Varadkar reveals tax incentive model for Shannon Airport

Minister for Transport Leo Varadkar yesterday revealed a tax-incentivised aviation model at Shannon Airport as the most likely model the Government is to pursue for the airport.

Describing the model as “Separation Plus”, Mr Varadkar said that, along with giving Shannon Airport autonomy from the Dublin Airport Authority (DAA), he will propose to Government that an International Financial Services Centre (IFSC)-type model for the aviation industry be established at Shannon.

Speaking at a Shannon Chamber of Commerce event in Shannon yesterday, Mr Varadkar said “it is my aim and intention to do something very exciting and innovative for Shannon that will recapture that early spirit that was there with the pioneers of aviation in this region”.

Mr Varadkar said that Separation Plus involved giving Shannon airport its independence and combining it with other agencies and other assets.

“The model we are most likely to propose for Shannon is the development of an international aviation based services centre for the region based around Shannon Airport and the lands around Shannon,” said Mr Varadkar.

Mr Varadkar said the proposal would seek to attract new industries “that don’t currently exist in Europe, such as aircraft refitting and aircraft recycling”.

The minister had intended to make an announcement on Shannon’s future before Easter, but he said that he hoped to bring a proposal to Government in April.

He said: “Working on this proposal is taking a little bit longer than we thought. We have to examine state aid rules and anything that may be done on the tax front.

“It is something that is going to work and be a big turnaround for the region.”

Mr Varadkar said the proposal will require private sector involvement and investment but that the Government “will need to have step-in powers to intervene in the unlikely event that things go wrong”.

He said that after Government has agreed a way forward, an interim board or interim task force will be appointed to draw up a business plan for Shannon.

He warned that if nothing is done for Shannon, the airport stands in danger of being passed out by Knock airport in passenger numbers in spite of there being a gap of over 900,000 in passengers currently.

“If the trends continue, it will happen because Shannon’s numbers are already down 20% this year and Knock is still growing.”