Timmy Dooley (Fianna Fail)

I join my colleague, Senator Paddy Burke, in welcoming the Minister for Transport, Deputy Cullen, to the House for what appears to be a relatively straightforward Bill allowing Ireland to ratify the Convention on International Interests in Mobile Equipment, known as the Cape Town Convention, together with its protocol, and to adopt them into Irish law.

This creates an international legal framework to facilitate the asset-based financing of aircraft, their engines and helicopters. The convention and legislation are very welcome since, while they appear rather obscure, their positive effect will be to continue to reduce costs in the aviation sector, in particular the cost of aircraft, something one hopes will result in lower air fares. The dropping of charges across the aviation sector generally has led to lower fares. I suppose it comes at a very welcome time, since oil prices are increasing. I know some airlines have been hedging in that regard. However, they are now reaching the point where they will have to purchase oil on the open market, and one hopes this legislation will have the knock-on effect of ensuring air fares remain at their present relatively low level. We must obviously be mindful of that, since oil prices have the capacity to increase fares.

The lending institutions have signalled their welcome for the convention and stated their willingness to reduce lending rates when it is adopted. I understand it will enter into force when eight countries have signed up, and six have already done so. It is to be hoped that Ireland will be the seventh. Anything we in this House can do to speed the Bill's passage is good. It will afford protection to lending institutions regarding asset recovery in the event of airlines or owners of aircraft defaulting.

In the fares war that has developed between airlines, it is delightful to see that they have taken a different approach to reducing costs rather than focusing, as they have recently, on airports. Unfortunately, heretofore, the entire focus of reducing or eliminating costs for airlines has been on airports. It is now common practice that landing charges are reduced to unsatisfactorily low levels and in some cases to nothing. There seems to have been an effort on the part of certain low-cost carriers to create a race to the bottom in service delivery and payments for airport services. That must be examined.

Forcing down landing and ground handling charges is creating severe difficulties for the airports' capacity to deliver services in line with customer demands. Low-cost carriers do not want to pay for services, but they jump up and down when they are not delivered to their expectations. That must be addressed. There is now an expectation among some low-cost carriers that the taxpayer should carry the cost of airport infrastructure, and that is totally unacceptable. It is a little like the little piggy who stayed at home paying for the little piggy that went on holiday. We would not want to see that situation evolve.

This is having a serious impact on individual airports, particularly in the light of recent, very welcome change following the State Airports Act 2004, which separated the three airports and allowed them to manage their own business effectively and efficiently. At the same time, it is still creating some level of difficulty for them, since they must now recover the costs associated with the airlines through charging higher prices for car parking, cups of tea, coffee and whatever else is sold in the airport. That price transfer issue is causing difficulties for the airports' operation, a case in point being Shannon Airport, with which I am fairly familiar from a home perspective. The new chair, board and management are finding things difficult in the new environment of low-cost carriers.

There must be balance, particularly where airports must stand firm while offering good value. There can be no return to the old days of their having a very high cost base and expecting the airlines to pay for it. That day is gone, something accepted across the board. However, there is also a need for balance to ensure there is no downward spiral of cutting costs to such a level that the airport cannot provide the service without stretching matters in some other peripheral area. Ultimately, that must have a negative effect. One can only charge so much for parking or a cup of coffee before one reaches the point where people will refuse to purchase anything at the airport and find another means of getting there. Then one is back to the question of who pays to provide the service to the airline. There must be balance in the discussion.

In the case of Shannon, there is a proposal to outsource the entire catering section. For some time, this has been a very profitable division in the airport. It has loyal staff and a very dedicated team that has worked hard over the years in an efficient, open and frank way to get the work done. The nature of their work is such that, particularly in providing services to some of the military aircraft that go through late at night or early in the morning, they have adopted specific work practices. It is now unfortunate that their work has not been enough and that the outsourcing of their service is required to cater for the greed of those airlines that are creating an impossible situation. Morale among the workers is low as a result, something that must be addressed.

The management seems to have been forced into a situation where it is offering no alternative to outsourcing. Through the Minister for Transport, Deputy Cullen, I call on the chairman of the management team at Shannon to engage in meaningful dialogue with the staff, particularly those in the sections to be outsourced. It is important to recognise that the State Airports Act 2004, through the Department of Transport and the actions of the Minister's predecessor, Deputy Brennan, provided full protection to employees regarding pay and conditions, something the present Minister has also supported. It also stipulates that there may be no compulsory redundancies. That must be taken into account in any relevant discussions.

Dialogue and an openminded approach to the debate are needed, as is a recognition that workers who have very much been part of the airport's success must have their concerns taken into consideration. All concerned, including workers not only in Shannon but in the three main airports and their regional counterparts, recognise change is needed. There has been a great deal of change right across the international aviation sector. At the same time, while the airports have obviously been unbundled, a process the importance of which we all accepted, there is still a need for them to stick together against the aggression of the profiteers in some of the low-cost carriers to ensure that there be no diminution of service to the point that one is faced with an overcrowded cattle shed. That would not be welcome from anyone's perspective, certainly not with regard to any of the proposals for new terminals, whether in Dublin or Cork.

There have been references to some airports being "gold-plated". That term has been used too liberally and does not reflect the approach taken by those designing the terminals. Some of the low-cost carriers would desire to have facilities at such a minuscule level that their costs would cease to exist. At the same time, one expects airports to provide an efficient service to consumers. If that continues, the airlines will get great credit for offering low fares and the airports, which are struggling to offer a service to facilitate airlines, will be seen as nasty for having to charge exorbitant rates for car parking, teas and coffees. The queues at many airports are very long because airports do not have the resources they need to handle increased passenger numbers. There is a need for control and balance in this debate. I ask the Minister to ensure that low-cost travel does not lead to the travelling public receiving a poorer service on the ground.

The positive outcomes which will accrue to Ireland as a consequence of the Cape Town Convention do not just involve lower fares. The Minister mentioned that an Irish company has been awarded the contract to manage the international registry, which is a key aspect of the infrastructure being put in place to implement the convention. It is great that the Department of Transport has entered into a public private partnership to ensure that the registry is based here. As the Minister said, the importance of the contract does not relate to the ten or 12 jobs which will be located here, but to the international prestige that will accrue. It demonstrates that the capacities, skills and ICT expertise needed to manage a registry of this nature are available in Ireland. The value of the equipment and facilities which will be managed in Ireland indicates that this is a high-worth area. The Minister mentioned that accountancy companies and legal practitioners in this country will do the work associated with these companies. Although the direct employment will be relatively small, the overall impact of the registry being located here will benefit this country significantly.

I welcome the Bill. Given that the registry is to be located here, it is particularly important that Ireland will be one of the first countries to adopt the Cape Town Convention. It is important that this Bill is passed without delay. The significant increases in the price of oil in recent years, which are causing difficulties in the low-fares sector, might start to affect the cost of fares. Airlines have started to take a broader approach to the process of reducing costs. Rather than continuing to try to reduce airport costs, they should examine the financing of their aircraft and some of the other facilities and services they provide. They have not examined the possibility of trying to reduce the quality of aircraft, for example, although we would all be concerned if they did so. They seem to think they can reduce the quality of the service given to people in airports. That needs to be examined.