Shannon and DAA to separate

The Government confirmed yesterday that Shannon Airport will be separated from the Dublin Airport Authority by December 31st and merged with the landbank of Shannon Development next year to form a new State-owned company.This entity will aim to create a hub for aviation-related services in the region to drive employment.

At a press conference in the Conference Centre Dublin, it was announced that two Shannon-based companies had signed memorandums of understanding to create 1,000 jobs within three to five years in the area on the basis that Shannon would be separated from the DAA. The identities of these companies were not revealed.

In total, up to 3,500 “new” jobs are expected to be created from the “newco” entity, which will have its own board, chief executive and management appointed in the coming months.

This emerged from the work of two Government-appointed task forces and was revealed by The Irish Times last week.

Shannon Airport’s €110 million debt will be transferred to the DAA. However, control over Aer Rianta International, the duty free company founded in Shannon, will remain with the DAA.

Minister for Transport Leo Varadkar described the separation decision as “historic” for Shannon. “There certainly is a risk, but the risk of doing nothing is far greater.”

He said the business plans for the new entity had been “robustly” stressed tested by KPMG.

Minister for Jobs, Enterprise and Innovation Richard Bruton described it as an “exciting development” for Shannon.

Rose Hynes, chairwoman of the aviation business development task force that advised the Government, said the plan was based around increasing air passenger traffic at Shannon to 2.5 million a year within five years from a current level of about 1.5 million while also developing an international aviation services centre.

Aviation companies

This will involve building on the cluster of 40 aviation-related companies in the Shannon region.

Shannon Airport director Mary Considine said the focus of staff and management was to ensure the airport was “financially and operationally ready for separation”.

However, trade union Siptu reiterated its concerns about the plan.

“The business plan for the new Shannon entity is unrealistically ambitious given that it is based on a model that envisages increasing Shannon Airport passenger numbers by 50 per cent within a short timescale,” said Siptu organiser Tony Carroll, citing the weak economic conditions and dampened consumer demand for travel.

He said there had been no consultation with staff, who were concerned about their job security and quality of employment.

Mr Varadkar said it was “defeatist” to suggest Shannon could not achieve “modest” growth in passenger traffic.