Dáil debates

Wednesday, 18 September 2013

Topical Issue Debate

Air Services Provision

4:05 pm

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The new speaking-time clocks are being used today. The time indicated on the screen during the Topical Issue debate will be the time allowed to the proposer and the Minister for the initial statement and reply - that is, four minutes each - and the time for each supplementary question and reply, which is two minutes each. I ask Deputies to comply with the time limits as running over time reduces the time available for other Deputies.

4:15 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank the Ceann Comhairle's office for selecting this issue. I tabled it because a direct commercial air route between Ireland and Asia would open up further opportunities for the creation of jobs and investment in the country and, in particular, add to our tourism potential. Deputies may recall that when Ireland qualified for the 2002 World Cup in Japan and South Korea, Aer Lingus offered charter flights to Tokyo and thousands of people went over to follow the national team. Unfortunately, a permanent route never took hold. In recent years we have seen great progress in Ireland's aviation industry. We have a state-of-the-art second terminal in Dublin airport from where one can fly to more destinations than ever before.

Our national carrier has flights to multiple destinations in the United States and North America. It has direct routes to large metropolitan areas and hubs such as Atlanta, Charlotte, Washington DC, Philadelphia and others and is adding San Francisco shortly. Seasonal routes have been in place to some Canadian cities, in particular, Toronto, for a number of years. Because of the number of carriers and options, people in Ireland have never had any problem reaching the United States and North America. We also have direct links to the Middle East. Emirates runs a daily service to Dubai and its sister airline, Etihad Airways, serves Abu Dhabi, both in the United Arab Emirates, yet we do not have a direct commercial air route between Ireland and the most populated continent on the planet. It has been identified time and again that such a route to an Asian city could be of significant potential to the economy.

Trade between Ireland and China is worth approximately €8 billion annually. Last year when the then Vice President, Xi Jinping, visited Ireland, it created major interest in China in the same way that US first lady Michelle Obama's visit to Ireland, including Glendalough, created major interest in America. On becoming President, he issued an invitation to the Ceann Comhairle to bring over a delegation, of which I was a member, earlier this year when we had an opportunity to meet him and other senior administrators in the Chinese Government. It is obvious that there is major potential in China alone, not to mention the other countries around it such as Indonesia and Thailand. Since the Dáil last sat in July, three Government Ministers have been on trade missions to China, increasing awareness in the Chinese business community of Ireland's potential as an investment location. We visited several Irish companies which have a big presence in China, the global headquarters of one of which remains in Cork and which could see major potential in further business development there. Our ambassador to China, Mr. Declan Kelleher, who has just finished an eight year term is a fluent Mandarin speaker and has done Trojan work in developing Chinese-Irish relationships.

We must continue to support the development of an innovation-friendly, pro-competition regulatory framework for aviation if Ireland is to be successful in our endeavours. We must continue to encourage new entrants to the Irish aviation sector. We have a state-of-the-art Terminal 2. As neither terminal is overstretched, they could accommodate more capacity.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Enhanced air access to key business and tourism markets around the world has always been a key element of Ireland's aviation policy. A direct service between Ireland and Asia, particularly to and from China, would be of huge benefit to our trade relations with key Asian economies and for inbound tourism. Our export trade to China alone is worth around €3.8 billion, with an import figure of €2.1 billion, and a direct air link would act as a stimulus to further growth in this area. Ireland has bilateral air transport agreements with a number of Asian countries, including China, India, Malaysia and Singapore. These agreements provide the legal framework for scheduled air services between Ireland and these countries. However, while these agreements have been in place for quite some time, there has been very little interest from the airlines in direct services.

Under our agreement with China, it is open to any Irish, EU or Chinese airline to operate services between the two countries. The establishment of such a service, however, has to be market driven; ultimately, therefore, it is a commercial decision for the airlines entitled to operate routes under the agreement. Most of our airports and Tourism Ireland have attractive incentives and co-operative marketing programmes available to encourage airlines to develop new services and help support new services and routes once they are up and running. The Dublin Airport Authority, DAA, recently signed a twinning agreement with Beijing Capital International Airport which will allow the two companies to co-operate to further commercial and tourism links between the two cities. The agreement is also designed to enable the two airports to engage in a joint marketing initiative to deliver direct airline services between Dublin and Beijing.

While we do not yet have direct air links to Asia, Ireland has extensive one-stop connectivity with most major cities in Asia through established European hubs such as Heathrow, Amsterdam, Paris and Frankfurt airports. Connectivity with Asia has been further enhanced in recent years with direct services from Dublin to Istanbul by Turkish Airlines, the commencement of Etihad services to Abu Dhabi in 2007 which run ten times a week and, more recently, daily Emirates services to Dubai, all offering one-stop connectivity to a large number of points in Asia through their respective hubs.

As mentioned, aviation is a key enabler of economic growth. It is important, therefore, that there is a clear policy framework in place to facilitate its continued development and optimise the contribution the sector can make to the economy. As a first step in the process to develop a new national aviation policy, my Department and the Irish Aviation Authority, IAA, hosted a conference on 3 December 2012 in the National Convention Centre to hear the views of stakeholders and start the debate on the issue. Taking account of the issues raised at the conference, an issues paper was published on my Department's website in February 2013. The paper poses a number of questions and covers eight broad areas: airports; air services; regulation and governance; aircraft leasing and finance; aerospace, education and training; general aviation; and sustainability. A total of 74 submissions were received in response to the consultation from a wide range of interests. The number and quality of the submissions received are very encouraging and demonstrate the strong interest there is in shaping future aviation policy in Ireland. The submissions are being reviewed and the intention is that a draft national aviation policy statement will be issued before the end of the year which will provide a further opportunity for stakeholder input before the adoption of the new policy document in early 2014.

The importance of connectivity generally is highlighted in a number of the submissions and the importance of direct services to Asia is also raised. The Ireland China Association made a submission highlighting the benefits which could follow from services to China. My Department and I will continue to work closely with the airport authorities, airlines and tourism agencies to encourage the development of direct air links with Asia. The intention behind developing the new aviation policy is to provide a clear framework for the expansion of the sector and, in particular, improving our international connectivity. However, decisions on individual air routes will be made on a commercial basis by the airlines in question which must be confident they will be able to sell a sufficient number of seats at a sufficient price to cover their costs and make a profit.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank the Minister for taking this issue and his comprehensive answer. For any airline to consider a direct route, it would have to be based on a commercial principle. The fact that there are reasonable one-stop alternatives in place is something we would have to examine. Nonetheless, for many years we have tended to look to markets in the United Kingdom and elsewhere in Europe in the first instance, as well as North America. Particularly in agri-food exports, we have competed with the Australasian countries which now have greater direct access to Asian destinations, particularly Hong Kong and Bangkok, if not China. There are other reasons they have historically become the destinations and hubs. We are still competing with them, but our market has moved and we need to follow it as best we can. It has been proved time and again that one needs as direct access as possible. Tourists will visit the first country they come to. The Emirates flights give people direct access from the Middle East to Ireland as opposed to another major European city, which is welcome.

However, there is further potential in China and elsewhere in Asia. We should work with the industry and carriers to see if they will take a risk, even for a 12 month pilot initiative, to see how we get on.

4:25 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Deputy Doyle and I are in broad agreement on this matter. Direct services from Ireland to Asia, and China in particular, would be beneficial. One stop access is useful but not as good as direct services by any means. Routes would of course have to operate on a commercial basis because we are not going to use taxpayers' money to subsidise businessmen travelling to and from China. However, the Government and State companies can help. For example, Tourism Ireland offered marketing supports on the San Francisco route and other long haul services to promote the new routes. The Dublin Airport Authority, Shannon Airport and other airports can also offer incentives in this regard. The normal incentive offered by State airports for new long haul routes is to waive airport charges for five years. These elements are in place and the Government can also step in with bilateral air service agreements and freedom rights where necessary. It is something we are keen to see happen. Improved access to the Middle East has been delivered and the west coast of the USA will be accessible from next year. After that, year round flights to Moscow and direct access to China or another Asian country are the next tasks on the list.