Shannon airport is looking to the future after the Heathrow controversy, writes Ciarán Hancock, Business Affairs Correspondent

On Sunday, Aer Lingus will operate its last flights from Shannon to Heathrow before switching the valuable slots to Belfast, where it feels it can earn more money.

It will cut a link that has lasted many decades and bring an end to the hopes of many out west that, somehow, the decision could be reversed.

Shannon Airport Authority (SAA) chairman Pat Shanahan still regrets the decision but says it's time to move on.

"The major concern was connectivity, particularly for businesses [in the west of Ireland]," he says, adding that the recent deal with CityJet to establish a link to Paris Charles de Gaulle from February should address that issue.

"It's time now to move on and focus on growing our services out of Shannon," he says.

It's about 10 weeks since Shanahan quit his executive role at Shannon in protest at the Dublin Airport Authority's decision last June not to share information that Aer Lingus planned to axe the Heathrow route.

It would be August before Shanahan discovered Aer Lingus's plans.

"The DAA had their issues with confidentiality but if we had known six weeks in advance of the decision we would have had the opportunity to change Aer Lingus's mind or to find an alternative carrier beyond the glare of publicity," Shanahan explains.

"I was disappointed that I wasn't informed in advance in time to make a difference."

Shanahan's focus is now firmly on securing Shannon's independence from Dublin.

In November, the airport submitted its business plan to the DAA and the Government and Shanahan is now keen to get on with it.

It's a point he will seek to drive home next Wednesday when he appears before the Oireachtas committee on transport.

"This business plan clearly demonstrates that Shannon can be independent in a commercial state and in an open skies environment," he says.

With a strong wind at its back, Shanahan believes that Shannon can achieve five million passengers within five years.

It carried 3.6 million in 2007, the same number as the previous year.

He expects CityJet to carry about 100,000 passengers to Paris this year while Ryanair, which accounts for about half Shannon's traffic, is likely to open yet more routes.

Shanahan is coy about certain aspects of the 10-year business plan, including revenues and profitability. Industry sources have suggested that the airport turned a profit last year of about €2 million.

The plan does envisage Shannon's €67 million debt being assumed by the DAA and a once-off capital injection to help it pay for a new US customs clearance facility and works to the airfield and other infrastructure.

The new customs post is believed to be costing about €7 million.

"Once those initial investments are done then Shannon can sustain its ongoing capital requirements from its cash flow and profit generated," Shanahan says.

In addition, the SAA's financial projections envisage just 20 per cent of the current level of US troop movements through the airport.

US soldiers have been an important earner for Shannon since the outbreak of hostilities in Iraq: 263,000 troops used the Co Clare airport in 2007.

Shannon has already undergone significant changes to its operations. More than 200 staff were let go last year as part of a €36 million redundancy programme funded by the DAA.

This is expected to yield cost savings of €10 million a year. "Shannon is now on a very sound financial footing."

Shannon's separation from Dublin requires the approval of the Ministers for Finance and Transport.

It is also dependent on Cork Airport achieving separation, a debate that has become bogged down on the debt racked up by its new terminal building.

"I would hope that the decision could be made within months. . . quite possibly over the next two to three months," Shanahan says.

There are other clouds hanging over Shannon. The open skies agreement between Europe and the US has brought an end to its stopover.

Shanahan says the airport expects to carry 100,000 fewer passengers on transatlantic routes in 2008.

The SAA has decided to reduce transatlantic landing charges by 50 per cent for the winter 2008 schedule to stimulate traffic.

"This will make it more attractive for airlines to continue year-round services," he says.

"For 50 years people have been writing off Shannon but I think it has a really bright future."