Shannon CEO hits out at government aviation policy

The chief executive of the Shannon Group has hit out at the Government’s aviation policy, which is facilitating the dominance of Dublin Airport.

Addressing members of Clare County Council at their November meeting, Shannon Group CEO Matthew Thomas said that aviation policy in Ireland is leading towards the country having only a single airport, in Dublin.

Mr Thomas provided figures that showed Dublin Airport had increased its market share from 72% in 2005 to 87% this year and was increasing its dominance at an incredibly fast pace.

He said that, despite the growing market across the island, Shannon Airport’s share had fallen from 5.4% to 5.1% since it achieved independence from the Dublin Airport Authority (DAA).

Nonetheless, the airport had managed to increase passenger numbers by 25%.
The Shannon Group was seeking to change the “very immature” Government policy with regards to airports, he said.

“The Irish aviation policy was only written a few years ago and this makes it very difficult for the regulator to regulate the DAA properly. More than 40% of foreign direct investment is located within an hour of Shannon Airport,” he said.

He pointed out that it is important to distribute the number of passengers flying through different airports in the country, as airports are a key driver of economic activity.

Acknowledging that the aviation market is growing very quickly, he explained that Dublin Airport is growing so fast it means Shannon Airport has a lower percentage of the market. Mr Thomas noted there is a new runway earmarked for Dublin Airport in 2020.

However, he also pointed out that if Shannon Airport had not gained its independence from the DAA, he believed its growth would be even less. He said the outlook for Shannon Airport under the guidance of the DAA was very “bleak”.

Commenting on some of the regional airports in the country, he said airports like Kerry and Waterford receive “massive state support”, unlike Shannon, which does not “receive a penny”.

He said management is working hard to increase passenger numbers and improve the experience for people using Shannon Airport.

“At the moment, experience in the airport is good. I want it to be great. Shannon’s biggest challenge is the intense competition from Dublin Airport.

“We are involved in a very rapidly changing market. There are opportunities to grow but you have to be incredibly aggressive to get your hands on them.

“When Shannon Airport pitches for business, we are bound by State-aid obligations so any incentive we give has to make money.

“Being competitive is absolutely crucial for Shannon Airport. We have a legacy cost base from a different era. We need to drive performance in order to make new investments. We are focused on all activities and are like a private operator, in terms of ensuring we get value for money.

“Shannon Airport spent about €15 million on upgrading the runway, which we didn’t receive any exchequer funding for, and it doesn’t really add anything to our business,” he said.

Considering that Shannon Airport operates under an EU regulatory regime for safety and security standards, he expects the airport will be spending about €6 million on improving security equipment, which it will not derive a great deal of benefit from.

He explained that all investments are self-financing, with no Government funding.
Working with one of the leading designers in the world over the last five months, he said the airport has plans for a €10 million investment in the airport interior.

Dan Danaher