Shannon's hopes of autonomy grounded

One More Thing: Now that Aer Lingus is taking flight from Shannon, the odds on the Co Clare airport ever becoming an independent…

One More Thing:Now that Aer Lingus is taking flight from Shannon, the odds on the Co Clare airport ever becoming an independent entity have lengthened considerably.

As it stands, Shannon is controlled by the Dublin Airport Authority. This is in spite of a long-term Government plan to give both it and Cork Airport full autonomy from Dublin.

This can happen only if both airports can produce viable business plans showing they are capable of standing on their own two feet.

Aer Lingus's decision to axe its Shannon-Heathrow route obviously affects Shannon's ability to pull that off. Aer Lingus carried about 320,000 passengers a year on the route, roughly 9 per cent of Shannon's annual traffic.

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In recent years, Shannon has relied on US military traffic to keep its head above water. In 2006, 280,785 troops used Shannon, generating an estimated €7.4 million. This was down on 2005, however, when €9 million was earned.

This is not a reliable or sustainable revenue base in the long term, as noted in DAA's 2006 annual report.

Management at Shannon have worked hard to cut the cost base, agreeing a €36 million restructuring deal with staff to reduce the headcount by 200.

It also cut a five-year deal with Ryanair that has led to Michael O'Leary operating more than 30 routes from Shannon. Ryanair puts more than two million passengers a year through Shannon, more than half the airport's annual total.

Having Ryanair as a large customer can be a double-edged sword, however. Although it brings a lot of business to the airport, it can also scare off other low-cost carriers.

In summer 2006, Easyjet axed services from Gatwick to Shannon, Cork and Knock after Ryanair launched competing services.

Some years before that, Go was forced to abandon routes from Dublin to Glasgow and Edinburgh in the face of fierce price competition from Ryanair.

Then there's the Shannon stopover. It will go in April, as part of the Open Skies deal agreed by the US and the European Union.

So far, Aer Lingus and a couple of the US airlines (Delta and Continental) have committed to Shannon for the immediate future. That position could change, however, and Knock's recent transatlantic deal with Flyglobespan has only added to the competitive pressures on Shannon.

Two transport ministers (Séamus Brennan and Martin Cullen) have come and gone since the wheels were put in motion on separating Shannon and Cork airports from Dublin.

Given the current outlook for Shannon, the incumbent Noel Dempsey might well be the third.