DESPITE Shannon Airport’s much vaunted recovery, Shannon Group is about to seek redundancies from staff, with talks between management and unions set to begin next week.
Shannon Group is a commercial semi state, with Shannon Airport as its core and also encompassing Shannon Commercial Enterprises (formerly Shannon Development)Shannon Castle Banquets and Heritage Limited (formerly Shannon Heritage) along with the International Aviation Services Centre.
In a statement to the Clare Champion on Wednesday evening Shannon Group claimed that the redundancies are required to help its competitive position. “The necessity to address the cost base of the Shannon Group business units has been known for some time. In recent times it has been referenced in the Shannon task force report and subsequent annual reports. We are exploring options to address this including a voluntary severance scheme. This will make for a more sustainable business model going forward.”
No details of what terms will be offered to staff looking to depart have been revealed as yet.
In its 2014 annual report Shannon Group stated that its profitability had improved considerably during 2014.That report also stated that there was a profit of €600,000 recorded between August 29 and December 31 of last year.
Speaking on Wednesday Clare TD Michael McNamara said, “I understand there is a meeting next Monday with a view to seeking voluntary redundancies. Obviously I’d be very concerned at that. I do appreciate that their cost base is under pressure but on the other hand they took it over with a particular cost base and said it was viable with that cost base. The workers there have already given a lot to maintain operations at Shannon. There are a number of workers there on a three day week with a view to maintaining the cost base and operations.”
Sources have said that Shannon Airport has far more staff than its current passenger numbers would indicate it requires, while the former Shannon Development property portfolio is in serious need of investment and is not proving as lucrative as may have been expected when Shannon Group was formed.
When she appeared before the Oireachtas Transport Committee in early 2013, Shannon Group Chairman Rose Hynes said that at the time there were no plans to seek a reduction in headcount. “There are circa 230 people working in Shannon Airport. There is no intention to reduce the number of jobs; rather, the intention is to grow the pie and increase passenger numbers. The airport caters for just 1.4 million passengers, but it has the capacity to cater for 4.5 million. The target is to achieve a figure of 2.5 million. What will be required in this regard is significant cost efficiency. We need to grow revenues and passenger numbers and have effective work practices. We will work with our staff to this end.”
Shannon Airport has seen some improvement in recent years following an extremely dramatic decline.
While there were over 3.6 million passengers in 2006 and 2007, the numbers then nosedived and in 2012 there were just 1.4 million, the worst performance since the late 1980s. However in 2013 things stabilised and last year the numbers increased to just shy of 1.7 million. Ironically, this week Shannon released a statement claiming it had a very successful month of May.
Shannon Group was established at the start of 2013 and it brought together Shannon Airport with Shannon Development’s property portfolio, which includes the Shannon Free Zone. It also has a tourism arm entitled Shannon Heritage, which runs attractions including Bunratty and Knappogue Castles.
Since its establishment there has been much positive publicity about the new entity, particularly regarding the airport’s recovery. That, coupled with the improving economy, makes the announcement to seek redundancies at this time a surprise to those outside the company.