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

I thank the Senator for his amendments and for adding to the discussion on this section of the Bill. I have not seen the report that is being issued on Thursday. I think it is a draft determination on the charges for the next quinquennium. I am not sure that it deals with cost overruns in terminal 2 but if it does I will be interested in studying its findings because obviously I have an interest in the matter. The Senator's comments in regard to the former Minister, Mr. Dempsey, are correct. It is not a letter that I would have signed and in the three years I have been in office I have made no such directions to the regulator because I favour independent regulation. In the fullness of time people will see terminal 2 as a good investment but perhaps it might have been built much more cheaply or operated differently. However, I think it was the right decision to build a second terminal. The high cost of the terminal in Cork has certainly made matters difficult for that airport because its operating costs are extremely high. In many ways, this is why Cork cannot now be separated.

I appreciate the motives behind the Senator's amendments are strong but I do not propose to accept them. I see exactly where the Senator is coming from in theory but I do not want add to the bureaucratic burden of this new airport when there is no need to do so. As he pointed out, regulation of airport charges at Shannon and Cork by the Commission for Aviation Regulation ended with the State Airports Act 2004. That was probably the correct approach because these airports are very small, with only 1 million of the 24 million or 25 million passengers travelling through the State's airports going through Shannon, fewer than 3 million going through Cork and fewer than 1 million going through Knock. These are small airports and I would rather see them compete freely and independently than fetter them by regulation. Regulation makes sense in regard to Dublin Airport, which dominates with its more than 20 million passengers.

As part of the draft aviation policy document published recently, an independent review of economic regulation will be carried out. I will give consideration to the Senator's ideas in that context. Subject to what may emerge from the review, my view is that Shannon Airport should not be subject to such regulation or oversight and should be allowed to compete freely.

The draft aviation policy also makes reference to making key aviation statistics available in one repository. The indicators that the Senator suggested will be considered in that context. The Senator's amendment No. 22 is a good amendment. These kinds of statistics need to be made readily available to us and a Government body should have the power to collect them. We are doing something similar on land transport. For the first time, we are collecting statistics on passenger numbers from private operators. Several months ago I signed a statutory instrument giving the National Transport Authority the power to collect that information. I would like to see something similar in aviation but I am not sure that the CAR is the correct body. Perhaps the CSO, the IAA or my Department should carry out this work. While I accept amendment No. 22 in principle, I would like to return to it on Report Stage when I have determined which is the right body to collect these statistics. I agree, however, that they should be collected and published by a Government body.

Shannon Airport wants to stand on its own two feet. It has never sought Exchequer support. It wants to demonstrate that if it is free from DAA control, it will be able to turn Shannon into a successful business. This is where the financial discipline the Senator has in mind should arise. This discipline will come in part from the fact that it will have to compete with other airports and, therefore, need to control its cost base in order to compete. Shannon has made a good start on that road and, at this stage, we should leave it at it to see how it proceeds. If anything, the indications are that since it became independent it has been able to reach deals with airlines to reduce airport charges in return for growth.

They have been able to do that without having to deal with a regulator. The solution in this case is competition, not regulation. In my view, prices need to be regulated if there is no competition but this is less necessary where there is competition and, in particular, when the competitor is a very small body, it makes more sense to allow that competitor to compete freely but to put in place price caps on the dominant body, which in this case is Dublin Airport.

The Senator made a good point about how airline competition rather than regulation of air fares has brought down air fares. There is a free market resulting in a range of choices for passengers. In many ways we are hoping to achieve this by allowing competition among the airports. For those reasons I do not propose to accept the amendments but I welcome amendment No. 22 and I would welcome the opportunity to consider it further and perhaps bring it to Report Stage.