In Dáil Éireann last week Transport Minister Shane Ross was asked by a Fine Gael backbencher to make a statement on “the cause of downgrading of Shannon Airport (and) the economic impacts for the region”.
Although the airport is in State ownership, Minister Ross referred Deputy Noel Rock to the Shannon Airport Authority (SAA), a subsidiary of Shannon Group plc, which he said, has statutory responsibility for the management and operation of Shannon Airport. “As such the issue raised by the Deputy is an operational matter for the company.”
Minister Ross further commented, “SAA is conscious of the need to control its costs so that it can remain competitive and continue to attract new airline business in an increasingly competitive international marketplace. In this regard, one of the proposals that the company has had initial discussions with staff and union representatives is to operate at Category 9 on a flexible basis rather than operate permanently at that level, 24/7, all year ‘round. This would contribute to a more efficient operating model at the airport without any material impact on flight operations. I understand that this arrangement will arise in any event, at nighttimes, for a temporary period of about 26 weeks as a consequence of the resurfacing of the main runway at Shannon which is due to get underway on 25th April next.”
Minister Ross told Deputy Rock his question has been forwarded to the SAA for a direct reply. The basis for the Dublin deputy’s enquiry appears to be the decision by Shannon Airport management to introduce cost-cutting measures. These include a voluntary redundancy scheme and downgrading the airport’s status, as noted by the Transport Minister.
Last month it was reported that management is working on a new masterplan for the State-owned airport which established its independence from the Dublin Airport Authority in 2013. People will recall that the SAA’s original business plan targeted 2.5 million passengers per year by 2021. Shannon Group PLC also aimed at creating 3,000 new jobs in aviation services and finance.
At that time Minister Varadkar stated, “I think it’s defeatist to think that we can’t achieve modest growth by 2021. Quite frankly, if Shannon can’t achieve that kind of growth by 2021, there is no future for the airport.” The newly independent board increased passenger numbers from 1.4 million to 1.7 million by 2015, although this is less than half of the 3.6 million travellers at its peak in 2007.
Along with the cost-cutting measures, management is also proposing a €44 million investment programme over the next five years to include €15m to resurface the runway. The Shannon Group has stated that it is committed to, “developing and investing in our airport and what the Group is proposing are measures to manage its business more efficiently to enable reinvestment back into the airport.
“We have commenced discussions on proposals to operate optimal manning levels to meet the needs of our airline customers.” Shannon Group has suggested that the operational changes will result in a requirement for a lower number of employees and insists, “To that end, we are proposing a Voluntary Early Retirement Scheme to employees over the age of 55 years as at 1st January 2017”.
In addition, Shannon Group says it is seeking to agree a staff redeployment programme for a number of business areas. The Group says it will also require a number of measures “which are vital to ensure we meet the needs of the business in the most cost effective manner. Among them are roster and shift changes, work practice changes and other efficiencies. These savings will bring Shannon’s competitiveness closer in line with accepted international aviation standards and ensure revenues are available to reinvest and drive employment elsewhere on the airport campus.”