Shannon Airport to be split from DAA

Peregrine

Unions protest over Government plan to separate airport authorities


The Dublin Airport Authority has notified unions that the Government intends to separate Shannon Airport from the Dublin Airport Authority on 31 December 2012.
The proposal is part of a Government strategy to create a merged entity in Shannon with three pillars: airport operations, Shannon Development property assets, and a newly-developed International Aviation Services Centre (IASC).
Minister for Transport Leo Varadkar and the Minister for Jobs & Enterprise Richard Bruton are due to formally announce the Government's proposals on Monday.
It is understood the Government believes that the new entity has potential for creating up to 3000 private sector jobs at Shannon within five years by fostering an avionics industry there.
However, in a letter to Transport Minister Leo Varadkar, ICTU General Secretary David Begg said the proposals were “founded on blind faith and wishful thinking on the part of certain interests”.
He said success appears to come down to dramatically increasing passenger numbers by 50% within a very short time scale but fears the proposals would give too much leverage to airlines - a clear reference to Ryanair.
He disputed that there is any imperative to proceed with separating Shannon Airport within weeks in the context of covenants with DAA bondholders.
Mr Begg proposed that staff should remain in the employment of the DAA, while putting in place secondment arrangements with the new entity.
He also warned that Congress will take all necessary steps with the law to defend the interests of union members.
Mr Begg said he has based his opinions on a ICTU-commissioned report from accountancy firm Mazars which warned that the government proposals carry a “substantial implementation risk”.
However, Government sources noted that their business plan had been stress-tested by KPMG who had described them as robust and that the new entity would be financially viable.
They say that while change always involves some risk, in this case doing nothing is not an option, given falling passenger numbers at Shannon Airport, and the unsustainable financial position of Shannon Development.

So Shannon to be seperated from the DAA on New Year's Eve. Two promises:

• 50% increase in passenger numbers
• 3000 jobs in 5 years to come from avionics

While it's true that something has to be done about Shannon's plummeting passenger numbers(2.7m to 1.7m in 2010?), does an instant 50% increase sound too enthusiastic?

Link to article

donvito99

Over to Shannon now. Interesting times ahead definitely, I wonder what form these jobs will materialise in.

Best of luck to them.

Doom

I'd say its too late already..... pity ........very handy airport.

GCU Flexible Demeanour

Nimrod 7 wrote: »

So Shannon to be seperated from the DAA on New Year's Eve. Two promises:

• 50% increase in passenger numbers
• 3000 jobs in 5 years to come from avionics

While it's true that something has to be done about Shannon's plummeting passenger numbers(2.7m to 1.7m in 2010?), does an instant 50% increase sound too enthusiastic?

Link to article

I think the short answer is yes, it does seem ambitious, particularly with Knock and Cork also looking to grow business.

The avionics thing you'd also wonder about; I know they are talking about a tax break, and maybe when we see what's in the Budget that will make sense. But its not that long ago that the European Commission ruled out both the Shannon Free Zone and IFSC regimes, essentially on grounds that regional disparities in Ireland didn't justify them. From the European perspective, there's no more reason to encourage avionics to cluster in Shannon that in that empty airport in Spain.

For all that, this is the only solution. I think both Shannon and the DAA will be happier apart.

Peregrine

Doom wrote: »

I'd say its too late already..... pity ........very handy airport.

It's a pity indeed

There are too many airports in the west to have one major airport there, Cork looks like it wants to eat into the rest of Shannon's passenger numbers

While Knock is capable of growing it doesn't really compete with Cork which serves the south of the country. Could this lead to both Cork and Knock growing further at Shannon's expense?

kub

Politically speaking of course, I wonder will the DAA now want to keep Cork passengers flying out of Cork for T/A, instead of departing out of Shannon?

Also will they now actively pursue a carrier for direct US services out of Cork?

Peregrine

kub wrote: »

Politically speaking of course, I wonder will the DAA now want to keep Cork passengers flying out of Cork for T/A, instead of departing out of Shannon?

Also will they now actively pursue a carrier for direct US services out of Cork?

Exactly, now that DAA is no longer responsible for both Shannon and Cork, it will obviously want Cork to grow, at the expense of Shannon or not.

Transatlantic flights from Cork never seemed viable due to Shannon and Dublin, which are only a short distance away, already providing them but DAA would want to change that.

It all depends on how the new authorities at Shannon play their game I suppose

REDhugh32

This is good for Shannon Airport, it needed to be free to make its own descisions on inward investment and take full advantage of the surrounding already installed resources, namely the freeszone industrial area.Shannon is a unique business model here,as its not like any other airport in the country. Much experience and years of skills development in the areo industry, means that it can expand globally, to develop as an all in one aircraft leasing and maintainance operation, along with cargo handling on a massive scale. It already does much of this, just in a restricted way. The russians have great hopes here.

questionmark?

Some wont appreciate this but sell it to Ryanair and watch passenger numbers balloon in next to no time.

highlydebased

questionmark? wrote: »

Some wont appreciate this but sell it to Ryanair and watch passenger numbers balloon in next to no time.

And say good luck to any other airline operating a european service for many years, after which time Ryanair will up sticks in a huff and there will be nothing left.

kub

highlydebased wrote: »

And say good luck to any other airline operating a european service for many years, after which time Ryanair will up sticks in a huff and there will be nothing left.

And that is the way they do it, am i correct in thinking that they already shafted Shannon a few years ago and transferred some flights to Kerry?

Strumms

Totally. And can you expect a MOL monopoly in SNN to treat other carriers fairy ? So goodbye to the consumer having any sort of choice out of there as to who they might fly with. I'm sure the local politicians and the usual suspects down there would all be for that. To hell with the consumer or he industry overall.

As expected, Legal challenge to this massive uncompetitive bailout been threatened.

http://businessetc.thejournal.ie/west-airport-knock-threatens-legal-challenge-over-shannon-plans-699083-Dec2012/

new press release
http://www.irelandwestairport.com/utility/news_details.aspx?id=308

Henry Ford III

Deleted User wrote: »

As expected, Legal challenge to this massive uncompetitive bailout been threatened.

http://businessetc.thejournal.ie/west-airport-knock-threatens-legal-challenge-over-shannon-plans-699083-Dec2012/

new press release
http://www.irelandwestairport.com/utility/news_details.aspx?id=308

That's actually quite funny.

Henry Ford III

Henry Ford III wrote: »

That's actually quite funny.

Too many uncomfortable facts for yourself and HD's bias to absorb,:rolleyes:

highlydebased

I think the uncomfortable facts are really for those at NOC. If Ryanair in particular introduced flights back at Shannon it is unlikely they would keep the same level of service at NOC.

The ironic thing is Shannon's previous loss (i.e Ryanair) was Knocks gain.

dubdaymo

Another sickening, appalling decision by yet another clueless transport minister. This nonsense instead of just getting rid of the DAA period and selling off the airports to someone who knows something about aviation and letting them get on with it. I have every sympathy for the hardworking NOC people and wish them well in whatever action they take.

As for the unions?
He (Begg) also warned that Congress will take all necessary steps with the law to defend the interests of union members.
That's all they're interested in - their selfish selves. To hell with the needs of the country.

irishbloke77

Deleted User wrote: »

Too many uncomfortable facts for yourself and HD's bias to absorb,:rolleyes:

Surely the end result here for knock is GOOD? They are already increasing their passengers numbers against Shannon's declining. Now, no-one is going to bail out Shannon's 8m euro debt each year. Are knock worried about direct competition.

Shannon got the 100m euros debt wiped out. Did they not also lose the part of the business that was making 36m euros profit each year?

Surely all this amounts to shannon now having to stand up, stop all the talk of it being the DAA's fault they are failing and transform into a viable business or fail?

For the country, yes, 100m euros is a big bill for the DAA to foot but the 8m euros per yar debt at shannon is no longer down to them and they get all the money from the duty free.

Are knock annoyed about the bailout or the fact they may probably lose flights to shannon. If they are offering such a good service, they won't lose any will they?

donvito99

http://www.irishtimes.com/newspaper/breaking/2012/1203/breaking23.html?utm_source=flow-fb

Job news already, perhaps the announcement of this "specific commitment" from the firms was delayed until the split itself was announced?

/cynic

RT&#201 wrote:

It is understood that taskforce has received investment commitments from two businesses, based in the aviation and aircraft maintenance sector, which could bring 850 jobs to Shannon in three years and a further 150 in five years.

Franticfrank

Considering how bad the situation has gotten at Shannon, any action to improve the situation should be welcomed. Best of luck to them and hopefully they'll turn it around.

Cosmo Kramer

irishbloke77 wrote: »

Now, no-one is going to bail out Shannon's 8m euro debt each year.

Do you really believe that?

Shannon will be bailed out again if needs be. Always has been, always will be. And if it doesn't belong to the DAA anymore, the locals will just find someone else to blame for their woes.

irishbloke77

irishbloke77 wrote: »

Surely the end result here for knock is GOOD? They are already increasing their passengers numbers against Shannon's declining. Now, no-one is going to bail out Shannon's 8m euro debt each year. Are knock worried about direct competition.

I think Knock has no problem with fair competition, but now instead of the government bailing shannon out with 8 million a year they have give them the yearly rents from shannon free zone which is several million. So Shannon airport can live of that even if they are losing several million a year.

They have basically given them a debt write off of 100 million and then several million a year to run the airport though rents and also giving them full control and ownership of all the state land banks around the airport, its a bonanza for shannon airport at other airports detriment. Nobody can compete with Shannon with terms so generous. That includes Kerry and Cork. They can undercut every airport for years to come and use their state funds to do it.

Shannon airport can continue to make large losses forever and will be subsidised by the other entities which that state have given for nothing. There is no fair competition in that. You have to wonder what idiot in government negotiated all that away for nothing?

Henry Ford III

Bitterness and jealousy aren't helping your case here mayomafia.

p.s. How much grant aid did Knock get in 2007?

Henry Ford III

Henry Ford III wrote: »

Bitterness and jealousy aren't helping your case here mayomafia.

p.s. How much grant aid did Knock get in 2007?

As usual with you, insult anybody that disagrees with you:rolleyes:.

I hope shannon does well as very job created there means more tax revenue and hopefully less taxes.

However i don't see it happening without MOL's/ryanair involvement and it should definitely not be happening by using state funds to undermine regional airports where there is no other reasonable alternatives.

Not much more to say except wait on the dail transport committee meeting tomorrow and see if any court proceedings come from that.

imurdaddy

The bitterness towards shannon form some posters is unreal! knock has been given many grants over the years from the state. its not state ownership but wants state money :rolleyes:

Neworder79

The bitterness towards shannon form some posters is unreal! knock has been given many grants over the years from the state. its not state ownership but wants state money

Had Knock or Kerry today recieved €100m capital investment and state assets and support to the tune of several million per year, the noisy Shannon lobby and Mayor of Clare would be out marching calling it the death knell and promising devastation. I don't think it's over the top to question wether the government risks distorting the market in this situation, or worse is making it policy to do so. They could at least included the promised aviation policy to give the decision some context.

Henry Ford III wrote: »

p.s. How much grant aid did Knock get in 2007?

€27 was promised for capital infrastructure (60/40% part matched by airports own funds), but about €12 was drawn down before aviation budget was cut. By that time a small terminal extension was completed, but several necessary runway, apron and land-side upgrade projects were scrapped.

Knock have benefited from capital grants over the years, but the sums are tiny compared to the cumulative capital and operating costs absorbed by the DAA for Shannon over the same period.

GCU Flexible Demeanour

Neworder79 wrote: »

Knock have benefited from capital grants over the years, but the sums are tiny compared to the cumulative capital and operating costs absorbed by the DAA for Shannon over the same period.

In fairness, wasn't the original Knock Airport pretty much fully funded by the State. So a debt-free Shannon, in principle, is the same thing - presenting the local management with a free airport.

You can argue about getting the rent roll on top; but I'm not sure Knock can call foul on the principle.

I think a lot will have to do with whether Shannon gets any tax breaks that other regions are excluded from.

mayotom

GCU Flexible Demeanour wrote: »

In fairness, wasn't the original Knock Airport pretty much fully funded by the State. So a debt-free Shannon, in principle, is the same thing - presenting the local management with a free airport.

No. Most of the funding came from Private local sources. The State Provided funds to complete the construction of the Airport after over 80% of the work had been completed and paid for.

Jesus Nut

What did I hear, something like 500 new jobs or so?

I know plans are moving along now aswell for the Irish Pilot Education Institute that will be set up in Shannon offering In house Integrated Fixed wing and Rotary wing pilot training. Their plan is to become the number one flight training institue in europe!

Does anyone know more about this?
I did hear from a fellow who works with Schweizer that they will want a dozen new machines from them alone.

Exciting times ahead for the region.

Jesus Nut

Jesus Nut wrote: »

What did I hear, something like 500 new jobs or so?

I know plans are moving along now aswell for the Irish Pilot Education Institute that will be set up in Shannon offering In house Integrated Fixed wing and Rotary wing pilot training. Their plan is to become the number one flight training institue in europe!

Does anyone know more about this?
I did hear from a fellow who works with Schweizer that they will want a dozen new machines from them alone.

Exciting times ahead for the region.

I don't anybody in the country has a problem with Shannon been a base for aviation and it should be encouraged if it creates jobs. But that is very different to the passenger sided of the business for which our taxes are heavily subsidising.

The passenger part is the only part of the industry that Knock is trying to compete with Shannon on. The 800 thousand Irish people in Knocks Catchment area are entitled so some services for their taxes. This airport provides tourist and essential business services to the whole region. Some of you appear to have pathetic distorted views that this region is not entitled to anything.

You have 700 thousand people willing to use Knock and pay a departure tax to use it. That shows just how needed the airport is for this region. Varadkar really needs to explain to taxpayers in the North west region why there taxes are been used to keep open an airport that cannot pay for itself i.e Shannon. He should also explain why the same generosity isn't shown to Knock.

Why was a departure tax not used in Shannon instead of taxpayers money ?? Is there something wrong with these people that they cannot pay for their own flights ???

Today's incredulous decision instead means that people who are willing to pay a departure tax in Knock will continue to be taxed/used to keep Shannon from closing at any cost, to the detriment of the only airport in the North west region, its crazy.:mad:

A320

Deleted User wrote: »

I don't anybody in the country has a problem with Shannon been a base for avionics

A base for Avionics?? what?