EIGHTEEN months on from its separation from the DAA, Shannon Airport is already demonstrating its ability to “stand alone”, according to the Minister for Transport Leo Varadkar.
He was speaking as legislation providing for the merger of Shannon Airport and Shannon Development, through the creation of the Shannon Group, was introduced in the Dail.
Fianna Fail transport spokesman Timmy Dooley, while broadly supportive of the aims of the State Airports (Shannon Group) Bill, said he remained concerned that the new airport company would not have the financial firepower of Aer Rianta International, which stays with the DAA, to fall back on.
And nor, said Deputy Dooley, could the airport rely on the rent revenue from former Shannon Development companies after Minister Varadkar said that the Shannon Group’s two constituent companies would be self-contained and could not “cross-subsidise” one another. This, Deputy Dooley said, was contrary to suggestions from government following the publication of the Booz report which resulted in the decision to free Shannon from the DAA.
That report, Deputy Dooley said, had “clearly stated that the viability of an independent Shannon was only possible if there was an association with the lands and activities of Shannon Development, and that an independent airport would not be viable unless there was between three million and five million terminal passengers”.
Passenger numbers at Shannon had grown to 1.4 million last year but this was still some way short of projections of a business plan published following the Booz report.
“The Minister also identified the expectation that there will be 10% growth this year, in line with the first months of the year. If that continues throughout the year, at best there will be an increase of 200,000 passengers, which brings us to 1.6 million passengers, well short of the 1.9 million that was projected in the business plan on which the Minister took the decision to separate the airport and take away Aer Rianta International,” said Deputy Dooley.
But Minister Varadkar expressed his confidence in the viability of Shannon, which had already made a profit in its first year of independence, a feat he described as “remarkable”.
Keeping Shannon Airport and Shannon Commercial Enterprises, as what remains of Shannon Development is to be known, as separate entities was necessary to comply with state aid rules and to ensure “financial discipline” at both, the minister said.
“It is important to point out that since Shannon Airport gained independence from the DAA 18 months ago, it has shown that it is able to stand alone. It has halted the decline in passenger numbers and there is going to be renewed growth this year, both in the numbers of routes and passengers.”
“While it is true,” the minister said, “that the airport will not reach the passenger levels forecast in the 2012 business plan, these forecasts were very ambitious, rightly so.
“Factors which contribute to this are lower than anticipated transit traffic such as that of a military nature and a delay in concluding an agreement with Ryanair on new services. The agreement to which I refer has now been concluded. However, post-2014, the Shannon Airport Authority, SAA, expects terminal traffic levels to catch up with the business plan estimates, albeit military traffic is likely to remain on a downward trajectory. In effect, the airport is lagging just one year behind the traffic estimates in the business plan.”
Deputies from Limerick and Clare all welcomed the bill, with Fine Gael TD Pat O’Donovan being so bold as to suggest that consideration be given to an admittedly “controversial” proposal to see “the name of the airport reflecting its nearest city”.
But his Fine Gael colleague in Clare, Deputy Pat Breen, hoped that any proposal to rename Shannon “Limerick International Airport” never gets off the ground, given the worldwide brand recognition Shannon already enjoys.