Timmy Dooley (Clare, Fianna Fail) | Oireachtas source

I move amendment No. 1:

To insert the following after "5th December, 2012":

"provided that Aer Rianta International is incorporated in the new, independent Shannon Airport Authority on or before 31st December, 2012."

I thank the Minister for outlining the Government decision to separate Shannon Airport from Dublin Airport. I could almost have expected to hear that same speech back in 2004. Much of the positivity emanating from it is the same kind of information provided by the Department and the Minister then, who believed a bright new dawn existed for Shannon Airport in a separated environment. Others in Cabinet at the time had serious concerns about the potential separation and the impact that would have on both Cork and Shannon airports.

At the time, the appointed day was left as a fluid date, to allow for business plans to be developed at Dublin, Cork and Shannon airports and a provision was put in the legislation requiring the development of business plans that were sustainable and viable. Unfortunately, during the very best of a boom, it was not possible to develop viable business plans at Cork and Shannon with an independent framework in place. A huge amount of work was done on this and independent boards were established at Shannon and Cork.

In his contribution, the Minister was almost contradictory and negative about the fact separation had not yet taken place, but yet he acknowledged that in 2007, passenger traffic peaked at Shannon Airport to a level of approximately 3.6 million passengers. At the time, I believed those numbers were unsustainable, because they were based on a deal with a particular airline that was unable to meet the targets they had set for themselves, despite the fact they were given an exceptionally good tariff and rates. Therefore, serious efforts were made then to see Shannon and Cork airports as viable entities in a separated environment. I am very pleased direct separation did not take place then, because if it had, Shannon and Cork airports would be cut adrift now. In the downturn we have experienced, they would not be viable and neither the Government nor the State would be in a position to invest in them. In the context of competition, EU rules on state aid would have precluded that. Had separation taken place, both airports would no longer be viable and the State would be left in a difficult position with regard to how it might reinvest in them.

I accept the separation proposal being put forward by the Government now is somewhat different. However, it seems to make assumptions based on a business plan that I do not believe is sustainable. The Minister has reiterated some of the figures here today. He has shortened his outlook from 2021 - the year he utilised last week - back to 2017 and has stated that by 2017, passenger numbers will be 2.3 million, as set out in the business plan. I ask him to look at the business plan in more detail. I accept the business plan is confidential, but the Minister has shared some of the numbers, so I will do the same.

There is an expectation or a projection that passenger numbers at the airport will have increased on current levels by 500,000, or 33%, by the end of 2014. While I hope that happens, I think it is fanciful to anticipate that it will. It is foolhardy to move on separation without putting in place some kind of secure backstop, in terms of a source of revenue for the airport at a time when this country is going through a very difficult financial crisis. Confidence is at a low ebb and people are not travelling to the extent that they did in the past. It is somewhat foolhardy to expect Shannon Airport to outstrip the general level of demand from a tourism traffic perspective and achieve a 33% increase. I ask the Minister to review the matter.

My amendment seeks to give Shannon Airport the kind of protection in the separated environment that it will need in the context of the losses it has been making. It would provide the airport with a revenue stream that would enable it to grow and develop as a counterpose to Dublin Airport. That was the original intention of the separation proposal in 2004. The general perception at the time was that Dublin Airport was killing off effective competition from the two other State airports. It was believed that the two airports in question needed to be established on an independent footing so they could compete effectively. If they could draw some of the traffic through the airports in the west and the south, it would assist the approach of successive Governments to balanced regional development and increase economic activity in those areas. This Government, which is separating the airports in a different economic climate, is not providing for any support or fall-back in the event of the targets not being reached. As I have said, the targets are overly ambitious in the short term. The airports will not have an opportunity to receive the support one might have expected.

The Minister has made the case for Dublin Airport owning Aer Rianta International, in effect. As Deputy Carey and others will know, Aer Rianta International was established by the management of Shannon Airport to support activity at the airport. This international business was grown out of Shannon and for Shannon. The Dublin-centric approach of the Dublin Airport Authority over the years has meant that much of the profit associated with Aer Rianta International has been put to the use of Dublin Airport. Aer Rianta International's stake in Birmingham Airport was sold for over €230 million in 2007. Those funds were used as base capital, in effect, to secure additional borrowings for terminal 2. Over the course of a decade, approximately €600 million has been transferred from Aer Rianta International into the coffers of the Dublin Airport Authority.

I do not accept the Minister's suggestion that if this Fine Gael-led Government decided it was desirable to give Aer Rianta International to Shannon Airport, it would have some kind of impact on the capacity of Aer Rianta International to trade successfully internationally. My understanding is that the books of Aer Rianta International show that more than €100 million has been loaned to Dublin Airport. The Minister has said publicly that Aer Rianta International needs to borrow €60 million next year. Perhaps it should start by reclaiming the moneys in question from Dublin Airport. It is an ongoing bone of contention that a company which was established principally to develop Shannon Airport, generate revenues overseas, support balanced regional development, facilitate continued growth and underpin the loss-making infrastructure that was at Shannon Airport is being transferred out of the region without any appropriate support in its place.

When exceptional items are removed, Aer Rianta International made a profit of almost €30 million last year. Some Deputies in the region have made much of the suggestion that Shannon Airport is being separated debt-free. If one goes back through the financial transactions that have taken place between the Dublin Airport Authority, the old Aer Rianta and Aer Rianta International, one will find that Shannon Airport and Aer Rianta International, which I would argue was a constituent part of Shannon Airport, have been of huge benefit to the overall group of companies. That contribution has never been marked against the debts that have been assigned to Shannon Airport. Although there has been an element of commingling of the debt and the revenues that have been generated, there has not been an appropriate write-down of the portion of the debt associated with the investment in Shannon Airport that is linked to the profits of Aer Rianta International.

I would have accepted it if the Minister had come to the House and said this could be reconsidered, or perhaps that we could assess how the profits of Aer Rianta International could be set apart or consider the possibility of setting out Aer Rianta International as an independent company, letting each of the three airports have some stake in, control of or access to the profits that emanate from it. However, he talked about the considerable risks for Shannon and said, effectively, that as the airport is in a bad position at the minute, it cannot get any worse. Of course it can be worse if the targets are not attained.

If the Minister was prepared to take the same gamble on Dublin Airport as he is on Shannon Airport, we would see a very different outcome. In particular, he should be prepared to separate Aer Rianta International and utilise the revenues and profits that emanate from that business to shore up the balance sheet of Shannon. However, that is not happening, unfortunately. I am particularly disappointed that the Labour Party and Fine Gael interest in the region is not forcing the Minister to protect Shannon Airport in this instance. We hear a lot of talk in this House and outside about people's interest in the region. The Minister of State should not seem surprised. I have heard him say that he loves Shannon Airport, that he has used it and that it means a lot to him. If it does, he should stamp his foot around the table with his senior Minister.

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