Dáil debates

Tuesday, 13 October 2009

12:00 pm

Photo of Joe CareyJoe Carey (Clare, Fine Gael)
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I want to express my absolute disgust at Aer Lingus for yet again singling out Shannon Airport for most of its planned cuts. I was shocked at the extent of the measures announced last Thursday. There is undoubtedly an agenda at work among senior Aer Lingus management to kick Shannon at every turn. Why else would the airline refuse to use the state-of-the-art new €21 million US pre-clearance facility at Shannon Airport? You can bet your bottom dollar that if the same facility were made available in Dublin first it would use it. Other carriers such as Continental, Delta and British Airways are availing of the service which puts Aer Lingus at a competitive disadvantage.

If Aer Lingus marketed and supported Shannon Airport as it does its new loss-making bases in Belfast and Gatwick, the potential of Shannon and the mid-west would be unlocked. Last winter 30,000 passengers travelled with Delta out of Shannon, whom Aer Lingus could attract.

Aer Lingus management is asking Shannon to carry an unfair burden. The loss of a 130-strong cabin crew base in Shannon and its replacement with a core group of just 20 to operate the Heathrow route is a step closer to Aer Lingus's full bypass of Shannon Airport. The Minister for Transport, Deputy Noel Dempsey, has a very poor record in defending services at Shannon. This crisis presents him with an opportunity to redeem himself.

He must intervene in the interest of balanced regional development, of securing a transatlantic base on the west coast, of business and tourism in the mid-west and of saving 102 jobs. He must use the 25% shareholding he holds in Aer Lingus to ensure US connectivity to the mid-west region. I plead with the Minister to act and for once to work in the interest of Shannon. We need to retain the full complement of cabin crew there to secure our vital Shannon transatlantic base. The Minister's failure to intervene in the Shannon-Heathrow dispute was a big mistake. He should not make the same mistake this time.

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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These are testing times for Aer Lingus and its staff, especially those based at Shannon Airport. The airline's lamp is burning through its cash reserves faster than it can refill them and by the end of the year its cash reserves are expected to be down to €400 million from €803 million in 2008. Some of the airline management's decisions in recent years have been questionable and have left the airline in a precarious position. It has spent €180 million cash on the purchase of two Airbus aircraft and has also been a casualty of fuel hedging. In addition, while it claims that this reduction in cash reserves is due to a combination of reduced sales and high staff costs, I understand it is due to save up to €55 million a year in staff costs from January 2010 as a result of cost savings agreed with staff in the last restructuring plan.

Unfortunately, Aer Lingus staff at Shannon and the people of the mid-west will once again pay the greatest price for these bad decisions. Aer Lingus has been continually undermining and downgrading its Shannon operation for several years. It now plans to shed 102 cabin crew jobs at Shannon which will have serious implications for future transatlantic services at the airport. Aer Lingus has failed to sign up to use the new state-of-the-art US pre-clearance facility and there is no reason Aer Lingus cannot negotiate an agreement with the US port authorities which would facilitate their Shannon passengers. It flies into terminal four in New York which has a domestic baggage claim area used by Delta, Northwest and Virgin America operating domestic services and the situation in Boston is similar with a domestic baggage claim area available which is used by Southwest for its domestic routes.

Its US advertising campaigns are tilted in favour of Dublin Airport as the two most recent campaigns testify. It now plans to reduce the New York EI 111 service from Shannon to a thrice-weekly flight. Bookings for the Shannon-New York service to the end of March 2010 are well ahead of bookings on the EI 105 Dublin-JFK service but I am amazed that the airline plans to operate its Shannon service on Tuesdays, Thursdays and Fridays two of which days have traditionally been poor for bookings on the New York route. I believe the airline is intentionally running down the Shannon operation to show that the Shannon service underperforms against the Dublin one. I have constantly pointed out the need for the airline to review the timing of its Shannon flight. EI 111 should depart at 9 o'clock or 10 o'clock in the morning which would allow the airline to compete for the 30,000 passengers who travelled with Delta Airlines last winter which is not operating from Shannon this winter.

I hope the Minister of State at the Department of Health and Children, Deputy Moloney, will tell the Minister for Transport that what is needed now is an urgent meeting with Christoph Mueller who has not had sufficient time to make himself au fait with the Shannon situation and I am calling on the Minister to arrange this meeting. The Government has a 25% shareholding in Aer Lingus and has appointed directors to the company. The Minister must have learned lessons from the Shannon-Heathrow debacle last year and I urge him to act and arrange this meeting immediately.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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We all know that Aer Lingus must cut its costs but it is out of proportion for it to take 102 cabin crew out of Shannon when it is taking only 100 out of Dublin and Cork airports together. In the interests of balanced regional development the west depends on having connectivity through Shannon Airport for the sake of industrial development and of the society in the west and mid-west. With all due respect to him, the Minister of State present here has no brief whatsoever for transport. That the Minister for Transport did not come to the House to reply to four different Deputies on this issue of crucial concern to the people in the mid-west indicates how he views Shannon Airport.

I urge the Government to use its 25% share in Aer Lingus. What was the point of keeping a 25% share in the airline if it does not use it in the interest of balance for the country? The transatlantic routes are crucial to Shannon's survival. It offers very few flights into Europe. There are a couple of Heathrow connections which we had to fight to win back, despite the Government's having allowed them to be taken away. Transatlantic travel is crucial to Shannon. I urge the Government to insist that the cabin crew that deals with the transatlantic routes be based in Shannon. That makes sense. Many flights go in other directions from Cork and Dublin. The Minister should let us have our cabin crew in Shannon and a commitment from Aer Lingus to Shannon Airport.

There is no problem about opening up the customs pre-clearance facility at Shannon and it should be opened now. I urge the Government to insist that Aer Lingus do that. There is a domestic baggage claim area in terminal four in JFK airport and in Boston airport. There is no problem about opening the pre-clearance facility in Shannon for Aer Lingus passengers and this will not conflict in any way with the Dublin passengers. It is a falsehood to suggest that this is a problem.

The airline needs to keep a proper base of cabin crew in Shannon Airport and above all to respect the loyalty of the staff who have stayed with the airline despite opportunities to go. It is vital to the west that we have air connectivity. It is shameful that the Green Party while in Government does not stand up for balanced regional development in which it is supposed to believe. I hope the Minister for Transport will somehow listen to this debate and take this issue seriously because it is of vital concern to us in the region.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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I beg the Acting Chairman's indulgence on a matter of vital interest for the mid-west and Limerick. It is absolutely shameful that the Minister for Transport is not in the Chamber tonight. When I was elected to the Dáil in 2007, the first issue before the House was the Shannon-Heathrow route. At that time, the Minister, Deputy Dempsey, stated he was disowning the problem of dealing with the 25% stake. When the Government retained its 25% stake in Aer Lingus, it did so for strategic reasons. I tabled a parliamentary question to the Minister on the transatlantic routes Aer Lingus operated from Shannon to which I got a two-line response stating that commercial operational matters at Aer Lingus are a matter for the management and board of the company. The Minister has three appointees on the board and he should be in the House tonight. We all know Aer Lingus has difficulties because of today's world markets but what is now required is a consideration of what can be done to keep a sustainable transatlantic service from Shannon Airport that will involve the retention of the 127 cabin staff based there.

The Heathrow route was taken from Shannon and Aer Lingus had to restore it because it was profitable. It made the wrong decision and is now making the wrong decision about the transatlantic routes and the removal of the cabin crew based at Shannon Airport. Negotiations are getting under way between unions and management. The Minister for Transport should use the 25% stake to ensure Aer Lingus looks at the broad overall perspective for a sustainable base in Shannon Airport for transatlantic routes.

Aer Lingus should be using the customer border clearance facility at Shannon Airport. Why is it not doing so? The Government paid for that facility to be based there. It is a 25% stakeholder. Why does it not insist that Aer Lingus use the facility?

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Hear, hear.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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It is a comparative advantage for Ireland and the mid-west. I am a Deputy representing Limerick. Shannon Airport is vital to us, both for connectivity through Heathrow and for the transatlantic routes. I cannot understand why the Minister for Transport is not present tonight. There are 102 jobs at stake. The future of the region is at stake with regard to the connectivity which is required for balanced regional development. That is why the Government retained its 25% stake in Aer Lingus.

It is cowardly for the Minister not to be present tonight to answer our questions. He should insist that Aer Lingus engage in meaningful discussions with the unions and management with regard to providing a sustainable service based in Shannon Airport with cabin crew based there. These people have given loyal service over many years to Aer Lingus and to Limerick, the mid-west and Shannon Airport. They want to stay in their jobs and are willing to work with management. Meaningful discussions are now required.

I understand discussions are getting under way tomorrow, with detailed discussions to take place on 29 October. I expect the Minister to come to the House and give Members an assurance that he will stand up for the interests of the Aer Lingus workers and the mid-west, Limerick in particular, rather than provide a meaningless two-line answer. We all want to work with Aer Lingus and we realise it has financial difficulties. Let us look at a sustainable model for Shannon Airport such as was never undertaken by Aer Lingus. The airline made a mistake with the Heathrow route and is now making a significant mistake with the transatlantic route and in taking cabin crew away from Shannon Airport. I want the Minister of State, Deputy John Moloney, who is present, to tell the Minister for Transport, Deputy Dempsey, we are not going to go away. This issue will return to the House and we expect the Minister to answer these questions then.

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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The Minister, Deputy Dempsey, has no intention of showing disrespect to Deputy O'Donnell, his colleagues or the House. He had agreed a prior engagement-----

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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Why is he not present?

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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I made the point he had a prior engagement. That does not mean he will be unavailable for future questions. I am certain he will be and I apologise in his absence.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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What about the 25% stake in Aer Lingus?

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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I apologised for the Minister's absence and assured the Deputy he did not intend to show any disrespect. I am sure he will be available to answer questions.

I thank Deputies for raising this matter on the Adjournment. Decisions on commercial and operational matters at Aer Lingus are a matter for the board and management of the company and it is not open to the Government to intervene in such matters. Aer Lingus is an independent company and has to make decisions on a commercial basis. The State's 25% shareholding does not confer on the Minister a right to influence commercial decisions at the company.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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He has three directors on the board.

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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I repeat the State's 25% shareholding does not confer on the Minister a right to influence commercial decisions at the company.

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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The Minister of State, without interruption, please.

Photo of Jan O'SullivanJan O'Sullivan (Limerick East, Labour)
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What is the point of it?

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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No interruptions, please.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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He has three directors on the board.

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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I am trying to give the Deputies an answer.

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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The Minister of State, through the Chair, please. Colleagues, please allow the Minister of State to respond. You are allowed to make your contributions and must be fair to the Minister of State.

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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The State's three representatives on the board of Aer Lingus derive their duties from the Companies Acts and, as such, are obliged to pursue the best interests of the company.

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)
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So much for the public interest.

Photo of John MoloneyJohn Moloney (Minister of State, Department of Education and Science; Minister of State, Department of Health and Children; Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Justice, Equality and Law Reform; Laois-Offaly, Fianna Fail)
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Subject to that duty the Minister has mandated the State-nominated directors to seek to ensure that all decisions of the company that have significant implications for wider Government, aviation or regional development policies are considered at board level. In any such decisions they are directed to seek to reconcile commercial and public policy objectives. The Government is satisfied from all the information available to it that a major restructuring of the group's cost base is essential if Aer Lingus is to survive.

The Minister understands that approximately 100 of the 676 job losses being sought by the company will be at its Shannon Airport base. Job losses are particularly regrettable in the current economic climate and the Minister and I have every sympathy for those whose jobs are on the line. The Minister understands a consultation process between management and staff is now under way and he encourages all parties to engage constructively in that process. The industrial relations mechanisms of the State are available to assist in reaching an agreed outcome for all concerned.

From an aviation policy perspective, the cornerstones of Government aviation policy are competitiveness and connectivity. A viable Aer Lingus is key to ensuring the achievement of these objectives. In Ireland, our priority now is to ensure we can sustain continued air access to key business and tourism markets. Competition among airlines serving the Irish market has been the cornerstone of our aviation policy resulting in dramatic growth in air services and passenger numbers over the past ten to 15 years until the advent of the global downturn. The best way to maximise Ireland's air connectivity is to see Aer Lingus returned to a stable footing to allow it to compete aggressively in the current very difficult market environment. This is a difficult time for Aer Lingus. I ask all stakeholders and regional interests to lend their support to the airline to ensure it has a viable independent future for the benefit of tourism, business and the country's economic recovery.

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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I thank the Minister of State and my colleagues for their various levels of co-operation.