News Irish News

Friday 22 September 2017

Ryanair made €13m offer for hangar months before rival

Anne-Marie Walsh Industry Correspondent

PRESSURE is mounting on the government to explain why a €13m Ryanair offer to take over an airport hangar and create 500 jobs was turned down.

New revelations raise questions about why the proposal was not pursued and Aer Lingus was instead granted a legally binding lease on hangar 6 at Dublin Airport.

Under the contract, Aer Lingus cannot be forced to surrender the hangar unless Dublin Airport Authority (DAA) needs it for development.

It can be revealed that:



  • Ryanair made a detailed €13m offer for the former SR Technics hangar 6, months before Aer Lingus moved in, although Aer Lingus did not offer new jobs. It kept on just 96 workers out of the 250 engaged in its line maintenance.
  • The Department of Transport has also indicated that Aer Lingus had first option on the hangar although the Taoiseach said there was a competition for it in the Dail.
  • The department told the Irish Independent that Aer Lingus had "rights to occupy" the hangar for the maintenance of its fleet.


Rights

But when pressed on the nature of those rights, the department said it could not comment as "commercial contracts between Aer Lingus and the DAA are a matter for them alone".

Tanaiste Mary Coughlan has said an obstacle to the Ryanair offer was its refusal to deal directly with the DAA.

But many details were given in Ryanair's letter last year of its offer, including its willingness to pay the existing rent of €200,000 a year.

The letter was sent to the chief executive of the IDA, Barry O'Leary, before SR Technics pulled out of Dublin Airport.

The proposal from Mr O'Leary offered the "largest job creation success story in Ireland in 2009".

He said the airline would pay the same price for hangar 6 as the DAA had paid to buy back the leasehold from SRT.

The proposal said Ryanair would locate a substantial proportion of its heavy maintenance operation to the hangar. It also said the airline had no desire to own the building.

Mr O'Leary assured the IDA the airline would agree to any lease restriction that would mean the hangar could only be used for maintenance.

The letter said he understood that DAA paid around €20m to buy back the leasehold in hangars one to six.

Based on an estimate that the floor space of hangar 6 was two-thirds of the total space, he said it would reimburse the IDA two-thirds, or €13.33m of the €20m fee.

The letter said the transaction would be "by some considerable distance the largest job creation success story in Ireland in 2009".

Along with the successful bidder for SRT, Dublin Aerospace Ltd, now located in hangar 5, the two operations could have created up to 750 jobs.

Former SR Technics workers are also furious that the aviation firm left the country with €35m of taxpayers' money.

This was made up of €20m paid by the DAA for the hangar leases and a further €15m rebate on statutory redundancy payments.

Meanwhile, it has emerged that the unemployed workers have suffered another blow -- their retraining courses have been cancelled.

The Irish Independent has learned that some redundant workers have been told that their degree courses, due to start this year, have been cancelled. This is because funding from the European Globalisation Fund -- which provides EU money in the wake of large-scale job losses -- has not yet become available.

Irish Independent

Editor's Choice

Also in Irish News