THE two task forces on Shannon Airport’s future are due to report within a few weeks, Transport Minister Leo Varadkar stated in the Dáil, while he also reiterated that the new Shannon Airport will not have ties to the lucrative Aer Rianta International.

Mr Varadkar also reiterated that the airport will be debt-free and claimed Shannon’s debts would be “similar to, if not greater than the value of Aer Rianta International if it were sold,” something that has been hotly disputed by many local interests.
Speaking about the task forces on Shannon, he said, “The aviation business development task force is seeking out and evaluating aviation-linked business opportunities that could be associated with the new Shannon entity, while the change management task force is developing proposals for transitional arrangements and for the appropriate corporate, managerial and operational structures of the new entity, including matters related to IT, HR, finance and property. This latter task force is also drawing up proposals for the transfer of Shannon Development functions to the IDA, Enterprise Ireland and Fáilte Ireland.
“I understand that these groups are well advanced in their examination of the range of issues that must be assessed in some detail in order to arrive at the best way forward for the new entity at Shannon. I also understand that the timescale for the task forces to submit their proposals remains mid-November. When those proposals have been evaluated by the steering group, both myself and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, will revert to Government before the end of the year with detailed proposals including an implementation strategy for the establishment of the new entity.”
Although the Government had already stated that ARI would remain with the DAA, Clare TD Timmy Dooley called for a rethink. “Aer Rianta International is a very significant asset. It was created in Shannon and has provided huge revenue to Shannon Airport initially and latterly to the DAA through the way the three airports were pulled together. What does the minister intend to do with Aer Rianta International? It is hoped and expected that he will ultimately decide to assign Aer Rianta International to the new independent State airport at Shannon. It would act as a very significant contributor to meeting the bottom-line cost to ensure the airport will be able to get through the transition period involved in moving from the protection of the group of airports to going it alone. It would be helpful if the Minister could clarify that matter.”
Responding to him, the minister said, “It is the case that Aer Rianta International started in Shannon but it is now almost entirely an international business and much of its investments are linked to the group rather than to one airport in the group. It is intended that Aer Rianta International will remain part of the Dublin Airport Authority, which will be renamed. It is also intended, if possible, to allow the new Shannon body to be debt-free. Shannon Airport’s debts are entirely its debts and they would be much higher were it not for Government measures in the past. If Shannon Airport’s debts were to stay with the DAA, they would probably be similar to if not greater than the value of Aer Rianta International if it were sold. One must bear in mind Aer Rianta International has very few assets. It operates concessions but does not own very much.”
The minister also said that Shannon will have to be viable in the future. “The new Shannon company needs to be on a sustainable financial footing. Quite evidently, there is no point in doing it otherwise. However, it also needs to be commercial. Quangos and State agencies are on a sustainable financial footing because they receive money from the Government. I do not want this to be a quango or a State agency. I want it to be a successful company which is on a sustainable financial footing from day one and which, from then on, will have to make a go of it. If it is successful, it will succeed, grow and improve each year. If it is not it will not and this is the risk that arises with any commercial venture.”
All going well, the new entity could be up and running in early 2013. “The legal work on separation and the business plans could take time but for all intents and purposes, the company could be established with its own board and be running itself in the new year.”
The minister expressed confidence about the future of Shannon after it leaves the DAA umbrella. “Given the work done by the aviation development task force, I am increasingly confident that separation will work. There is genuine and real interest from industry in investing in Shannon. The infrastructure is in place and it does not involve building runways or hangers or involve support from Government. All it requires is the right business deals. The reports I have received on the work of the task force are very encouraging.”

Financial sustainability the key to future success

FINANCIAL sustainability is the key for a successful take-off for a restructured Shannon, according to Clare TD Pat Breen.
Mr Breen welcomed recent statements by Transport Minister Leo Varadkar on the subject. “Proposals for Shannon Airport by the previous administration failed because a halfway house arrangement, put in place in 2004, left Shannon Airport in limbo with limited autonomy from Dublin and strangled the airport’s ability to grow and develop. This Government is determined to restore and strengthen Shannon Airport’s role as the key driver for economic activity in the West of Ireland ensuing the Governance structure, which is put in place now supports the delivery of a financially sustainable airport going forward. And in that regard, I welcome Minister Varadkar’s recognition that the new company needs to be placed on a sustainable financial footing.”
He believes the new structure will see some recovery at Shannon. “The airport is strategically the most important piece of infrastructure in the entire region underpinning thousands of industrial and tourism jobs in its hinterland. Historically, the airport has performed best when it had strong local control over its own business development. The new structure which will be put in place will allow the airport to be resilient over the longer term.”
His party colleague, Deputy Joe Carey welcomed Mr Varadkar’s statement in the Dáil that the two steering groups on Shannon are at an advanced stage in their work. “Minister Varadkar confirmed in the Dáil that both groups are well advanced in their examination of the range of issues that must be assessed in order to arrive at the best way forward for the new entity at Shannon. Both of the task forces will submit their final reports by mid-November for evaluation by Minister Leo Varadkar, Minister Richard Bruton and the steering group, with a decision to be brought to Government before the end of the year including an implementation strategy for the establishment of the new entity. Minister Varadkar confirmed he was anxious to bring this project to a conclusion, as he is increasingly confident that separation will work. It’s his intention to appoint a board and to begin the search for a chief executive officer sooner rather than later.”