“There is a grave danger that Shannon Airport is on a downward spiral,” the chief executive of Shannon Development, Dr Vincent Cunnane, has warned.
In demanding urgent measures to underpin recovery, he maintained, “Shannon will not survive on passengers alone” and further warned that without government funding it would be difficult.
Dr Cunnane, recently appointed to the board of the Shannon Airport Authority, bluntly stated, “Aer Lingus is the key problem”, when questioned at Monday’s launch of the 2009 review of Shannon Development performance.
Accusing Aer Lingus of prevaricating on the services to operate from Shannon this year, he said, “What we want from Aer Lingus is certainty”.
He pointed out that the network of travel contacts developed by the agency in the USA “want to use Shannon”. With Aer Lingus protesting that off-season losses nullify peak season profits, he pointed out that by using smaller aircraft on the Shannon-Newark service “Continental Airlines are showing the way”.
He pointed out that Aer Lingus had declined to make use of the travel time and costs-saving advantages of the Customs and Border Protection and, in response to suggestions that incentives might be offered, said “every incentive has been offered to Aer Lingus to use all the facilities at Shannon”.
Acknowledging the ending of quota protections for Shannon since open skies deregulation three years ago, Dr Cunnane said that the “huge impact” on Shannon called for concerted initiatives and measures, which had been set out in the Tourism and Economic Development Plan and which have been re-asserted in the report and calls for action on the recommendations of the Mid-West Task Force.
Dr Cunnane, who is also chief executive of the task force, wants the full €53 million package of airport support funding and infrastructure development to be implemented. The disappointment among key tourism interests about the lack of response from Government and State promotion agencies to calls for promotion funds to be directed specifically to Shannon was also reflected in Dr Cunnane’s remarks.
He pointed out that €3m per year in boosted promotion funding in North America had been devoted to a Visit the Wonderful West campaign for each of the past two years. But this year the funding was reduced to €2m and the concerted effort to have that reduced funding devoted exclusively to promotion of the Shannon gateway had fallen on deaf ears. “This year’s €2m in funding is not enough to compensate for open skies,” he said.
For Shannon Airport to survive, reliance on passenger numbers alone would not be enough, Dr Cunnane said.
“The future is in the combination of the Customs and Border Protection pre-inspection and cargo,” he explained. While the extension of CBP procedures to cargo has yet to come into force, the advantages of the facility “is why we set such store by the Lynx cargo hub project”.
With the Mid West Task Force urging the Government to sanction €7m investment by Shannon in a partnership in which Lynx would invest €15m, Dr Cunnane revealed that the proposed cargo hub promised substantial future development and growth. “A controlled temperature room is just the first phase and phases two and three would be significant not only for the region but for the country generally,” he said.
In face of the upcoming withdrawal of European services by Ryanair, Dr Cunnane expressed his belief that commercial routes being vacated by Ryanair could attract replacement carriers. “With the Shannon Airport Authority marketing manager, Declan Power, we are actively seeking out these opportunities,” he said.
As chief executive of the Mid West Task Force, Dr Cunnane said that a communication had been received from Tanaiste Mary Coughlan’s Department of Enterprise and Employment signalling that a response to the recent demands for urgent action is being prepared. “The task force has stated that the €53m package is vital for the airport. The question now is how to bring all the required actions together. But without Government funding it will be difficult,” he said.
Jobs and tourism in freefall
The clock was turned back on the two key areas of Shannon Development activity when jobs on Shannon Free Zone fell back to late 1990s levels and numbers attending its castle and other attractions shrank back to mid-1980s level.
Employment at the 100 companies in the Shannon Free Zone has declined by almost 2,000 in the past 10 years, official figures released in the Shannon Development review of 2009 on Monday reveal. Jobs at the Free Zone reached a peak of 8,058 in 2000. With the exception of a gain of 70 in 2004, the employment level has been in decline and reached 6,320 at the end of 2009. The last time that Free Zone employment was at that level was in the second half of the 1990s.
“It could have been a lot worse,” said Dr Vincent Cunnane, Shannon Development chief executive, at the media briefing on 2009 results at the Radisson Hotel in Limerick. The setback to employment could have verged on 1,000 in one year, only for the 260 new jobs that came on stream. He pointed out that four in every five of the 787 jobs lost last year were due to contraction of employment rather than closures. He added that Shannon Development had been successful in securing help under the Government’s Employment Subsidy Scheme for 14 Free Zone firms. That €2 million subsidy got commitment from the firms involved to maintain 1,800 jobs.
In its role as the region’s tourism development agency, Shannon Development efforts also secured the employment subsidy for tourism ventures in the region and secured commitment to maintain a further 1,500 jobs.
“Between these two initiatives it is hoped that a total of 3,300 people will continue to be able to support themselves and their families in this region and spend in the local economy,” Dr Cunnane said.
Although indicating that the outlook for 2010 would suggest “another difficult year” at the Free Zone, the industrial base at Shannon is being strengthened by continued investment. Last year Shannon Development approved financial supports of €15.5m spread over 13 firms, which between them are ploughing €57 million investment into their Shannon operations. Most of that investment is coming from one multinational, Intel, which is investing €50m in what will rank as one of its three specialist centres in the world and where the workforce is due to almost double to 300 over the next four years.
In its own commercial tourism operations under the banner of its Shannon Heritage subsidiary, the downward trend of the past five years struck with a vengeance last year.
End of year figures, which combine numbers of day visitors to attractions and numbers attending castle banquets and other evening entertainments fell back by 65,000 to 440,000.
While not broken down into day visitors and night-time attendances until its annual report proper, which comes out in mid year, last year’s combined figures are on a par with the 416,000 level recorded in 1985. The 2009 figures also reflect the decline since 2000 when day visitor figures alone came to just short of 580,000. When combined with banquet and Irish night attendances of over 136,000 that year, the out-turn in 2000 came to 716,664.
“As a result of the downturn in the tourism industry Shannon Development now says that it has developed a range of initiatives to attract new customers, including a number of new products aimed specifically at the home market.
“Continuing to innovate will be crucial in moving forward into an even more difficult tourism climate next year,” it was acknowledged.