To ask the Minister for Transport his views on whether, in the event of a partial sale of Aer Lingus, it would be possible to include a caveat in the sale agreement to ensure the retention of landing slots at Heathrow Airport by Dublin passengers; if he is actively considering such a clause; the action which has been taken to examine this proposal; and if he will make a statement on the matter.
- Olivia Mitchell.
For PRIORITY answer on Thursday, 12th May, 2005.
Ref No: 15715/05
Answered by Minister for Transport (Martin Cullen)
REPLY
I want to see the slots being retained at Heathrow regardless of the ownership structure of the national airline. I am very aware of the concerns raised about specific strategic issues in the context of any proposal to reduce the States shareholding in Aer Lingus. These relate not only to the slots at Heathrow but also to the Aer Lingus brand and direct services on the Transatlantic.
I should clarify for the House that Ireland does not own any Heathrow slots. These slots are held by Aer Lingus on the basis of Grandfather rights which are rights of historic precedence. Aer Lingus has round 4% of Heathrow slots the fourth largest after BA, BMI and Lufthansa and operates in the region of 25 round trips daily in peak season. Apart from Aer Lingus, BMI is the only other operator on Heathrow/Dublin and there is no other operator to Heathrow from Cork or Shannon.
It should also be pointed out that Heathrow services are a key element in the Aer Lingus product and a key contributor to profits. I have no reason to believe that this will not be the position into the future, whatever the ownership status of Aer Lingus.
However, I should also point out that as direct services increase to European and other points, the importance of Heathrow for international connectivity is diminishing. Also, the other major European hubs in Paris, Frankfurt and Amsterdam are continuing to grow and have good direct connections from Ireland from a range of airlines.
The allocation of slots at congested airports such as Heathrow is governed by EU Regulation 95/93 as amended by Regulation 793/2004. The current regulation allows for the retention of Grandfather slots. It also allows for the exchange of slots but is silent on the issue of the sale of slots. However, this has not prevented the development of a grey market in slots where the practice of exchanging slots for cash has developed.
The Commission published a study last year on potential mechanisms to develop market orientated slot allocation schemes. This study was followed up by a consultation paper later in the year. The Commission is now developing its thinking on the potential mechanisms that could be included in draft legislation. My Department will continue to monitor developments at EU level in relation to any proposed changes to the regulatory regime for slots.
The current EU regulatory regime may of course change in the future. Accordingly, there is no absolute guarantee that access to the current level of Grandfather slots at Heathrow can be maintained indefinitely, even if the current ownership status of Aer Lingus remains the same.
However, I want to assure the House that in the context of any decision to reduce State ownership in Aer Lingus, all the options available within the regulatory framework will be examined to ensure adequate ongoing access to Heathrow for Irish consumers.
