Friday 28 July 2017

Boost for Shannon as go-ahead for major cargo facility a step closer

AVIATION

John Mulligan

John Mulligan

THE Dublin Airport Authority (DAA) is expected to formally announce today that it has signed a heads of agreement with Texas-based group Lynxs that could bring long-running efforts to construct a major international cargo base at Shannon Airport closer to reality.

The heads of agreement follows on a memorandum of understanding signed between the two groups over two years ago.

However, it is believed that the sides have now entered into a due diligence phase on the project and hope to be in a position within 12 months to announce whether the plan will be advanced to construction.

It is understood that both the DAA and Lynxs could jointly commit up to €17m to the scheme, with about €5m of that from the airport authority, if proceeds. Speaking at the beginning of the summer to the Mid-West Institute of Chartered Accountants, Finance Minister Michael Noonan confirmed that funds had been earmarked by the DAA for the cargo project.

Transport Minister Leo Varadkar has also been a proponent of the project. Earlier this year, the DAA began seeking expressions of interest from suitably qualified companies to potentially design, build, finance and operate a 10,000 sq metre cargo facility at Shannon. Lynxs has already pre-qualified as a candidate.

Details of the heads of agreement are understood to include matters such as the agreed scope of the project and a number of key commercial terms, such as proposed rents to be paid.

It is expected the lease for the facility will initially extend for 33 years.

Shannon's longer term future has been in doubt as the level of commercial passenger traffic at the facility continues to fall. It made a loss of about €8m last year.

Ryanair chief executive Michael O'Leary recently claimed that Shannon Airport had "priced itself out of existence".

The claims in his letter to Clare County Council were sharply rejected by the Shannon Airport Authority.

The chairman of the Shannon Airport Authority, Brian O'Connell, said this month that the airport would have to change its business model if it wanted to have a financially viable future. He said it would have to "reconfigure itself and re-engineer its future" as a result of the new economic reality.

Indo Business

Promoted articles

Also in Business