Michael Kitt (Galway East, Fianna Fail)

I thank Deputies Coveney and Clune for raising this issue. The State Airports Act 2004 provides the framework for the establishment of Shannon and Cork as independent airports. As part of the airport restructuring process, the boards of Cork and Shannon Airports are required to prepare business plans for eventual separation. All three airport business plans have to be co-ordinated by the Dublin Airport Authority for eventual approval by the Minister for Transport and the Minister for Finance.

Among the requirements to be satisfied in advance of separation is the need to ensure the financial sustainability of all three State airports. It has always been the Government's position that the resolution of the debt issue at Cork Airport would have to ensure that the debt burden Cork would undertake would be a manageable one for it and would form a reasonable basis for Cork Airport's autonomy, without in any way putting at risk its commercial future. However, it is also the Government's position that the sharing of the Cork debt, much of which by the way was incurred in financing the new terminal and other infrastructural works at Cork Airport, to be borne by both the Cork and Dublin Airport Authorities will have to take account not only of what is commercially and financially feasible for Cork Airport, but also for the Dublin Airport Authority.

In order to break the logjam between the DAA and the CAA on the equity of the debt, the Minister for Transport, Deputy Noel Dempsey, appointed Mr. Peter Cassells to mediate between the two parties with a view to reaching an agreement acceptable to both. Mr. Cassells's conclusions and recommendations were the outcome of that dialogue with both parties. The recommendation is that the CAA takes responsibility for debt of €113 million in return for the transfer of net assets of €220 million on separation. The board of the CAA has accepted this recommendation. This is a positive step which will enable the finalisation of realistic business plans, taking account of the Cassells recommendations in the case of Cork. The Minister has already received the Cork and Shannon business plans and he expects shortly to receive a finalised commentary on those plans by the DAA when it submits its own plan under the Act. He would expect the DAA's commentary to address recent trends in the aviation market, the challenges facing the State airports and the financial and operational aspects of restructuring.

As the Deputy is aware, Mr. Joe Gantly stepped down from his role as chairman of Cork Airport with effect from 1 August last and it is hoped to fill that vacancy in the near future.

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