Up to 1,000 jobs projected for Shannon aviation sector

Tuesday 04 December 2012 11.00
Shannon Airport is to be separated from the DAA at the end of the year
Shannon Airport is to be separated from the DAA at the end of the year

Up to 1,000 jobs in the aviation sector are expected to come to Shannon as it prepares to become a totally independent airport by the end of the year.

The Government announced last May its decision to separate Shannon Airport from the Dublin Airport Authority.

Shannon Airport and Shannon Development will become a new commercial entity in public ownership.

An aviation business development taskforce, headed by former Shannon Airport board member Rose Hynes, has been working towards making Shannon independent.

It is understood that the taskforce has received investment commitments from two businesses, based in the aviation and aircraft maintenance sector, which could bring 850 jobs to Shannon in three years and a further 150 in five years.

The commitments are based on Shannon being an independent commercial entity.

Unions have said that the current 220 jobs at Shannon could be at risk if the investment plans do not materialise.

SIPTU described the plan as unrealistically ambitious.

Minister for Transport Leo Varadkar said doing nothing was not an option, because the airport was in serious decline.

He said while there were risks in the plan, he believed the airport will achieve growth.

The minister said that if Shannon Airport cannot grow passenger numbers to 2.5 million by 2021, there was no future for it.

Speaking on RTÉ's News at One, Mr Varadkar said he understood concerns raised by unions, but added that he believed the targets were realistic.

"The risk of doing nothing is that the airport will continue to decline and then either we'll have to close entirely or be redesignated as a regional airport and to me that would be a disaster for the region and that's why we're willing to take whatever risks are associated with this plan," Mr Varadkar said.

SIPTU's Tony Carroll said that workers at Shannon Airport had not been consulted at all about the plans.

He said they had now been mandated by workers to ballot for industrial action if the necessary guarantees about the future of the 220 people employed there and their job security are not given.

Fianna Fáil’s Transport spokesman Timmy Dooley said he believes the business plan for the future of Shannon Airport was not realistic.

He said the plan would leave the airport without a secure source of revenue, which puts the airport's future in jeopardy.

Speaking on RTÉ’s Drivetime, Mr Dooley said the airport was highly unlikely to reach targets for passenger numbers set by the Government in the short term.

He said unless passenger numbers grow to the extent predicted, Shannon will not be able to continue as an international airport.

'Illegal State aid' claim dismissed

The minister dismissed concerns expressed by Knock Airport that the plan - in which the DAA will assume Shannon Airport's debts - amounts to illegal State aid.

Mr Varadkar said it was not State aid, but was a reassignment of assets among State bodies.

The minister said that since 1993 Knock Airport had accepted €44m in State aid. He added that if the airport had a problem with such supports, it should stop taking them.

He said he believed the plan was on a sound legal footing, and added that if Knock or any other airport wants to mount a legal challenge to State aid, he would be interested to see where that ends.

Neither Mr Varadkar nor Minister for Jobs, Enterprise and Innovation Richard Bruton would disclose what companies would be creating jobs announced today.

However, they said the two companies had signed memoranda of understanding - though they are contingent on Shannon being separated.

Mr Bruton described the business plan for the project as "robust" and "financially viable".

He said change was never without risk but sticking with the status quo as not an option. He said the new project had the potential to create up to 5,000 jobs.

Asked about Michael O'Leary's proposal that the Government should sell State airports and other transport companies to the private sector, Mr Varadkar said privatisation was not being considered by the Government.

He acknowledged that the €100m of Shannon debt that will remain with the DAA will be paid off by passengers using Dublin Airport.

Mr Varadkar refused to comment on speculation that the Budget will introduce incentives to underpin the success of the new entity.

He said the separation of Cork Airport was not being considered at present, noting that it had an even greater debt burden than Shannon.

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