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New independent Shannon Airport & Shannon Development to merge printable version

03 Dec 2012: posted by the editor - Ireland

Shannon Airport is to gain full independence from Dublin Airport Authority on 31 December 2012 and will merge with a restructured Shannon Development to form a new, publicly-owned, commercial entity in 2013.

Minister for Jobs, Enterprise & Innovation Richard Bruton and Minister for Transport, Tourism & Sport Leo Varadkar have confirmed that the Government will now implement the decision taken in principle last May.

Specific commitments for the creation of 850 jobs has been secured from two Shannon-based companies, as part of plans for an International Aviation Services Centre. These commitments depend on the separation of Shannon Airport from the DAA.

A report from the Aviation Business Development Task Force, set up by the Shannon Steering Group, also states that the Aviation Services Centre 'is conservatively projected to create and maintain 3,000-3,500 new direct jobs within five years, not including construction jobs'.*

A Government statement said decision will grant Shannon Airport the long-awaited freedom to determine its own future in the best interests of the airport itself and of the Shannon region, and merge it with a restructured Shannon Development. The new entity will include Shannon Development's extensive landbank and will be tasked with developing an international aviation centre of excellence.

Based on the further detailed work that has been undertaken over the past six months, Minister Varadkar said he is satisfied that Shannon Airport can perform to its full potential without the constraints of remote oversight and DAA control.

Minister Varadkar said: "The decision taken today is an historic one and will free the board and management of Shannon airport, together with their employees, to bring a fresh approach to the future development of the airport. A key element of that future will be the development of an International Aviation Services Centre (IASC) in and around the airport, building on a range of aviation-related activities already undertaken in Shannon such as aircraft maintenance and leasing.

"I am particularly struck by the degree of support for an independent airport across a wide spectrum of interested parties including business interests, chambers of commerce, and local authorities. Airport users, service providers, and prospective new airport customers including airlines and companies have expressed an overwhelming desire to deal directly with Shannon on a separated basis."

Minister Bruton said: "Last May, the Government decided in principle to establish an independent Shannon airport and restructure the enterprise agencies in the region in a drive to create a world class aviation industry in the Shannon region. This week the Government has made a decision on the details and implementation of that vision, which will act as a catalyst for economic development and job-creation in the region.

"By restructuring the enterprise agencies in the Shannon region we can ensure that indigenous and multinational industry already in the region or considering locating there have access to a comprehensive range of supports. By merging a strong independent Shannon Airport with the extensive property holdings, experience and expertise of Shannon Development we will create a strong new State company which will work with the IDA and Enterprise Ireland on developing an International Aviation Services Centre in the region. The implementation of these decisions represents a new start for enterprise and jobs in the Shannon region."

Last May, Minister Varadkar and Minister Bruton were tasked by the Government to develop an implementation strategy for the new entity and assess the feasibility of creating an international aviation services centre with the airport as its hub.

They were assisted in this by a Steering Group of senior officials from five Government Departments and two Task Forces under the chairmanship of Rose Hynes (Chair of Bord Gáis Éireann) and John Fitzgerald (Chair of the National Transport Authority and An Post).

Legislation will now be drafted to establish a new, publicly-owned commercial Shannon entity comprising the airport and the restructured Shannon Development. This legislation will also make an appropriate change to the name of the Dublin Airport Authority to take account of the new ownership structures. The Government plans to have this legislation enacted by the Oireachtas by the middle of next year.

It is now intended to make appointments to the Boards of the Shannon Airport Authority and Shannon Development to ensure that the necessary work is undertaken in relation to the establishment of the Shannon entity and the transition arrangements for Shannon Development. In addition, over the next six months, the Steering Group will continue to oversee the completion of that work in the agreed timeline.

Further information
* The Final Report by the Shannon Aviation Business Development Task Force will be published on the websites of the Department of Transport, Tourism & Sport and the Department of Jobs, Enterprise and Innovation on Monday. The Final Report of the Change Management Task Force will be published in due course.

Shannon Airport has suffered a serious decline in recent years. It has been loss-making since 2008 and passenger numbers have fallen by 60% over the past five years. Regardless of where ownership of the airport lies, this is untenable. The Government had already made a decision in principle last May that Shannon Airport is not viable within the current DAA structure and is clearly not realising its potential to make a more meaningful contribution to the local economy of the wider Shannon region.

The Government decided last May to restructure Shannon Development and to transfer its enterprise support functions to Enterprise Ireland and the IDA, and its tourism functions to Fáilte Ireland. The transitional arrangements associated with these moves were also examined as part of the work of the Task Forces and these functions, together with the associated staff, will transfer to the relevant agencies from January onwards.

Minister Varadkar said that he will make an Order under the State Airports Act 2004 next month specifying 31 December 2012 as the day (the 'Shannon appointed day') on which the assets of Shannon Airport will be vested in the Shannon Airport Authority and from then on, the SAA will be statutorily responsible for the ownership, management and operation of the airport.

Tags: Shannon Airport

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