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Russian firm could usher in new era for Shannon with jobs bonanza

Jobs boost: Taoiseach Enda Kenny gets a tour of the Transaero Engineering Ireland hangar at Shannon earlier this year with Transaero managing director Alexander Krinichanskiy; Joe Millar, executive chairman; and Willie McGonagle, CEO, Transaero Engineering Ireland

Jobs boost: Taoiseach Enda Kenny gets a tour of the Transaero Engineering Ireland hangar at Shannon earlier this year with Transaero managing director Alexander Krinichanskiy; Joe Millar, executive chairman; and Willie McGonagle, CEO, Transaero Engineering Ireland

  • by Mike Dwane
 

AIRCRAFT maintenance firm Transaero is believed to be the company which has “committed” to creating over 800 new jobs at Shannon Airport as soon as its autonomy from the DAA is finalised.

The company – which only set up in Shannon in May after acquiring Aer Atlanta Aero Engineering – could also boost passenger traffic in time with its associated airline looking at making transit stops in Shannon en route from Russia to North America.

No details have been announced on the two companies the Government has claimed have signed memorandums of understanding to bring 1,000 jobs to Shannon in the near future. One is set to create 825 jobs inside three years and the other to hire 150 by 2018.

This would represent an excellent start for the government’s plans to create up to 3500 new jobs at the International Aviation Services Centre – a critical element of the Government’s future plans for an independent Shannon.

Minister for Transport Leo Varadkar said Shannon’s viability depended both on growing passenger numbers and on attracting aviation and aeronautics companies to the 2,000-acre landbank which the airport company will own once it is merged with Shannon Development’s property assets. And Transaero - which is Russia’s second biggest airline and has significant MRO operations - fits both growth profiles.

The companies said to be on the cusp of announcing almost 1,000 jobs already operate in Shannon and sources who spoke to the Limerick Leader this week said that Transaero was the company with the most capacity to create in excess of 800 jobs.

Rose Hynes, chair of the aviation business development task force which negotiated the memoranda of understanding, declined to confirm who was planning to create the jobs - but did say that the investments were contingent on independence for Shannon.

This, she stressed, did not mean they were dependent on incentives announced by Minister for Finance Michael Noonan in the budget this week.

“They are not linked to tax incentives but on separation itself. What they have said to us is that they would be prepared to expand but that was contingent on separation. They don’t want any uncertainty in relation to the airport and who they might be dealing with,” said Ms Hynes.

She did say that Transaero had already spoken of its interest in acquiring fifth freedom rights at Shannon. Under international aviation regulations, fifth freedom rights allow carriers from a third country to carry passengers between two other countries. This previously applied to another Russian airline at Shannon - Aeroflot - which allowed passengers embark at Shannon while planes between Russia and North America.

It is understood that Transaero is exploring fifth freedom rights in respect of services between Moscow and Miami and that US-bound passengers could clear American customs and immigration checks in Shannon while the aircraft refuels and takes on passengers.

The new airport company would assume Shannon Development’s property portfolio and while it is the intention to retain the Shannon Free Zone for aviation activity, the plan does not rule out the sale of Shannon Development’s extensive property holdings around the region to reinvest in the new company.

Reports this week suggest the National Technology Park in Plassey and Kerry Technology Park could be sold to the IDA for up to €20 million.

While the final report of the task force makes clear it is not intended to rush property sales in a depressed market, it is recommended that the new company enter into covenants with Shannon Development - covering a projected six-month period ahead of a formal merger in July 2013 - whereby airport management could make recommendations in respect of property transactions.

SIPTU, which represents the majority of the 220 airport staff at Shannon, has welcomed this weeks positive news on jobs but has expressed “serious reservations on the lack of detail” in the overall plan and complains workers have not been consulted.

The task force report identifies a number of areas where the jobs can be created. These cover areas where Shannon has a long history - such as aircraft maintenance and leasing and finance - but also new opportunities.

As the airline industry continues to grow globally, Shannon can position itself to train various professionals. Around 500,000 pilots and 600,000 aircraft maintenance engineers will be needed globally over the next 20 years and Shannon has the capacity to provide training facilities. In respect of pilots, the relatively uncongested skies over Shannon provide huge scope for a training school.

Irish exporters - particularly in medical devices and foodstuffs - lack the modern, temperature-controlled warehousing they need and there is also huge potential for Shannon as a cargo hub, the report’s authors suggest. Dublin currently handles 90% of Irish air freight and much “Irish” air freight is loaded at UK airports.

With most of the world’s air freight still carried in the holds of passenger aircraft, a thriving cargo business in Shannon could boost passenger numbers at Shannon.

“Cargo is a major contributor to airline revenue, in particular on long-haul operations. The availability of appropriate airport cargo facilities can therefore assist an airport in attracting new long-haul passenger services, by improving the route revenue potential from the airline’s viewpoint,” the report states.

Dismantling of aircraft and the sale of parts and the registration and the fit-out of private jets are also identified as potential growth areas. Another recommendation is to extend the N19 dual carriageway - which ends abruptly at Drumgeely roundabout - into the airport proper.

 

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