Committee Reports > List of Committees > Joint > 1979 > Committee on Commercial State-Sponsored Bodies > Report No. 06 - Aer Rianta Teoranta

APPENDIX 6

LETTER TO CLERK TO JOINT COMMITTEE FROM AIR CANADA

Thank you for your Committee’s invitation to express our views on the operation of Aer Rianta and we hope our comments will be helpful.

Initially we would like to emphasise that relationships between Air Canada and Aer Rianta are extremely good at all levels and particularly at Shannon Airport where our operation in Ireland is based.

Situation Analysis

Air Canada has operated between Shannon and Canada since 1947 and is the only carrier with an unbroken scheduled trans-Atlantic service since that date. Admittedly we do not have a high frequency scheduled operation but we also use Shannon as a prime alternate and our total operation is fairly consistent on a year round basis. We maintain a full time office at Shannon staffed by four long-service Irish personnel and use the handling service provided by Aer Lingus for passenger and cargo services and airport maintenance. We also operate a sales/reservations office in Dublin with a permanent staff of six Irish personnel with additional temporary local staff in the summer period.

Aer Rianta

Prior to Aer Rianta’s taking over responsibilities previously held by the Department of Transport and Power, Aer Lingus and the Shannon Airport Sales and Catering division we found it a simple matter to communicate with each of these agencies insofar as the Air Canada operation was concerned.

Since that time, however, we find ourselves in some difficulty in reconciling the overlapping commercial interests of Aer Rianta with the lack of control which they have in the provision of airport handling facilities which they include—wittingly or unwittingly—in their sales package when they are promoting the use of Shannon Airport to non-scheduled carriers in particular. Our experience would indicate that the service of Aer Rianta in permitting the non-scheduled carriers to use Shannon has not been fully followed through with Aer Lingus to ensure the handling agency is fully geared to cope with the increased traffic without affecting the standard of service to Air Canada and. I am sure, the other scheduled carriers in the peak period. While the service is not always bad, due to the shortage of trained personnel and fully serviceable equipment the best that can be said about it is that it is extremely inconsistent and results generally in our standards of service not being met. When we complain to the handling agency it is very obvious they are too busy and involved with non-scheduled carriers to provide Air Canada with the service for which they are paying.

I would recommend that when Aer Rianta are selling these package deals to non-scheduled carriers they should provide the entire handling service themselves or at least insist that Aer Lingus provide a separate unit specifically for this purpose without detriment to the scheduled operators.

It has been proven beyond doubt and well accepted that the Ireland/Canada operation cannot possibly approach a break-even situation on a year round basis and in view of the continued anxiety to preserve Shannon as an international airport it occurs to me that to ensure the future of the airport function. Aer Rianta should strongly consider offering cost reducing incentives to the scheduled carriers as the Shannon Development Co., I.D.A., etc., offer incentives to industrialists to set up at Shannon. To a major extent the industries at Shannon with a few notable exceptions rely mainly on surface transport for import and export of raw material and finished goods. The scheduled carriers contribute consistently towards the continuation of the pure airport function, but they get no consideration whatever in terms of relief in costs which would at least acknowledge the importance of the scheduled carriers to the future of Shannon and Aer Rianta’s organisation at the airport.

Strong consideration should be given to the importance of the year round operation by the scheduled carriers and perhaps some cost relief in the lean Winter period might provide the incentive to encourage the carriers to be fully involved in the future of the airport function. Reduced rentals as offered to industry should also be considered.

On the cargo side of the business in which we can see fairly good potential for future development we find it most unsatisfactory that the cargo terminal facility is totally controlled by our chief competitor, Aer Lingus.

This situation must be changed if the potential is to be fully developed and the immediate remedy would appear to have Aer Rianta consider taking over this area provided they can supply the required un-biased, experienced, efficient personnel, space and equipment at a reasonable cost.

I will conclude by commenting on the alleged Duty Free shop facility. Should a Trade Description Act be introduced in this country, Aer Rianta would certainly find it difficult to justify the “Duty Free” aspect. At one time we actively promoted the Shannon Duty Free shop in our sales programmes and were proud to do so but due to the severe criticisms which we have received with regard to the prices at Shannon and Dublin we can no longer include them as an incentive to shop at Shannon. If the items are indeed “duty free” the profit margin would appear to be exorbitant when compared to prices at full retail duty paid outlets.

A very close study should be made of the “duty free” aspect to restore some confidence in the “shop at Shannon” slogan which was so successful in the past.

Once again we would like to express our appreciation of your Committee’s invitation to comment on the Aer Rianta operation and if there are any specific points arising from your investigation we will be glad to co-operate further in answering any questions which you may develop from all the information and opinions submitted to you.

7 June 1979