‘Impossible’ to determine ARI sales reinvestments

THE Dublin Airport Authority (DAA) has said it is “impossible” to provide information on what proportion of the hundreds of millions raised by the disposal of Aer Rianta International (ARI) assets was invested in Shannon.

 

The ultra-lucrative ARI was founded and developed by Shannon executives but the Government are insisting it will stay with Dublin when Shannon leaves the DAA structure, a decision that has been lambasted by former airport executives.

It has also been criticised by Fianna Fáil, who have called on the Government to ensure it stays with Shannon. Clare TD Timmy Dooley is bringing a motion to this effect before the Dáil.

The DAA took control of ARI after the State Airports Act of 2004 and former Shannon executives such as Liam Skelly and Michael Hanrahan have claimed that Shannon has already lost out, as it didn’t benefit to any significant extent after the DAA sold hugely valuable ARI holdings.

At the time of the State Airports Act, one of ARI’s major assets was a stake in Birmingham Airport and in 2007 this was sold for €315 million.

This week The Clare Champion asked the DAA how much of this sum was reinvested in Shannon but it said it couldn’t provide an answer.

“It’s impossible to say, as the group does not operate in that manner,” it stated.

This claim that it is “impossible” is questionable as in 2007 the then DAA chairman Gary McGann openly said that most of the money was being used to fund a second terminal at Dublin Airport.

“The proceeds will be used principally to support the funding of the €2 billion investment programme at Dublin Airport, which will transform the travel experience for all the airport’s customers,” he commented at the time of the sale.

Since ARI came under DAA control it has delivered profits of €164m. When asked how this money has been used, the DAA didn’t indicate how much had gone to Shannon, or indeed to the other two State airports, Dublin and Cork.

“Any profits made by the group or any of its constituent parts since 2004 have been reinvested in the business both in ARI and at the group’s three Irish airports or paid to the State as a dividend,” the DAA stated.

ARI also holds a 20% shareholding in Dusseldorf Airport but the DAA declined to put a value on this, saying it has never done so publicly.

Shannon, Cork and Dublin were all equal stakeholders in the old Aer Rianta structure, which was in existence before the State Airports Act. Aer Rianta had ownership of the Great Southern Hotel group but the DAA opted to sell all the hotels in 2006, generating a profit of around €150m.

In this week’s statement, the DAA also claimed it is impossible to say how much of this money had gone back to Shannon.

While it didn’t provide information on how money raised by the sale of ARI or Aer Rianta assets had been spent, the DAA claimed that around €110m has been invested in Shannon over the last eight years.

Transport Minister Leo Varadkar has been adamant that ARI will stay with the DAA, despite the huge role played by Shannon in its success.

If it were to stay in Shannon there is no doubt but that it would be far easier for the airport to turn a profit.

In 2011, ARI had a managed turnover of over $1 billion and employed over 3,500 people worldwide, with outlets in Russia, China, India, the Ukraine, Canada, Barbados and the Middle East.