Paradox of big business will see jobs go as airport nears record turnover

Despite passenger numbers at Shannon Airport continuing to rise, it is to lay off 200 workers, writes Mid-West Correspondent Jimmy Woulfe.

IT’S one of those paradoxes of big business.

As passenger numbers at Shannon soar, the airport management say it’s crucial that the permanent workforce is reduced.

Negotiations are ongoing to cut staff numbers from 520 to 320.

The Shannon Airport Authority (SAA) has drawn up a €30 million plan for the way ahead. Part of this investment will help pay off workers prepared to leave. Those with 24 years or more service can expect redundancy packages of €100,000 and their company pensions will be available at the age of 55.

The 320 who stay will get €10,000 in recognition of new work practices management wants to introduce.

Already this year passenger numbers are 22% ahead of 2005, which was a record year for the airport with 3.3m passengers.

Ryanair’s alliance with Shannon has been a huge success. The low-cost airline operates 24 European routes from the airport.

Ryanair chief Michael O’Leary has been quick to latch on to an incentive package at Shannon which lowers airline charges.

As part of the deal, he has pledged to deliver 2m passengers a year within five years, and to base four aircraft at Shannon.

In return he has got an extremely competitive deal from the SAA.

Mr O’Leary said recently: “Ryanair’s expansion makes Shannon one of the best served regions of its size in Europe and is a major boost to tourism and business in the Mid-West, bringing 240 jobs through 240,000 additional passengers and €55m tourism spend.”

He said that when Ryanair’s fourth Boeing 737-800 is based in Shannon from September, the airline’s investment in the airport will rise to €240m.

Some people may not like US troops passing through en route to the Middle East and Afghanistan — but it’s big business for Shannon.

And the US ambassador, James Kenny, didn’t mince his words recently when he said it’s business they can shift to “dozens of other” European airports if the plug was pulled at Shannon.

More than 300,000 troops will pass through the airport this year. By the end of April, more than 145,000 US military personnel stopped off there.

Although the airport does not release a figure for the US military business, it is understood to receive in excess of e20m a year in landing and handling charges from the airlines carrying the troops.

This year Shannon is poised to record a turnover topping €100m and is expected to post a significant profit, having exceeded the break-even point last year after years of ongoing losses.

Aer Lingus, while reducing it’s presence at Shannon, is still the biggest player on transatlantic routes.

Next year the open skies agreement between the US and EU will see the abolition of a major requirement which forms the cornerstone of the present bilateral agreement between the Irish and American Governments.

This requires airlines wishing to operate transatlantic services from this country to provide one-for-one flights at Shannon and Dublin.

Shannon caters for more than 700,000 transatlantic passengers and some fear the open skies deal will see some airlines concentrate their transatlantic schedules at Dublin.

However, Aer Lingus has stated it will make available 400,000 seats next year on its Shannon transatlantic schedule when the deal kicks in.

Other transatlantic carriers such Delta and Continental have recently announced increased flights at Shannon.

IBEC, the employers’ body, has warned that American companies would pull out of the Mid-West if they did not have good year-round access by air to the US.

But the group also said open skies will open up new opportunities for Shannon.

The much publicised overcrowded conditions at Dublin — a tent is being erected to augment the terminal building — has also benefited Shannon with many people using it who would be in Dublin airport’s traditional hinterland.

The huge increase in sun destination flights at Shannon has enabled it widen its customer catchment area into the Midlands and east Leinster.

But there are many challenges ahead for the dynamic SAA, led by businessman, Pat Shanahan.

One obvious and immediate necessity is additional car parking space due to the huge increase in business.

An option open to the SAA is to reclaim a piece of fairway territory from the Shannon golf course which is on land owned by the airport.

This may not go down well with golfers who might say it would interfere with a valuable tourist asset.

Just another paradox of the Shannon success story.