Séamus Kirk (Louth, Fianna Fail)
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To ask the Minister for Transport, Tourism and Sport if he will provide an update in his plans for the separation of State airports; and if he will make a statement on the matter. [45183/12]

Joe Carey (Clare, Fine Gael)
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To ask the Minister for Transport, Tourism and Sport if he will report on the progress that has been made regarding the separation of Shannon Airport from the Dublin Airport Authority; and if he will make a statement on the matter. [44956/12]

Patrick O'Donovan (Limerick, Fine Gael)
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To ask the Minister for Transport, Tourism and Sport if he will provide an update on the separation of Shannon Airport form the Dublin Airport Authority; the progress that has been made at Shannon to attract new routes to the airport; and if he will make a statement on the matter. [44954/12]

Pat Breen (Clare, Fine Gael)
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To ask the Minister for Transport, Tourism and Sport if he will provide an update on Shannon Airport, with particular reference to the status of proposals to separate Shannon from the Dublin Airport Authority; and if he will make a statement on the matter. [44952/12]

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 9, 31, 41 and 58 together.

These questions relate to the separation of Shannon Airport from the Dublin Airport Authority. As the Deputies will recall, following the Government decision in principle in May to separate Shannon Airport from the Dublin Airport Authority and merge it in a new entity with a restructured Shannon Development, a steering group of senior officials from five key Departments was established to bring forward proposals for the implementation of that decision.

As part of the restructuring of Shannon Development, the latter's functions in respect of enterprise supports, both for domestic companies and inward investment, will transfer to Enterprise Ireland and the IDA respectively while the agency's tourism functions, including the regional tourism offices, will transfer to Fáilte Ireland. In this regard, last month the Government approved proposals from the Minister for Jobs, Enterprise and Innovation to amend the IDA Act 1986 to enable Enterprise Ireland and IDA Ireland to carry out enterprise development functions in the Shannon Free Zone. These changes will bring a more integrated, streamlined and focused discipline to the delivery of both enterprise support and tourism services in the region.

The steering group is being assisted by two task forces which were established in June. The aviation business development task force is seeking out and evaluating aviation-linked business opportunities that could be associated with the new Shannon entity while the change management task force is developing proposals for transitional arrangements and for the appropriate corporate, managerial and operational structures of the new entity, including matters related to IT, HR, finance and property.  This latter task force is also drawing up proposals for the transfer of Shannon Development functions to the IDA, Enterprise Ireland and Fáilte Ireland.

I understand that these groups are well advanced in their examination of the range of issues that must be assessed in some detail in order to arrive at the best way forward for the new entity at Shannon. I also understand that the timescale for the task forces to submit their proposals remains mid November. When those proposals have been evaluated by the steering group, both myself and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, will revert to Government before the end of the year with detailed proposals including an implementation strategy for the establishment of the new entity.

In the meantime, Shannon Airport is continuing its business operations including maintaining its existing airline customers and attracting new business where possible. This includes a range of schemes on offer to incentivise airlines to increase services and passenger numbers at the airports.  In addition to the usual schemes, a new growth incentive scheme was introduced last year by the DAA at the three State airports which is due to run until 2014.  This scheme is one element of the three pronged strategy announced last year by Government as part of the jobs initiative to encourage inbound tourism.  In this regard, the recent decision by United Airlines to operate a new Chicago-Shannon service five times a week next summer is very welcome.

Timmy Dooley (Clare, Fianna Fail)
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I thank the Minister for his comprehensive reply. He has indicated that the steering groups are on schedule to bring forward a business plan, which was probably part of the original legislation. The Minister spoke about the breaking up of Shannon Development. This very important agency has been of strategic importance to the mid west region and I am very disappointed that this Government has decided to dismember it. The Minister has not spoken about Shannon Heritage, which is really the pool of assets owned and controlled by Shannon Development and consists of the tourism attractors. Examples would be Bunratty Castle and Folk Park and a number of other castles and tourism attractions in the region. Could he identify where he expects those assets to ultimately reside?

Aer Rianta International is a very significant asset. It was created in Shannon and has provided huge revenue to Shannon Airport initially and latterly to the Dublin Airport Authority through the way the three airports were pulled together. What does the Minister intend to do with Aer Rianta International? It is hoped and expected that he will ultimately decide to assign Aer Rianta International to the new independent State airport at Shannon. It would act as a very significant contributor to meeting the bottom line cost to ensure the airport will be able to get through the transition period involved in moving from the protection of the group of airports to going it alone. It would be helpful if the Minister could clarify that matter.

Leo Varadkar (Dublin West, Fine Gael)
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I do not know what the final proposal of the steering group will be with regard to Shannon Heritage. There are three options. It can either become a company in its own right that is totally separate from everyone else, a subsidiary of the new Shannon entity or a subsidiary of Fáilte Ireland. Shannon Heritage Limited does a very good job and runs the sites very well so wherever it ends up, it will do a good job.

The general consensus emerging from people I speak to about this is that it would not be appropriate for it to be a subsidiary of Fáilte Ireland because Fáilte Ireland is moving out of tourist attractions. It will either be separate in its own right or, more likely, a subsidiary of the new Shannon entity where it probably belongs. In practical terms for the people working there it will not make a huge difference.

It is the case that Aer Rianta International started in Shannon but it is now almost entirely an international business and much of its investments are linked to the group rather than to one airport in the group. It is intended that Aer Rianta International will remain part of the Dublin Airport Authority which will be renamed. It is also intended, if possible, to allow the new Shannon body to be debt free. Shannon Airport's debts are entirely its debts and they would be much higher were it not for Government measures in the past. If Shannon Airport's debts were to stay with the DAA, they would probably be similar to if not greater than the value of Aer Rianta International if it were sold. One must bear in mind Aer Rianta International has very few assets. It operates concessions but does not own very much.

Joe Carey (Clare, Fine Gael)
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The Government has made Shannon and the mid-west a priority and I compliment the Ministers, Deputies Varadkar and Bruton, on their work to date. I welcome the fact the work of the task force is on schedule. This work will result in the dawning of a new era for Shannon and it is important that is brought to a conclusion as soon as possible. Does the Minister have plans in place to appoint a board to appoint a chief executive officer? Will he indicate a timeframe for this? What is the Minister's view on how Shannon Airport will work? Is he optimistic about separation?

Timmy Dooley (Clare, Fianna Fail)
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Send on the CV.

Leo Varadkar (Dublin West, Fine Gael)
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I agree with Deputy Carey. I am very keen to bring this project to a conclusion. Like most things I have started in this job, it has taken longer than I thought for various reasons, and there are always complications, but we are on target for mid-November. If all goes to plan, it would make sense to appoint a board and begin the search for a chief executive officer sooner rather than later.

Given the work done by the aviation development task force, I am increasingly confident that separation will work. There is genuine and real interest from industry in investing in Shannon. The infrastructure is in place and it does not involve building runways or hangers or involve support from Government. All it requires is the right business deals. The reports I have received on the work of the task force are very encouraging.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I call Deputy Kieran O'Donnell who represents the Limerick interest.

Kieran O'Donnell (Limerick City, Fine Gael)
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Limerick and the mid-west.

Timmy Dooley (Clare, Fianna Fail)
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Just do not claim the airport.

Kieran O'Donnell (Limerick City, Fine Gael)
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Many Limerick people have worked in the airport over many years. It has been a very positive reciprocal arrangement.

I welcome the comments made by the Minister, Deputy Varadkar. I compliment the work of the aviation business development task force led by Rose Hynes and the change management task force led by John Fitzgerald. With regard to separation, from a regional perspective it is very important Shannon Airport is put on a sustainable financial footing by being debt free and being able to promote the airport as a destination. The ancillary activities are crucial and we must never lose sight of the fact it is an airport. I ask the Minister to be conscious of this.

I welcome the fact the Minister expects to receive reports from the two task forces in mid-November. When does he expect that he and the Minister, Deputy Bruton, will bring the reports to Cabinet for approval to progress with separation? When does he expect a formal announcement to be made on appointing a board and chief executive officer? When does he expect to make an announcement on corporate governance and the financial structure?

I represent the constituency of Limerick city, which includes a portion of County Clare, and I am very glad to represent it. The people of the mid-west are looking forward to having an airport for the region. We want a good take-off and the two elements required for this are corporate governance and a proper financial structure.

Leo Varadkar (Dublin West, Fine Gael)
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The Deputy has made a very valid point. The new Shannon company needs to be on a sustainable financial footing. Quite evidently there is no point in doing it otherwise. However, it also needs to be commercial. Quangos and State agencies are on a sustainable financial footing because they receive money from the Government. I do not want this to be a quango or a State agency. I want it to be a successful company which is on a sustainable financial footing from day one and which, from then on, will have to make a go of it. If it is successful, it will succeed, grow and improve each year. If it is not it will not, and this is the risk that arises with any commercial venture.

The Minister, Deputy Bruton, and I expect to bring the conclusions of the working groups to Cabinet in November and all things going to plan, assuming we will have Cabinet support, I expect to proceed with appointing a board by the end of the year, which will then recruit a chief executive officer. Asking me how long it will take to recruit a chief executive officer is a different question and I cannot answer it. Something else I have learned is that it can take a bit of time to do this.

Kieran O'Donnell (Limerick City, Fine Gael)
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When does the Minister expect it will be made known in the public domain that the formal corporate governance structures have been put in place? When will the final Cabinet proposal for the future structure of Shannon Airport in its separated form be known?

Leo Varadkar (Dublin West, Fine Gael)
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The plan is to publish the plan for all to see and begin implementation in November, and if not in November by the end of the year. We are in limbo and huge patience has been shown in the region on this point. I do not want us to be in limbo for much longer. The plan is to have everything done and dusted and agreed by Cabinet by mid-November, or at the end of the year by the latest, and then to begin implementation immediately. The legal work on separation and the business plans could take time, but for all intents and purposes the company could be established with its own board and be running itself in the new year.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister for his response. The steering group is very important, as are the growth incentives and the recent announcement made by the Minister on the five flights between Shannon and Chicago. It shows we can look for new routes and find them. A debt exists and I am not clear on how appointing a new chief executive officer or directorship will deal with it. Will the State take some responsibility for the debt? Are we still considering selling off State assets? I am concerned that Shannon Airport would be one such asset. It has given phenomenal service to the mid-west and the country over the years.

Leo Varadkar (Dublin West, Fine Gael)
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There is no question of the State taking on the debts of any airport. There is potential to work out the debt whereby the debt would stay with the DAA which would continue to pay interest on it but it would no longer have to cover the operating losses which exist at Shannon Airport. It could be done in such a way that it would not seriously impact on the balance sheet of the DAA, or what will be the new DAA which will have a new name taking into account that it will not just be a Dublin body. This must be worked out, but there is certainly no question of the Exchequer taking on the debts of any airport.

There are no plans for the sale of Shannon Airport to a private buyer, nor has there been any expression of interest. If someone was willing to invest in the airport, one could not turn a blind eye, but it has not arisen and there are no plans in that regard.

Timmy Dooley (Clare, Fianna Fail)
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I thank the Minister for his frankness, but he and I differ significantly as regards airports. He believes that they should be commercial ventures. While I accept his point about putting them on a secure financial footing, he has also stated previously that, after being given the best chance, they either take off or crash land. If we are serious about balanced regional development, which has been a hallmark of successive Governments, one cannot view an airport, which is critical infrastructure, as a commercial venture no more than one can view the tunnel connecting counties Clare and Limerick under the River Shannon in the same way. My colleague, Deputy O'Donnell, will appreciate that. While the airport is such a venture to some extent, the State underpins it and underwrites the losses.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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A question, please.

Timmy Dooley (Clare, Fianna Fail)
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Will the Minister review the Government's policy position on airports such Shannon and Knock, the former in particular, given its strategic access to the region? It should not need to be positioned as a commercial venture.

Joe Carey (Clare, Fine Gael)
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Having recently been briefed by Ms Rose Hynes, I was encouraged by the work of her steering group. I compliment her in that regard. Passenger traffic will be the airport's core activity, but I wish to discuss new business. I do not know how much the Minister can say today, but it would be helpful if he could tell the Dáil about the new types of activity he envisages for the airport and the business and jobs such activity might generate.

Leo Varadkar (Dublin West, Fine Gael)
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To advise Deputy Dooley, it would be a major mistake to start a new company by telling it that it would be underwritten and that it would have a pile of money as a safety net if something went wrong. One way to ensure that a commercial venture fails is to tell it that it does not need to succeed. We must put it up to Shannon Airport to succeed on a commercial basis. It can do it.

The Deputy mentioned balanced regional development. The Shannon Foynes Port works on a commercial basis in the region, as does Galway Port. The west is not such a basket case that it cannot be a commercial success. We should aim for commercial success as a starting point. There is a risk in even suggesting otherwise or in giving people licence not to succeed by putting in place safety nets, subventions, etc.

I compliment the task force on its work. I appreciate the phenomenal pro bono work of Ms Hynes and Mr. John Fitzgerald, the chairpersons.

Shannon Airport is predominantly a passenger airport and will continue to be so. We hope to regain some lost business in terms of passengers and aviation firms, but the discussions with the businesses in question are commercially sensitive and I cannot go into them in detail.

Peter Mathews (Dublin South, Fine Gael)
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I have come to this debate late, but could Shannon Airport be a location for the Air Corps? It could be a base to help in the policing of fishing fleets and so on off the west coast. We could think laterally.

Timmy Dooley (Clare, Fianna Fail)
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It would protect Government Deputies.

Peter Mathews (Dublin South, Fine Gael)
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The Air Corps could move from Baldonnel.

Kieran O'Donnell (Limerick City, Fine Gael)
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Decentralisation mark 2.

Leo Varadkar (Dublin West, Fine Gael)
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That is a question for the Minister for Defence. Deputy Mathews can ask him about the matter. As we have a small airforce, moving to Shannon Airport would mean closing Baldonnel. The Coast Guard is doing well operating out of Shannon Airport. I would need to pass the Deputy's suggestion on to the Minister for Defence.

Dessie Ellis (Dublin North West, Sinn Fein)
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It would get the rendition flights.