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

IMEACHTAÍ AN CHOMHCHOISTE

PROCEEDINGS OF THE JOINT COMMITTEE

Dé Máirt, 16 Nollaig, 1980

Tuesday, 16 December, 1980

1. The Joint Committee met at 4 p.m.

2. Members Present.

The following Members were present:

Senator Eoin Ryan (in the Chair); Deputies Austin Deasy, Barry Desmond and Liam Lawlor; and Senators Patrick M. Cooney and Brian Hillery.

11. Draft Report on Aer Lingus, Teoranta and Aerlínte Éireann, Teoranta.

The Committee resumed consideration of the Draft Report:

(i) Paragraph 22 amended and agreed to, as amended.

(ii) Paragraph 29 amended and agreed to, as amended.

(iii) Paragraph 31 amended and agreed to, as amended.

(iv) Paragraph 33 amended and agreed to, as amended.

(v) Paragraph 60 amended and agreed to, as amended.

(vi) Paragraph 61 amended and agreed to, as amended.

(vii) Paragraph 63 amended and agreed to, as amended.

(viii) Paragraph 69 amended and agreed to, as amended.

(ix) Paragraph 70 amended and agreed to, as amended.

(x) Paragraph 72 amended and agreed to, as amended.

(xi) Paragraph 73 amended and agreed to, as amended.

(xiv) Paragraph 80 amended and agreed to, as amended.

(xiii) New Paragraphs.

Following new paragraphs inserted before paragraph 81.

“81. The question of handling charges came up in the course of our inquiry. Aer Rianta in its memorandum to us recorded that Aer Lingus provides a variety of services at Irish Airports as agents for Aer Rianta. These services include passenger handling, baggage handling, cargo handling and aircraft handling. Aer Rianta state that:—

‘While the principal/agency relationship is accepted by Aer Lingus and we are fully satisfied with the standard of services they provide, it has not been possible to reach agreement on the level of control which Aer Rianta should exercise over the charges made by Aer Lingus for these services.’

Dan-Air maintained in evidence that’… the handling charges which we are currently paying in Ireland are much the highest that we pay anywhere in Europe’.”

“82. It is important to keep clear the distinction between

(a)Landing charges: Landing fees, passenger load fees and certain other charges which are levied by Aer Rianta,

(b)Handling charges: Passenger, baggage, cargo and aircraft handling charges which are levied by Aer Lingus; these services being supplied by Aer Lingus as agents for Aer Rianta.

In relation to the former, which were the subject of a complaint by Aer Lingus at that time, we recommended in our report on Aer Rianta that the question of the competitiveness of landing charges should be referred by the Minister for Transport to the National Prices Commission for urgent examination. We do not propose to comment further on such charges at this stage.”

“83. In relation to the handling charges we note Act Lingus’ view that it generates ‘the costs in order to provide these services and we could be placed in an impossible situation if we handed over control of the charges to a third party’. Aer Lingus states that its charges are based on marginal costs and that a substantial part of the handling operation is required for its own traffic anyway. Aer Lingus also states that they operate an ‘open-book system’ so far as Aer Rianta are concerned ‘so that they are in a position to examine the structure of our costs’. Aer Rianta are consulted by Aer Lingus about proposed changes in handling charges.”

“84. It appears to us that there is economic logic in the arrangements that now exist between Aer Lingus and Aer Rianta in this matter, but we urge Aer Lingus to keep its handling charges down to the maximum extent possible, so as to avoid a possible deterrent to the development of airline traffic to Ireland. If Aer Rianta are not satisfied, on the basis of the cost information made available to them, that the handling charges are reasonsable, they should take up the matter with the Minister for Transport.”

(xiv) Paragraph 88 amended and agreed to, as amended.

(xv) Paragraph 99 amended and agreed to, as amended.

(xvi) Paragraph 117 amended and agreed to, as amended.

(xvii) Paragraph 120 amended and agreed to, as amended.

(xviii) Paragraph 124 amended and agreed to, as amended.

(xix) Paragraph 128 amended and agreed to, as amended.

(xx) Paragraph 131 amended and agreed to, as amended.

(xxi) New Paragraph.

Following new Paragraph inserted after Paragraph 134.

“In view of the deteriorating economic climate for the air transport industry generally, and for Aer Lingus in particular, the Committee requests that a debate on this Report take place in the Seanad in accordance with the Order of that House of 14 May 1980.”

Draft Report, as amended, agreed to.

Ordered: To report accordingly.

12. Adjournment

The Joint Committee adjourned at 6.30 p.m.