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Shannon debt wiped but DAA keeps Aer Rianta

SHANNON Airport is to begin its era of independence free of its €100 million debts - which are to remain on the books of the DAA - Minister for Transport Leo Varadkar has indicated.

SHANNON Airport is to begin its era of independence free of its €100 million debts - which are to remain on the books of the DAA - Minister for Transport Leo Varadkar has indicated.

But Aer Rianta International, the global airport retail business which grew out of Shannon, is to remain a DAA subsidiary.

The Cabinet this week discussed the final report of the steering group established in May to plan the airport’s separation from the DAA.

While the Government still has to finalise issues with trade unions, a formal announcement on separation is now only days away and will most likely take place at a press conference next Monday, it is understood.

Minister Varadkar had earlier indicated Shannon could only begin its autonomous era if debt-free. And he said the new airport company might also require initial working capital.

But Clare Fianna Fail TD Timmy Dooley said this week that in not holding on to Aer Rianta International, Shannon had been sold short, and did not have the financial firepower to be viable.

“I am pleased Shannon is adding North American routes next year, to both Philadelphia and Chicago,” Minister Varadkar said in response to Deputy Dooley’s criticism.

“Its ability to set its own charges again, if it is separated, will assist it in securing new business, which will be a positive for the airport. The 2004 Act, which was introduced by Fianna Fáil, always envisaged that Aer Rianta International would remain part of what was then the Aer Rianta Group, now DAA. That remains the case. The Act also requires that whatever happens, both entities must be viable. Shannon must be viable and the remaining DAA must be viable. For Shannon Airport to retain Aer Rianta International and have its debt written off, would bring the viability of both Dublin Airport and Cork Airport into question. It was never going to be a case that Shannon would get both a debt write-off and retain Aer Rianta International.”

But Deputy Dooley has said “cutting Shannon adrift” of the DAA at such a time leaves the airport without a revenue source and said the business plan appeared to be partly based on winning back routes which were far from certain.

On Aer Rianta International, he said: “a state company registered and based at Shannon Airport, this company was created, established, developed and operates out of Shannon, which generated a profit last year in excess of €30 million. 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.

“To ensure the airport continues to remain competitive, then Aer Rianta International needs to form part of this new entity,” he said.

But Minister of State Jan O’Sullivan, who was Tuesday’s cabinet meeting, said the decision on Aer Rianta International “comes in the context of Shannon being debt-free”.

“A balance has had to be struck here and everybody who looks at it fairly understands there has to be that balance struck and we could not have a situation where all the cards were left in the hands of either Shannon or the DAA,” she told the Leader.

Minister O’Sullivan, along with Minister Vardakar, met with ICTU officials this Wednesday to consult on outstanding issues concerning the workforces at both Shannon Development and Shannon Airport. She declined to go into detail on the discussions.

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