Shannon to be split from DAA

Wed, May 9, 2012, 01:00

The Government has announced its intention to separate Shannon Airport from the Dublin Airport Authority. 

Minister for Transport Leo Varadkar and Minister for Enterprise Richard Bruton said Shannon Airport and Shannon Development would be brought together to form a new entity with a commercial mandate.

Shannon Development’s functions in relation to indigenous enterprise and foreign direct investment will transfer to Enterprise Ireland (EI) and the Industrial Development Agency (IDA) respectively.

Shannon Development's tourism functions, including Regional Tourism Offices, will transfer to Fáilte Ireland. This new entity will continue to support the property needs of IDA and Enterprise Ireland clients.

The Ministers said they would establish a steering group to determine the most effective organisational structure of the new entity and develop an implementation strategy.

The group will assess the feasibility of creating an international aviation "centre of excellence" at Shannon and may establish expert sub-groups to assist it in its work.

"This is a significant step in developing the aviation sector in Ireland and securing the future of Shannon Airport. It heralds a new era for the Shannon region," Mr Varadkar said.

"We want to recapture the pioneering spirit of the people who gave us the airport and the Shannon free zone concept. . . Our task now is to develop these proposals in more detail.''

Mr Bruton said the announcement represents a new start for jobs and enterprise in the Shannon region.

He said an independent Shannon Airport Authority with the extensive property holdings, expertise and experience of Shannon Development would help focus State’s resources on developing a strong aviation industry in the area.

"Today’s announcement is an important start, but more work remains to be done to deliver on the potential of this proposal and we will press forward immediately with the necessary work," the Minister added.

In relation to Cork Airport, the Government has decided that the existing ownership of the airport by the DAA will be maintained for the present. Cork Chamber of Commerce called on the Government to reconsider this decision.

To take account of this decision, the DAA will be renamed to reflect the fact that there are now two airports and international businesses in the group structure.

Passenger numbers at Shannon declined by 6 per cent last year when domestic travel was not included in the figures.

Shannon Development has welcomed the announcement.

"There is still a lot of detail to be worked out around the new structure and operation of the new entity, but today’s announcement is undoubtedly a major step towards creating a new entity which will act as a catalyst for growth for the wider region in the years to come," it said in a statement.

Ryanair criticised the decision not to sell Shannon Airport, saying it meant there would be "no real change or reform nor radical cost reduction or efficiencies."

Consulting group Booz last year recommended to the Government that Shannon Airport be separated from the DAA and placed into a separate corporate structure with a remit to expand its activities beyond passenger travel.

The Booz report was commissioned recently by Mr Varadkar to help him determine if Shannon and Cork airports should be separated from the DAA.