By Mike Dwane
Published on Saturday 8 December 2012 16:00
Fears that the new Shannon Airport company will start life in a weak cash position and be starved of revenue after separation from the DAA have been dismissed this week by Rose Hynes, chair of the aviation business development task force.
Minister for Transport Leo Varadkar also rejected financial worries raised by trade unions and Fianna Fail’s Timmy Dooley, saying the government’s plans had been robustly tested by KPMG. He expressed confidence that Shannon would achieve the modest passenger traffic growth and attract the aviation industry necessary for the plan to succeed and for the airport to prosper.
The final report of the Hynes task force, published this week, states that the “new entity has already put in place adequate working capital facilities, and transition plans for both the Shannon Airport Authority and the DAA have been completed”.
Ms Hynes - who is being mooted this week as a potential chair of a reconstituted Shannon Airport Authority board - expressed confidence that the airport would have the revenue stream to make the plan work.
“The revenue will come from the traditional aeronautical and non-aeronautical (shops, parking etc) activity of the airport as well as the rental income stream from the Shannon Free Zone and Shannon Development property,” she told the Leader.
“We would be starting out with sufficient positive funds for operating as well as with money for capital expenditure,” she said, while two banks had already agreed to extend loan facilities to the new company.
Rental income from the Free Zone alone is in the region of €14 million but the industrial estate could perform much better, according to Ms Hynes. She disagreed with criticism that the new airport company was taking on too many dilapidated Shannon Development properties which would require significant investment.
“Currently, there is only a 44% occupancy rate in the Shannon Free Zone and that is one of the things that will have to be immediately addressed. Until now there has been a policy not to reduce rent in the Free Zone and that can be looked at. On the state of the buildings, some of them were refurbished only five years ago and still haven’t been occupied,” she said.
The plan provides for the possible provision of new aircraft hangars by extending the airside into the Shannon Free Zone. This could attract new aircraft maintenance firms or allow existing operators to expand. The Department of Finance has already made approaches to the European Investment Bank in relation to the provision of hangars and aircraft parking facilities at Shannon. In time, this could see the supersized Boeing 787s visit Shannon regularly for maintenance.
On what many in the region regard as the unfair loss to the DAA of the highly profitable Aer Rianta International, Ms Hynes said the task force had to focus on what was realistic.
“We saw it from the earliest stage as unattainable and on that basis we said we would just have to move forward and get on with it rather than focusing energy on the unattainable,” she said.
She appealed to the 220-strong Shannon workforce - many of whom are to be balloted for industrial action as they demand guarantees that terms of employment will be honored by the new company - and to other dissenting voices to now row in behind the plans.
“In fact the terms and conditions of the workers in Shannon are there and provided for as far back as the (2004) State Airports Act and the only basis on which they can be transferred is that they keep those terms,” she said.
“It is an important and momentous day for Shannon and what we need now is for everybody to buy into the idea that there is a whole new era. In the shape of the International Aviation Services Centre, we can look forward to welcoming new business and jobs into the region. The airlines likewise would like to come up to the line but similarly were waiting for an end to the uncertainty around the airport. I understand some of the concerns the trade union people have but I hope that they will come round because we need everybody collaborating and working together so that we can turn things around sooner,” Ms Hynes said.
Minister Varadkar, meanwhile, acknowledged that while the strategy of separation was not without risk, it would be far riskier to do nothing in the context where the airport had lost over two million passengers inside five years.
“What we did not want to see was Shannon continuing to lose business and end up being a regional airport. That would be a disaster for the region,” he said.
Targets to bring total passenger traffic - currently at 1.6 million - up to 2.3 million by 2018 and 2.5 million by 2021 were “modest and achievable”, according to the minister.
“Quite frankly, if Shannon can’t achieve that number by 2021, then there is no future,” he added.
On Aer Rianta International, Minister Varadkar said it was never going to be the case that Shannon would have its €100 million debts wiped and hold on to the lucrative semistate company. Shannon’s historical debts, he said, would be paid off in the coming years by passengers at Cork and Dublin. Allowing Shannon retain ARI could jeopardize the other airports while ARI itself needed the DAA balance sheet to borrow against if it wanted to invest in overseas assets.
Fianna Fail’s Timmy Dooley said that the ARI trade-off amounted to a sell-out of the region and thundered: “it defies logic how Government Oireachtas representatives in the region can stand by and allow a Dublin-based minister to gift Dublin Airport such a valuable asset”.
But Minister Varadkar reminded him that it was the State Airports Act introduced by a Fianna Fail government in 2004 which established that ARI would remain a DAA company.
Story and photo: http://www.limerickleader.ie
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment