Timmy Dooley (Fianna Fail)

I welcome the Minister. It is tremendous that he is available to us at what is a very critical juncture in the life of Aer Lingus and that we have the opportunity to discuss the options and issues relevant to the company and to feed into the thought process of the Cabinet. From time to time, we are somewhat critical of Ministers for not listening to us enough and it is good the Minister is with us today.

There is no doubt Aer Lingus is performing very well, despite Senator Paddy Burke's comments on the inaction of Government. As the Minister said, over the past three years, Aer Lingus has come back from the brink on a number of occasions. The most critical time Aer Lingus faced in its entire history was that following 11 September 2001. The actions of all concerned at the time to bring the company back to profitability were a true sign of the commitment of not only the management, the board and the workers, but of Government and of its policy to allow the management team to operate as it did in returning the company to profitability.

The company has been doing particularly well. This year it will return a profit in excess of €90 million, which is exceptional when one considers that the aviation sector worldwide is in turmoil, as the Minister pointed out. Many of the major flag carriers and best known brands in the United States are operating under chapter 11. They are on the verge of bankruptcy and would be bankrupt were it not for the protection of the Government and the courts of the United States. It would be very wrong to castigate Aer Lingus and the Government for policies which have been pursued. In fact, the Government should be congratulated on the work it has done in this regard.

It is important a review takes place on the future growth and development of Aer Lingus, on which the Minister is working. The business plan in place is aggressive in terms of its targets for the future. There is a requirement in regard to funding and the Minister has rightly taken a very cautious approach to making a decision. Senator Paddy Burke is right that it is important a decision is made but it is also important the right decision is made. The right decision cannot be based on a relatively quick analysis of the issues as there are some very strategic issues at hand about which the Minister has spoken. It is not only about looking at the asset value. A number of commentators over the past six to eight weeks made statements that the Government's inaction had written value off the airline. It is not about writing value off the airline, it is about protecting a strategic national asset.

Aer Lingus is strategic for the most basic of reasons. This is an island nation and we need direct connections and access to markets for tourism, as the Minister said, for trade and for general business. That is critically important. It is a factor highlighted even more clearly by decisions taken by a previous Administration in regard to Irish Shipping. At present there is the potential for a crisis in the export of live cattle. It is a particularly difficult trade and later this month P & O Ferries will pull out of the Rosslare to Cherbourg route, making it virtually impossible to ship live cattle to the Continent. We can see the consequences of not having State involvement in shipping. It is abundantly clear from that example that there is a need for State control over Aer Lingus, particularly since so many other airlines are in financial trouble and there is a recognition worldwide that there will be some level of consolidation. If, at some stage in the future, Aer Lingus was totally privatised, none of us would want people in some boardroom in Chicago or Boston deciding it was no longer necessary to have direct flights to Ireland and that people should travel through London, Paris or wherever. For that reason, the strategic value of Aer Lingus is critical and should be maintained when the Government decides what the future ownership of the airline will be.

The Goldman Sachs report set out a series of options and carries out a fairly decent analysis of the position of the airline sector and of Aer Lingus. From my reading of it, it did not seem to come down in favour of one option in a forceful way. It did not make it easy for the Minister or for the Cabinet sub-committee in terms of identifying one option. The critical option is for the State to retain an interest in the airline to protect a vital national interest. It will become an even more vital national interest if the expected consolidation in the aviation industry takes place. That will happen as sure as night follows day because no matter how much state support the American Government continues to give to its airlines, the crazy situation that exists cannot continue for very long and similar issues are arising for European airlines.

At times, I have been critical of Aer Lingus and the way in which it has set about managing its business. To some extent it has neglected Shannon Airport, the mid-west and the entire western region by failing to recognise the existing key airport infrastructure. Ryanair has grasped that nettle and has shown tremendous vision and confidence in the region. That company has recognised that there is a capacity to use Shannon and the west generally as a low-fares base for bringing a large number of passengers from the UK and Europe to Ireland. That development is part of a tourism promotional programme. The importance of Ryanair in the market as a market maker has forced Aer Lingus to compete for business. Ryanair has sharpened the attitude of Aer Lingus by ensuring that it is competing to a best practice model throughout the world. Marketing Ireland is not the core work of Ryanair but the net result of increased competition in the domestic airline industry is that the level of tourism being generated for Ireland will increase dramatically. The kind of numbers Ryanair is projecting for the mid-west region as a result of the announcement of new routes on Monday this week will result in an additional 1 million passengers coming through Shannon in the next year. That figure will rise to 2 million within five years, which represents a tremendous increase in passengers compared to current figures.

Shannon Airport's new board of directors must be congratulated on the work they have done in such a short period to encourage this new business. There is no exclusive deal with Ryanair; it is open to every airline, including Aer Lingus, that is prepared to make the commitment Ryanair has. I have been critical of Aer Lingus because deals like the one at Shannon could be availed of by Aer Lingus. In its past business plans, Aer Lingus set about halving its workers at Shannon Airport but there was absolutely no need for that. Ryanair is proving that the business is there so Aer Lingus will have to change its mindset which focuses on the east coast and the transatlantic routes.

For far too long Aer Lingus has fished where the large concentration of business is, rather than doing what other airlines have done in trying to create and develop a market. Ryanair, easyJet and other low-cost carriers have proved that if one is serious about business, cutting costs and providing imaginative routes, the customers will follow. That is the kind of business Ireland needs. It is not just about keeping airports open but also about getting additional tourism. Ryanair is saying that 80% of passengers will be inward bound, which is of great importance for Ireland.

Much has been said about the management's role in the survival of Aer Lingus, which is correct. There is no doubt about the tremendous work that has been carried out by Mr. Willie Walsh and his management team. It must be recognised, however, that the unions and staff generally have made a significant contribution to that survival plan not alone through accepting pay cuts, but also through changes in work practices. Many people might say it is their duty to do that but their efforts should be recognised along with their capacity to ensure the continued growth of the airline.

I welcome the Minister's swift decision on the recruitment process. As soon as he realised the Aer Lingus management team was not for turning, he called in the acting chairman and insisted that the process should begin immediately. Some concern has been expressed, however, about the management team and the fact that they are continuing to run the company for the next six months. The Minister should consider appointing the acting chairman, or one of the directors of the board, to act in an executive role in the intervening period to protect the interests of the company. That is not to suggest that Mr. Walsh or his management team would in any way work against the company but it would give greater confidence if a member of the board sat in some kind of executive position as an acting chief executive officer until such time as a successor is found.

Senator Paddy Burke said that Aer Lingus is rudderless at the moment but nothing could be further from the truth. The acting chairman is an exceptionally experienced individual in the aviation sector. He has tremendous knowledge and brings a great depth of international experience to the board at a time when international markets are critical to the future growth and development of Aer Lingus

The Minister made some important points about the transatlantic business and the bilateral arrangement. There is considerable concern in Clare and the mid-west about the future of the bilateral arrangement. Most people accept that an open skies policy is coming but we are concerned about the rate of change. We have great confidence in the Minister and his negotiating team to put in place a package of measures to ensure the future growth and survival of the transatlantic business. That business is hugely important to the west of Ireland. Statistics show that where restrictions are removed, airlines that currently fly into a number of airports may ultimately re-route to one destination. I have more confidence than others, however, because County Clare, the mid-west and the west generally constitute a destination. Statistics from the US east coast show there is a critical demand for such services for eight to ten months per year. We are mainly concerned about the winter months. I hope that with some element of Aer Lingus being retained under State control, arrangements can be put in place to ensure we have direct access all year round. That is critical from the tourism viewpoint to some extent, but it is more critical for local business.

Shannon has the biggest industrial park outside Dublin so it is crucial that business people who have invested there should have confidence that direct air connections to and from Shannon will continue. I have spoken about this matter to the Minister on a number of occasions and he is acutely aware of the issues involved. Hopefully a package of measures can be put in place in the short term on bilateral arrangements to allow Shannon Airport to move from being mainly a transatlantic destination. It now has the capacity to grow in other directions due to the European markets that are opening up through Ryanair and, hopefully, through other low-cost carriers, including Aer Lingus. An open skies arrangement will be foisted upon us at some stage through the negotiations between the US and the EU, but in return for the commitment of Aer Lingus, being controlled or owned to some extent by the Government, there should be an assurance that direct daily flights will continue to the mid-west region.

The Shannon area comprises a tremendous piece of infrastructure for the aviation industry. Unfortunately, over the decades, roads in the region have suffered from a lack of investment by successive Governments. However, the construction of the Ennis bypass is a critical development in this regard. It is under way and is progressing well. Another key infrastructural element involves opening up access from Galway city to Shannon. The Minister is aware of the proposals for the N18 to ensure that Galway city is within one hour's journey of an international airport. Currently, people in Galway find it easier to travel to Dublin Airport than to Shannon Airport. That is a crazy situation when one considers we are trying to take pressure off the east coast. It is bad enough to have the M50 clogged up with people getting to or from work in Dublin or travelling to the airport, but people from the west and midlands should be facilitated to fly via Shannon Airport. If the N18 development can be opened up it would be very welcome.

A rail spur would be another key infrastructural development of major benefit to Shannon's future growth. Proposals in this regard have been circulated to the Department which has asked Iarnród Éireann to examine the feasibility of such a project. We must be imaginative in this respect.

Management at Ryanair recently announced that the airline envisages 2 million passengers travelling through Shannon within five years. Hopefully, other airlines will follow. In this context, the numbers already there are blown out the window. There is now a demand and a sustainable business case for a rail link to Shannon Airport. I thank the Minister for his efforts in meeting people from the region in his short time in the Department. This has been significant in bringing all players to the table and will ensure there is an effective outcome that keeps everybody on side.