Time ripe for an ambitious plan to steer future potential

Change is needed to make the best of Cork Airport, writes Cork Chamber president John Mullins

IN recent weeks the Minister for Transport, Tourism and Sport, Leo Varadkar announced the commencement of a study on options for the future ownership and operation of Cork and Shannon Airports, which will be carried out by Booz & Company.

Given the range of issues which delayed the separation of the three State Airports of Dublin, Shannon and Cork up to 2008 and as enshrined in the State Airports Act 2004, Cork Chamber took the opportunity to engage candidly with Booz & Company on how the Chamber feels the future of Cork Airport should unfold.

The Chamber is of the view that Cork Airport is a crucial and critical asset for economic development that is strongly supported by Cork Chamber and regional stakeholders and is also a key element of the “Cork Gateway” identified by Government, having the critical mass to generate and promote regional economic and social development.

Cork Airport has been central to economic life in the Southwest of Ireland for over 50 years, and has grown consistently to become an integral piece of regional economic infrastructure. Commercial life in the Southwest is inextricably linked to Cork Airport, and the region is fortunate to have such a world class facility as a resource for businesses.

Cork Chamber is firmly of the view that the current governance structure of Cork Airport is not conducive to the wider economic development of the Cork region. Given that it is one of the most important facilitators of economic development in the Munster region and beyond, it needs to operate in the most efficient manner possible.

It is unsustainable for the affairs of Cork Airport to be controlled directly by the Dublin Airport Authority (DAA), as they are not best placed to drive the strategic development of aviation in the South West.

It is now crucial that the uncertainty surrounding Cork Airport’s future direction is dealt with and the independence and balance sheet strength is afforded to Cork Airport to set out its own business strategy, maintain stability and attract further routes.

The Chamber believes that the fundamental point is that the governance and liabilities of Cork Airport must be restructured to allow the airport compete on a fair basis with Dublin and Shannon and deliver valuable connectivity for the region.

There is a need for a fundamental restructuring program which reviews governance, control, business and route development and financial sustainability. While ownership is not at the very core, restructuring must be fully carried out before any change in ownership to allow development of an ambitious plan by new owners.

Cork Chamber has proposed the solution to consist of a local company to be an asset owner represented by a competent Board, representative of the region. The asset owner may include a private equity player /airport operator who is incentivised to create profit/passenger flow/traffic/routes. The concession would need to be a long-term concession.

The level of debt transferred to the asset owner would have to be sustainable, nowhere near current levels and this could be achieved in part by selling some of the Airport’s property portfolio or leasing it long-term. Regardless of the timeline of implementation of this approach, Cork Chamber recommended that greater autonomy within the DAA structure is required immediately.

An ambitious new business plan is required for Cork Airport and it is essential that this plan is developed with stakeholder input. The key sectors of society in the region must also have some say in the operation and strategy of the airport; at least via representation on the board.

Other issues highlighted by the Chamber included the importance of the Cork-Heathrow, Cork-Amsterdam and Cork-Paris slots, which should not be underestimated and need to be safeguarded.

Efforts needed to continue to secure a carrier for a regular and frequent air connection between Cork and Dublin. Additional route development to prominent locations such as Frankfurt, Brussels, Milan, Prague, and Madrid are also required and direct long-haul flights from Cork to the US must be introduced.

The time is ripe for a long-term sustainable solution to be put in place and the Chamber will continue to engage with the Minister and his Department to ensure the best outcome for the region.