A five-year action plan detailing what needed to be done to cushion the impact of the open skies policy and to allow the mid-west to continue to develop, industrially and economically, was presented to him. I previously called on the Minister to follow up on his publicly-stated commitment to secure the future of the mid-west by stating when this report would be implemented and indicating if it would be acted upon in its entirety. Unfortunately, nothing happened. However, that is the common response of the Government to issues affecting Clare.

The lack of proper measures means that the Shannon area can expect a 30% drop in trade. The shortening of the introductory period leading into the start date of the open skies agreement confirms the apathy with which this Administration views the mid-west. In the immediate aftermath of the announcement of the agreement, Aer Lingus announced new routes to San Francisco, Orlando and Washington. Significantly, all of those routes will operate from Dublin Airport. There is no doubt that this agreement will lead to a cherrypicking of routes by airlines.

Much was made of the establishment of customs and immigration clearance in Shannon and this was trumpeted as a jewel in the crown of Shannon's future. However, it now transpires that a similar station will operate out of Dublin Airport within a year. This is further proof of the Minister's contempt for the mid-west. Last October I asked him if he would provide tourism promotional funding for Shannon Airport to partly balance out the heavy funding allocated to the development of Dublin Airport. He replied that the funding of future developments at Shannon Airport will be a matter for commercial consideration by the new independent airport authorities when Shannon Airport becomes fully independent in accordance with the framework provided in the State Airports Act 2004.

Shannon is the one airport for which open skies represents a major negative and the Minister can only wash his hands of it. If he was serious with regard to securing the future of Shannon and the mid-west, this fund and other packages would have been put in place before the open skies agreement was announced. In the past I asked the Minister if he would provide a route support fund for Shannon. He again kicked for touch by refusing to make any commitment in that regard. It is little surprise that there is great scepticism in the mid-west with regard to the chances of Shannon Airport starting from a debt free position under the State Airports Act.

Counties Clare and Limerick are among the top three counties with the highest concentration of employment by US-owned companies per head of population. The Shannon free zone is one of Ireland's largest industrial parks and incorporates the largest proportion of American investment in Ireland. American private investment, which has maintained the Celtic tiger economy, has in the past been split 50-50 in employment terms between the west and east of the country. The impact of open skies, combined with the road network which, under the national development plan, will radiate from Dublin, will give the greater Dublin region and its environs a huge advantage in attracting American investment.

More than 120,000 jobs in the mid-west are directly or indirectly affected by Shannon Airport. If the loss of regular flights within Ireland continues and results in a decline in the level of service being offered from Shannon Airport and its not being able to support business needs because of reduced service by carriers or poorly timed flight schedules, companies based in the mid-west will not easily connect to the major business cities in Europe, including Dublin, and will not be able to attract potential business. Last year IBEC conducted a survey of 123 companies that employ more than 20,000 people. Some 25 of these companies expressed strong concern that a substantial reduction in flights from the US to Shannon could result in their relocating their operations outside of Ireland. They also outlined their concern that their parent companies might stop any further investment if access to Shannon were hindered under open skies.

I stated in the past in the House that it is high time serious investment was made in the mid-west to protect existing industry and attract future growth. A new bridge across the Shannon is required to open up north Kerry and west Limerick and make the mid-west attractive to investors.

Clare and the mid-west are long overdue a pay-off from this Administration to make up for decades of neglect. I guarantee the Minister if that payback is not announced in the near future the Government will get its own payback in spades in the forthcoming election. The Minister has let Shannon and the mid-west down and has sold us down the river.

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The open skies agreement has been applauded by the Dublin business community in particular because it will bring about the end of the protectionist policy of the Shannon stopover. I and my party have serious concerns regarding the possible implications of the agreement, particularly as regards the west.

Despite people's criticising it, the protectionist policy to which I refer successfully led to extensive development in the region and helped create more than 12,000 decent jobs there. It also encouraged quite an amount of foreign direct investment in Limerick city and surrounding counties. It helped the University of Limerick in the context of the industrial research and development that has taken place on its campus.

Shannon Airport is a vital item of infrastructure in the mid-west and thousands of jobs are indirectly dependent on its future viability. When the Minister broke the airport authority into three separate authorities at Dublin, Cork and Shannon, we argued that it was wrong to do so and that it had the potential to undermine Shannon's future viability. The open skies agreement has similar potential. We need to hear a great deal more about the Minister's supposed intention to prepare an economic and tourism development plan for Shannon. That should have been announced ahead of any other announcement regardless of whether it was a transitional arrangement. The money should have been signalled ahead of schedule. The Signal group in Shannon highlighted the need to put in place this €53 million fund to help compensate Shannon for the loss of income from the tourism trade and on foot of the potential pull-out of business interests as a result of fewer flights to the airport. A concern also exists that in the future transatlantic air traffic will concentrate on large carriers to Dublin city to the detriment of the west. It is a major challenge for Shannon Airport. Many believe the open skies policy will signal the death knell for Shannon Airport. It is up to the Minister and the Government to prove them wrong. This can happen but only if the development plan and compensation for the area are fast-tracked and the preparations are made. Marketing of Shannon and the west as a tourism area must also be increased substantially so it is made more attractive for tourists to seek flights directly to Shannon and to ensure the west is opened up.

This does not only involve Shannon Airport. The west must be opened up in terms of infrastructure. I concur with what Deputy Eamon Ryan stated previously with regard to a high-speed rail network. Even a simple matter such as the dual carriageway between Ennis and Galway has not been started even though it is long promised.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It is past Ennis at this stage. What is Deputy Ó Snodaigh talking about? We opened the Ennis bypass recently.

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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It is not in Galway, is it?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It is not. It is being built. What more does the Deputy want? Does he want me to build it myself?

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I am not criticising the Minister. I am stating we need to fast-track development to ensure a soft landing for the west. A need for investment in tourism and jobs in the west if the status of Shannon was undermined was signalled for a long time. However, we still have the Minister announcing he will prepare a plan and that his Department will finalise it. It is hoped he will do so quickly within the coming weeks so the workers and people in Shannon can benefit from the open skies agreement in the same way as Dublin and the east coast. The agreement has been applauded by many and it is up to the Minister to prove wrong those who state the area will experience a down turn. I believe he can do so through the proposed plan.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I thank all colleagues for their contributions to the debate and in general terms the welcome for what EU-US open skies will mean to Europe and, more importantly, to Ireland — notwithstanding some of the particular points of which I am well aware such as the concerns in the west. I absolutely reject any idea that I as Minister for Transport during recent years or the Fianna Fáil Party in Government have not fulfilled commitments made to the west. The level of investment in recent years in the west and mid-west in particular is unprecedented, certainly during my tenure in office.

One of the issues I was asked to deal with by interests in Shannon and the west during early discussions on EU open skies was to fast-track a range of infrastructural projects which would demonstrate clearly to the mid-west that the Government's commitment was real. This was raised as an issue in discussions I had with unions and other representative groups. Any fair assessment of this commitment will accept this has happened.

The major motorway on the Atlantic road corridor is well under way. Ennis was bypassed, which brought fantastic benefits and relief to the area.

James Breen (Clare, Independent)
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Ennis has been partially bypassed. The Minister should get the record straight and tell the truth to the House. The western bypass is not in place

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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As the Deputy knows, I opened the Ennis bypass.

James Breen (Clare, Independent)
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The Ennis bypass is partially complete.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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As a follow-on to this, under the national development plan, I moved forward, as requested, more than €400 million to continue the completion of this major section of the Atlantic road corridor motorway between Shannon and Galway at the fastest possible pace. This is under way and a major tunnel under the Shannon is under construction also.

Deputy O'Sullivan raised the issue of the feasibility of the railway connection to Shannon. As she probably knows from her colleagues in Limerick, I did not go with it because the analysis, figures and economic case in the original draft were extremely poor. A different set of requests and questions were sought and these have gone into the mix. The local authority is dealing with it at present. I expect to receive the final report soon and it is hoped that it will be positive.

I believe a good economic plan is important and I will fulfil the commitment. There is nothing like meeting new customers face-to-face. In this case, the new customers are any city or airport in the United States. I have tried to get this message through to the people in Shannon for some time. Getting on a plane to the United States with a product to offer is what it is all about. One does not need billions or millions to do so. One needs energy, a plan and focus to do it.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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One needs an airline willing to fly to the airport.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I am struck by what Knock is doing. It is interesting and extraordinarily clever. Knock does not have half the natural hinterland available to Shannon. I do not state this as a criticism of Shannon but as an example of taking advantage of a changed environment. Shannon is a fantastic asset not only to the mid-west, but to Ireland. It is an extremely important international airport. I believe the future for Shannon is as big as Shannon wants it to be.

James Breen (Clare, Independent)
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Will the Minister provide it with debt-free status? It is a straight question. Will the Minister invest €59 million over what the mid-west regional authority requested?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It is not an issue because Shannon does not have a debt. I am not bothered about it.

James Breen (Clare, Independent)
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Will the Minister invest in it as the mid-west regional authority requested?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Absolutely.

James Breen (Clare, Independent)
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Good man. I am delighted to hear it.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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There is no question about it.

James Breen (Clare, Independent)
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It is extremely important to hear this from the Minister.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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Of course it is and it is important to the people there.

James Breen (Clare, Independent)
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I thank the Minister for his commitment.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I repeatedly stated this with regard to investment. The Deputy is correct.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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The Minister is misleading the Deputy.

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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It is crucial from the point of view of my responsibility for future major investment being made in the airport and there is no question about it. I made the point that Shannon is not only important to the mid-west, it is crucial to Ireland. It is significant infrastructure which is under-utilised and under-performing.

I am delighted that after many difficulties a new cost-base was agreed for Shannon as it is absolutely crucial. I know it was a difficult process but I am delighted the outcome is so positive. Having its cost base corrected positions the airport to be able to compete and have an asset to sell internationally to major destinations available to it in the United States.

From a European perspective, this is a good deal. Everyone accepts it is a terrific deal for Ireland. The potential for this country is unlimited. Already, it is stated——

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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Why must we take all the pain and none of the rewards?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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——the potential benefit for Europe is approximately €12 billion for customers and 80,000 new jobs. This is how Europe views it. Ireland is included in this and for Ireland it potentially means a doubling of the number of passengers from the United States. It is correct to state that, similar to any country, the majority of those flights will want to go to a capital city. However, if Shannon holds what it has and increases its range of new destinations it will be enormously successful. I also believe Cork and Knock will be successful.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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How could they all be successful?

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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What about Waterford Airport?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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The south-east airport goes without saying.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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Look at the record for open skies. They all fly from capital cities.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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When will we receive the plan?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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As soon as it is ready. It is as simple as that.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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When is that?

Photo of Martin CullenMartin Cullen (Minister, Department of Transport; Waterford, Fianna Fail)
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I am happy to reject some of the points made and state that as a regional Minister I have strongly demonstrated my commitment on behalf of the Government and particularly Fianna Fáil in Government to the mid-west and west by all of the infrastructure that is not only being spoken of but is under way, totalling billions of euro.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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Tell that to the people of Clare.

Question put and agreed to.