Government poised to ease airport’s burden of debt

CORK Airport will not get the debt-free status promised by former Transport Minister Seamus Brennan, but will receive some relief from the burden, the Irish Examiner has learned.

Transport Minister Martin Cullen will make a final decision by early autumn on the level of debt the airport must bear as an independent entity. While the debt-free status promised is seen as unsustainable, a senior source within Government this week gave reassurance that the level of debt with which Cork will be burdened as a result of its €180 million redevelopment will not leave it in a vulnerable position.

According to the source, the last thing the Government wants to do is to cut the apron strings and burden Cork with such debt that it would be bound to fail.

In May, the Dublin Airport Authority commissioned consultants BDO Xavier Simpson and Aviation Economics to examine the financial future of Cork Airport.

The Department of Transport received the report earlier this month and has referred it to another consultant company, PriceWaterhouseCoopers (PwC), to carry out an independent assessment.

That process is expected to be completed within a matter of weeks and will test the conclusions of the DAA report on growth and income projections.

While no details have emerged as to what burden of debt has been recommended, Taoiseach Bertie Ahern and Mr Cullen have already strongly indicated that independence will not come with a debt-free balance sheet.

However, the indications are that Cork will not have to bear the entirety of the costs of its terminal revamp.

Meanwhile, suggestions that proceeds from the sale of the Great Southern Hotels group could be used to offset the airport’s debt have been dismissed by the DAA.

Speaking in the Dáil earlier this month, the Taoiseach said that while Cork Airport would be run as an independent airport, it could not be done in such a way that would undermine the finances of the DAA. He pointed to Dublin Airport’s massive capital commitments in the coming years, including Pier D, a second runway and Terminal 2.