No cross-subsidisation for airport, says Varadkar

Transport Minister Leo Varadkar has confirmed that there will be no cross-subsidisation between an independent Shannon Airport and the rent roll from Shannon Development’s extensive land bank.

In the latest figures available, the Shannon Development land-bank provides €11m in annual gross rent receipts.

However, addressing the Dáil on the State Airports (Shannon Group) Bill 2014, Mr Varadkar indicated that the airport will not have access to the Shannon Development rental revenues in the merged Shannon Group.

“The success of the Shannon Group will be enhanced by ensuring that its two main subsidiaries are each commercially successful in their own right and do not cross-subsidise each other.

“This structure will also facilitate greater transparency in the application of State aid rules by Shannon Group and its subsidiaries. Any business arrangements between them will be on a commercial basis and will involve no cross-subsidisation of operations at the airport.

However, Fianna Fáil transport spokesman, Timmy Dooley, expressed fears over the lack of financial day-to-day support of Shannon airport as a result of not allowing cross-subsidisation.

In response, Mr Varadkar said: “It is important to point out that since Shannon Airport gained independence from the DAA 18 months ago, it has shown that it is able to stand alone.

It had halted the decline in passenger numbers and there was going to be renewed growth this year.