ALONG WITH giving Shannon airport its independence from the Dublin Airport Authority, Minister for Transport Leo Varadkar will propose to Government that a tax-incentivised international financial services centre-type model for the aviation industry be established at Shannon.
Speaking at a Shannon Chamber of Commerce event yesterday, Mr Varadkar said “it is my aim and intention to do something very exciting and very innovative for Shannon that will recapture that early spirit that was there with the pioneers of aviation in this region”.
He said this “separation plus” involved giving Shannon airport its independence and also combining it with other agencies and assets.
“The model we are most likely to propose for Shannon is the development of an international aviation-based services centre for the region based around Shannon airport and the lands around Shannon,” he said.
Mr Varadkar said the proposal would seek to attract new industries “that don’t currently exist in Europe, such as aircraft refitting and aircraft recycling”.
The Minister had intended to make an announcement on Shannon airport’s future before Easter, but Mr Varadkar said he hoped to bring a proposal to Government in April.
“Working on this proposal is taking a little bit longer than we thought,” he said.
“We have to examine State aid rules and anything that may be done on the tax front.”
Mr Varadkar added: “It is something that is going to work and be a big turnaround for the region.”
He said the proposal would require private sector involvement and investment.
However the Government “will need to have step-in powers to intervene in the unlikely event that things go wrong”.
He said that after Government has agreed a way forward, an interim board or interim taskforce would be appointed to draw up a business plan for Shannon.
The Minister warned that if nothing was done for Shannon the airport stood in danger of being passed out by Knock airport in passenger numbers, despite a current gap of over 900,000 passengers.
“I think if the trends continue as they are it will happen because Shannon’s numbers are already down 20 per cent this year and Knock is still growing. It is only a matter of time without a change in policy.
“My personal preference for Shannon is to end the current half-way house that isn’t working and give Shannon the tools it needs to turn the situation around to get passengers, employment and investment up,” Mr Varadkar said.
The Minister said independence for Shannon would allow it to pursue new routes aggressively.
On Shannon’s estimated €100 million debt, Mr Varadkar said: “It is very obvious to me that if Shannon is going to succeed as an independent airport it is going to have to be given a good start.
“It won’t be able to succeed if it starts off with a debt of €100 million or close to that, and it won’t be able to succeed if it doesn’t have working capital to invest and to absorb losses in the initial years if there are losses,” said the Minister.
