AVIATION:IRISH AVIATION could be set for a major shake up under proposals submitted to Government by the Colm McCarthy-led review group on State assets and liabilities.
Mr McCarthy has recommended the Dublin Airport Authority (DAA), which runs Dublin, Cork and Shannon airports, should sell its non-core assets to help it reduce its debts.
He also recommended the State sell its 25 per cent stake in Aer Lingus at an “opportune” time.
Mr McCarthy said it was probably not necessary for Aer Lingus’s Heathrow slots to remain under State control. It was “unimaginable” that the Dublin-London Heathrow route would not be adequately served by the market given that the corridor was currently one of the busiest in Europe.
In relation to the DAA, Mr McCarthy highlighted the potential sale of Aer Rianta International, which runs a chain of duty-free shops abroad, and a 20 per cent stake in Dusseldorf airport in Germany, which the group has valued at €150 million.
It has recommended the DAA be freed from paying any dividends to the State in the near term to allow it to reshape its balance sheet. The DAA has debts of about €1 billion, largely relating to the building of Terminal 2 in Dublin.
The group said that “in due course, privatisation of the airports should be considered”.
Mr McCarthy said regulatory arrangements applying to Dublin airport should be “reviewed and in particular, the scope for political intervention in capital investment decisions curtailed”.
The group concluded that any sale of assets at the Irish Aviation Authority (IAA) should be limited to its air traffic control service. This might possibly be merged with its counterpart in the UK. The IAA’s aviation safety, licensing, and certification functions should remain in State control.
Ryanair head of communications Stephen McNamara said: “We have always believed that the State’s Aer Lingus shareholding would be sold. And we continue to call for the break-up of the DAA monopoly. They should only hold on to the vital infrastructure, which is the runways.”