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Division over proposed Shannon Airport leasing

FEARS have been voiced about the possible impact of the leasing of Shannon Airport to private interests, with a view expressed that such a move could ultimately lead to its closure during the wintertime.

The leasing of the airport is up for discussion as the Shannon Airport Authority (SAA) is understood to have submitted a proposal to the Minister for Transport suggesting that the airport be separated from the Dublin Airport Authority and leased privately for a period of 15 to 35 years.
Shannon is understood to have lost around €16 million in the 24 months between the start of 2009 and the end of 2010 but as recently as March, Dublin Airport Authority chairman, David Dilger, was forecasting a smaller loss this year, with break-even to be achieved in 2012.
It is understood the SAA proposal was made on foot of a consultant’s report, but it has been claimed this report was not seen by all members of the board. Few details are available about what the SAA put forward but in a statement to The Clare Champion on Wednesday, chairman Brian O’Connell said the way Shannon Airport operates needs to be changed significantly.
Mr O’Connell said the Minister for Transport had sought the views of the SAA on the desirability and feasibility of restructuring Shannon as an independent airport; privatisation/part-privatisation options with the State or DAA retaining a shareholding and also on the role of the SAA should separation not be viable.
While he didn’t reveal what the SAA had put forward, Mr O’Connell maintained that Shannon has to adapt to changed conditions.
“Since receiving the minister’s communication, we as a board, have held a number of meetings and discussions addressing the real challenges that exist in the aviation industry, both globally and nationally, at this point in time. It is clear that the ways and means we have organised and managed business in the past have to change, to take into account the reality of present and future market challenges. It is no longer sustainable for any business to continue in a loss-making mode. Every business, including Shannon Airport, must re-configure itself and re-engineer its future in the light of the dramatically changed economic landscape.”
He said the board is very aware of the importance of a successful airport. “As a board, we are very mindful that Shannon Airport is, and should continue to be, a powerful driver of current and future economic viability in the whole West of Ireland region if it is adequately capitalised and superbly managed.
“During the course of our deliberations, we considered a wide range of options which could optimise and maximise the commercial potential of Shannon Airport. We analysed present international trends and examined locations similar to Shannon around the world, which are operating successfully.”
He said the board has submitted its proposals as requested by the minister and it is now up to him to deliberate upon them.
Shannon-based county councillor, Sean McLoughlin said he would be vehemently opposed to allowing Shannon pass into private hands. “It’s crazy, we can’t let it be privatised for a day, a week or a year. It has to be owned by the public for the public.”
He said he is concerned that if it is taken over, Shannon could become a seasonal airport, closing down during the winter.
Councillor McLoughlin agrees, however, that the situation cannot remain the same at Shannon. “We have to look at the management structure from the board right down. What’s needed is autonomy, with Shannon being debt and liability free and with a good reserve of cash to start.” He acknowledged this would mean cutbacks in the future at Shannon.
Clare TD Pat Breen said there is no cause for workers at the airport to be alarmed. “I am in regular contact with staff representatives and I want to re-assure staff working in Shannon Airport once again that no decisions whatsoever have been taken on the future of the airport and that they will be fully consulted on any plans or proposals going forward. All that is happening at present is that Minister Varadkar has written to the three boards at Dublin, Cork and Shannon airports seeking their views on the best way forward for the three main airports. I understand that all three boards have now made submissions and that the minister is taking time to evaluate those submissions. I also understand that other stakeholders in the region have made their views known to the minister, including the IHF.”
Clare TD Joe Carey also said there is little cause for concern. “I welcome the fact that finally a note of realism is entering the debate on the future of Shannon Airport. I welcome the minister’s invitation to the Shannon board for its views on how it would see the airport operating independent from the Dublin Airport Authority. I have for a number of years advocated the path now being pursued by the minister and have strongly suggested this approach in my discussion with Minister Varadkar since the formation of the present Government.
“However, I note the concerns expressed in a recent article in The Irish Times with regard to suggestions as to what shape the new structure might take. I am happy to say, from my contact with the minister, that there is no need for these concerns. The minister is fully aware of the importance of our airport to the region and I am satisfied (from my dealings with him) that he will only proceed with a new structure that enhances our airport’s prospects.”
Deputy Michael McNamara said he is against privatisation. “We are in a difficult place economically and financially and our only future is growth. Shannon has been, and should be, a catalyst for growth and it shouldn’t be just viewed as a business to generate income. It’s a key piece of strategic infrastructure.”
He also said he is perturbed by reports that members of the SAA board aren’t happy with proposals. “I’m particularly concerned by reports that some members are not happy about it and I wonder how that came about. If the proposal was not put before the board members it would fly in the face of corporate governance structures to the extent that resignations would be required,” he stated.
Shannon-based Senator Tony Mulcahy said he would be opposed to full privatisation but indicated a public-private partnership might be more palatable.

 

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