Cassells to advise on DAA-Cork airport debt split

Former trade union leader Peter Cassells has been appointed by Minister for Transport Noel Dempsey to advise him on the level of Cork airport's €220 million debt which should be borne by the Dublin Airport Authority (DAA) if separation of the two proceeds.

Mr Cassells, a former general secretary of the Irish Congress of Trade Unions, has been asked by the Minister to draft a report by March 7th in an effort to break the logjam on the issue.

The two sides are at odds over how the debt should be carved up between the DAA and Cork. The DAA has argued that Cork is sufficiently profitable to carry a debt of €100 million on its books.

In a business plan sent to the Minister recently, Cork airport is believed to have indicated that it could carry a debt of €50-60 million on separation from the DAA.

The Government announced plans to separate Cork and Shannon airports from the DAA, formerly known as Aer Rianta, some years ago. At that time, the then minister Séamus Brennan said Cork and Shannon would be given their commercial freedom on a debt-free basis.

The State Airports Act was enacted in 2004 but has yet to take full effect as the separation process has stalled. It was decided that Shannon and Cork could not separate until viable business plans that would allow them to operate as independent entities were approved for both.

In a statement, the DAA said: "The DAA welcomes this initiative by the Department of Transport to add momentum to the decision-making process concerning possible separation of the airports and will co-operate fully with Mr Cassells over the coming weeks," it said.

A spokeswoman for Cork airport said: "The Cork Airport Authority welcomes this initiative by the Minister . . . and hopes that it will help move the process forward."

In 2005, Mr Cassells was asked by the Department of Transport to advise on a collective bargaining structure for separation of the airports. That work was shelved. This is not the first time that Mr Dempsey has asked Mr Cassells to mediate on his behalf.

When he was minister for the marine and natural resources, he asked the former union leader to intervene in the dispute between the Shell to Sea lobby group and oil company Shell over the Corrib gas project.

Mr Cassells was defeated in the 2004 European elections where he stood for Labour in the East constituency.