Tom Morrissey (Progressive Democrats)

I welcome the Minister. This is the third time in the past week he has been here listening to debates on transport. The introduction of this Bill focuses attention on the independence of Cork, Shannon and Dublin Airports. Cork and Shannon will be able to operate autonomously and generate their own level of activity in a competitive environment. The debate on this Bill has concentrated mainly on the unions' demand for job retention and guarantees. Cork Airport processed 2.2 million terminal passengers in 2003, up from 800,000 in 1994. This was achieved with a staff complement of 202. Shannon Airport processed some 2.4 million passengers in 2003 compared to 888,000 in 1993 but there are 590 staff at Shannon, almost a ratio of 3:1. If these figures are correct, and I do not doubt them as they came from the relevant marketing departments, Shannon has a much greater staff complement than Cork, servicing virtually the same number of passengers.

Much has been said about business plans for the restructuring of our airports. What business plan has allowed such a disparity to occur and envisages that it can continue? The only way such a scenario could continue is under the present monopoly structure. The capital investment in Cork in the past seven years was €67 million, while Shannon received €70 million in the same period. Restructuring will allow both airports to be autonomous and free of debt, and employ good local management teams specifically tasked with generating traffic to their areas. Surely this is better than the present process whereby any increase in Cork or Shannon traffic must be approved by Dublin.

At the Oireachtas Joint Committee on Transport last year Ryanair's Michael O' Leary confirmed that neither Shannon or Cork could make its own arrangements with regard to Ryanair fees, and consequently, the business was lost to Kerry Airport. As a result, traffic at Kerry Airport grew by 72% in 2003 solely due to Ryanair business, demonstrating the importance of autonomy whereby local management was able to deal successfully with a carrier to ensure that additional business was brought to the Kerry area. Shannon has tremendous potential given the strong industrial American base in the mid-west region while Dublin Airport is predicted to double its passenger numbers to some 30 million passengers over the next 15 years.

Business plans are important but coming from the present monopoly whereby Dublin dictated terms to the regions, I doubt that any business plan produced by the present board would adequately allow Cork and Shannon restructure themselves to meet the challenges of the future. Over the next nine months the new boards will have the power, and more important, the incentive, to prove that the autonomous route will yield better results. Many question the viability of Dublin Airport under the restructuring. The airport, which is projected to grow to 30 million passengers and established 24 new routes in 2004, has a bright future, free of the burden of regional airports such as Cork and Shannon which, under the management of independent boards, will encourage greater marketing opportunities to attract new business. Under the proposed legislation Cork and Shannon will have the power to set their own charges, independent of the regulator. While each airport will have the power to increase its charges, competition will be the name of the game.

Many question the purpose of this legislation. It was prompted by concern about how the three State airports could continue to fulfil their mandate in a changing aviation environment. This was a public policy decision, not a simple business one and the mandate is to maximise passenger freight throughout for the benefit of industry, tourism and the economy as a whole. One third of the population and one third of economic growth activity lies east of Athlone. Some 50% of foreign, mainly American, investment is also based in that area. International access is critical to the continued promotion of balanced regional development. Some 83% of all UK traffic currently goes through Dublin and 84% of all European traffic also goes through Dublin. Are we seriously suggesting that 84% of all passengers want to come through Dublin Airport?

Some people say there is no business plan or business case. However, we now have three boards of experienced and enthusiastic business managers who have a track record of business success. One does not build business success by analysis but by action and competition in the market. There is no compelling business case to maintain a 97% monopoly on airports in the country. There is no compelling business case for a "no change" stance and protecting a monopoly. There is no business case that says Shannon Airport can only develop if it is under the thumb of Dublin management. The analysis carried out by PwC does not say Shannon and Cork Airports cannot succeed, rather, PwC shows scenarios in which both Shannon and Cork can operate successfully.

Financial restructuring of the airports will be necessary. The technical way forward has been set out by consultants to the Minister and no insurmountable obstacles are evident. Only a few years ago, the board of Aer Rianta — including worker directors — wanted a part-privatisation of the company, in other words, to replace a public monopoly with a private monopoly. Privatisation is not part of the Government's plan which gives Cork and Shannon Airports the opportunity to have full commercial independence. This is a commitment of the programme for Government and it will be implemented.

The benefits of competition are evident when one looks at other airports that have competed for new passengers. Ten years ago, Prestwick in Scotland dealt with 10,000 passengers, this year it will have 2.5 million. Prestwick used to have transatlantic gateway status but that ended in 1990 when it had to compete with Glasgow. No doubt many people said Prestwick would never survive, but by competing with an independent commercial strategy its passenger numbers have grown to over 2 million.

Liverpool Airport had very few passengers ten years ago and it now has 5 million, mainly due to EasyJet. Charleroi's passenger numbers have grown from almost none to 2 million. Frankfurt-Hahn, a former military base started from zero ten years ago and now has 3.5 million passengers. There was a 92% passenger load from Frankfurt-Hahn to Farranfore throughout last winter, which proves there is a demand for a direct service to the west of Ireland. Shannon Airport currently has 2 million passengers, 1 million of these by virtue of the compulsory stopover.

Northern Ireland has three competing, independent airports. Why can we not do likewise? Airports can compete and there is no reason to be defeatist. Some people say jobs are at risk from the break up of Aer Rianta. Every 1 million passengers would bring 1,000 new jobs in air services, tourism and other areas. The way to grow jobs at Shannon is to give the airport freedom to generate more passenger numbers which would benefit the whole region. There will be no diminution in the employment rights of Aer Rianta workers.

The Progressive Democrats wholeheartedly support the Minister's endeavours. We salute his courage in facing the task that lies ahead in the restructuring of Aer Lingus——