850 jobs on the way as Govt confirms Shannon Airport & Shannon Development to merge

If you haven't seen the Departments announcement on the future for Shannon, here's the full press release.
Tony

Monday 3rd December 2012

850 jobs on the way as Govt confirms Shannon Airport & Shannon Development to merge

Decision will grant full independence to Shannon Airport & create new commercial aviation & trade entity

The Government has decided to grant Shannon Airport full independence from Dublin Airport Authority on December 31st 2012 and merge the airport with a restructured Shannon Development to form a new, publicly-owned, commercial entity in 2013.

Minister for Jobs, Enterprise & Innovation Richard Bruton and Minister for Transport, Tourism & Sport Leo Varadkar have confirmed that the Government will now implement the decision taken in principle last May.

Specific commitments for the creation of 850 jobs has been secured from two Shannon-based companies, as part of plans for an International Aviation Services Centre. These commitments depend on the separation of Shannon Airport from the DAA.

A report from the Aviation Business Development Task Force, set up by the Shannon Steering Group, also states that the Aviation Services Centre ‘is conservatively projected to create and maintain 3,000-3,500 new direct jobs within five years, not including construction jobs’.*

The Government decision will grant Shannon Airport the long-awaited freedom to determine its own future in the best interests of the airport itself and of the Shannon region, and merge it with a restructured Shannon Development. The new entity will include Shannon Development’s extensive landbank and will be tasked with developing an international aviation centre of excellence.

Based on the further detailed work that has been undertaken over the past six months, Minister Varadkar said he is satisfied that Shannon Airport can perform to its full potential without the constraints of remote oversight and DAA control.

Minister Varadkar said: ‘The decision taken today is an historic one and will free the board and management of Shannon airport, together with their employees, to bring a fresh approach to the future development of the airport. A key element of that future will be the development of an International Aviation Services Centre (IASC) in and around the airport, building on a range of aviation-related activities already undertaken in Shannon such as aircraft maintenance and leasing’.

“I am particularly struck by the degree of support for an independent airport across a wide spectrum of interested parties including business interests, chambers of commerce, and local authorities. Airport users, service providers, and prospective new airport customers including airlines and companies have expressed an overwhelming desire to deal directly with Shannon on a separated basis’.

Minister Bruton said: “Last May, the Government decided in principle to establish an independent Shannon airport and restructure the enterprise agencies in the region in a drive to create a world class aviation industry in the Shannon region. This week the Government has made a decision on the details and implementation of that vision, which will act as a catalyst for economic development and job-creation in the region.

“By restructuring the enterprise agencies in the Shannon region we can ensure that indigenous and multinational industry already in the region or considering locating there have access to a comprehensive range of supports. By merging a strong independent Shannon Airport with the extensive property holdings, experience and expertise of Shannon Development we will create a strong new State company which will work with the IDA and Enterprise Ireland on developing an International Aviation Services Centre in the region. The implementation of these decisions represents a new start for enterprise and jobs in the Shannon region.”

Last May, Minister Varadkar and Minister Bruton were tasked by the Government to develop an implementation strategy for the new entity and assess the feasibility of creating an international aviation services centre with the airport as its hub.

They were assisted in this by a Steering Group of senior officials from five Government Departments and two Task Forces under the chairmanship of Rose Hynes (Chair of Bord Gáis Éireann) and John Fitzgerald (Chair of the National Transport Authority and An Post).

Legislation will now be drafted to establish a new, publicly-owned commercial Shannon entity comprising the airport and the restructured Shannon Development. This legislation will also make an appropriate change to the name of the Dublin Airport Authority to take account of the new ownership structures. The Government plans to have this legislation enacted by the Oireachtas by the middle of next year.

It is now intended to make appointments to the Boards of the Shannon Airport Authority and Shannon Development to ensure that the necessary work is undertaken in relation to the establishment of the Shannon entity and the transition arrangements for Shannon Development. In addition, over the next six months, the Steering Group will continue to oversee the completion of that work in the agreed timeline.

Further information

* The Final Report by the Shannon Aviation Business Development Task Force will be published on the websites of the Department of Transport, Tourism & Sport and the Department of Jobs, Enterprise and Innovation on Monday. The Final Report of the Change Management Task Force will be published in due course.

Shannon Airport has suffered a serious decline in recent years. It has been loss-making since 2008 and passenger numbers have fallen by 60% over the past five years. Regardless of where ownership of the airport lies, this is untenable. The Government had already made a decision in principle last May that Shannon Airport is not viable within the current DAA structure and is clearly not realising its potential to make a more meaningful contribution to the local economy of the wider Shannon region.

The Government decided last May to restructure Shannon Development and to transfer its enterprise support functions to Enterprise Ireland and the IDA, and its tourism functions to Fáilte Ireland. The transitional arrangements associated with these moves were also examined as part of the work of the Task Forces and these functions, together with the associated staff, will transfer to the relevant agencies from January onwards.

Minister Varadkar said that he will make an Order under the State Airports Act 2004 next month specifying 31 December 2012 as the day (the ‘Shannon appointed day’) on which the assets of Shannon Airport will be vested in the Shannon Airport Authority and from then on, the SAA will be statutorily responsible for the ownership, management and operation of the airport.

Ends

Department of Transport, Tourism and Sport: 01 6041090 / 01 6041087

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Shannon Announcement is Momentous

The Government’s announcement today, in relation to the future of Shannon International Airport, its surrounding landbank and the Shannon Industrial Free Zone is a momentous moment not only for the airport but also for the wider Mid West Region

Did you know that in the late 70's the Concord was a regular visitor to
Shannon  for training flights. It was noisy but an amazing sight!

It will enable Shannon Airport to compete independently for business, without the dead hand of the Dublin Airport Authority (DAA) hanging over it.  Also, the placing of the landbank around Shannon Airport under the remit of the new Airport management structure will contribute immeasurably to the growth of the Shannon Free Zone.

Today marks the culmination of years of lobbying from public bodies, regional development agencies, private organisations and politicians in the Mid West Region

As a member of Clare County Council in 2007, I was one of 32 Councillors to back a motion requesting that Shannon be freed from the shackles of the DAA after the Authority’s failure to prevent Aer Lingus from axing its Shannon to Heathrow services. It has taken five years for autonomy to be finally granted and I think this is a momentous moment not only for the airport but also for the wider Mid West Region.

I welcome Minister for Transport Leo Varadkar’s announcement today of a range of supports for aviation-related industry, which will be of immediate benefit to Shannon in attracting good quality jobs to the region. Furthermore while recent speculation that Ryanair will significantly increase services from Shannon cannot be confirmed, there is no doubt that the new Shannon Airport company will have absolute autonomy to carry out its own business in whatever way it chooses.

Bringing the IDA on board to assist with industry placement in Shannon is a massive step in the right direction. Land must be available for investors to purchase at a much more competitive rate than that being currently offered. A reduction in this rate will attract investment from both existing and new clients. Furthermore, I believe that a proportion of the existing and future rental income from industrial estates in the Shannon Free Zone should be used for the refurbishment of the various estates and the promotion of the airport.

Not everybody has embraced the separation from the DAA and I am aware that Fianna Fáil has some reservations on the matter. Even though the Government has been in place for just 18 months, it has undertaken a very substantial evaluation of the issues. Today’s announcement encompasses part of the original vision for Shannon when the Free Zone was established and bringing together the airport and the substantial landbank makes sense for the future viability of both the airport and jobs in the region.

While Fianna Fáil wants Aer Rianta International to be based in Shannon providing an income stream, I believe that the property portfolio to be vested in the new company will provide a capital base to ensure Shannon’s viability. The key is that the income generated by the industrial estates will move into the new body. The airport currently has €5.5m losses per annum, in my opinion no business model will work if it’s going to be subsidised to that amount per year. The future viability of Shannon does not come down to handing over a lump sum or even Aer Rianta International.

People say to me that an airport needs passengers, the way I see it is that the airport needs income. Already we know that Shannon Development takes in over €13m per year from the industrial estates. Take from that the cost of maintaining that property and you are still left with around €8-€9m per year in income. That will now be channelled to the new body providing the income to drive the marketing and promotion of new industries to invest here.

I remember former Clare T.D. Donal Carey once saying that if Shannon goes well then the region will go well. We want this region to really grow and the only way we are going to do that is with a newly created management structure. If we can all work together on this over the next few years, I believe we’ll see a massive change of fortune for Shannon and the wider region.

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Autonomy Will Allow Shannon Airport To Grow

It has been a long time in the making but today is a big day for Shannon and the region.

On top of all the monumental news in relation to the airport and the Free Zone, I also want to throw another idea into the melting pot. Assuming that we get an opportunity to rename the airport, I'm suggesting we name it after the great visionary who started it all and call it "Shannon Brendan O’Regan Airport". What do you think?

I've put out a press release on the events and you can read it here in the rest of this post.

Shannon-based Fine Gael Senator Tony Mulcahy has welcomed the Government’s decision to grant full autonomy to Shannon International Airport and merge Shannon Development and its existing tourism, enterprise and industry roles with other regional development agencies, including the IDA, Enterprise Ireland, Failte Ireland and the new Airport Management structure.

The former Mayor of Shannon and Clare said autonomy would enable Shannon Airport to compete independently for business “without the dead hand of the Dublin Airport Authority (DAA)”. He said the Government announcement in relation to an autonomous Shannon Airport and Free Zone marked the culmination of years of lobbying from public bodies, regional development agencies, private organisations and politicians in the Mid West Region.

“As a member of Clare County Council in 2007, I was one of 32 Councillors to back a motion requesting that Shannon be freed from the shackles of the DAA after the Authority’s failure to prevent Aer Lingus from axing its Shannon to Heathrow services. It has taken five years for autonomy to be finally granted and I think this is a momentous moment not only for the airport but also for the wider Mid West Region,” Senator Mulcahy said.

He continued: “The focus now turns to identifying the exact make up of the new management structure at the airport, which I believe should include a representative from each of the major agencies in the Mid West as well as a selection of community and business leaders. The best way of driving the future development of the airport and the surrounding Free Zone is to have local and regional experts from the fields of business, tourism and aviation at the helm.”

On the issue of whether debt-free status would be granted to Shannon, Senator Mulcahy stated: “Discussions are presently taking place in relation to the debts that have built up at Shannon Airport through the years. I am confident these considerable debt issues will be resolved in the coming months and that the facility and its new management structure will be well placed to develop a new and progressive marketing and development strategy for the Airport and Free Zone by the time full autonomy is achieved.”

Senator Mulcahy said there were a number of ways in which new business could be secured at Shannon Airport. “Every effort must be made to entice low cost carriers such as Ryanair back to Shannon and to promote the airport as a low cost passenger hub. Furthermore, the customs and border pre-clearance facility should be extended to include U.S.-bound cargo traffic.”

“As the airport can no longer survive alone on air passengers travelling to and from the facility, the development of ancillary operations such as an international cargo hub is key to securing the future viability of Shannon Airport. Furthermore, the removal of the DAA’s influence over the airport will allow for the exploration of the development of a global logistics centre for humanitarian aid in Shannon, a proposal that has been put forward by Clare County Council in the Clare County Development Plan 2011-2017. Developments like this are feasible considering Shannon’s strategic location, the facility’s unrestricted runway, its round-the-clock operation and the availability of a large amount of space around the airport.

“Other possible developments that could be explored by the Airport’s new management structure, once established, are a residential flight school and a centre for space collaboration and research co-operation. Each of these proposals has been suggested in the past but their potential has never been fully investigated due to the overbearing influence of the DAA,” he said.

Senator Mulcahy suggested that the airport be renamed and rebranded once the transition had been completed. “I suggest renaming Shannon Airport as Shannon Brendan O’Regan Airport, in memory of a man whose entrepreneurial spirit was behind the establishment of the Shannon Free Airport Development Company and the world’s first Duty Free Shop at Shannon Airport.”

Meanwhile, Senator Mulcahy said the placing of the landbank around Shannon Airport, currently managed by Shannon Development, under the remit of the new Airport management structure would “contribute immeasurably” to the growth of the Shannon Free Zone.

“The proposal to bring the IDA on board to assist with industry placement in Shannon is a massive step in the right direction. Land must be available for investors to purchase at a much more competitive rate than what it is currently being offered. A reduction in this rate will attract investment from both existing and new clients.

“Furthermore, I believe that a proportion of the existing and future rental income from industrial estates in the Shannon Free Zone should be used for the refurbishment of the various estates and the promotion of the airport,” concluded Senator Mulcahy.

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Autonomy For Shannon Is Now Inevitable

This post is from a press interview with Kehlan Kirwan of FocusSME.

Fine Gael Senator Tony Mulcahy from Shannon said he believes that full autonomy for Shannon Airport is inevitable, after a Government-commissioned report recommended an end to the Dublin Airport Authority’s (DAA) management of the facility.

Senator Mulcahy said the Booz and Company report strengthens the argument put forward by public bodies, regional development agencies, private organisations and politicians in the Mid West Region in relation to an autonomous Shannon Airport and Free Zone.

He said he believed Minister for Transport Leo Varadkar and his Department will issue a decision on Shannon Airport’s future “by mid-April, if not earlier”.

According to Senator Mulcahy: “I spoke with Minister Varadkar today and reiterated my long held belief that Shannon Airport will require full autonomy if it is to prosper in the future. The Booz and Company report clearly backs up this view and I would be confident that once due diligence has been undertaken in relation to the financial implications of such a move that the Minister will issue a decision that will benefit Shannon Airport”.

Shannon Airport has been in a storm of controversy over the past few years as locals and politicians have criticised the DAA’s handling of dwindling passenger numbers at the airport. This could also pave the way for Shannon to separate from the DAA and transform itself by creating a logistics hub for the west of Ireland, a suggestion that has been voiced on numerous occasions.

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