Pat Breen (Clare, Fine Gael)
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64. To ask the Minister for Transport, Tourism and Sport the position regarding legislation to establish the Shannon group plc; and if he will make a statement on the matter. [40507/13]

Marcella Corcoran Kennedy (Laois-Offaly, Fine Gael)
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108. To ask the Minister for Transport, Tourism and Sport the position regarding legislation to merge Shannon Airport Authority and Shannon Development. [40504/13]

Michelle Mulherin (Mayo, Fine Gael)
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144. To ask the Minister for Transport, Tourism and Sport the position regarding legislation to merge Shannon Airport Authority and Shannon Development; and if he will make a statement on the matter. [40528/13]

Dara Calleary (Mayo, Fianna Fail)
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643. To ask the Minister for Transport, Tourism and Sport when the international aviation centre of excellence will be established at Shannon airport, his views on the number of jobs it can support; and if he will make a statement on the matter. [33578/13]

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 64, 108, 144 and 643 together.

These questions relate to the Shannon group. As the Deputies will be aware, at its meeting on 23 July the Government approved the heads, or general scheme, of the Shannon aviation services and miscellaneous provisions Bill which provides for the creation of the new Shannon group entity, incorporating the Shannon Airport Authority, SAA, and a restructured Shannon Development. The heads are now with the Office of the Parliamentary Counsel for drafting of the Bill. I also forwarded the heads of the Bill to the Chairman of the Oireachtas Joint Committee on Transport and Communications for any views the committee may have, and where appropriate these can be incorporated into the drafting process. The heads are posted on the Department’s website. The timescale for publication of the Bill will largely depend on the drafting process and I remain hopeful we can publish and proceed with enactment in the current Dáil session although I recognise this will be challenging.

At its core, the Bill will provide for SAA and Shannon Development under a unified management structure to facilitate renewed passenger growth and to maximise the potential of the airport facilities at Shannon and of the land bank and properties in the adjacent Shannon free zone for development, growth and jobs, particularly in aviation-related services. The business development task force report of last November pointed to the real opportunities to develop and grow a specialist employment hub for aviation-related services, building on the existing industry cluster in Shannon which already employs more than 1,600 people. Over a five-year period, the task force estimated that an expanded aviation services centre at Shannon could create over 3,000 new jobs.

A key driver for these initiatives was the dramatic fall in passenger traffic at Shannon airport since 2007 and the need to restructure Shannon Development. Based on passenger numbers to the end of August and projections for the remainder of the year, it is expected the first key objective of the independent airport authority, namely to halt the slide in traffic, will be secured this year. This will be a major achievement for the board and new management team in Shannon and the employees at the airport. I am confident they will build on this achievement and secure renewed growth in the years ahead.

Pat Breen (Clare, Fine Gael)
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I compliment the Minister on his actions with regard to the airport. Since he took over the transport portfolio passenger figures at the airport have improved, after years of decline.

This is the third consecutive month there is growth at the airport, which is extremely important and is directly due to the policy of the Minister and the Government. I compliment the chairperson of the Shannon Airport Authority, Ms Rose Hynes, and the CEO, Mr. Neil Pakey, on the work they have done so far.

This legislation is extremely important for the airport. New flights have been secured this year and there will also be new flights next year, with Aer Lingus serving the destination of Shannon all year round from New York and Boston. It is a matter of sustaining and building, as the Minister rightly said. The legislation is particularly important in regard to aviation-related industries, as the Minister noted in his reply. There is much work to be done in developing the greenfield site at the Shannon free zone. I ask the Minister to, if at all possible, fast-track the legislation. It is the final piece of the jigsaw and the current position is hindering the chances of getting aviation-related industry into the airport. There are already 33 companies there and this is vital for the airport going forward.

Leo Varadkar (Dublin West, Fine Gael)
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I acknowledge the Deputy's concerns and I am doing my very best in that regard. I am starting on the Road Traffic Bill today, the Minister of State, Deputy Kelly, is finishing off the Taxi Regulation Bill and the Minister of State, Deputy Ring, will be proceeding with the Sport Ireland Bill quite soon. Shannon Development is right up there among the pieces of legislation we want to get through in the session, and while there is a huge amount of legislation coming through the Dáil and Seanad at the moment, we will do our very best.

Michelle Mulherin (Mayo, Fine Gael)
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I welcome the progress being made to sort out the sustainable future of Shannon Airport, which is very important for the region. It needed attention and that attention is being given. However, I am otherwise concerned about the timing of legislation. I say this in the context of the report the Minister has signed up to with the board of management of Knock Airport, given we are coming to the budget and the report is not published yet. There was to be a report last June giving a plan of action in order that Knock's position could be safeguarded, because it will be impacted by Shannon from a competition point of view.

That is the situation in regard to Knock. First, when will we have that report? Second, is the Minister prepared to implement in full the recommendations of that report to secure the future of Knock Airport as he is doing for Shannon Airport?

Leo Varadkar (Dublin West, Fine Gael)
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I do not have the report yet and I am not even sure if it is completed. I know the working group has done a lot of work on it already and I expect to see it quite soon, certainly in the next few weeks.

I cannot commit to implementing recommendations I have not seen. I expect that the recommendations will not all be directed at my Department but also at other Departments and other groups, and I cannot speak on their behalf. However, I share the Deputy's desire to safeguard Knock Airport, which provides very important access to Connacht and the west of Ireland region. Of course, there will be limitations to that. For example, no State aid is being provided to Shannon and everything it does, it has to do with the money it makes from its passengers and its landbank. Knock is in a different situation. It does receive State aid and it does get grants from the taxpayer, although it does so under particular European state aid rules that have to be adhered to.

Timmy Dooley (Clare, Fianna Fail)
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The Minister's Government went ahead with the dismantling of the Shannon company. Unfortunately, when he separated out Shannon, the Minister made very significant promises about putting in place a new company that would incorporate the airport and SFADCo. While most of the employees have been transferred out of SFADCo, some still remain. That organisation is no longer in a position to carry out the remit that was originally provided to it and the Minister is now telling us the legislation will, at best, be coming forward towards the end of this session. I do not believe that is acceptable, either to the people who are directly affected or to the people who have now been put in charge of the airport, who are effectively hamstrung in their ability to create the kind of external employment outside of the confines the Minister talked about. Shannon Development has been obliterated and the Minister has not succeeded in bringing forward appropriate legislation to allow Shannon Airport to develop.

The Minister will be aware that his party in government made very significant promises around Lynx Cargo. It was a catch-cry of its candidates in the constituency that a cargo facility was going to be built and paid for by the State.

That has not happened, despite the promises that were made. Aer Lingus's maintenance division has moved its facilities to Dublin to free up a hangar for Transaero, which was supposed to provide a considerable increase in employment in the area of aircraft maintenance. I understand those plans have now been shelved.

There has been a great deal of glossing over the separation process. The Minister's decision to separate Shannon was based on projections of an increase of 500,000 passengers in the first year of its operation as an independent entity. That has not materialised. While the Minister and his representatives in the region will attempt to draw a broad brush over the issue, the facts of the matter, when one drills down into the details, are somewhat askew in regard to the promises he made.

Leo Varadkar (Dublin West, Fine Gael)
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As the Deputy rightly pointed out, a great deal can be achieved without legislation. Already, for example, the staff have transferred, there is a common board and a new chief executive officer has been appointed. The decline in passenger numbers has halted and numbers are starting to recover. Shannon Group is on course to break even financially this year, which is a major achievement by the management, board and staff. I did not expect them to achieve it in year one, anticipating instead that it would take at least three years. It is important to acknowledge that.

I will be very honest with the Deputy. I love the job the Taoiseach has entrusted to me, but the most frustrating aspect of being in government is that it takes a long time to get things done. I, too, am frustrated that the legislation is taking so long. I assure the Deputy that I will do my best to progress it as quickly as I can.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister for his response. I am disappointed that we will have to wait so long before debating the legislation. Shannon Airport was for many years the backbone of the west in the context of the passenger numbers that passed through it. There has been a massive decline in those numbers in recent years. The Minister indicated that no state aid is assigned to Shannon. Does he envisage any such aid at any point in the future should the airport run into problems? There are not many airlines in Europe that do not receive some type of state support.

In regard to new businesses and so on, can the Minister give some indication of how his Department proposes to promote Shannon, attract new businesses and airlines and so on? Is there any prospect of other airlines coming into Shannon?

Leo Varadkar (Dublin West, Fine Gael)
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When I talk about state aid I am referring either to Government grants, preferential loans or subsidies. No such aid is envisaged for Shannon, nor would it be permitted under European law. There are good reasons for that. We have had a very bad history across Europe of governments using the people's money to subsidise one business or entity against another. This usually ends up with both requiring money from the state and the taxpayer the ultimate loser. State aid can only be given under strict EU rules and for particular reasons. In the case of airports, it might apply to those in isolated regions where there is no commercially viable alternative, as might be the case, for instance, in Donegal, Knock, Waterford or Kerry. The provision of such support for Shannon would require state aid clearance, which I do not expect we would get.

So far this year, new services from Shannon include Aer Lingus to Faro, United Airlines to Chicago, US Airways to Philadelphia, Flybe to Glasgow and Ryanair to Alicante. The company is in negotiations with a number of airlines, both long-haul and short-haul, regarding the provision of additional services. Those negotiations are commercially sensitive and it would not be appropriate for me to discuss them.

Michelle Mulherin (Mayo, Fine Gael)
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The Minister's indication that there will be no state aid for Shannon points us in the wrong direction. We are all hopeful that the new company at Shannon will be able to sustain itself. The airport's success has not come about by accident but as a result of the Government's using its authority to direct that certain things be done. Action in this regard is not being taken by some external agency or other but by the State. It is this very favourable position which could potentially adversely affect Knock, and that is why we need a report sooner rather than later.

Leo Varadkar (Dublin West, Fine Gael)
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The Government owns Shannon Airport and has, therefore, the capacity to make directions in regard to it. We cannot make directions in respect of an airport that is not owned by the State. Shannon will be required to sustain itself; that was the case from day one. It was always made clear that it would have to pay its own way without state aid.