Brendan Ryan (Labour)

I am tempted to speak about Cork Airport at the beginning of my contribution, rather than at the end, so that I can stay in tune with Senator Dooley. I will not resist the temptation to say some things about policy, however. This Parliament has a peculiar role in assessing this legislation because 43 of the Bill's 53 pages consist of an international convention that Members do not have the power to amend. I am not complaining, but simply stating that the power of Members to scrutinise the Bill is restricted. I will ask a few questions about the Bill in a moment.

No rational person could do anything other than welcome this Bill. All Irish people should compliment those involved in winning the contract to run the international registry. As I was reading the explanatory memorandum and as the Minister listed the countries which competed with Ireland to win the contract, I realised that it was not an accident that an Irish company won it. It happened as a consequence of the good decision, which was taken by a Government I did not support, to attract various forms of financial services to this country and to assemble people with a considerable range of skills in one location.

Those who advance development theories about clusters, etc., are heavily validated when one considers that jobs are being created in the aircraft leasing sector, which is far removed from banking. The aircraft leasing services in this country which did not succeed were useful in that they helped a large number of individuals and professions to develop skills in this area. People say that the tradition of making barrels in County Louth led to the development of the furniture industry in County Monaghan and one can draw a similar parallel in this regard. This country's achievement in this area is to be welcomed.

If one were to accept the opinions of some of our more pessimistic economists, one would think that this country's current level of economic achievement is a blip and that it is inevitable that we will revert to our past status at some future time. There is no such thing as an optimistic economist, as they seem to deal in degrees of pessimism. There is ample evidence on many levels to suggest that we have moved to a different level of economic performance in many areas. I am not trying to make life simple or be complacent. Some world competitiveness bodies have suggested that some areas of government and public service have not adjusted to the new realities of how this country does business. Some of them have complained about the Government's lack of speed, flexibility and responsiveness when confronted with new situations. This country's success in winning the contract for the international registry is to be welcomed in that context.

I have read the Cape Town Convention, but I would be exceeding my capacity for overstating things if I were to pretend that I understand all its contents. I challenge the Minister to state that he understands everything in it. I do not expect him to comment on the matter, at least not on the public record. I am sceptical about it. I understand the bones of the convention, however. The Bill's explanatory memorandum is quite clear, as these things go. The Minister's speech was also quite easy to follow. Any questions I have about the matter are being asked simply for the purposes of clarification.

I understand that participation in the registry by a leasing company, financing institution or purchasing body will be voluntary. Such organisations will not be compelled to participate in the registry. The registry's appeal is that it will lead to a decrease in the rate of interest to be paid by those who borrow money. We must assume that companies which purchase aircraft will believe that the reductions in interest rates will be worthwhile, given the increased likelihood that such assets will be seized or at least be accessible. In that context, we need to assume that most aircraft purchasers do not get involved in dodgy business, even though a great deal of dodgy business takes place in the world.

I look forward to learning of the degree to which the register is used by some of the thrusting and competitive low-cost airlines with which we are familiar. Perhaps they will choose to pay higher interest rates rather than using the register. They might not disclose some of the under-the-counter sweeteners being used. I refer to the imposition of low costs, rather than corruption. As a casual observer of the airline industry, I am aware that the official price that is cited for new aircraft often bears little relationship to the price offered to a major purchaser.

There is also the issue of explicit or implicit government subsidies. I believe European support for Airbus is unfairly criticised because there is no explicit similar support in the US. Much of the subsidy for innovation in that area comes from the US military budget. Although this support filters into civilian aircraft it is not classified as a subsidy. This leads to the ridiculous situation we currently have in the World Trade Organisation, WTO. There could be major implications for the European aerospace industry on the day the new Airbus is being tested. I think it has landed by now so I need not worry about the superstitious implications of welcoming it before it lands.

This is a huge achievement for Europe. The US had world dominance ten or 15 years ago in this area and the United Kingdom was a brief contributor before it pulled out. Boeing became an effective world monopoly when it amalgamated with McDonald Douglas. That Airbus became the dominant aircraft manufacturer in the world is a significant European achievement. This comes at a time when we tend to flagellate Europe for its lack of competitiveness.

One can make all the aircraft one wants but this counts for nothing unless they are sold. The scale of financing this is enormous. Even our most famous low-cost airline cannot finance the purchase of a new fleet from its own assets. Either it finances the deal from the manufacturer through delayed payments or it borrows the funds. The situation will be better for everyone, including the consumer, if the financial system is regulated. I agree with Senator Dooley that it would be best if airlines competed on the real cost of air travel rather than the companies' ability to extract subsidies from the taxpayer.

I was intrigued by the reference to aircraft, engines and helicopters. The protocol also mentions railways and space assets. The overlap between military and civil in space is less clearcut than in other areas. Where does the necessity for inclusion of space assets arise in this convention? I am intrigued by the introduction of space assets into what is a complex piece of international accounting, or a registry of deeds.

There is no explicit reference to the EU. Is there no single EU position or code of law on this? It seems extraordinary that every single country in the EU would deal with this in a different way. We might find ourselves in a situation where Ireland would be a signatory to this protocol and Germany, France and the UK would not. I am not sure of the implications of that, but at the international level of the WTO the EU negotiates on our behalf. The dispute between Boeing and Airbus is being carried out by the EU and the US rather than Britain, France, Germany and Spain and the US. I am surprised this convention is being dealt with in a different way.

I am also intrigued by the countries that have ratified this. They are a motley crew. I am glad the US, a major player in the world economy, is a signatory. It has not participated much in recent years but it does have a financial interest here. The other five — Panama, Ethiopia, Nigeria, Pakistan and Oman — are not from the dynamic part of the world economy, neither are these countries noted for their aircraft manufacturing. If some of these countries are involved in the funding of aircraft leasing I would like to know the source of the money. With the exception of the US it is a strange collection of countries. Diplomatic convention precludes the Minister from saying the kind of things I am allowed to say. Nevertheless perhaps he could make some comment on these countries using diplomatic language.

As I understand, the purchaser or leaser and the supplier will agree in which country's court they will settle the case. I would not like to depend on the court in Ethiopia to sort out the €250,000 I might have loaned to Ethiopian Airlines. Pakistan is a dictatorship and I would like further explanation on the significance of the countries that have ratified this convention. When will other countries ratify it? What about Britain, Germany, France, Canada, Australia, South Africa or other developed or developing countries?

The discussion on aircraft leasing invites some extraneous comments. Although I do not always agree with the Minister, I see him as someone who likes to make things work. I believe that the current emphasis on low fares is in danger of leaving us with one large international airport in Dublin and a number of less accessible airports. This large airport is overcrowded and under-resourced. There are fewer and fewer opportunities to link into the international air service from Cork Airport. The number of destinations one can fly to from Cork, without having to collect luggage at Dublin, has decreased dramatically. This has happened since Aer Lingus rediscovered itself.

An international businessman who is interested in investing in Cork will have to collect his baggage in Dublin, clear customs, and check in again. There is no way to send luggage via Aer Arann to Cork or Shannon. That may sound like a minor inconvenience but serious travel by international investors is incompatible with provincial airports where luggage cannot be transferred and tickets cannot be changed. Recently, I was in stuck in Amsterdam on political business and intended to return to Cork via an Aer Arann flight from Dublin. KLM went to enormous lengths to fly me to Dublin but could do nothing about the remainder of my journey because Aer Arann lay outside the loop. My inconvenience was minor but this situation could negatively influence perceptions of competitiveness and attractiveness.

The IDA informed me that street litter is as significant as costs in deterring potential investors. Investors may be discouraged if, upon exiting airports, they see that their surroundings have not been looked after properly. My experience of travelling from Amsterdam to Cork might also have a negative effect on investors' perceptions. Now that it has returned to an even keel the Minister should discuss with Aer Lingus the restoration of ease in international travel through Dublin to the two major regional airports. When the airline provided a regular service between Dublin and Cork there was efficiency of movement and ease for people in rearranging flights.