Flotation possible by mid-2001, says chief
Aer Rianta could be floated by summer 2001, its chief executive said yesterday. Mr John Burke has rejected suggestions by the Minister for Tourism and Sport, Dr McDaid, that the firm's part-privatisation could pose a threat to tourism.
While the Minister for Public Enterprise, Ms O'Rourke, is expected shortly to ask the Cabinet to float about 30 per cent of Aer Rianta, Mr Burke suggested an initial public offering (IPO) could take place by mid-2001.
Previously, it was thought a part-flotation might proceed in 2002, about a year after the planned Aer Lingus IPO. The timing of the Aer Lingus flotation has not been decided, although an IPO this autumn is favoured.
Should this happen, Mr Burke said Aer Rianta's flotation could proceed next year. "We're certainly behind them [Aer Lingus] in the queue. We would not be as sensitive to the market in timing," said Mr Burke.
Aer Rianta and advisers to Ms O'Rourke, AIB Capital Markets and Warburg Dillon Read, have recommended the part-flotation to provide funds for its long-term capital investment programme.
After an address to the Leinster Society of Chartered Accountants, Mr Burke rejected Dr McDaid's suggestion that a rise in Aer Rianta's passenger landing fees would inhibit tourism traffic to Ireland. Airport charges made up 4 per cent of operating costs at "average airlines" and represented a "small component" only of holiday costs, Mr Burke said.
In his address, Mr Burke said the loss of intra-EU duty-free sales would reduce net profits by £30 million (#38 million).
"This will be partially offset by the unwinding of old discount schemes [on airport charges]. It will be a number of years before we get back to the 1998 level of profit," he said. Aer Rianta's after-tax profit was £48 million in 1998.
On the Great Southern Hotel group - the short-term disposal of which has been recommended by AIB Capital Markets and Warburg Dillon Read - Mr Burke said Aer Rianta still wanted to exit the hotel industry. Options for an exit strategy are believed to include selling the eight hotels individually or in groups, with others remaining in Aer Rianta's control.