The Government has said today that the separation of Shannon Airport from Dublin Airport Authority will create 850 jobs.
The Government has revealed that on December 31 Shannon will separate from Dublin Airport Authority (DAA), leaving the authority saddled with €100m worth of debt.
The airport will merge with a restructured Shannon Development to form a new, publicly-owned, International Aviation Services Centre in 2013.
The new entity will include Shannon Development’s extensive landbank and will be tasked with developing the international aviation centre of excellence.
The decision taken in principle last May. Minister for Jobs, Enterprise & Innovation Richard Bruton and Minister for Transport, Tourism & Sport Leo Varadkar today confirmed that the Government will now implement the decision.
A report from the Aviation Business Development Task Force, set up by the Shannon Steering Group, 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".
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."
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.
"In accordance with its legislative mandate, DAA will continue to work with the Government to implement the shareholder’s decision in relation to Shannon Airport," the DAA stated today.
Speaking this afternoon, Seán Murphy, Chambers Ireland deputy chief executive, said: "While this is a welcome move, the big challenge for Shannon and its new management is to get its cost base at an appropriate level that makes it attractive to new incoming airlines and allows it to compete for customers with other airports on the island.
"Even allowing for transiting passengers, Shannon’s visitor numbers have fallen dramatically in the past five years. It is currently third to Dublin and Cork Airports, respectively. These numbers must rise to above 2.5 million for the airport to be sustainable in the future. That is the major challenge for Shannon."
Clare Fine Gael Senator Tony Mulcahy welcomed the move.
"It has taken five years for autonomy to be finally granted and I think this is a momentous moment not only for the airport but also for the wider Mid West Region," Senator Mulcahy said.
"I warmly welcome the Minister for Transport, Leo Varadkar’s announcement today of a range of supports for aviation-related industry, which will be of immediate benefit to Shannon in attracting good-quality jobs to the region."
Clare county manager Tom Coughlan also welcomed the announcement, saying: "For many years, Clare County Council has encouraged and supported the establishment of an autonomous Shannon International Airport.
"The Council is particularly satisfied the airport is being granted independence in relation to its future operation and that the newly created entity will drive the sustainable development of the surrounding landbank, as envisioned in the Clare County Development Plan 2011-2017."