[Article] Cork Airport 'may be leased to local management'

Victor

http://www.breakingnews.ie/2004/05/11/story147018.html

Cork Airport 'may be leased to local management’
11/05/2004 - 08:46:01

A consultants' study has reportedly found that Cork Airport may have to be leased out to local management rather than established as an independent entity in competition with Dublin Airport.

Reports this morning said the PriceWaterhouseCoopers study highlighted the lease plan as a way to avoid depleting the reserves of the new Dublin Airport authority under the Government’s plans to break up Aer Rianta.

The study reportedly found that transferring the debts of Cork and Shannon Airports to the new Dublin Airport company could have serious implications in the short and medium term.

It also warns that Shannon Airport could lose up to €30m in its first five years as an independent entity.

http://home.eircom.net/content/irelandcom/topstories/3172323?view=Eircomnet

Report says leasing out Cork Airport is an option
From:ireland.com
Tuesday, 11th May, 2004



Cork Airport may have to be leased out to local management rather than become an autonomous entity from Dublin Airport, suggests a confidential report.

The report, prepared by PricewaterhouseCoopers (PwC), suggests the lease plan might be one way to avoid depleting the reserves of the new Dublin Airport company.

The report, which has yet to be published by the Department of Transport, points out that breaking Aer Rianta into three independent companies could have significant company law implications, at least in the short term.

One of these is that a certain level of reserves must remain with the Dublin Airport company. Simply spinning off Shannon and Cork airports and transferring their debts to Dublin could have serious implications, the report is believed to state.

It warns that removing the asset values of Cork and Shannon from Dublin and also adding huge debt to Dublin's balance sheet might be problematic in the short to medium term. Consequently it suggests the Government and unions consider the alternative idea of leasing Cork to local management.

The report is also believed to warn that Shannon Airport could lose up to €30 million in its first five years. It is thought that PwC suggested one way to address this would be to put start-up capital into Shannon Airport.

This might not be necessary as the Department of Enterprise, Trade and Employment has confirmed it is considering transferring control of Shannon Development's industrial zone to the new Shannon Airport company.

This 600-acre site contains a large number of tenant companies and the Shannon Airport company could benefit from its €6 million in annual revenue.

A spokesman for the Tánaiste, Ms Harney, said this idea was being studied along with several others. Shannon Development declined to comment.

The report points out that getting additional airline traffic is key for Shannon Airport's development. It is understood the designate board for Shannon has looked at several business models that might attract low-cost operators, including Ryanair.

Meanwhile, businesses based along the west coast have called on the Government to upgrade the infrastructure linked to Shannon Airport, including the N18 to Galway.

The Atlantic Technology Corridor, whose member companies include Dell, Nortel Networks, Analog Devices and Hewlett-Packard, said the road to Shannon Airport was like a "dirt track".

Atlantic Technology chief executive Mr Ollie Daniels said that, while the organisation supported an independent board for Shannon, major infrastructure deficits needed to be tackled.