Committee Reports > List of Committees > Joint > 1980 > Committee on Commercial State-Sponsored Bodies > Report No. 14 - Aer Lingus, Teoranta and Aerlínte Éireann, Teoranta

APPENDIX 9

LETTER TO CLERK TO JOINT COMMITTEE FROM BORD FÁILTE ÉIREANN

Reference Joint Committee to examine the Reports and Accounts and overall operational results of Aer Lingus Teoranta and Aerlinte Éireann Teoranta, Bord Fáilte would make the following points:—

1. Bord Fáilte Éireann, as the National Tourism Organisation, charged with the responsibility of developing and promoting Ireland as a tourism destination to the optimum benefit of Ireland, recognises the role of the national airline and its contribution to the national economy. Furthermore, Bord Fáilte is aware of the very considerable contribution Aer Lingus and Aerlinte have made and continue to make to the development of tourist traffic to Ireland.

2. Bord Fáilte aims to ensure that access transport capacity is available to match projected demand and that this capacity is offered at a competitive cost related price.

3. In recent years Aer Lingus have been operating at a profit on its Continental European and Britain/Ireland routes. The role of Aer Lingus in developing traffic from Continental Europe — the fastest growing market for Irish tourism — has been considerable, as reflected in both the network and frequency of services now provided.

4. Aerlinte’s operations on the North Atlantic reflect the increasing difficulties of all carriers serving the North Atlantic routes, especially in the wake of ‘de-regulation’. The difficulty is one of serving the US-Ireland market on a year-round basis with its characteristics of high tourist content; peaked demand pattern; mainly US originating; a relatively small market with a high proportion of demand in a low yield fare category. Increasing the trend on the North Atlantic is concentration on high density routes between main city pairs linking the USA and Europe. With escalating fuel costs the type of equipment used is becoming more critical as airlines attempt to improve the per-seat-mile cost

5. Bord Failte considers it essential, from the tourism viewpoint, for Ireland to have a strong, viable national airline, because Ireland cannot afford to depend on the operations of carriers who have no long-term commitment to servicing Ireland. In recent years other carriers have withdrawn services on the North Atlantic for economic or other rationalisation of operations reasons. Ireland has been fortunate that our national carrier maintained its North Atlantic operations in spite of economic difficulties.

6. Bord Failte maintains a close relationship with Aer Lingus/Aerlinte in relation to forward planning re capacity and tariffs, together with general promotional activities. The national carrier is sensitive to the needs of Irish tourism, and while clearly the operational objectives of Aer Lingus and Bord Fáilte may differ, all decisions affecting tourism are fully discussed in advance.

7. In marketing overseas, Aer Lingus works closely with Bord Fáilte, to the extent, in some areas, of sharing office accommodation and personnel.

8. Aer Lingus undertakes tourism promotion overseas through consumer and trade advertising and public relations operations. They also maintain regular contact with travel agents and tour operators in the markets and in certain markets they themselves act as tour operators. They also undertake ground handling arrangements in Ireland, generally complementing their overseas tours operations.

9. Aer Lingus cooperate with the marketing and promotional activities of Bord Failte overseas and participate in joint advertising and joint promotions.

10. With increasing fuel costs, the need to replace ageing or less than economic fleet poses a difficult problem for Ireland. The challenge will be to match the relatively small market demands and varied traffic patterns of routes into Ireland with aircraft of the right capacity, so as to permit the achievement of satisfactory load-factors and hence viability.

11. While Bord Failte consistently works towards the provision of a promotional pricing structure on access routes into Ireland which generates increased traffic, we ensure that short-term gains for tourism do not result in a net loss to the national economy.

Mise le meas,

Niall P. Reddy,

Secretary to the Board.

8th February, 1980.