Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State, Deputy Alex White. It is appropriate that the Minister of State at the Department of Health is in attendance because this airport is in an acute condition heading towards a terminal condition, and it has engaged in serious self-harm in the recent past.

The reports on Shannon when it was under regulation by the Commission for Aviation Regulation showed that it had an extremely high cost per workload unit - more than double that in Cork - and extremely low levels of productivity - by far the lowest of the airports at which the commission looked. It was moving 3,591 workload units per member employed at Shannon as against 10,500 in Cork.

I support every measure to break up national airport monopolies. I note that is happening in the United Kingdom, that the last vestiges of the British Airports Authority are being broken up. Airports should compete against each other and this is a start to what should happen here.

Shannon will have to get its act together. It has a record, as the Warburg Dillon Read report states also, of wasteful investment. That report states that, at Shannon and Cork, forecast expenditure per planned extra passenger reaches levels significantly above that spent by the group of airports with which it was compared and that this suggests poor value is being achieved, unnecessary work undertaken or a significant catch-up requirement exists.

Shannon must adjust to the world of low-cost airlines which charge probably approximately 20% of what airlines used charge in fares. Such airlines have eliminated travel agents. It did not really matter with airports when airlines did not compete because there was a large bundle of money of which the airports took a good deal.

The Government saw this problem happening in 2004 but the legislation has waited for eight and a half years. Cork Airport was also given its independence. Whose foot has been on the brake the whole time? I recall the officers of Aer Rianta opposing the then Government with scant regard to the role of Parliament in passing legislation to create the Cork Airport Authority and the Dublin Airport Authority. I believe Cork should also have what Senators have referred to as the "dead hand of the Dublin Airport Authority" removed from it.

We should not have removed the regulatory role. As I stated, the regulator found important features of inefficiency in Cork in regard to the terminal built there and in Shannon in regard to both labour productivity and capital expenditure.

The regulator also found deficiencies in Dublin. The passenger per gate was two thirds of the best performer. Its passengers per square meter of terminal was one third of the best performer and the air traffic movements per runway are approximately three quarters of the best performer. The labour productivity is approximately half of the comparator airports.

The Government, on 27 October 2009, bypassed the regulator. The then Minister used his powers to ignore what the regulator said. The Government increased airport charges. Shannon lost 61% of its business. A ¤1 charge became ¤7.50 and the Government then imposed a ¤10 passenger tax. No wonder this airport is in trouble.

The solution is to also separate Cork Airport, to restore the prospect of competing terminals at Dublin and to restore the regulator's powers because this high-cost airport sector - all three of them - is imposing serious costs on Irish tourism and transport.

There has been too much low labour productivity, wasteful capital expenditure and going to the Department of Transport, Tourism and Sport to emasculate the regulator for the sector by having the Minister issue orders which appear afterwards on the commission's site. The then Minister did not issue a press release on 27 October 2009 when he ordered the regulator, against advice and his better judgment, to increase the charges.

This is an outer offshore island and we need an efficient airport sector, which we do not have at present. We will hold the Presidency of the EU on 1 January. Other countries for whom aviation is less important, and I include the United Kingdom, impose substantial air passenger charges on travel which really affect island countries. We should call for taxes based as a percentage of the fare or general sales taxes because a high per head tax on some of the lowest air fares one will find anywhere is a serious barrier to people accessing this country and undermines events such as The Gathering.

This should be the first day on which we discuss this issue. We must examine excess costs in Cork Airport as well as in Shannon Airport, although Shannon Airport has the most serious problem. We should also examine those in Dublin Airport. There has been too much complacency in the Department of Transport, Tourism and Sport over the years and too much interfering with the referee when he tried to regulate the charges. This is why Aer Lingus and Ryanair are taking business out of the country. It is too expensive to land in Irish airports. The Government has a major problem on its plate.