Proud day for democracy opened the skies for Irish aviation

 

ANALYSIS:TOMORROW MARKS the 25th anniversary of a remarkable day in Irish parliamentary democracy. On that day in 1984 an all-party agreement to pass all stages of emergency legislation to restrict price competition in aviation was stopped in the Dáil. The Air Transport Bill, 1984, sought to imprison, fine heavily and remove the travel agent’s licence from persons selling airline tickets below prices determined by the minister. The emergency legislation was introduced following the State’s failure in a court case against Transamerica for charging too little on its Ireland-USA routes.

The lone ranger in opposition to the Bill was Desmond O’Malley, then an Independent TD excluded from Fianna Fáil for failing to support the policy that the purchase of a condom required a medical prescription. His powerful and persuasive speech against the Bill and in favour of the consumer caught the main parties by surprise.

“Trying hard not to agree with Dessie” was how The Irish Times described the debate.

Political correspondents variously formed the views that opponents of the Bill on the government side included John Kelly, Hugh Coveney and Liam Skelly, and in Fianna Fáil included Mary Harney and Padraig Flynn, the latter convinced that the £240 (€280) air fare between London and Shannon was a major obstacle to developing the western region.

The minister promoting the Bill, Jim Mitchell, was in Japan. The role of promoting the Bill in the Dáil fell, hospital-pass style, to junior minister Ted Nealon. The minister could not come back to present the Bill because the air fares were too dear was his witty explanation. The joke rebounded and bemused commentators wondered if the Bill had been passed might the promoting minister have been stranded in Japan while our prisons filled up with airline executives and travel agents.

Then party whip Bertie Ahern was crucial in helping stop the Bill, which as a director of Bord Fáilte I opposed.

Within 18 months Ryanair was operating the Waterford-Gatwick route. In less than two years Ryanair was on the Dublin-London route and fares fell by more than half on the first day of competition.

The Aer Lingus which the Air Transport Bill, 1984, sought to protect, had 2.2 million passengers. This year, the four Irish airlines, Ryanair, Aer Lingus, Cityjet and Aer Arann, will have 80 million passengers.

The parliamentary revolt against the cartels which had controlled international aviation since 1944 gave Ireland a first mover advantage before the rest of Europe finally deregulated aviation in 1997. Ryanair is the largest international airline in the world and has the highest market capitalisation of any airline worldwide. With 68 million passengers this year it is more than double the size of British Airways.

Irish aviation illustrated brilliantly that monopolists charge you too much and produce too little. The parliamentary revolt in 1984 changed the way we think about aviation in an outer offshore island. Low-cost access to this island boosts national competitiveness.

The success of Irish aviation in international markets over the last 20 years contrasts with much of the subsidy-guzzling quango-based waffle that passes for industrial policy here.

The Irish parliamentary revolt of June 27th, 1984, was essential to ending the cartel domination of international aviation and is admired internationally. The change in parliamentary opinion in Ireland in one afternoon contrasts with several years of congressional hearings in the United States as presidents Ford and Carter, Senator Edward Kennedy and Professor Alfred Kahn took on the incumbent protected airlines.

Ireland needs more parliamentary revolts. Secret deals with bankers, builders and religious orders should be no more acceptable now than deals with cartel airlines then. There should be less parliamentary whipping of divergent opinions in our rigid party system.

A proud tradition of parliamentary oratory from Grattan, Flood, O’Connell and Parnell was revived briefly on June 27th, 1984. We hear it seldom today.

As Ireland returns to rates of unemployment, tax and public debt of the 1980s, a reformed parliament might again lead the way out of our crisis.

The best way to celebrate the 25th anniversary of a remarkable day in parliamentary democracy is to have a lot more of them.


Sean Barrett is senior lecturer at the department of economics in Trinity College, Dublin. His book, Deregulation and the Airline Business in Europe, is published by Routledge