[Article] €41m expansion plan for Knock Airport

Victor

http://www.thepost.ie/web/DocumentView/did-129504567-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews-2FIreland.asp

€41m expansion plan for Knock Airport
07/11/04 00:00
By Niamh Connolly Public Affairs Reporter

Plans for a €41 million expansion at Knock International Airport have been submitted to the government by the airport's chief executive, Liam Scollan.

He said Knock, which hopes to handle one million passengers by 2008, had been invited to apply for funding under the National Development Plan.

The Knock submission involves a three-way partnership between the airport, government and the private sector. More than half of the funding required would come fromthe exchequer, according to Scollan. "Rather than going cap in hand to the government,we're looking for a business partnership," he said.

Scollan said Knock's 3,200 metre-long runway was the third-largest in the country, and could handle Boeing 757s and 737s and Airbus 320s. That led to a 55 per cent growth in passengers for 2004, he said.

"The first reality is that Knock is in the league of Shannon and Cork, not Sligo, Galway or Donegal.This has come home to roost in our figures over the last number of years," said Scollan, a former chief executive of theWestern Development Commission. The numberof charter passengers using the airport almost doubled to 51,000 this year, from 26,000 last year, because of the use of larger aircraft. The airport also made an operational profit of more than €100,000, compared with a loss of €24,000 last year. "Monsignor [James] Horan had great vision in building this airport against a backdrop of decline and emigration," Scollan said.

"Now we need to expand the airport with the same vision about economic growth in the west of Ireland." Knock ac commodates Bmibaby, Ryanair, MyTravelLite, Futura, Spanair, Monarch Air, and next January, Easyjet will launch its first flight to Gatwick. The airport is expanding its sun and winter ski charter flights through operators such as Falcon, JWT, Stein and Slattery. "Knock Airport is beginning to have a huge impact on regional development, and the Gatwick route, for example, will improve connectivity," Scollan said.

"We're now looking at how to expand into the US." A recent report from Goodbody Stockbrokers said that Knock Airport supported 480,000 bed nights in the west, contributing €37million to the regional economy. Scollan said Knock's reliance on subsidised public service obligation (PSO) routes had lessened. "The cost overall to the taxpayer has dramatically reduced, and we have made proposals on how it could be further reduced," said Scollan. "Knock's dependency on the PSO flights and government subsidies is a myth.

"Only 8 per cent of Knock's revenues come from PSO flights, and that's a subsidy that's directed at Dublin Airport, Knock Airport and the carrier."

ishmael whale

Victor wrote:

Quote:
Scollan said ..... "Only 8 per cent of Knock's revenues come from PSO flights, and that's a subsidy that's directed at Dublin Airport, Knock Airport and the carrier."

I think he'll find that the subsidy is paid to the carrier, that Dublin doesn't need it, that (at least up to recent years) it accounts for a high proportion Knock's flight related income. But if he's willing to see the PSO subsidy go, then why should the taxpayer not agree. Oh, because he has his hand out for another €41 million. Knock pretend to giveth, and then taketh away in abundence.

Allegedly 20 million would move Galway to a site where it could take jets. If 40 million was available for airport development in the West, it would look more sensible for them to use it to get out of the corner they’ve painted themselves into with Shannon and Knock.

http://archives.tcm.ie/irishexamine...11/ihead_10.htm

Galway airport plan in doubt

Declan Varley
JUST days after Galway airport announced a £5 million expansion plan, the airport board has been asked to scrap its plans by a Government Junior Minister.
The £5 million plan would have seen the complete redevelopment of the terminal building at the airport at Carnmore, but Junior Minister Eamon O Cuiv said that this plan should be dropped so that a massive £20 million plan would be provided to build a totally new airport elsewhere.

Occidental

ishmael whale wrote:

Allegedly 20 million would move Galway to a site where it could take jets.

Not unless the site is called Shannon it won't.

ishmael whale

From what I can gather from the Dail Debates, the State provided a grant of £1.5 in 1986/87 towards the building of Galway Airport, and EU funding of £600,000 was given around the early nineties. They also seemed to get £3.1 million around 1998 to do work on the runway.

Adjusting for inflation, according to the Central Bank’s Compendium of Irish Economic Statistics,

£1.5 million in 1985 would be worth 1.5*1.71=£2.565 million today
£600,000 in 1990 would be worth 600,000*1.46=£876,000 today
£3.1 million in 1995 would be worth 3.1*1.29= £3.999 million today

So, overall, the State has invested £7.3 million in Galway airport, divided by .787564 to give €9.3 million.

The original grant seems to have been intended to meet 75% of the building cost – I don’t know how this turned out. But, from these figures, €20 million would seem to be a reasonable estimate of the cost of rebuilding Galway Airport – but clearly I’m open to a more informed opinion.

Even if it was twice the cost, it would still only take what Knock is seeking as additional funding. Surely there’s a better use for it providing Galway with an Airport that can grow with the city.

Occidental

Ishmael,

The new runway and ancillary works at Dublin are estimated at €130m and will be doing well to come in at this cost, despite the fact that the Airport Authority already owns the land. Galway are looking at building a new runway, taxiways, apron, terminal, tower, fire station, hangar, car park, access roads and nav aids on a site they may have to pay for. The runway may be half the length and half the width of the one in Dublin, but €20m is still bull**** of the highest order.

BTW, You forgot to mention that Dublin-Galway is also a PSO route.

ishmael whale

Let me first stress that I don't claim any particular knowledge of airport construction, but the existing airport seems to have been built with less than a €10 million contribution from the State. Now even if private investors were expected to match this, that's still only €20 million.

If they could build the existing airport with this level of funding (adjusted for inflation) why could they not repeat the feat ? Presumably the existing airport also has runway, taxiways, apron, terminal etc etc. Clearly the finished product might not be on the same scale as Shannon (although it might ultimately do more real business). But it would seem feasible to build an airport for less that you indicate.

Occidental

ishmael whale wrote:

Let me first stress that I don't claim any particular knowledge of airport construction, but the existing airport seems to have been built with less than a €10 million contribution from the State. Now even if private investors were expected to match this, that's still only €20 million.

If they could build the existing airport with this level of funding (adjusted for inflation) why could they not repeat the feat ? Presumably the existing airport also has runway, taxiways, apron, terminal etc etc. Clearly the finished product might not be on the same scale as Shannon (although it might ultimately do more real business). But it would seem feasible to build an airport for less that you indicate.

The existing airport was built in the early seventies without a penny from the government. The first hard runway was laid in 1978, again without a penny from the government.

The current runway comes in at just under 4000ft. A new airfield would be looking at a runway of at least 6500ft and most likely is excess of 7000ft. The current runway is 100ft in width, while the new runway would be 150ft in width. The new runway will also require a heavier base, due to the higher loadings it will receive. A new apron would need to be at least 4 times the size of the existing apron(to accomodate larger aircraft) and will also require a heavier base. I'd go on about taxiways, but as the current airport has very little you could call a taxiway there's not much point.

As Galway airport is so vibrant, perhaps you can explain why it receives twice the amount of PSO funding that Knock does.

dmeehan

Occidental wrote:

As Galway airport is so vibrant, perhaps you can explain why it receives twice the amount of PSO funding that Knock does.

well, maybe thats why it is so "vibrant"

ishmael whale

Occidental wrote:

The existing airport was built in the early seventies without a penny from the government. The first hard runway was laid in 1978, again without a penny from the government.

Fine, I take it the State money given in the late 80’s early 90s was simply to develop the existing airport rather than build a new one. At the same time this still doesn’t give us a ballpark for how much a new one would cost. Looking at it another way, how much did Knock cost, and would the €40 million they are looking for not contribute significantly to a new airport for Galway?

Occidental wrote:

As Galway airport is so vibrant, perhaps you can explain why it receives twice the amount of PSO funding that Knock does.

Well, I take it that we accept as given that Galway has an inbuilt disadvantage in that it can only take smaller aircraft. It does have the highest subvention – but this seems to reflect the fact that its PSO route carries more passengers than the others – it accounts for 97,000 out of a total of around 260,000 subsidised passengers.

I’m taking this material from the ‘Review of Air Services Supported by the Essential Air Services Programme’ here http://www.transport.ie/upload/general/4803-0.pdf

It says:
“In absolute terms, the Galway PSO route currently enjoys the highest levels of subvention – €5.1 million in 2003. Kerry has a subsidy of roughly €4.5 million per annum; next comes Knock with €3.2 million. The other routes are subsidised to a far lower extent – less than €2.5 million per annum.”

But this is not the whole story:

“Kerry and Galway, although enjoying the highest aggregate subvention levels, have the lowest subvention per passenger by a significant margin. The subvention at these airports is nonetheless comparable to the typical fare actually charged, that is, the Exchequer is paying roughly half the cost at the two best-performing airports, and a far higher proportion at the remainder. In round terms, the Exchequer pays €1 for every €1 paid by passengers at Galway and Kerry; €2 for every €1 paid by passengers at Sligo, Donegal and Derry; and €5 for every €1 paid by passengers at Knock. These rates of subvention are considerably in excess of those encountered in other public transport modes.”

ishmael whale

Answering my own question about Knock Airport, according to the Dail Debates the final cost was expected to be £13.5 million in the early/mid 1980s.

This was a time of rapid inflation. £13.5 million in 1980 would be £41.3 million today. £13.5 million in 1985 would be £23.1 million today(using the Central Bank purchasing power indices found here:
http://www.centralbank.ie/data/QrtBullFiles/2004%2003%20Compendium%20of%20Irish%20Economic%20Statistics.pdf ) .

Converting to euro gives the following figures:

£41.3 million = €52.4 million
£23.1 million = €29.33 million

So, on the face of it, it would look like Knock originally cost, at today’s prices, €30 million to €50 million. It would therefore seem that €40 million would make a very significant contribution to rebuilding Galway airport to a site where it can grow with the city, which seems a more promising use than spending it on Knock.

http://www.oireachtas-debates.gov.ie

“Dáil Éireann - Volume 345 - 10 November, 1983
Ceisteanna—Questions. Oral Answers. - Knock Airport.
[2074] 1. Mr. Mac Giolla asked the Minister for Transport Government expenditure to date on Knock Airport by way of grant and loans; and if it is intended to commit further public moneys to the project before the airport opens.
Minister for Transport (Mr. J. Mitchell): Total expenditure to date on the Connacht Regional Airport project amounts to £8.8 million, all of which has been provided by way of grants from the Exchequer. Additional Exchequer grants totalling £500,000 are committed in respect of expenditure on the project in the period up to 31 December next. …. The cost of the finished airport is still £13.5 million.”