Airport future not linked to ‘labour costs’

SHANNON’S future as an independent airport isn’t predicated on major reductions in labour costs, while legal advice on complying with State aid regulations was obtained from the Attorney General prior to Shannon’s separation from the Dublin Airport Authority (DAA), according to Transport Minister Leo Varadkar.
Mr Varadkar, who spoke to The Clare Champion on New Year’s Eve, the day before Shannon split from the DAA, also said the new targets set for Shannon are “very doable”.
Staff at Shannon have been given assurances that they won’t be facing cutbacks for a number of months at least, but there is concern that adjustments will be sought next year. Mr Varadkar said that while the business plan for Shannon isn’t based on cutting staff, some adjustments will probably be required.
“The terms and conditions that the employees have transfer with them. The transfer happens today and those terms and conditions can
only be changed by negotiation, so that may take some time, it’ll be up to the new board and the new management to work out what changes, if any, are needed but I think it’s fair to say that, whether separation happened or not, there would be changes. There are changes down in Cork and that hasn’t been separated. There are about 20 or 30 redundancies.
“At the same time, if you look at the business plan [for Shannon] it’s not predicated on a major reduction in labour costs or anything like that. The assurance that I’ve given staff is that there won’t be any compulsory redundancies during the transition period and there are no plans for compulsory redundancies at all, but it’s a State-owned enterprise, similar to ESB or Bord Gáis and it’s going to be the management and board that run it.”
Shannon’s debts, which were estimated to be around €100 million, have been left with the DAA following separation. When it was announced that this would happen Knock Airport’s chairman, Liam Scollan, said a challenge might be taken at European level.
However, Mr Varadkar said the Government had consulted the Attorney General prior to making its decision and he is confident State-aid regulations have not been breached.
“I think overall what Shannon has got is a fair deal. Perhaps if it had been more generous then there might have been a case for others to argue that it was State aid and to take a case against it, but we were very careful not to do that and to make sure we were on safe ground. I’m confident that if there is a challenge on State aid grounds that we’ll win that challenge.”
There has been much anger in the Mid-West at Shannon losing its stake in Aer Rianta International (ARI), the multi-million euro travel retail company that has been run from Shannon since it was founded in the late ’80s.
While Mr Varadkar has been pressed on the issue numerous times, he hasn’t accepted that Shannon would be better off retaining ARI, even if it was also left with its €100 million debt. He still held this position when he spoke to the ’Champion.
“I don’t know if that’s true because ARI needs €60 million worth of investment in the coming years and the borrowings for that are going to be borrowed against the assets in Dublin, by and large. I wouldn’t like to have seen that money borrowed against the assets in Shannon. If Shannon does borrow it should be done to develop Shannon and not perfume shops in China.”
He paid tribute to Rose Hynes, who has been appointed the chairperson of the new Shannon company, saying she had done a sterling job as chair of the aviation business development task force, which reported last year.
“Her work was really extraordinary. She just went totally beyond what she was asked to do and exceeded everything she was asked to do. It’s not just her business experience, it’s also the fact that she has a commitment to the region and that makes a big difference.
“I’ve often found that when it comes to making something works, it works because the people who are in charge of it make it work and I think she’s a huge asset.”
Last month’s budget included incentives for the aviation sector, although these were not focussed on Shannon, as some had expected. However, the Minister said he feels the Clare airport is in a great position to benefit from the measures.
“Shannon is in the best place to avail of any tax breaks, even if they do apply to other airports.