Leasing and privatisation on cards for local airports
Published 24/10/2011 | 05:00
THE Government is to consider leasing or part- privatising Cork and Shannon airports after warning that combined annual losses of €22m can no longer be sustained.
Transport Minister Leo Varadkar confirmed that a new report on the future of Ireland's three main airports -- Dublin, Shannon and Cork -- will aim to break up the Dublin Airport Authority (DAA) monopoly.
He bluntly warned that the DAA -- which controls all three facilities -- can no longer use the profits from Dublin to cover losses at the Clare and Cork operations.
However, airport unions are now worried that Cork and Shannon -- which have haemorrhaged routes and suffered plummeting passenger numbers over the past three years -- may face swingeing cuts in staff numbers as part of the shake-up.
Mr Varadkar warned that change is unavoidable.
"There is something here that we cannot ignore. Cork is losing between €10m and €14m a year, Shannon is losing €8m a year -- in the past that was sustainable because the profits from Dublin were sufficient to cover that. But that isn't the case anymore," he said.
"Regardless of whether Cork or Shannon remain within the DAA group, no matter what structural issues occur, there are going to have to be big changes at both airports because we cannot continue to have them losing the money they are losing now."
The new report -- which will detail recommendations to the Cabinet in the new year -- will consider all options including sell-offs.
"It is looking at concession options, lease options and potential part-privatisation," the minister admitted.
Last night, Clare Fine Gael TD Joe Carey welcomed the announcement.
"For far too long Shannon Airport has been on a spiral of decline," he said.
"The governance model is not working. There is no coherent long-term plan which anyone can point to which maps a way forward for the airport. This will be a short, professional and expert review conducted with a view to putting a proper plan in place and analysing what the best way forward for Shannon is."
Last night, major European airport owners -- and airlines including Ryanair -- watched the proposed DAA break-up with mounting interest.
Ryanair has offered to take-over Cork's old terminal and use it as a dedicated hub.
The budget carrier also repeatedly failed to secure its own terminal at Dublin airport.
Earlier this year, the Government slashed funding to smaller regional airports.
The move came after it emerged taxpayers were subsidising passengers to use six small regional Irish airports by an average of €15.75 per head -- more than double the cost of passengers using the country's three major airports.