Tanaiste saw Ryanair deal long before SRT closed
TANAISTE Mary Coughlan thought it couldn't get worse. Sorry. It can. In fact, it gets far worse today with the publication of the very first letter sent by Ryanair chief Michael O'Leary to Ms Coughlan on February 26 last year.
This previously unreleased piece of correspondence obtained exclusively by this newspaper predates the letters between Mr O'Leary and the Tanaiste published by the Sunday Independent last week, by over five months.
More crucially for the Minister for Enterprise, Trade and Employment, however, the letter of February 26 landed on her desk on Kildare Street more than seven months before SR Technics finally closed its operations at Dublin airport in October, shedding the last of its 1,135-strong workforce.
Also significant is the fact this letter was dropped in the Tanaiste's in tray a full nine months before Aer Lingus inked a deal with the Dublin Airport Authority last November last to take over SRT's former facility, signing a lease which Ms Coughlan insists cannot now be undone to facilitate Ryanair.
Mr O'Leary's letter reads as follows:
The recent announcement that 1,100 people are to be made redundant following the decision by SR Technics to close its heavy-maintenance operation at Dublin airport combined with the downturn in commercial aviation worldwide creates the very real prospect that a high-tech well-paid industry with a skill set developed over several decades may disappear entirely from Dublin Airport, particularly as the trend to develop aircraft maintenance facilities in low labour cost countries of the world accelerates.
The impact of such a loss to the people directly employed by SR Technics and those employed in the many supporting industries that feed off its operation, the north Dublin area, and the exchequer cannot be measured in financial terms alone. The knowledge base and currency of the various State and semi-State training agencies such as Fas and DIT, who have continued to provide training and upskilling support directly and indirectly to support such a complex organisation, and other third-level colleges providing engineering graduates, will unfortunately also wither as the demand for such services cease to exist.
The lack of suitable facilities at Dublin together with an airport monopoly that has repeatedly refused to engage in constructive dialogue on alternative facilities has forced Ryanair to locate base maintenance facilities overseas where more proactive airports and supportive local authorities have supported and facilitated our developments and reaped the benefit of the high-tech jobs that result.
One only has to look at the multimillion-euro investments in maintenance facilities Ryanair has made in recent years at Prestwick and Stansted (where we have just opened a £25m maintenance and flight simulator facility) to see the results of this co-operation. Indeed, we are currently in discussion with several European regions and governments to identify the location of the next phase of this ongoing investment in maintenance.
However, in the light of this recent announcement by SR Technics, Ryanair (the world's largest international low-fare airline with its headquarters in Dublin, a current fleet of 177 Boeing 737 NG aircraft and firm orders for another 142 aircraft for delivery before 2012) is willing to immediately step in and commit its foreseeable future base maintenance requirements and guarantee the survival of this industry and the creation of up to 500 well-paid aircraft maintenance jobs in north Dublin.
This offer is conditional only upon our ability to operate free from the interference of the DAA monopoly and to facilitate this we are prepared to buy the freehold to the Hangar 6 facilities back from the DAA for the same cost that they have paid to SR Technics and on the same terms and conditions that this facility has operated under since its inception. This will provide Ryanair with the necessary facility in which to carry out our maintenance and allow for the creation of up to 500 high-tech aircraft maintenance jobs. By any economic measure it is clear that Ryanair is the only viable airline alternative with the scale, growth and capacity which can genuinely justify and sustain the continued existence and expansion of this industry and create this volume of jobs and skills at Dublin.
However, as the fastest growing airline in Europe, we cannot delay implementing our maintenance support infrastructure and if this opportunity is missed, we will be forced to continue to invest
in non-Irish overseas facilities, a situation that will remove any opportunity for Ryanair to create this volume of new jobs at Dublin airport. I trust, however, that with your vision and commitment, that situation will not arise and I look forward to your acceptance of my proposal and that we can quickly move forward and limit the loss of jobs and skills arising from SR Technics decision.
Mary Coughlan had her chance. She didn't take it. The following day -- February 27 -- she wrote back to Mr O'Leary and informed him that the IDA would be in touch.
Many thanks for your letter of February 26 conveying your proposal regarding the SR Technics facility at Dublin airport. I very much welcome your expression of interest. I think the best way to progress this matter quickly is to put you in contact with IDA Ireland who have dealt with SR Technics on the Government's behalf for many years and have been tasked with following up on any expressions of interest in the business. I have asked Barry O'Leary to contact you as soon as possible.
Last Tuesday night, the ball bounced back with a bang into the Tanaiste's court: a face-to-face meeting with Ryanair chief Michael O'Leary in her office at the Department of Enterprise, Trade and Employment.
Mary being proactive?
Of course not.
A public outcry following the Sunday Independent's exposure of her failure to act on the Ryanair proposal, followed by a succession of former SR Technics workers on the radio describing life on the dole was enough to jolt the Tanaiste into action.
So how did the meeting go? If Michael O'Leary's account is anything to go by, not very well.
"The meeting lasted for about 45 minutes. The first half an hour consisted of her trying to maintain that there was a 20-year lease with Aer Lingus and the Government couldn't break it. Then she finally blurts out that there was a 12-month vacation clause that could be exercised."
Asked how she came to admit that, Mr O'Leary says: "I don't know. There was lots of back and forth. At one stage, she questioned whether I was really committed to creating jobs in Ireland. I said 'Well how can you ask a question like that?' I asked her 'Do you know how many people I employ?' She said 'No'."
Clearly incredulous at Ms Coughlan's failure to swot up on the Ryanair success story, Mr O'Leary added: "I said 'you're the minister for jobs and you don't know how many people I employ in this country and you're querying my commitment to creating jobs when I'm in here offering to create 300 jobs. I've created more jobs in this country than you have!'"
Turning to the matter of the Tanaiste's refusal to intercede with the DAA to assist Ryanair's efforts to create jobs at the former SR Technics facility, Mr O'Leary says: "She said 'I can't interfere with the DAA. It's a commercial company'. I told her the DAA's not a commercial company, it's a government monopoly. The Government had no difficulty in interfering last November when the Minister for Transport wrote to the Aviation Regulator ordering them to increase the fees by 40 per cent. They've no difficulty in interfering with the affairs of a commercial semi-State company when it's increasing the cost to consumers, but when it wants to create jobs, they say they can't interfere."
Noel Dempsey's role in the affair, or lack thereof, is interesting.
What does the Ryanair boss make of the Minister for Transport now? He was, after all, briefed by the IDA on the low-cost carrier's proposals for the SRT facility and its plans to create 500 jobs.
Asked what he makes of Noel Dempsey now, Mr O'Leary says: "Nothing. Noel Dempsey and the Department of Transport are the downtown office of the DAA. They protect and abet the DAA. They're clearly going to do whatever the DAA want and the DAA want to find any way humanly possible of avoiding Ryanair getting its hands on Hangar 6. But in all fairness to Noel Dempsey, who I think is useless and has presided over the greatest collapse in traffic in tourism at Irish airports as Transport Minister, this isn't his issue. It was a jobs issue. We offered the minister for jobs 500 jobs last February if they would sell us the lease of a large, empty hangar. The Government faffed around and told us to deal with the only people we wouldn't deal with, the DAA."
So Ministers Coughlan and Dempsey did nothing and aren't worth talking about, or to. What about the Boss of bosses, Taoiseach Brian Cowen?
Mr O'Leary is unforgiving in his analysis.
"Cowen said in the Dail that Ryanair didn't make an offer for Hangar 6. Wrong. We made numerous offers for it, all of which came with 500 jobs. He said there is a 20-year lease and it can't be broken. Wrong. You don't have to break the lease. It has a 12-month notice provision that the DAA can exercise at any time they wish.
"He said there was a competition for Hangar 6 and Ryanair didn't enter. He's right on that one because we didn't even know there was a competition. The correspondence makes it clear we were making offers all the way from February 26, 2009, for Hangar 6. He said that Aer Lingus won the competition. Well, please explain how they did it. Who was the judge? What were the criteria? Did you have to collect 10 crisp packets or come up with a 10-word slogan: 'I love Fianna Fail or the DAA because . . .'?
"How did Aer Lingus manage to win a hangar when they've put no maintenance business in it and there's no new jobs in the hangar?
"Aer Lingus are losing €100m a year and they're about to make 900 people redundant. Why are they wasting €3.5m a year renting an empty hangar? It's remarkable," he said.
For the record, Tanaiste Mary Coughlan wrote to Mr O'Leary on a further three occasions after February 27 last year in response to his requests that she personally intercede with the Dublin Airport Authority (DAA) in Ryanair's bid to secure SR Technics' former hangar facility at Dublin airport.
Those letters -- copies of which were published exclusively in the Sunday Independent last week -- revealed how Ms Coughlan refused Mr O'Leary's requests for intervention with the DAA. This despite the Ryanair chief's claim that the DAA's involvement represented a major obstacle to Ryanair's desire to take over Hangar 6 and provide employment to 500 aircraft maintenance engineers.
The Tanaiste's reluctance to involve herself in the airport negotiations is further exposed today with our publication of just one representative sample of the eight standard acknowledgement letters sent to Mr O'Leary by the minister's office.
Five months after he first made his offer to Ms Coughlan in her capacity as Minister for Enterprise, Trade and Employment, the following response was received on September 9, 2009:
Dear Mr O'Leary,
I acknowledge receipt of your recent letter to the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Mary Coughlan TD, regarding the Hangar 6 facility.
I will bring your correspondence to the Tanaiste's attention at the earliest opportunity.