Aer Rianta break-up to go ahead

Séamus Brennan is to proceed with his plan despite a report indicating difficulties at Shannon and Cork. Arthur Beesley and Chris Dooley report.

The Minister for Transport, Mr Brennan, has indicated he is pressing ahead with the break-up of Aer Rianta, despite a report that suggests Shannon and Cork airports could find it difficult to thrive on their own.

The PricewaterhouseCoopers (PwC) report says Shannon could be loss-making up until 2006, even with all debt wiped off its balance sheet. It also states that debt levels at Aer Rianta generally could rise to €400 million.

The report says Dublin Airport's profitability could be seriously eroded by large interest payments on debt transferred from Shannon or Cork.

Aer Rianta has indicated it will oppose the release of the report. However, unions are demanding a copy. A Government spokeswoman said the Government would discuss the matter ahead of a meeting next Tuesday between the Department of Transport and the Aer Rianta unions. She indicated the Government was prepared to release the report but needed to hear the views of Aer Rianta.

Last night an Aer Rianta's spokesman said the report contained commercially sensitive information the company did not want published.

Speaking in Shannon yesterday, Mr Brennan said the break-up of Aer Rianta was "settled Government policy" and brushed aside concerns about the report's figures "because you can produce all sorts of projections. The airports are far better off competing with each other, developing their own businesses and taking a view to grow their markets," he said after unveiling a new 100 million road into Shannon.

"We can trade figures on this decision until we are blue in the face but, at the end of the day, all they are is projections. This is a strategic Government decision which I think is the right one for Shannon and Cork airports.

"I take the view that Shannon and Cork airports are better in the long term with new boards, new authorities, clean balance sheets, debt free and to be in a position to grow those airports strongly and that is the correct road forward," he added.

"At the end of the day, it is a strategic judgment on whether you believe that Shannon and Cork are better off as autonomous airports with strong boards and responsibility for their own destinies or whether you believe that they remain part of a national monopoly dominated by Dublin."

Reacting to details about the report on RTÉ yesterday, Labour Party leader Mr Pat Rabbitte said: "Spokespeople for Mr Brennan attempted to rubbish the existence of the report and the Minister himself told RTÉ later that the report only said that an overhang of debt would lead to difficulties and that was the reason they had decided to remove the debt.

"Clearly when Minister Brennan didn't like the results of the consultancy, for ideological and political reasons, he went ahead anyway to break up a valuable and high-performing company and then sought to misrepresent the contents of the PwC report. This break-up must be resisted until, at the very least, a sound business case has been made for it in the interests of passengers, employees, and taxpayers," he said.

SIPTU claimed it was time for the Government to "come to their senses" and abandon the plan to break up Aer Rianta. Mr Michael Halpenny, national industrial secretary, said the reported contents of the PwC analysis vindicated the union's stance on the issue.

Mr David Begg, general secretary of the Irish Congress of Trade Unions, has written to the Taoiseach, Mr Ahern, asking for the report to be made available.

Mr Halpenny said Mr Brennan had admitted there was no business plan for the break-up. "If the PwC analysis is correct, then the only result of the implementation of the break-up proposal will be to turn a successful, profitable, publicly owned enterprise into a series of loss-making disasters."

Yesterday's talks between the unions and Department officials were on the future of the Shannon stopover. The two sides are to meet again next week.