Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I thank the House for giving me the opportunity to introduce the State Airports (Shannon Group) Bill 2014. When we last had a debate about Shannon Airport in this House in December 2012, I was about to make the order that would trigger the separation of Shannon Airport from the Dublin Airport Authority, DAA. Separation took effect on 31 December that year when responsibility for the ownership, management and operation of the airport passed to the Shannon Airport Authority. I will reflect on the performance of the independent Shannon Airport but separation of the airport was just one part of a two-step process designed to deliver a new future for the airport. The second part is the subject of the Bill, the main purpose of which is to establish a new commercial State company, Shannon Group plc, which will incorporate both the Shannon Airport Authority and its nextdoor neighbour, Shannon Development.

The establishment of the Shannon Group will complete the foundations to support a new future for Shannon Airport and the mid-west region as envisaged in the report presented by the Shannon aviation business development task force in November 2012. In that report the task force was satisfied that an independent Shannon Airport, coupled with a restructured Shannon Development, could develop and grow passenger traffic and the route network. It also anticipated that it could create new employment opportunities in aviation-related services in and around the airport. It pointed to the opportunities to develop and grow an internationally recognised centre for aviation services at Shannon. This could draw on its geographical location, good airfield facilities and ample adjacent land. It also has an existing foothold in aircraft leasing and maintenance operations, with a skilled English speaking workforce and US pre-clearance facilities.

When we separated Shannon Development from the DAA, the first priority for the independent airport authority was to halt as quickly as possible the dramatic and constant prevailing downward slide in passenger traffic in the previous five years. A decline on the scale suffered at Shannon - the airport had lost two thirds of its passengers between 2006 and 2012 - was always going to be challenging to address. However, the outturn for last year of 1.4 million passengers marginally exceeded the outturn in 2012 of 1.39 million.

This reversal of the serious slide of previous years was a major achievement for Shannon in its first year as an independent airport and is a tribute to its board, headed by Ms Rose Hynes, and to the management and all the staff. With new routes operational and increased capacity on existing services, Shannon is now looking forward to new and sustainable growth. A renewed energy is evident at the airport.

I will now turn to Shannon Development. The Government decided two years ago to restructure this company. Its functions in respect of indigenous enterprises and foreign direct investment were to transfer to Enterprise Ireland and the IDA, respectively, and its tourism functions were to transfer to Fáilte Ireland. The main benefits of this restructuring included the streamlining of Shannon Development's activities, the elimination of duplication of work by public bodies in the region and a more focussed role for the remaining part of Shannon Development, namely, managing and developing its property portfolio including the Shannon Free Zone adjacent to the airport. That restructuring is complete. It was accompanied by significant staff transfers to the national tourism and enterprise development agencies and redeployments to other public bodies in the Limerick-Shannon area. That exercise was assisted by an independent facilitation process which addressed staff concerns and concluded in May last year. A voluntary redundancy scheme was also successfully implemented in Shannon Development under which 25 staff elected to leave the organisation. Approximately 20 staff remain in Shannon Development, which will become part of Shannon Group under this Bill.

Shannon Heritage is a stand-alone and successful subsidiary of Shannon Development and is unaffected by these changes. The Government decided some time ago that Shannon Heritage will remain within Shannon Group pending a review of its most appropriate permanent location. Considerable attention was given to the optimum legal structure for the merger of Shannon Airport Authority with Shannon Development. A number of different options were considered and my Department and the Department of Jobs, Enterprise and Innovation worked closely with the Office of the Attorney General in this regard and we thank her and her staff for their assistance.

Shannon Group will be the parent or holding company for SAA and the restructured Shannon Development. Under this legislation, it will acquire all the shares of these two companies from the Minister for Public Expenditure and Reform. Both will maintain their separate legal identities as wholly-owned subsidiaries of Shannon Group. In the new scenario, the restructured Shannon Development, which will be renamed Shannon Commercial Enterprises Limited, will have a commercial remit. This structure has a number of advantages. Keeping the businesses of Shannon Development and SAA separate from each other will impose financial discipline on each of them and ensure both will pursue a commercial ethos. The success of Shannon Group will be enhanced by ensuring that its two main subsidiaries are each commercially successful in their own right. This structure will also facilitate greater transparency in the application of state aid rules by Shannon Group and its subsidiaries. Any business arrangements between them will be on a commercial basis and will involve no cross-subsidisation of operations at the airport.

In the case of the SAA, the proposed structure avoids another transfer of staff from the airport authority into another company. When Shannon gained its independence from the DAA less than 18 months ago, all staff working in the airport were transferred from the employment of the Dublin Airport Authority to that of the SAA. Despite the protections for those transferring staff which were contained in the 2004 State Airports Act and in the TUPE regulations, their union representatives expressed serious unease and reservations at the time about the transfer to the new employer. It proved a considerable burden for management in the SAA to assuage those concerns as well as dealing with all of the administrative issues involved. While the transfer went smoothly on that occasion, there is some merit for all concerned in avoiding yet another staff transfer for those employed by the SAA.

Similarly, the staff that manage and deal with the property portfolio in Shannon Development will also remain in that company. The Government's objective in creating Shannon Group is to bring a unification of purpose to the two separate companies for the overall benefit of the business. This will also have indirect positive impacts for the Limerick-Shannon area and the wider region, including the western region. As well as promoting a greater commonality of purpose, the new company will maximise the synergies between the SAA and Shannon Development to promote the development and expansion of the aviation services centre in and around the airport, that is, the delivery of an international centre for aviation services with potential for new job creation as reported on by the Shannon task force. This will be greatly facilitated by the fact that the Shannon Free Zone lands are adjacent to the airport itself. However, this advantage of physical proximity needs a new dynamism to carry through on the potential of the Shannon campus. On behalf of the Minister for Jobs, Enterprise and Innovation and myself, I wish to acknowledge the contribution of the chairmen, directors, management and staff of Shannon Development and Shannon Airport over the past two years in ensuring the smooth operation of the companies while working together to prepare for the establishment of Shannon Group.

I know that the pioneering spirit of the people who gave us the airport and the Shannon Free Zone concept has been rekindled and there is now an exciting opportunity to exploit to ensure a brighter future for the airport and the region.

While the central aim of the Bill is to provide for the establishment of Shannon Group, there are some other important elements in the Bill that I want to mention, including the adoption of the Alternative A insolvency regime under Cape Town convention. This Bill will provide for implementation in this country of the special insolvency regime applicable to aircraft that is set out in the Cape Town convention. Through enactment of the International Interests in Mobile Equipment (Cape Town Convention) Act 2005, Ireland was among the first countries to ratify this convention. The Cape Town convention provides an international legal framework for the financing of high-value moveable or mobile assets such as aircraft, trains and satellites. The convention has no meaning or effect unless and until a protocol is agreed and comes into force for each of the asset types covered by the convention. To date, only one protocol, the aircraft protocol, is operational. The 2005 Act also gave effect to the protocol in national law. Essentially, the convention and protocol provide protection for creditors of aircraft assets in countries that have signed up to the convention.

Ireland has always punched above its weight in the aviation sector and this sector is growing rapidly on a global basis. We have a particularly strong foothold in the aircraft leasing business, with nine of the top ten global leasing companies located in Ireland. It is estimated that an average of 1,350 new aircraft of 100 seats or more will be delivered each year up to 2030 and that the commercial aircraft market will have annual funding needs of over €100 billion in the coming years.

About 40% of world's fleet is currently on lease, and this share is expected to grow to at least 50% over the coming decade. Clearly, we are in a good position to capitalise on the opportunities that will arise in this area in the coming years, to strengthen our position as a leading global centre for the aircraft leasing industry and to develop aviation finance in Ireland. Increasingly, airlines and leasing companies are looking to the capital markets for their funding needs. A particular form of debt financing for aircraft that emerged in the US in the 1990s is enhanced equipment trust certificates, EETCs. These are essentially bonds, an aviation-specific form of asset-backed security, where the secured asset is the aircraft itself. One of the factors underpinning the success of these bonds in the US is the assurance under the US bankruptcy code that, in the event of bankruptcy or insolvency of the airline, creditors can repossess the collateral aircraft within 60 days. This has proved popular for both airlines and investors in the US as it reduces the risk to investors and facilitates higher ratings from credit rating agencies for these financial instruments. The reduced risk and higher credit rating has resulted in substantial interest cost savings for airlines and lessors.

The Alternative A insolvency regime for aircraft assets under the Cape Town convention and protocol essentially replicates the insolvency regime in the US, where EETCs have been successfully issued since the 1990s. It is a matter for individual countries to specify the waiting period following which, if a default is not rectified, the creditor is entitled to automatic repossession of the aircraft. The vast majority of countries that have adopted the Alternative A regime have opted to replicate the 60-day period applicable in the US and, under this Bill, we are also proposing to adopt a waiting period of 60 days. Adoption of this Alternative A insolvency regime for aircraft will support the development of aviation finance in Ireland and help maintain Ireland's leading global position in aircraft leasing. It will ensure that our leasing companies and airlines will have access to international capital at competitive rates. There is already growing competition in this market from other jurisdictions that have adopted the equivalent of Alternative A.

An exemption from stamp duty was provided by the Minister for Finance in the Finance Act 2013 to facilitate the successful issuance of EETCs in Ireland and make this form of financing more attractive to investors. Together with the proposed implementation of the Alternative A insolvency regime, these measures will enable airlines and leasing companies to access more competitive finance terms and will help sustain and develop the leasing and aviation finance sectors in Ireland.

I also want to make special mention of section 33 of the Bill, which provides for an amendment to the existing statutory provisions governing superannuation schemes in our State airport authorities. It will facilitate changes by the trustee to the Irish Airlines (General Employees) Superannuation Scheme, which I will refer to as the IAS scheme. This scheme dates from the 1950s and is a multi-employer scheme covering the majority of employees, pensioners and deferred pensioners in the State airports and in Aer Lingus.

It also covers some of those who worked for SR Technics before it closed its operations at Dublin Airport in 2009. All issues concerning the IAS scheme, such as its rules, provisions, contribution rates and benefits, are matters for the trustees of the scheme, its members, its participating employers and the national regulator of occupational pension schemes, the Pensions Authority. I do not control the scheme and I cannot impose or prescribe a solution for its problems, but I can help and I am doing so through the expert panel, which I will discuss later in this speech.

Some 69% of the approximately 14,800 members of the IAS scheme work or worked for Aer Lingus, 26% of them work or worked for the Dublin Airport Authority or the Shannon Airport Authority, and 5% of them worked for SR Technics. The members of the scheme are split almost equally into three groups: current employees, known as active members; pensioners; and deferred pensioners - those who have left the company but are not yet drawing on their pensions. The scheme is closed to new members, such as newer staff who started to work for these companies in recent years. Under the IAS scheme, fixed contributions are payable by employers and members regardless of the scheme's funding position. The benefits and contributions are defined in the scheme's rules. The scheme is registered and operated as a defined benefit scheme under Pensions Authority criteria due to the benefits it seeks to provide. It is accounted for as a defined contribution scheme by the sponsoring employers due to the fixed funding covenant.

In March 2013, the IAS scheme reported a deficit on the statutory minimum funding standard basis of €769 million. The priority position of pensioners under the Pensions Act 1990 - prior to the amendments made in the Social Welfare and Pensions (No. 2) Act 2013 - means the residual funds that would be available for active and deferred members in the event of a wind-up of the scheme would be approximately 5% of their benefit expectations. Clearly, this is not an acceptable position. Employers and unions held extensive negotiations under the auspices of the Labour Relations Commission and the Labour Court on the way forward. This ultimately led to the Labour Court recommendations of May 2013. The trustees of the IAS scheme issued fresh proposals to the employers and unions in February of this year. Those proposals include a number of benefit reductions which would affect existing active members and deferred members, as well as pensions which are already being drawn down. The latter approach is permitted under the Social Welfare and Pensions (No. 2) Act 2013. These proposals are the subject of ongoing discussions. The trustees have asked that the positions of deferred members and pensioners be taken into account in those discussions.

As Senators will be aware, an expert panel was appointed in March 2014 following consultations between my Department and the Department of Jobs, Enterprise and Innovation with the Irish Business and Employers Confederation and the Irish Congress of Trade Unions. The panel was asked to carry out an investigation of how a final resolution of the industrial relations issues relating to the IAS scheme can be secured. It has held a series of meetings with all relevant parties, including the Dublin Airport Authority, the Shannon Airport Authority, Aer Lingus, the trade unions and representatives of deferred members and pensioners. It has identified a number of critical issues that it believes should be jointly explored to deepen its understanding of the scope for progress between the parties. Intensive discussions on these issues are ongoing. The panel will issue a further report at the end of this month. It is important that these discussions and deliberations be allowed to proceed in a calm atmosphere so that a resolution to this long-standing and complex issue can be found. I hope the parties reach agreement on the way forward. If this happens, it will be important for the necessary tools to be in place ensure their proposals can be implemented.

The amendments contained in section 33 of this Bill are designed to facilitate the implementation of any proposals that emerge from the negotiations that are under way to resolve the IAS scheme difficulties. I am certainly not pre-empting or anticipating what those solutions might be. These amendments are not intended to undermine the terms and conditions of employment of staff. I will take Senators through section 33 in detail on Committee Stage. In summary, provision is being made for employees, if they wish to do so, to cease making contributions to the IAS scheme when they become a member of another scheme. It is a bone of contention among some employees who are members of the IAS scheme that they must continue to contribute to the scheme even though, given the substantial deficit in the scheme, any such contributions may accrue little benefit for them in the future. However, this will not solve the problems in the IAS scheme, which still must be addressed by the parties. Provision is also being made for new pension schemes to be established, with ministerial approval, that do not have to replicate the inflexibilities of the IAS scheme. This will ensure that if the parties agree that a new pension scheme should form part of the solution to the problems in the IAS scheme, the legislative tools are in place to establish such a scheme.

Clarification is being provided of the powers of the trustee of the IAS scheme, particularly in the context of ensuring an agreement among the parties on the way forward can be implemented. Also, in a situation where, despite the best efforts of the parties, it ultimately proves impossible for the parties to reach agreement

With regard to the latter, I have no doubt that all the parties engaged in the current discussions will do their best to find solutions to the problems in the IAS scheme. I am absolutely sure they are all serious and genuine in their approach and determination to find compromises that will have general acceptability. However, we also need to prepare for the possibility that compromise may not be attainable. In such a scenario, the only likely alternative would be a direction from the Pensions Authority to the trustees to wind up the scheme as clearly a continuation of the scheme with an unresolved substantial deficit is not tenable. Rather than have the IAS scheme wound up, the provisions in the Bill will allow the employers to take their members out of the scheme and each can negotiate directly with their staff representatives on a solution without the multi-employer constraint and inflexibilities inherent in the scheme. It is far more preferable that the current discussions should succeed in finding an agreement that will be sustainable into the future. I hope all the parties involved will continue to put all their efforts into finding the most feasible and equitable solution to the matter in a timely manner.

I will now outline the main provisions of the Bill. The main purpose of the Bill is to establish the new commercial State company, the Shannon Group, and transfer to it ownership of the SAA and Shannon Development from the Minister for Public Expenditure and Reform.

Part 1 has five sections that deal with the Bill's Title and collective citation, definitions, expenses, the making of orders and repeals. These are standard sections in a Bill of this nature.

Part 2 relates to the Shannon Group. It is a key part of the Bill and provides for the establishment of the Shannon Group as a public limited company under the Companies Acts, the issuing of 38,100 shares in the company to the Minister for Public Expenditure and Reform and the issuing of one share, to be held in trust by the Minister, to each of the subscribers to the memorandum of association of the company. These are standard minimum requirements for a public limited company under the Companies Acts. The citizens of the country will be the ultimate owners of the new company. Section 9 provides for the payment of dividends to the Minister for Public Expenditure and Reform and for such dividends to be disposed of for the benefit of the Exchequer and society at large.

The rest of Part 2 sets down the purpose, functions and general duties of the Shannon Group and provides power for the company to borrow, subject to ministerial consent. An aggregate borrowing ceiling of €100 million for the group and its subsidiaries is specified in section 13, but it can be varied subsequently, if necessary and justified, by ministerial order.

Part 3 deals with the administration of the Shannon Group and corporate governance arrangements. The board of the company will have ten members, including the chairman, the chief executive and two employee representatives. The chief executive of the group will also be appointed as chief executive of each of its two main subsidiaries, the SAA and Shannon Development. Initially, it means that the current CEO of the SAA and Shannon Development, Mr. Neil Pakey, will be the first CEO of the Shannon Group.

On staffing matters, provisions are made in section 18 which confirm the transfer of ownership of the SAA and Shannon Development to the Shannon Group and that it will not operate in a way that will worsen the conditions of service or remuneration of staff currently working in these two bodies.

With regard to section 20, I took on board a suggestion made by the Oireachtas Joint Committee on Transport and Communications when it looked at the heads of the Bill, that the members of the board of any subsidiary of Shannon Group should be appointed by the group board rather than solely by the chairman. However, subject to notifying the Shannon Group board, the Minister of the day may specify any subsidiary for which he or she wishes his or her consent to be obtained for board appointments.

Sections 21 and 22 provide for the reporting arrangements for the Shannon Group.

Provision is made in section 23 for a pension scheme in the Shannon Group. Any such scheme will be subject to approval by the Minister, with the consent of the Minister for Public Expenditure and Reform. Standard provisions regarding the conduct of directors and employees of the Shannon Group and its subsidiaries are also included in Part 3, as is a power for the Minister to issue directions and guidelines to the company.

Part 4 contains only two sections, the key one being section 28 which provides that, following the establishment of the Shannon Group, all shares held by, or on behalf of, the Minister for Public Expenditure and Reform in the SAA and Shannon Development will be transferred to the Shannon Group. The SAA and Shannon Development will then be wholly owned subsidiaries of the Shannon Group.

Simultaneously with this transfer of ownership, the existing boards of SAA and Shannon Development will be dissolved. This will allow the board of Shannon Group to make appointments to the boards of these subsidiaries under section 20, which I referred to a moment ago.

Part 5 relates to the restructuring of airport companies and contains a number of provisions that are relevant to the State airports. Section 30 provides for the dissolution of Cork Airport Authority plc. However, the section also provides the power to re-incorporate that authority again at a later date. Essentially, the provisions in the State Airports Act 2004, which would facilitate the separation of Cork Airport from the DAA, if such a decision is made, are being preserved. Cork Airport Authority plc was incorporated in 2004 with the intention by the then Government of moving relatively quickly to the separation of Cork Airport from the DAA. However, that never happened and it was never envisaged that the company would remain in existence for a decade without the airport being separated from DAA. The board of Cork Airport Authority has existed only in skeleton form for some time. Even in the period before that, when a board was in place, there were significant corporate governance concerns on the part of directors about being on a board in such circumstances. Fulfilling the normal expectations of the board of a public limited company is difficult, particularly given the statutory and fiduciary duties and obligations on it. I am therefore taking the opportunity provided by this Bill to bring this abnormal situation to an end while preserving the power for the Minister to incorporate the company again at a future date.

I am conscious of the importance of Cork Airport in the context of the social and economic development of the city and the wider Cork region, including its importance for tourism. This is why DAA has established a new high level stakeholder body, the Cork Airport Development Council, CADC, to boost the development of the airport. The council held its first meeting in March this year. The CADC, which is chaired by DAA chairman Pádraig Ó Ríordáin, will provide a forum for stakeholders, including senior representatives from the tourism and business sectors, who have an interest in the development of Cork Airport to engage with management at the airport and to help contribute to traffic and route growth.

Section 31 provides for the re-naming of Dublin Airport Authority as "daa". The company has a strong preference to change its current name to the acronymic form, daa, and to cease all references to Dublin Airport Authority. However, each of its two airports at Dublin and Cork will be branded separately. Over the past ten years, the name "daa" has become embedded in public and corporate consciousness as the master brand for the group. The acronym, daa, is already used extensively across infrastructure, systems and other assets.

Section 32 contains a series of technical amendments to existing airports legislation, in particular the Air Navigation and Transport (Amendment) Act 1998 and the State Airports Act 2004, which arise as a consequence of the re-naming of Dublin Airport Authority, the dissolution of Cork Airport Authority and the power in section 30 referred to earlier to re-incorporate CAA at a future date. I have outlined already the rationale for the provisions in section 33 dealing with amendments to existing legislative provisions governing superannuation arrangements in the State airport authorities and to facilitate amendments to the IAS pension scheme.

Part 6 of the Bill pertains to Shannon commercial enterprises and contains a number of miscellaneous provisions relating to Shannon Development. Section 34 provides for the renaming of the company's official title, Shannon Free Airport Development Company, SFADCo, as Shannon Commercial Enterprises Limited to reflect its future commercial focus. Allied with this new commercial focus, section 35 provides for the ending, on a phased basis over four years, of Shannon Development's exemption from corporation tax and it also removes the company's current exemption from capital gains tax. These types of exemption are only appropriate for non-commercial State bodies.

Section 34 provides for certain technical amendments to other legislation as a consequence of Shannon Development's future commercial remit. This section also removes Shannon Airport Authority and Shannon Development from the scope of worker participation legislation since these two companies will be subsidiaries of Shannon Group and, as I mentioned earlier, I am providing for two employee representatives on the group board in primary legislation.

Section 37 provides discretionary power for the transfer of the Shannon customs free zone land from the Minister to Shannon Development. Since approximately 1959, the Shannon free zone lands have been leased to Shannon Development at nominal rent under long-term leases. When I published the general scheme of this Bill last year, the proposal was that these lands would be transferred to Shannon Development at no cost. It has since been clarified in conjunction with the Attorney General's office that, subject to further analysis, such a transfer for no consideration could constitute state aid. For this reason, section 37 provides discretion, not a commitment or an obligation, for the Minister to transfer the relevant land to Shannon Development.

This will provide time and space, following enactment of the Bill, for my Department to explore, in consultation with the Attorney General's office, options for the proposed land transfer which would be in compliance with state aid rules. The consequential amendment of the Customs Free Airport Act 1947 in section 38 will reflect the change in land ownership from the Minister to Shannon Development if, and when, the lands actually transfer. Sections 39 and 40 provide for the transfer to Enterprise Ireland of Shannon Development's equity holdings in businesses in the Shannon Free Zone and, similarly, for the transfer of any rights, duties and obligations relating to grants awarded or approved to either the IDA or Enterprise Ireland. These equity holdings arose from Shannon Development's enterprise and support development remit for indigenous companies. These provisions follow-on from the restructuring last year of Shannon Development and the transfer of its non-commercial functions in respect of enterprise support to the IDA and Enterprise Ireland. Provision is also made in section 41 for the transfer of Shannon Development's superannuation scheme, its liabilities, duties, obligations and funding, to the Minister for Jobs, Enterprise and Innovation.
This section also enables that Minister to appoint a specified agency of his Department to administer the pension scheme on his behalf. The provisions reflect an agreement between management and staff in Shannon Development, reached last year under the auspices of an independent facilitator, that the staff remaining in the restructured company, which number approximately 20, would maintain their public service pension scheme arrangements.
Part 7 contains a number of miscellaneous provisions relating to the airports.
Section 43 creates a new offence of dazzling, or attempting to dazzle, a pilot or air traffic controller. This is in response to incidents of lasers being shone at aircraft which could distract the pilot. Following consultation with the Department of Justice and Equality, this issue has been the subject of a joint approach by my Department and the Irish Aviation Authority to the Attorney General's office. The shining of lasers at aircraft is increasingly a problem at airports throughout the world. In 2013, the IAA received 281 reports of lasers being shone at aircraft operated by Irish airlines and more than half of those reports, 158 or 56%, related to incidents within Irish airspace. These incidents can affect safety and have potential to cause serious side-effects such as flash blindness and glare which can distract pilots and air traffic controllers. While, thankfully, there has never been an accident as a result of such irresponsible behaviour, it is in the public interest that it be an offence to use powerful lights to deliberately or recklessly dazzle or distract aircraft pilots and air traffic controllers. The section provides for penalties on summary conviction of a class A fine, namely, up to €5,000, or up to 6 months jail or both or, on conviction on indictment, a fine of up to €250,000 for a corporation or €50,000 for an individual or jail for up to five years, or both. Section 44 provides for the updating of bye-laws at airports in relation to the immobilisation, removal, detention, release or disposal of illegally parked vehicles.
Section 45 makes it a requirement to move a vehicle, when occupied, upon being asked to do so or, where such a vehicle is unoccupied, it provides power for the airport authority to move the vehicle. The section also provides for the costs associated with such removal to be borne by the owner or person in control of the vehicle. Section 46 is a standard provision which provides "authorised officers" and "authorised persons" with immunity in any proceedings relating to the exercise of their duties, subject to the court being satisfied that such exercise was carried out in good faith and on reasonable grounds.
Section 47 is a technical amendment updating the definitions of "authorised officers" and "authorised persons" to take account of the change of name of Dublin Airport Authority and the fact that Shannon Airport is now vested in the Shannon Airport Authority. Section 48 amends section 27 of the State Airports Act 2004in respect of fixed payment notices at airports where offences under by-laws are alleged to have been committed and includes a new provision, section 27A, whereby the registered owner of a vehicle used in the commission of an alleged offence, if that owner was not using the vehicle at the material time, can declare who was using the vehicle. This is in line with the fixed charge provisions in the Road Traffic Acts.
Section 49 provides the Minister with the option - not an obligation - of approving appointments to the boards of subsidiaries of the airport authorities generally. Unless there is good reason for doing this. I believe the Minister of the day should not involve him or herself in appointments to the boards of subsidiaries of the airport authorities. This should be left to the main airport authority board. That was the position under the Air Navigation and Transport (Amendment) Act 1998but an amendment introduced in paragraph 13 of the Schedule to the State Airports Act 2004made prior ministerial consent for appointments to subsidiary boards obligatory in all cases.

I am, therefore, returning to the position under the original 1998 Act. Section 49(2) provides that no conflict of interest will arise for directors of subsidiary companies because of their relationship with the parent company. This is simply common sense. The issue has arisen at Dublin Airport Authority subsidiary board meetings and for clarity the company requested that it be put beyond doubt.

Part 8 relates to Article XI (Alternative A) of the Protocol to the Convention on International Interests in Mobile Equipment, the Cape Town Convention, on aircraft equipment. I have already referred to the need for Ireland to adopt the Alternative A insolvency regime under the Cape Town Convention to support the development of aviation finance in Ireland and capitalise on the opportunities that will arise in this area in the coming years. Section 50 of this long Bill provides for the legal mechanism to do this by amending section 5 of the International Interests in Mobile Equipment (Cape Town Convention) Act 2005 to provide that the Government may make an order to implement this specific Alternative A insolvency regime. Subject to enactment, it is my intention to arrange for the Government to make the order under this section as soon as possible.

The final part of the Bill, Part 9, contains two related sections amending elements of the Transport (Tour Operators and Travel Agents) Act 1982 and the Package Holidays and Travel Trade Act 1995. Two aspects of the 1982 Act have been deemed by the European Commission to be incompatible with EU law - in particular, the statutory requirement for tour operators and travel agents wishing to sell their services in Ireland to be in possession of a valid licence from the Commission for Aviation Regulation and to lodge a bond as security against potential insolvency with the aviation commission. One difficulty posed by these provisions is that where travel businesses within the EU meet the requirements of the member state in which they are established, we cannot impede their right to trade in Ireland by requiring them to meet additional requirements, such as licences and bonds. A reasoned opinion was received from the Commission in October last. We accepted the findings and undertook to the Commission to make the necessary statutory amendment at the earliest opportunity. I am taking this opportunity to do so.

Section 51 is intended to overcome these difficulties by making several amendments to the Transport (Tour Operators and Travel Agents) Act 1982 to clarify the position with regard to travel businesses established in another member state offering travel for sale from Ireland. Section 52 amends the Package Holidays and Travel Trade Act 1995 to bring penalties in line with the amended 1982 Act. Discussions are continuing with the European Commission to ensure that these amendments make our national laws regulating the travel trade compatible with the EU Services Directive. I may propose a further amendments on Committee Stage following the conclusion of discussions with the Commission.

I believe this Bill will provide for a better structure for the State assets in Shannon. It will serve to promote renewed growth in passenger numbers at the airport and new job creation opportunities, particularly in the aviation sector. I commend the Bill to the House and I look forward to comments from Members in the debate.