Jimmy Deenihan (Kerry North, Fine Gael)
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Question 120: To ask the Minister for Transport if he will enter into a binding arbitration process with an airline (details supplied) in relation to the public service obligation contract for the Kerry to Dublin route from Kerry airport; and if he will make a statement on the matter. [37083/10]

Noel Dempsey (Meath West, Fianna Fail)
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The Kerry/Dublin Public Service Obligation (PSO) route is operated under the current Public Service Obligation (PSO) contracts for services linking Dublin Airport with the regional airports at Derry, Donegal, Sligo, Ireland West Airport Knock, Galway and Kerry Airports. These contracts commenced on 22 July 2008 and are due to expire on 21 July 2011. The specifications required for the service, including the stipulation that three return flights per day would be required, were set out in the tender Notice which was published in the EU Journal in January 2008.

In the case of the Kerry route, following the EU public tendering process, a bid submitted by Ryanair, which met the above requirements, emerged as the winner. The bid from Ryanair also set out the compensation it required in order to operate the service.

Based on that bid, Ryanair was awarded the contract to provide the scheduled air services over the three year contract period and are receiving payments in accordance with the contract. The contract does not include a provision for binding arbitration and I have no plans to enter into such a process.

However, the contract does include termination clauses, including a specific provision for termination by mutual agreement in the event of the rejection of a proposal for additional compensation and three months notice being given. It also provides for unilateral termination if either party gives the other at least six months notice of termination.

I can assure the Deputy that I have fully met my obligations under the terms of the contract and must comply with the requirement of European Law in relation to the operation of the PSO contracts governed by Regulation 1008/2008. It is a matter for Ryanair to ensure that it also meets its obligations under the contract.