IHF against leasing Shannon

LEASING Shannon to private interests would not be in the best interests of Clare or the Mid-West, according to the Irish Hotels Federation (IHF).

In a letter to Transport Minister Leo Varadkar, chairman of the IHF Shannon Region, Lahinch hotelier Michael Vaughan, said that in the event of the airport being in the hands of private interests, developing traffic numbers might not be a priority.
“On the question of a private leasing of the airport, we have a concern that such a leaseholder could rationalise operations at the airport to gain overall profitability to the detriment of traffic numbers and balance of traffic. A throughput of one million passengers with a heavy concentration on freight and logistics allied to redevelopment of the curtilage of the airport could be a profitable private model. Such a model would restrict severely the ability to attract seasonal tourist routes, take strategic positions on new routes and use the airport as a true economic driver,” Mr Vaughan said.
He also claimed Shannon needs to remain in the State’s hands for the long term. “The IHF believes some form of State ownership and intervention will always be required at Shannon. What we need is a model of operation that recognises that the airport is a portal for tourism growth and economic revival. Rather than viewing the operation at Shannon as a profit or loss, we view it as an investment in industry and commerce to the Western Seaboard. We would like to have an ongoing study of the macro benefits of the airport to distributing a more even spread tourism recovery and economic development.”
Mr Vaughan claimed existing structures are different to those operating in relation to other forms of transport. “The current ownership structure has Shannon operating to a profit mandate that would not be acceptable in other areas of transport infrastructure. The department no doubt does not place such a metric on the operation of bus and rail stations. It is increasingly obvious to the IHF that future traffic development will be on the basis of low-cost or no-cost to airlines, who take huge risk in establishing new routes. The airport needs a fund, a change of profit mandate or access to subsidy to allow it operate and offer more than competitive terms to attract new routes. The return to the State comes later down the chain in tax receipts and sustained business and employment as a result of business generated through the airport.”
Mr Vaughan stated that Shannon does need a certain amount of independence. “Shannon needs autonomy within a State-owned structure, not independence or severance from the DAA. The IHF understands the great benefit that the resources of the DAA brings to Shannon but that benefit is best harnessed when the airport can manage independently within that ownership, and would have access to other supports that recognise the vital economic force that an airport can have on a region.”
A vibrant tourism industry can play an important role in recovery and Shannon has to be used effectively, he added. “The current traffic throughput for Shannon is likely to be 1.3 million this year. There is much work to be done to get the figure past two million passengers, especially trying to achieve a majority of that traffic being tourists. The national recovery translates to regional recovery and the driver of recovery in the West is more likely to be tourism. What we are asking you to consider is how Shannon can be best primed and used to be a major force in driving the regeneration of tourism in the West.”

Separation from DAA not feasible
REPORTS suggest the presentation on Shannon’s future given to Transport Minister Leo Varadkar on behalf of the Shannon Airport Authority states that separation from the Dublin Airport Authority (DAA) isn’t feasible in the manner envisaged in the State Airports Act of 2004.
While the report given to the minister is said to argue that the airport needs to be run with a Shannon focus, it doesn’t suggest that the 2004 plan is still feasible.
Shannon’s passenger numbers have declined drastically over the last few years and in 2011 they may be less than two thirds of what they were in 2004. The airport has also been incurring significant financial losses. It is understood that the report sent to the minister also examines other options, including leasing the airport to private interests.
This week, Clare TDs said that they share the view that independence for Shannon is not a runner. “I’ve always said through the years that Shannon on its own is not viable. What’s happening now is that Shannon is not working, passenger numbers are falling and it needs to be changed,” said Deputy Pat Breen.
He said that Shannon does have a lot of potential, but changes do have to be made and a renewed focus on marketing the airport is required.
His party colleague Joe Carey said that there is a need for a proper debate on Shannon’s future. He feels that new structures are necessary but said that it needs to remain in the State’s hands.
Labour party TD Michael McNamara didn’t believe that Shannon can afford to split from the DAA. “I think it wouldn’t be viable, who would pay the bills? Shannon is being subvented and if it was independent it couldn’t operate.”
Fianna Fáil’s Timmy Dooley said that he had long held the view that Shannon couldn’t be cut off, and that if it were it would be “in an impossible position”.
While Deputy Dooley was not arguing for Shannon’s separation from the DAA, he claimed that there should be more local control over its operation.
He said he would like to see a body similar to CIE, which has responsibility for Iarnród Éireann, Bus Éireann and Dublin Bus; having overall responsibility for the three State airports, while allowing them to act with a large degree of independence.
It is understood that the Board of Shannon Airport are due to meet in the coming weeks and it is believed that several members of the Board didn’t see the report that was sent to Mr Varadkar.