IRELAND. Dublin Airport Authority (DAA) Chairman Gary McGann has told a parliamentary transport committee that Aer Rianta International, the international duty free-to-airport investment arm of the former Aer Rianta, should remain part of DAA.
Under the terms of the break-up of Aer Rianta last year, the three airports – Dublin, Cork and Shannon – were intended to have autonomous boards and be recreated as individual authorities. But only DAA has been put in place to date due to the heavy debt burden of the two other facilities.
As a result the exact ownership of Aer Rianta International has not been resolved though for now it is effectively being managed and operated as a subsidiary of DAA.
The profit contribution from Aer Rianta International’s combined interests rose to €17.4 million in 2005, up from €9.4 million the previous year. Another strong performance by its international retail operations, particularly in the former CIS, and a higher contribution from airport investments were the principal reasons for the +85% rise.
According to a report in today’s Irish Times, McGann, speaking before the Oireachtas (Parliament) Joint Committee on Transport, revealed that DAA has reserves of just €140 million while being asked to assume debts from Cork and Shannon of €300 million.
McGann said DAA needed to have enough reserves to break up the three airports but said this was currently impossible due to debt levels. He said that, while this may “sound like a technical accounting issue”, unless the DAA had enough distributable reserves it could not facilitate the separation of the three operations.
The sale of Aer Rianta International has been touted in some quarters as the solution to paying off the debt. But that will hardly appeal to DAA which can use the profitable division’s returns to facilitate its own heavy and overdue investment in Dublin Airport. DAA Chief Executive Declan Collier has insisted the business will not be sold though the Aer Rianta-owned loss-making Great Southern Hotel chain is being divested.
McGann said Aer Rianta International was unlikely to become part of Shannon Airport and that it needed to be sheltered by a company with a strong balance sheet. He said “strong logic and intuition” would indicate it should become part of DAA.
His and Collier’s messages about Dublin Airport in particular received a mixed response from the committee. Several members said that while there was congestion at peak periods, the airport generally operated well. However, Senator Shane Ross said airport customers were treated with “total and utter contempt” and the airport was the “gateway to rip-off Ireland”.
He claimed foreign exchange outlets at the airport levied the highest commissions in the Republic.
MORE STORIES ON DUBLIN AIRPORT AUTHORITY AND AER RIANTA INTERNATIONAL
Aer Rianta International profits soar; Dublin Airport Authority posts strong 2005 results – 10/04/06
Dublin Airport Authority committed to “˜building the ARI brand’ says new CEO – 29/09/05
