Cork Airport would benefit slightly if it was removed from the control of Dublin Airport Authority — but Shannon would benefit hugely as DAA ownership is a “significant threat to its viability”.
This is according to a new report prepared for Leo Varadkar, the transport minister.
The Booz and Company analysis, due to be published in part today, shows in the five years up to 2010, traffic has fallen by up to 20% at Cork and 50% at Shannon. The report describes Cork Airport as “a viable business under current ownership arrangements”.
However, its cash flow problems could be greatly improved if its debt was restructured within the DAA.
While not making any outright recommendations, the consultants said the “benefits of separation would be more significant” for Shannon, arguing that full separation would enable the best growth prospects — especially if the airport forges better business links with surrounding industrial developments.
Shannon has debts of about €100m and lost €8m last year. Cork Airport is losing up to €14m a year and is also carrying a €113m debt, largely due to the construction of a new terminal.
The report says further financial analysis would have to take place to determine the “appropriate level of debt that could be allocated to each of these airports” if they were removed from DAA control.
The authors say Cork is in a “healthier situation” than Shannon and the need for separation “is less obvious although greater autonomy in terms of marketing and route development ... would be good”. The consultants expressed concern Shannon could face significant cash flow issues in the future and problems meeting necessary capital expenditure and future interest payments.
They warned that unless Shannon makes better use of its landbanks, further develops its cargo business potential and expands its US pre-clearance facilities to include cargo, it will continue to require subsidies from the DAA and passenger traffic will not improve.
Booz and Company was asked to examine Cork, Dublin and Shannon airports and make recommendations on future ownership and operational options.
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