Dublin Airport Authority has €140m for airports' debts

Authority has €140m for airports' debts
From:ireland.com
Wednesday, 21st June, 2006


Dublin Airport Authority (DAA) chairman Gary McGann has revealed the company has reserves of just €140 million at a time that it is being asked to take on debts from Cork and Shannon of €300 million.

Mr McGann, speaking before the Oireachtas Joint Committee on Transport, said the authority needed to have enough reserves to break up the three airports, but this was not possible at present.

The Government has spoken on several occasions about helping Cork and Shannon to grow by making them debt free, but this has proven hard to achieve.

Mr McGann said that, while this may "sound like a technical accounting issue", unless the DAA had enough distributable reserves - effectively accumulated profits - it could not trigger a separation of the three airports.

Mr McGann was downbeat about Shannon's future, especially with its current cost base. "Shannon is not viable with its current cost base," he said, adding that "significant underlying losses" were currently masked by the temporary impact of US military transit traffic.

Mr McGann said the decision of the aviation regulator to sanction only a €6.14 per passenger charge at Dublin was a major financial headache for the authority. He said €7.50 was desperately needed so the airport could develop its various capital projects. The airport only had two sources of revenue, commercial income and airport charges, he noted.

Mr McGann hinted that, in the years ahead, Aer Rianta International, which operates a number of overseas airports and duty free shops, should be owned by Dublin airport. He said it was unlikely to become part of Shannon airport and it needed to be sheltered by a company with a decent balance sheet. He said "strong logic and intuition" would indicate it should become part of Dublin.

Mr McGann agreed Dublin airport was suffering from serious congestion, with passenger numbers rising by 15 per cent a year, twice the rate of growth at other international airports. He said he hoped this kind of growth would eventually settle down. He refused to comment on whether there was now a need for a second airport in Dublin.

Declan Collier, DAA chief executive, said that if a new runway was not built by 2010, the airport would have to turn away aircraft.

He said a planning application for a second terminal of 75,000-80,000 sq ft would be lodged during the summer with Fingal County Council. He said the size of the facility had to be increased following the receipt of fresh growth forecasts from the two main airlines - Ryanair and Aer Lingus.

Several committee members, including Labour's Róisín Shorthall and Fianna Fáil's Jim Glennon, said that while there was congestion at peak periods, most of the time the airport operated well. However, Senator Shane Ross (Ind) said customers of the airport were treated with "total and utter contempt" and the airport was the "gateway to rip-off Ireland". He said foreign exchange outlets at the airport levied the highest commissions in the Republic.