Reducing costs: Shannon Airport
SHANNON Airport has confirmed that it is introducing a range of cost-cutting measures which will include reducing the status of the airport and restrict the number of larger airlines transiting through the airport to allow for a €44 million investment programme over the next five years.
Management at the Mid-West hub met with the three unions representing staff this week to inform them of the plans, which will include the recategorisation of the airport from a category 9 down to a category 7 on a flexible basis, which will limit the number of larger airlines transiting through Shannon.
Staff at the airport reported that the announcement came as a "complete shock and bombshell" and expressed their fears that the airport is struggling financially since it separated from Dublin Airport Authority (DAA) in 2012.
The airport is part of the Shannon Group, which includes Shannon Heritage and oversees the running of and redevelopment of King John's Castle in Limerick, amongst other subsidiaries in its property portfolio.
"Staff now feel that Shannon can't survive on its own, and this will reduce our status to the same level as Knock and Kerry airports. We're losing money since we left the DAA, and the realignment is going to have a knock-on effect for the Mid-West. A category 7 airport is for smaller aircraft, making us effectively a Ryanair airport for European destinations. But they can recategorise it to a status 9 upon request," said one person affiliated with the airport.
Union officials with Siptu, Impact and the TEEU will now discuss the proposals and their implications with staff employed across the airport.
In response to queries from the Limerick Leader, a spokesperson for Shannon Airport said it has proposed the introduction of a range of measures to reduce costs and help facilitate a €44 million investment programme over the next five years.
Among these projects is the overlay of the airport runway commencing this summer at a cost of €15 million.
"Shannon Group is committed to developing and investing in our airport and what the Group is proposing are measures to manage its business more efficiently to enable reinvestment back into the Airport. We have commenced discussions on proposals to operate to optimal manning levels to meet the needs of our airline customers," said the spokesperson.
The group outlined that the proposed measures include the realignment of Shannon Airport from a full-time Category 9 to a flexible Category 9 service.
"This and other operational changes will result in a lower employee requirement and, to that end, we are proposing a Voluntary Early Retirement Scheme (“VER”) to employees over the age of 55 years. We are also seeking to agree a redeployment programme for a number of business areas.
"We also require a number of measures which are vital to ensure we meet the needs of the business in the most cost effective manner. Among them are roster and shift changes, and work practice changes and efficiencies.
"These savings will bring Shannon’s competitiveness closer in line with accepted international aviation standards and ensure revenues are available to reinvest and drive employment elsewhere on the airport campus," said the spokesperson.
Financial accounts for Shannon Airport Authority showed that passenger numbers increased from 1.4 million in 2013 to 1.64m in 2014, with turnover increasing from €39.1m to €42.8m, an increase of 9.5%.
By 2015, passenger numbers again increased to 1.7 million, with passenger numbers increasing by 22% since the airport left the DAA group, with a 12% increase in its US market.
In 2015, over €4.6m was spent by the airport on a number of capital expenditure projects.
In February, airline Norwegian confirmed details of its new budget transatlantic flights from Shannon, with fares starting at €69. Sources said these flights will not be affected by the change in status given the size of the airline carriers.
The services will start on July 1 between Shannon and Stewart International Airport, Orange County – just 90 minutes from New York – and from Providence Green Airport, Rhode Island, 90 minutes from Boston.
Shannon hailed the new services by the budget carrier as “a major opportunity for tourism and wider business sectors across the west and south of Ireland”.
Norwegian has also announced flights from Cork and Dublin.