Shannon airport

source

Report confirms DAA threat to Shannon

by Rebekah Commane and John O'Shaugnessy
Thursday, 01 March 2012 12:05

SHANNON Airport is faced with a significant threat to its viability under current ownership arrangements, according to the Booz and Company report.
Commissioned by Minister for Transport Leo Varadkar in a bid to identify and analyse the future of the three state airports the report, published in part this Wednesday, recommended that full separation from the Dublin Airport Authority would provide the greatest autonomy and incentives to deliver traffic growth.
Responding, Deputy Kieran O’Donnell told the Limerick Post:
“It clearly states that the current model at Shannon Airport is not working and that a fresh look at new ways to improve it are demanded.
“It is also made clear that Shannon needs to be independent of the DAA if it is to improve passenger numbers.
“The demand for the development of landbanks around the airport has been further strengthened”


The report reveals that Shannon has been hardest hit of the State airports in the four years to 2010, with a fall of 50% in passenger figures, while operational costs remain high.
It suggests that opportunities to develop niche businesses would be further enhanced should the airport be more integrated with the surrounding industrial developments, in particular the Shannon Free Zone, which is currently owned and managed by Shannon Development.
According to the report the loss of Shannon as an asset is “unlikely to create significant risks to the DAA’s Financial viability”.
However, it does state that the airport would require financial support to maintain its current size and operating capacity.
“Integrating the Shannon Free Zone with the airport would address this issue”.
It also recommends the exploration of new sources of revenues, “including exploitation of land banks, cargo business potential and improved expansion of the US pre-clearance facility to include cargo”.
However, the report also states that there is “good reason to believe that Shannon Airport will continue to require subsidies from the DAA and that traffic will not recover to previous levels, at least in the short-run”.
The Booz report recommends two approaches for the future control of Shannon.
The first recommends a DAA restructure, with each airport given the status of independent subsidiary within the overall airport group.
“The independent airport boards would set strategic direction for the airports and appoint individual management teams with responsibility for developing tailored business plans”.
The second recommends separating out ownership and operation of Shannon Airport under a local concession model.
Under this approach the composition of the Local Authority holding entity could include Clare and Limerick County Council, with the former recently approving such an approach.
“The holding company could also include Shannon Development as part of a move to integrate the airport with nearby industrial land, as well as input from relevant commercial interests and public bodies as required”.

.

A320

source wrote: »

Report confirms DAA threat to Shannon

by Rebekah Commane and John O'Shaugnessy
Thursday, 01 March 2012 12:05

SHANNON Airport is faced with a significant threat to its viability under current ownership arrangements, according to the Booz and Company report.
Commissioned by Minister for Transport Leo Varadkar in a bid to identify and analyse the future of the three state airports the report, published in part this Wednesday, recommended that full separation from the Dublin Airport Authority would provide the greatest autonomy and incentives to deliver traffic growth.
Responding, Deputy Kieran O’Donnell told the Limerick Post:
“It clearly states that the current model at Shannon Airport is not working and that a fresh look at new ways to improve it are demanded.
“It is also made clear that Shannon needs to be independent of the DAA if it is to improve passenger numbers.
“The demand for the development of landbanks around the airport has been further strengthened”


The report reveals that Shannon has been hardest hit of the State airports in the four years to 2010, with a fall of 50% in passenger figures, while operational costs remain high.
It suggests that opportunities to develop niche businesses would be further enhanced should the airport be more integrated with the surrounding industrial developments, in particular the Shannon Free Zone, which is currently owned and managed by Shannon Development.
According to the report the loss of Shannon as an asset is “unlikely to create significant risks to the DAA’s Financial viability”.
However, it does state that the airport would require financial support to maintain its current size and operating capacity.
“Integrating the Shannon Free Zone with the airport would address this issue”.
It also recommends the exploration of new sources of revenues, “including exploitation of land banks, cargo business potential and improved expansion of the US pre-clearance facility to include cargo”.
However, the report also states that there is “good reason to believe that Shannon Airport will continue to require subsidies from the DAA and that traffic will not recover to previous levels, at least in the short-run”.
The Booz report recommends two approaches for the future control of Shannon.
The first recommends a DAA restructure, with each airport given the status of independent subsidiary within the overall airport group.
“The independent airport boards would set strategic direction for the airports and appoint individual management teams with responsibility for developing tailored business plans”.
The second recommends separating out ownership and operation of Shannon Airport under a local concession model.
Under this approach the composition of the Local Authority holding entity could include Clare and Limerick County Council, with the former recently approving such an approach.
“The holding company could also include Shannon Development as part of a move to integrate the airport with nearby industrial land, as well as input from relevant commercial interests and public bodies as required”.

.

The worrying part is clare and limerick county council involvement,please stay away,they cant
even manage a few traffic cones!!

Cosmo Kramer

A320 wrote: »

The worrying part is clare and limerick county council involvement,please stay away,they cant
even manage a few traffic cones!!

I like that part of it. Their Councillors are always the first to bang on about how the airport is mismanaged/mistreated/overlooked etc. and everyone outside the mid-west has to listen to their rubbish. Give it to them to run and tell them there will be no DAA or central government funding after three years and any shortfall can come out of their local authority budgets. That might quieten them down a bit.

Cosmo Kramer

Cosmo Kramer wrote: »

I like that part of it. Their Councillors are always the first to bang on about how the airport is mismanaged/mistreated/overlooked etc. and everyone outside the mid-west has to listen to their rubbish. Give it to them to run and tell them there will be no DAA or central government funding after three years and any shortfall can come out of their local authority budgets. That might quieten them down a bit.

Why aren't the passengers made to pay the funding shortfall, add it to the ticket. Then if it cant survive due to a lack of customers, close it!!

highlydebased

Deleted User wrote: »

Why aren't the passengers made to pay the funding shortfall, add it to the ticket. Then if it cant survive due to a lack of customers, close it!!

What a load of shíte. You really can't make a good point can you!

Hogzy

highlydebased wrote: »

What a load of shíte. You really can't make a good point can you!

I thought he was taking the piss?

kub

Deleted User wrote: »

Why aren't the passengers made to pay the funding shortfall, add it to the ticket. Then if it cant survive due to a lack of customers, close it!!

Good evening Mr Michael O Leary, nice of you to contribute to our little thread.

As per the Booz and Company report above, so they recommend that SNN be leased out to others for a period of 20/30 years and that DAA retain the management of DUB and CRK.
I wonder if this becomes a reality, will SNN and CRK become competitors? Will CRK at last get some T/A routes especially with future aircraft such as the 739 and 321Neo coming on line, both of which surely 17/35 can accomodate.

A320

Booz and Company???

How long is Brian Cowen at this,he could of picked something more subtle

kub

kub wrote: »

Good evening Mr Michael O Leary, nice of you to contribute to our little thread.

As per the Booz and Company report above, so they recommend that SNN be leased out to others for a period of 20/30 years and that DAA retain the management of DUB and CRK.
I wonder if this becomes a reality, will SNN and CRK become competitors? Will CRK at last get some T/A routes especially with future aircraft such as the 739 and 321Neo coming on line, both of which surely 17/35 can accomodate.

If its funding and large deficits and debts are taken off the tax payers back i see no problem with that. Cork really is the only other airport outside of Dublin with the population that justifies large national investment, certainly in these times. Although I Don't think the resident Limerick/Shannon lobby crew here would be too happy with the required lay offs and wage reductions needed in SNN to make it sustainable. SNN should be treated like the other regional airports(Knock & Kerry) in Ireland and let fend for itself(10 euro passenger charge in Knock keeps it running and expanding), with all state support weaned off.

You will always have the parochial type here that will support it and want an airport in their back garden no matter how much money it is losing for taxpayers, just as long as they don't have to travel any considerable distance to an airport and they don't have to pay any extra for their state subsidised holiday flights..

A 10 euro passenger levy in SNN would raise 16 million a year, covering its yearly deficit and having it debt to taxpayers paid within 10 years. 10 euro should not be too much for people that want the convenience of an airport in their back yard...cost of two pints. The customers like in other better run regional airports would then be paying for the airport not the taxpayer.

Skyhawk684

Since Galway Airport is almost dead, and Knock has a firm grip over most of "The Whest" I think Shannon Airport should market itself as the airport of Galway city and Limerick city. Cork has a population of 119,418 , Galway and Limerick have a combined population of 160,000 , so Shannon should be able to handle the same amount of passengers as Cork ( around 2 million + my figures are from wikipedia ).

Marketing Shannon as Limerick's and Galway's airport would mean advertising it and adding signage in Galway directing people to Shannon.

Thats just my opinion though

roundymac

With the new motorway you could be in SNN in a jiffy, but you do have to have the routes to attract the punters.

Hogzy

Skyhawk684 wrote: »

Since Galway Airport is almost dead, and Knock has a firm grip over most of "The Whest" I think Shannon Airport should market itself as the airport of Galway city and Limerick city. Cork has a population of 119,418 , Galway and Limerick have a combined population of 160,000 , so Shannon should be able to handle the same amount of passengers as Cork ( around 2 million + my figures are from wikipedia ).

Well not really. The population of metropolitan Cork is around 400,000. There are over 500,000 in the county. So there would have to be a significantly larger population within the area of Galway and Limerick if Shannon is to beat Cork on Short haul.

Skyhawk684

Hogzy wrote: »

Well not really. The population of metropolitan Cork is around 400,000. There are over 500,000 in the county. So there would have to be a significantly larger population within the area of Galway and Limerick if Shannon is to beat Cork on Short haul.

If we are talking about metropolitan, then Limerick and Galway have around 350,000-400,000 still though.

Hogzy

Skyhawk684 wrote: »

If we are talking about metropolitan, then Limerick and Galway have around 350,000-400,000 still though.

Fair enough. But Galway metro area would not be 100% committed to flying out of Shannon rather than Dublin. Both involve a long enough drive. Granted that SHannon is in fact closer but it wouldnt surprise me if the majority of Galway flew out of Dublin.

Where as the entire Cork metro area is within a 15-20min drive from Cork airport. If Galway were to be included in potential travellers for Shannon then you would have to include Kerry, South Tipperary and Waterford as potential travellers to Cork.

I dont know if I am explaining that too well. Basically Cork airport has a substantially larger population within a 30-40min drive than Shannon does within the same distance.

aw

A theory playing on my mind...

If I had a billion or two lying idle, looking to invest, (which I don't, alas!)

I think you could make a good case to take the lease on Shannon for 30 years and then invest in a rail link to the existing main line rail system, something like what Stobart have just done in Southend Airport.
Obviously you'd need a frequent link and would need Iarnrod Eireann to play ball too.

I do think that would reap rewards.

Not hugely familiar with the railways but how feasable would a rail link from Shannon Dublin be, again assuming IE were on boards and even perhaps a private train system?

Plowman

This post has been deleted.

Skyhawk684

Skyhawk684 wrote: »

Since Galway Airport is almost dead, and Knock has a firm grip over most of "The Whest" I think Shannon Airport should market itself as the airport of Galway city and Limerick city. Cork has a population of 119,418 , Galway and Limerick have a combined population of 160,000 , so Shannon should be able to handle the same amount of passengers as Cork ( around 2 million + my figures are from wikipedia ).

Marketing Shannon as Limerick's and Galway's airport would mean advertising it and adding signage in Galway directing people to Shannon.

Thats just my opinion though

You will find that most Galway people are using Knock already due to better routes with Ryanair, Advertising for Knock has been in place as far down as Gort. The Tuam bypass will only help this. 40 minutes from Galway to Knock, Tuam Claregalway obviously much closer.

If SNN could get Limerick people to stop using Cork or DUB it would be a start.

Cosmo Kramer

It would be interesting to see which airport out of Knock/Galway/Shannon is most used by people travelling to/from Galway city. I would guess it is Dublin - not everyone has a car and particularly in the case of incoming tourists, Dublin airport offers great bus links to Galway that the other two airports cannot match.

At this point in time there is no way you can combine the Galway/Clare/Limerick populations and come to the conclusion that Shannon has the same short-haul catchment area as Cork becuase Galway traffic uses multiple airports and only a percentage travels through Shannon.

roundymac

http://www.irishexaminer.com/business/varadkar-planning-shannon-airports-exit-from-daa-186911.html
This should be interesting, will it make or break Shannon, and if it can be done for Shannon why can't it be done for Cork as well.

Cosmo Kramer

Leo Varadkar wrote:

We are trying to make a success of an airport that is declining and declining rapidly... There is a fairly good chance that Knock will take over Shannon this year in terms of passenger numbers.

Sorry, what?!

dowlingm

As suggested on page 1 of this thread moving the bulk of Air Corps operations to Shannon (just as the Naval Service is located in Haulbowline) is the way to go I think. Training flights would be less intrusive and Shannon is much closer to the maritime patrol zone. Were Casement civilianised then it could take Weston's business - with a main runway almost twice as long it could attract larger corp jets and a scaled down Air Corps presence could remain in the form of GASU/army liaison/MATS. It should have been done years ago - during the boom the sale of Casement would have fetched a tidy sum which might have not only covered the relocation cost but left a bit over. There would have been opposition from the locals but the Air Corps wasn't a quiet neighbour either - think back to the Magister era!

The one advantage such a move would have is that it would be a form of State aid to Shannon but one that would be difficult for the Eurocrats to veto as it is a military matter. Closing an ETOPS24 ILS II airport with the longest runway in the country doesn't seem in the LONG TERM interest of the country.

As for the rail link, I love the idea, have done for years, but the studies written on it are very discouraging. The time to lay the rail link was when Shannon was being built as a "new town" but that coincided with huge cutbacks in rail in Ireland and I doubt many people wanted to put their name to a rail expansion project or even preservation of a future access.

Johnny901

Moving the bulk of the Air Corp from Baldonnel to Shannon and having to set up the whole operation in Shannon (admin/Maintenance etc) does not make sense to me. I am also sure there is something to be gained in having the Air Corp close to the Mil training in The Curragh

What will it achieve ? A few extra movements per day maybe.
What Shannon needs is loads of euro spending passengers. Once the Shannon Airport Management have automony they will aggressivly promote Shannon and possibly regain some of the passengers lost to Knock. I could never see Shannon being closed, way too important for that.

Baldonnel could be opened up to civilian traffic much the same way Frankfurt Rhein Main was, civil on one side of the runway Mil on the other.
Aimed at executive jet operations mainly, airline stuff needs to stay in Dublin Airport.

Johnny901

Johnny901 wrote: »

What Shannon needs is loads of euro spending passengers. Once the Shannon Airport Management have automony they will aggressivly promote Shannon and possibly regain some of the passengers lost to Knock.

Ryanair are planning on doubling the amount of routes out of Knock over the next 5 years, With the increase in passenger numbers the airport should be able to reduce the 10 euro development levy making it an even better option for passengers and airlines.

Shannon to try and break even will have to introduce a similar passenger levy to a customer base that is not used to it and likely unwilling to pay it. A levy on Shannon airport of a similar amount to Knock over the past 10 years would have meant that airport was running on budget and there deficit paid off. Instead it looks like Vradker will take the very easy route and make tax payers take the hit.

cson

Are you on the board of Knock Airport or what?

Or Msgr Horan reincarnate?

dowlingm

Deleted User wrote: »

Ryanair are planning on doubling the amount of routes out of Knock over the next 5 years

What MOL gives, MOL can and does take away.

Deleted User wrote: »

With the increase in passenger numbers the airport should be able to reduce the 10 euro development levy making it an even better option for passengers and airlines.

Are you aware of any airport that has reduced its dev levy simply because pax numbers increased?

dowlingm

Johnny901 wrote: »

Moving the bulk of the Air Corp from Baldonnel to Shannon and having to set up the whole operation in Shannon (admin/Maintenance etc) does not make sense to me. I am also sure there is something to be gained in having the Air Corp close to the Mil training in The Curragh

[snip]

Baldonnel could be opened up to civilian traffic much the same way Frankfurt Rhein Main was, civil on one side of the runway Mil on the other.
Aimed at executive jet operations mainly, airline stuff needs to stay in Dublin Airport.

Well, for one thing the operation will need land which it can acquire from the airport authority. This will give SNN a cash injection which can go against debt or to fund further capital improvements which customer airline deem prerequisites to expansion of service. For a second having the CASAs in SNN will not only reduce flying time to patrol areas but if this had been done in previous years maybe ministers wouldn't have been using them in contravention of the EU grants which helped buy them.

I certainly think some Air Corps presence can be retained at Baldonnel if co-location with the Army at the Curragh itself is deemed too much of a comedown but I think it would be important that the civil presence be primary and not treated as unwelcome lodgers because of history and whatnot.

Johnny901

So you are moving them to Shannon to reduce flying time on Maritime patrol and as a way of subsidising Shannon ?

Agree with you on Knock, up to this the relationship has been working but that can change, very quickly if MOL does not get what it wants.

Joe 90

Deleted User wrote: »

Ryanair are planning on doubling the amount of routes out of Knock over the next 5 years, With the increase in passenger numbers the airport should be able to reduce the 10 euro development levy making it an even better option for passengers and airlines.

Shannon to try and break even will have to introduce a similar passenger levy to a customer base that is not used to it and likely unwilling to pay it. A levy on Shannon airport of a similar amount to Knock over the past 10 years would have meant that airport was running on budget and there deficit paid off. Instead it looks like Vradker will take the very easy route and make tax payers take the hit.

Then again, if Shannon does not have a passenger levy the passengers might prefer Shannon to Knock.

Joe 90

dowlingm wrote: »

What MOL gives, MOL can and does take away.


Are you aware of any airport that has reduced its dev levy simply because pax numbers increased?

I thought that some airports had seen passenger numbers and flight numbers reduce after introducing a passenger levy.

roundymac

Did'nt MOL?Ryanair threaten to pull out of Kerry a few years back when they went to introduce a IR£5 levy saying it would interfere with their low fares?