IRELAND. In the latest twist to the planned government break-up of state-owned airport operator and retailer Aer Rianta, the group’s international division, including all its foreign duty free businesses, could be divided between Dublin and Shannon airports.
According to a weekend report in the Irish Times, which has been close to the central players throughout the long-running saga, the plan for the international division is designed to get around legal obstacles to Minister of Transport Seamus Brennan’s master plan.
Brennan controversially wants to have the State’s three main airports, Dublin, Cork and Shannon, run independently of each other.
The Irish Times said new proposals to smooth the transition involved shelving plans to sell the authority’s Great Southern Hotel group pending a review, and dividing up Aer Rianta International (ARI) between Dublin and Shannon airports. They also suggest that the Dublin Airport Authority fund part of the development of Cork’s new €60 million terminal.
Consultants PricewaterhouseCoopers and solicitors Matheson Ormsby Prentice (MOP) allegedly drew up the proposals and submitted them to the Department of Transport in a confidential document seen by The Irish Times.
The Department hired the consultancy group when Brennan’s plan to break up Aer Rianta ran into unforeseen legal obstacles related to the group’s status as a public limited company.
As revealed previously by The Moodie Report, Irish law forbids the distribution of a company’s assets when the amount exceeds its reserves. Aer Rianta has €200 million in accumulated profits on its balance sheet, but the value of the assets to be distributed comes to €400 million.
Under the proposals, the break-up, due to happen before the end of the year, would be triggered by the payment of a dividend from Aer Rianta International to Aer Rianta.
The report continued: “This would help to boost Aer Rianta reserves. Then the document states that the “˜first airport’, understood to be Shannon, should be transferred to its independent authority. Aer Rianta, which at that point will become the Dublin Airport Authority, will continue to own and operate a “˜second’ airport, Cork, for an unspecified period. During this time, Cork’s authority will have an advisory role in its operation.”
The Irish Times claimed that the Minister is “known” to have considered the sale of both Great Southern Hotels and ARI in order to realise the cash needed for the plan. The consultants say that Dublin Airport Authority/Aer Rianta, should keep the hotel chain “pending a strategic review of its funding and asset ownership requirements”.
The PricewaterhouseCooper report allegedly states that Dublin and Shannon should get joint ownership of ARI’s duty free shops, which include Moscow Sheremetyevo Airport, interests in Aer Rianta International-Middle East, a strong North American operation and others.
