Kieran O'Donnell (Limerick East, Fine Gael)
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I thank the Acting Chairman for allowing me to raise this vital report for the mid-west. I congratulate Deputy Gallagher on his appointment as Minister of State at the Department of Health and Children. I am extremely disappointed the Minister for Transport and the Marine, Deputy Dempsey, is not here and hope it is not a sign that he will continue in the same vein as his predecessor, Deputy Cullen, in terms of his attitude to the mid-west. In particular, we have a €53 million mid-west tourism and economic development plan to deal with the impact of the open skies agreement for Shannon Airport and the region. When will the plan be implemented, how much will be spent and who will administer the fund?

I welcome the fact the programme for Government refers to a marketing plan being put in place. The reference is somewhat vague, but nonetheless I welcome it and trust that part of that marketing plan will be the full implementation of the €53 million tourism and economic development plan.

Open skies is effectively now in place for Shannon. A transitional period was supposed to operate from October 2006 to April 2008 but flights can be stacked and averaged over the period, three for one. This agreement was only negotiated and concluded by the former Minister, Deputy Cullen, on 3 March 2007 but the airlines have been allowed to go back to October 2006 to stack flights. We now have airlines effectively putting open skies fully in place for Shannon Airport, which will have grave implications. Three airlines are about to pull out from Shannon Airport. American Airlines, which flies year round to Chicago, will be gone from October 2007. Air Canada, which flies year round to Toronto, will cease operations on 10 August 2007. Delta, which flies to Atlanta in the winter months, will be gone from this winter. The implications of that are serious. There are, for example, six new hotels in Limerick, one of which is down 2,000 bed nights for 2008 because of uncertainty around future flights. Will the Minister of State confirm that CIE International Tours is redirecting all of its US business to Dublin because of that same uncertainty? That will have disastrous consequences for the region in 2008 and 2009.

One of the reasons the former Minister, Deputy Cullen, accepted the agreement was that an assurance was given by Aer Lingus, through its CEO Mr. Dermot Mannion, that 400,000 passengers would be retained, year round, at Shannon. Has the Minister received any written confirmation from Mr. Mannion to this effect? This is critical in terms of retaining year round flights for this region.

An IBEC report was published at the end of 2005 which showed that US multinational companies in the mid-west region are fearful about a reduction in transatlantic flights. A survey carried out among 123 companies, which between them employed 25,000 people and had an annual turnover of €6.12 billion, found that 70% believed the level of connectivity between Shannon Airport and the US was vital to their competitiveness. Furthermore, if there was a reduction of 100,000 tourists coming into the mid-west region and 200,000 transatlantic passengers, that would result in a 30% reduction in overseas revenue, amounting to €75 million. Over one fifth of the respondents said they would consider moving out of the region if US flights from Shannon were discontinued.

The Government has neglected the mid-west region to date. Successive Ministers have ignored it and again I express my disappointment at the absence of the new Minister for Transport and the Marine, Deputy Dempsey. I urge the Minister to implement this plan in full. I want to know when it will be implemented, how much will be spent and who will implement it.

Pat Gallagher (Donegal South West, Fianna Fail)
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I thank Deputy O'Donnell for raising this matter. I apologise for the Minister for Transport and the Marine, Deputy Dempsey, who is unavoidably absent, due to a prior commitment. His absence does not indicate his lack of interest in this issue.

It is important to trace the background to the proposal to establish an economic and tourism development plan for Shannon. Following decisions taken by the European Court of Justice in 2002 in the so-called open skies cases, the European Council of Ministers granted a mandate to the European Commission for the negotiation of an open skies agreement with the US. Against the background of the Government's commitment to the liberalisation of air transport services between Ireland and the US, Ireland supported that mandate.

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 of the Chambers of Commerce of Ireland, all supported moving to open skies with the US, as soon as possible.

EU negotiations with the US about a wide-ranging aviation agreement began in October 2003 and continued in 2004 and 2005. In November 2005, the EU and US negotiators reached agreement on the text of a comprehensive first-step air transport agreement. A transitional arrangement for Ireland, relating to the phasing out of the Shannon stopover, was included in the November 2005 text but remained in abeyance, pending finalisation of the negotiations.

Following certain difficulties on the US side last year, which meant the agreement could not be concluded, negotiations at EU-US level resumed in January 2007. Over the course of a further two negotiating rounds in February and March a series of modifications to the text were agreed by the negotiators. The final agreement was endorsed by the Transport Council on 22 March 2007 and signed by the US and the European Commission at the EU-US summit on 30 April 2007. The agreement as a whole is to enter into force on a provisional basis from 30 March 2008.

The original transitional measures agreed in November 2005 relating to the granting of additional traffic rights to three US destinations, as well as measures to phase out the Shannon stopover, entered into effect immediately following approval of the draft agreement by the Council of Ministers in March 2007. This means the Shannon stop requirement will not be fully terminated until March 2008. Aer Lingus has already announced it will commence new services to three new US destinations in the autumn namely to San Francisco, Orlando and Washington Dulles.

With a view to assisting Shannon Airport and the wider Shannon region to adapt to the new arrangements under the open skies regime, the former Minister for Transport gave an undertaking to prepare an economic and tourism development plan for the region to ensure Shannon Airport sustains and grows transatlantic air services.

Also in the context of the 2005 draft open skies agreement, the then Minister for Transport sought and obtained assurances from Aer Lingus that the airline will maintain the current level of transatlantic traffic of approximately 400,000 seats a year with regular year round scheduled services between Shannon and Boston and New York.

Kieran O'Donnell (Limerick East, Fine Gael)
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Did he get those assurances in writing?

Pat Gallagher (Donegal South West, Fianna Fail)
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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. In this context it is clear that if Shannon Airport is to develop as a successful and sustainable business, one of the issues that must be addressed is the airport's uncompetitive cost base. On 5 April last, the airport workforce voted to accept a restructuring programme which has been drawn up to achieve €10 million cost savings annually for the airport. Management is now implementing the programme. Critical to its success is the realisation of some 200 voluntary redundancies from the company. If the necessary cost savings are achieved then the airport will have a solid basis for business planning and responding effectively to the opportunities and challenges of open skies.

The economic and tourism development plan for the Shannon catchment area is close to finalisation and is due to be considered by Government in the coming weeks. In drawing up the plan, the Minister for Transport and the Marine consulted with his colleagues, the Ministers for Arts, Sport and Tourism, Enterprise, Trade and Employment, Finance, and Communications, Energy and Natural Resources. The Minister also welcomes the input to this process of the liaison group established by the Mid-West Regional Authority. The group comprising the Mid-West Regional Authority, Clare County Council, Shannon Development, the Shannon Airport Authority, SIGNAL and IBEC, brings together key stakeholders with a shared commitment to the development of the Shannon region.

The report puts forward a series of wide ranging and ambitious proposals to this end. The recommendations span infrastructure development, tourism product development, tourism promotion and institutional reform. Not surprisingly, there is considerable overlap between the proposals and existing initiatives that are under way or planned.

I want to assure Deputy O'Donnell that the report and its recommendations have been examined by the relevant Departments in the preparation of the proposed tourism and economic development plan for the Shannon catchment area. As I have said, the plan is now being finalised. It will be considered by the Government in the coming weeks and, subject to Government approval, will be published as soon as possible thereafter. It would, therefore, not be appropriate for me to comment in any more detail before the Government has considered the matter.

Kieran O'Donnell (Limerick East, Fine Gael)
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May I interject with one quick question?

Johnny Brady (Meath West, Fianna Fail)
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No, I cannot allow that. The Deputy had time to contribute.

Kieran O'Donnell (Limerick East, Fine Gael)
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It will be too late.