Doubts grow over Aer Rianta plan

A GOVERNMENT think-tank yesterday cast doubts on the proposed break-up of Aer Rianta and warned the plan could leave Shannon and Cork airports in financial trouble.

The National Institute of Transport and Logistics (NITAL) a Government- sponsored advisory body warned the break-up of the state airport monopoly could also isolate the regions making them less attractive to tourists and investors.

The latest analysis comes as strike action was narrowly avoided for the second time yesterday only after Taoiseach Bertie Ahern intervened to reassure workers concerned over Aer Rianta's break up.

NITAL director general Professor Austin Smyth said that Cork and Shannon would likely seek extra business from low-cost airlines if Aer Rianta was broken up.

However, he warned that low-fare carriers paid much less in fees making it much more difficult for an airport to remain profitable even if passenger numbers were going up.

"Both airports will need to grow but the problem is they will likely attract low- cost airlines to do that," he said.

"The problem is when you become dependent on them it's difficult to get enough from them to maintain your bottom line," he said using the example of Belfast's Aldergrove airport which has seen its throughput increase but its profits nosedive because of its reliance on low-fare airlines.

Yesterday's report, which also rates Ireland's other transport infrastructure, is yet another blow to Transport Minister Seamus Brennan's plan to break up the company and comes after a leaked Price Waterhouse (PWC) report also concluded that Shannon and Cork would be unviable as independent entities.

However, NITAL's report also cautions any loss of international hub routes could leave the regions served by Cork and Shannon airports vulnerable to decline.

"The proposed break up of Aer Rianta into competing airport businesses, while at first sight superficially attractive, does raise questions about the financial viability of Shannon in particular, and the implications of a downgrading in that airport's and indeed Cork's role for wider economic objectives," the report concluded.

"If you lose the Shannon stopover and other international links the attractiveness of the region is negated. Tourists and investors will see it as a less attractive area," said professor Smyth.

"The latest findings were just the latest in a long string of conclusions that Aer Rianta should not be broken up," said Labour transport spokeswoman Roisín Shortall.

"This is exactly what the PWC report also found and is yet more evidence that what Minister Brennan is trying to do has no merit, has no business plan and is based purely on a whim," she said.

A spokesman for Transport Minister Seamus Brennan could not be contacted last night.

However, in a letter to SIPTU on Monday, Taoiseach Bertie Ahern assured unions that legislation to cater for Aer Rianta's breakup would not be published before Easter.