Aviation a key craft in our flight to recovery

THE chief executive of the Dublin Airport Authority was recently appointed chief executive of London City Airport.

The DAA itself has been without a chairman for months and a number of directors are ending their terms this year.

These unconnected events give those who own Irish airports — we the taxpayers — a unique opportunity to rethink the entire strategy of airport management in Ireland.

Because the DAA is effectively a monopoly, it has strong powers over market access, by air, to and from Ireland.

This, implicitly, makes it a crucial agent in the development of our island economy.

Air connections here matter more than in economies with large land borders such as Germany and France.

My thoughts on this issue are simple — Ireland needs it’s airports as weapons in the global economic war.

If they are super-efficient and highly price competitive, they act as valued extensions of economic policy. If they are not the opposite applies.

Evidence at present suggests the latter is true. After a huge capital expenditure programme including very large terminals in Cork and Dublin, and airport charge increases to help fund the associated debt, Irish airports are hamstrung in their ability to attract new airline capacity.

That challenge is amplified by a recession-mired economy.

To address the DAA’s issues, while at the same time relying on airports as ignitors of economic activity, very radical thinking is needed. Here is just one plan:

1. Dispose of the minority stake in Dusseldorf airport owned by the DAA and sell the duty free Aer Rianta International, both of which are no longer priorities in the Irish economic emergency.

2. Sell and lease back at least one terminal in Dublin and offer both Cork and Shannon for sale, with very low debts courtesy of the actions outlined here.

3. Float Dublin Airport on the stock exchange as, effectively, a utility that offers investors sustained dividends while keeping it’s net debt levels low over the next decade.

These actions would help liberate competitive impulses among the three key airports while giving the Government a chance of recouping money from the airports while delivering competitive air access for Irish business and citizens.

Given the traumatic economic conditions we all find ourselves in, the need for outside-the-box thinking has never been greater.

Airports are just one litmus test of this Government’s willingness to think radically.

For the sake of the future of this economy, let us hope they are up for the challenge.

Executives within the DAA need some clear mission statement from their board and its 100% shareholders — you and I.

Over the past decade we asked them to build cathedrals and then abused them when the final bill arrived.

This time, we must provide a mandate that creates an infrastructural asset that supports and augments growth in the economy.

Clarity on that issue will help airport managers to prioritise their resources while re-energising activity on Irish runways.

Passenger numbers at Irish airports are lower today than during 2001, despite spending over €1bn on new terminals.

The scope to lift activity levels is therefore huge but a key is needed to unlock capacity in these shiny terminals. Government holds the keys. Now it needs to find the right doors.

Joe Gill is director of research with Bloxham Stockbrokers