Adj Debate Shannon

November 14th, 2007 - Pat Breen

Dail Adjournment Debate – Wednesday, 14th November 2007

DEPUTY PAT BREEN T.D.

I wish to raise on the Adjournment Debate as a matter of extreme importance recent media reports that the business plans for Shannon Airport has been completed prior to any decision being made on the Airport’s debt, I urge the Minister to outline if the Government’s commitments in the State Airports Bill 2004 will be delivered

Deputy Pat Breen: I welcome the opportunity to raise this important matter here in the House tonight.

Media reports yesterday indicate that the business plan for Shannon Airport has been completed and forwarded to the Dublin Airport Authority for approval and that Cabinet members have been canvassed to support this plan. I remind the House that the previous Minister for Transport, Deputy Cullen, said, “Both I and the Minister for Finance must be satisfied as to the state of operational and financial readiness of the Shannon and Cork Airport Authorities before the assets of the airports is invested in those authorities.” Following questions from my colleagues, Deputies Clune and Coveney, it is now clear that Cork will be burdened with payment of some of its debt, in spite of commitments given by the then Minister, Deputy Séamus Brennan, and the Taoiseach. This is appalling. Is this also the case for Shannon Airport? It is a shame the Minister for Transport is not here to answer these questions because they are very important.

The clouds have gathered over Shannon Airport since the general election. Prior to this, the Government was giving out commitments like confetti at a wedding but now, one by one, they are evaporating. The Government has failed to safeguard our Heathrow slots, failed to intervene and has not secured an alternative airline. As a result, 320,000 passengers have been wiped off the airport’s bottom line.

The Department of Transport and the Minister failed to act. Shannon Airport is not a priority in the Department. I am seriously concerned that the independence of Shannon is being rushed through without any proper evaluation of the airport’s ability at this time to stand on its own two feet to deflect attention from the Government’s inaction on Shannon.

We must look at the real picture in Shannon. We must ensure that another failure by this Government does not come back to haunt us. Today, the CSO figures confirm that for the second month in a row there has been a drop in the number of trips to Ireland from North America, a drop of 8,900 trips for September 2007 and 4,100 for August 2007. These figures do not address the length of stay, the average spend or the regional imbalance.

The previous Minister told us in Shannon that we should embrace the opportunity, that aircraft were sitting in 22 new US airports ready to take off and that we would share in that business. They have not landed in Shannon, the story there is very different. American Airlines has ceased its Shannon operation. US Airways did not operate for the winter and the Aer Lingus chief executive Dermot Mannion has only given a guarantee of direct trans-Atlantic flights from Shannon up to October 2008. The reality is that direct seats sold from the US into Shannon are falling year by year, down from 577,000 in 2006 to 442,000 for 2007, with projections of 355,000 direct seat sales for 2008.

This Government told us that in tandem with the introduction of Open Skies, there would be a €53 million tourism and economic plan to help soften the landing at Shannon. Not one cent has been received and the plan is still in its infancy. The former Minister, Deputy Cullen, also told us that he “sought and received guarantees from Aer Lingus” that it would deliver 400,000 trans-Atlantic passengers post-Open Skies. Another commitment and another broken promise.

The industrial climate in the Shannon region is also quivering. Over the past few weeks there were announcements of job losses at Tyco Electronics, John Crane Limited, Thompson Financial and at Aer Lingus at Shannon. Many more companies in the Shannon free zone are facing difficulties because this Government has failed to address Ireland’s deteriorating competitiveness. If we do not maintain our link to Heathrow, this may only be the tip of the iceberg. Confidence in doing business in our region is being eroded.

Does this Government intend to write the obituary for Shannon and the region? If we do not ensure that our airport’s future operational and financial requirements are addressed, our fate will be sealed. The airport has a debt of between €70 million to €80 million. Will this be written off by the Government? Has the business plan been finalised without a commitment on writing off this debt?

The cost of developing the necessary infrastructure to sustain the future needs of the facility could be anything up to €250 million. The extension of car parks, resurfacing the main runway and taxi-ways and replacing air bridges all cost money. When one lands at Shannon one notices many temporary buildings in a dilapidated state, all of which require refurbishment. Shannon Airport faces an uncertain future with 320,000 passengers wiped off the Heathrow route, no guarantees on transatlantic passengers, significant capital cost projections, a dependency on military traffic and an over-reliance on low-cost operations.

Therefore it is important that before any decision on the break up is finalised, the airport’s ability to fund its future capital investments should be addressed. This is the reason the location and control of Aer Rianta International is pivotal to any decision. It is imperative that this is retained under the umbrella of Shannon Airport. When the State Airports Act 2004 was being debated, the then Minister, Deputy Séamus Brennan, reaffirmed that the trade unions would be consulted fully on all issues of concern, including the preparation of business plans for each airport. Has this process taken place?

An Ceann Comhairle: The Deputy’s time has expired.

Deputy Pat Breen: I am uncertain whether my constituency colleague, Deputy Tony Killeen, will reply to this matter this evening. Whoever does so should be aware that fast-tracking independence without ensuring the ability of the airport to stand alone may come back to haunt us, as have the Heathrow slots. I ask the Minister to get it right this time.

Minister of State at the Department of Community, Rural and Gaeltacht Affairs (Deputy Pat Carey): I thank Deputy Breen for raising this important matter. I will take this motion on behalf of the Minister for Transport, Deputy Noel Dempsey. The State Airports Act 2004 provides the framework for the establishment of Shannon as an independent airport. As part of the airport restructuring process, the board of Shannon Airport is required to prepare a business plan for eventual separation.

In their examination of the plan, the Ministers for Transport and Finance must both be satisfied that all three airports have the capacity to operate on a sound commercial basis before giving final approval to the business plans. The agreement of the Dublin Airport Authority, DAA, will be central to the conclusion of the business planning processes for Shannon. The Shannon Airport Authority, SAA, has submitted its business plan to the DAA to pave the way for eventual autonomy for Shannon Airport. The Department of Transport has recently received a copy for its information. My colleague, the Minister for Transport, Deputy Noel Dempsey, understands there will be engagement shortly between the DAA and SAA on the plan’s content and he looks forward to hearing the outcome of the DAA-SAA discussion process with a view to making progress on separation in a timely fashion.

Subject to satisfactory progress being made on this plan, the Minister for Transport awaits the DAA’s overall considered views on airport separation to enable the plans to be examined by him, together with his colleague, the Minister for Finance.