Bernard Durkan (Kildare North, Fine Gael)
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Question 203: To ask the Minister for Transport his plans for the development of increased air flights between Dublin and the rest of the country with particular reference to the development of a modern air taxi service; and if he will make a statement on the matter. [36069/06]

Martin Cullen (Waterford, Fianna Fail)
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In the EU there is an open skies policy in which airlines are free to operate what routes they choose, including domestic routes, provided they satisfy the necessary requirements.

The provision of scheduled air services between the major towns and cities in Ireland is essentially a matter for airlines, if they consider there would be a demand for a particular service on a particular route. This is not a matter in which I or my Department would normally be involved, except as regards Public Service Obligation air services (PSO). Member States of the EU are allowed to provide financial compensation for the operation of PSO air services to regional airports, where it would not be economically viable for airlines to operate on a commercial basis. In 2005, I announced the award of contracts for the provision of PSO services from 2005 to 2008 on routes linking Dublin with the regional airports in Galway, Kerry, Sligo, Donegal, Ireland West (Knock) and City of Derry. There are no plans to expand this programme.

Ireland is adequately served by a network of airports, both international and regional. Furthermore, road and rail transport links between major towns and cities have improved significantly in recent years and further major improvements are planned as part of Transport 21.

Bernard Durkan (Kildare North, Fine Gael)
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Question 204: To ask the Minister for Transport the action he proposes to take to encourage competition in air transport; and if he will make a statement on the matter. [36070/06]

Martin Cullen (Waterford, Fianna Fail)
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The air transport market in the EU has been fully liberalized and consequently fully competitive since 1992 with an open skies policy in which airlines are free to operate what routes they choose. This has provided an environment for increased competition, giving low cost carriers access to the market to the ultimate benefit of the consumer.

In June 2006 the EU concluded a multilateral agreement with ten additional countries on the Establishment of a European Common Aviation Area (ECAA). There is also a 1999 air transport agreement between the Community and Switzerland so that the effective market for Community air carriers now encompasses 36 countries. These measures have transformed the aviation sector making it extremely competitive giving the consumer a wide range of choice. The process will continue with a further EU regulation which will consolidate, simplify and further streamline the regulatory process.

I intend to ensure that Ireland's airports can provide cost competitive and appropriate infrastructure to meet the current and prospective needs of the aviation sector. In addition I will continue to facilitate and encourage as wide a range as possible of safe, reliable, regular and competitive commercial air services with non EU countries for Irish tourism, trade and industry. These objectives will be pursued by concluding liberal regulatory arrangements with non-EU states and by seeking to facilitate greater access on transatlantic routes by concluding the EU-US Open Skies agreement.

Bernard Durkan (Kildare North, Fine Gael)
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Question 205: To ask the Minister for Transport his plans for the future of Aer Lingus and the development of air transport generally. [36071/06]

Martin Cullen (Waterford, Fianna Fail)
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The Irish aviation sector plays a vital role in our continuing economic development and is a critical feature of the growth in tourism and trade. Aviation is particularly important for us because we are an island nation. The key objectives of Irish Aviation policy and the strategies being pursued to achieve those objectives are set out in my Department's Statement of Strategy 2005-2007 which was published on 29 July 2005 on the Department's website.

In broad terms the main objectives of Irish aviation policy are:

To facilitate and encourage as wide a range as possible of safe, reliable, regular and competitive commercial air services for Irish tourism, trade and industry; and

To ensure Ireland's airports can provide cost competitive and appropriate infrastructure to meet the current and prospective needs of the aviation sector.

These objectives will be pursued by concluding liberal regulatory arrangements with non-EU States and by seeking to facilitate greater access on transatlantic routes by concluding the EU/US 'Open Skies' agreement. Open Skies offers significant growth and hub opportunities with considerable potential benefit to the Irish economy. I am seeking to bring this issue to conclusion in an EU-US context. If agreement on an EU/US agreement cannot be reached in a reasonable timeframe, I will seek to progress this bilaterally with the US authorities.

The recent successful flotation of Aer Lingus has provided the airline with access to new equity to enable it to compete effectively and fund the growth of its business. Through the IPO, the company now has new equity of the order of €0.5 billion, which provides it with unique opportunity to pursue its expansion based business strategy. It will be a matter for the Board of the company going forward to decide on its future strategy.

In relation to the proposed takeover of Aer Lingus by Ryanair, the Government's view is that Ireland's strategic objectives for aviation would not be well served by such a takeover. Earlier this week Ryanair applied to the European Commission for approval of its bid. Officials from my Department have already had initial contacts with European Commission officials to outline the Government's concerns in relation to the proposed takeover and will make further representations to the European Commission on this in the coming weeks.

With regard to Airports, it is Government policy to foster airport development, particularly at the three state airports, in order to encourage as wide a range as possible of reliable, regular and competitive air services to and from Ireland. Policy is also aimed at facilitating the contribution of the regional airports to balanced regional development.

Airport development in Ireland must take into account the needs of low cost and full service airlines. Airport development should also enable the development of critical long-haul business to North America and to other long haul destinations. Major development will be required at our key gateway airport, Dublin Airport, over the next decade. Among the priorities are a new Terminal 2 and pier and apron facilities that will allow the airport to respond to demand and to improve the overall passenger experience for all users.