CORK

[840]

Assuming Cork Airport gets stuck with an 80 million debt, it will mean an annual cost to the airport of between €5 million and €15 million depending on the credit rating that the CAA gets and whether their aim is to make the interest payments or actually start paying off the debt. Assuming a figure at the mid-point, it would mean finding an extra €6 per return passenger.

The most likely target would be the cost of parking. It's an easy way of not pissing off the airlines. The extra amount per passenger is unlikely to be enough to prompt many passengers to switch to Dublin or Shannon. Although, it's unlikely that all the costs could be recouped in this way.

Another strategy would be to look for some capital sum to help pay down the debt. This could mean land disposals around the airport, selling off the right to operate the car parks for a lump sum or perhaps selling the old terminal.

I would seriously doubt that a significant extra charge would be passed on to the airlines. Besides many of them probably have contracts that wouldn't allow it.

As regards whether Cork Airport should get the debt. In theory, it probably should. However, there have to be questions about how a business can adequately plan when it doesn't know its debt level, about whether the terminal and new facilities would have been developed at a slower pace if CAA was planning it as a standalone business and about whether a major competitior should be allowed to order the building work and get you saddled with a massive debt making competition more difficult.

On the Shannon issue, if Shannon were allowed to go debt-free and Cork wasn't, there would be a case to be taken to the European court over it (if Cork gets the debts associated with it's new facility, Shannon should be responsible for it's infrastructure and general losses over the years). However, I have little hope that the airport board would have the balls to stand up to the minister who appointed them like that.

[eastjimmy]

hi all, i aggree 100% with mr840 above, it looks like cork is about to be screwed big time yet again.. but i can not understand why shannon is not coughing up for the building also ... i can see some of you looking on in dis belief but think about it,,who paid for all the building in shannon not to long ago it came from the aer rianta budget... and you could almost see the head honchos in dublin thinking a while back"hmmmm gee how will we fund the building in shannon??? i know lets not do any thing at cork again this year tell them times are hard..." ..
also he makes a valid point above how can a new board plan fro the future if they dont know what sort of debt they will have on there shoulders....
am so so so fed up with all.. airbridge... inadequate and terrible space in terminal. not enough stands.. no covered walk way to the far off stands down in togher, no bus facility to far off stands.. no cat 3 equipment at the worst airport in the country weather wise.. its fu??in bullsh@ite.. it really is.. still waiting for Mr. Cullen to reply should be interesting...

[Tom the Tenor]

There has been a lot of copy about the airport and new terminal in the local media today in Cork and especially in the Irish Examiner newspaper. The newspaper's editorial is severely critical of Minister Cullen's saying little on the matter so far which is in contradiction to his usual standard of wanting to be at centre of everything whether be it the stored and unused voting machines costing 60millions Euros or 52 millions of Euro spent refurbishing Farmleigh House, the State guest house for visiting VIPs. The government put Mr Cullen in charge of announcing last year's new initiative on transport that is estimated to cost 36 billions of Euro in the years ahead yet no money can be found for Cork Airport! Not good enough, Mr Cullen.

The Lord Mayor of Cork, Councillor Deirdre Clune (FG), convened a meeting today of the Cork members of the Oireachtas including the two senators in order to try and seek a cross party consensus on the new terminal. The meeting took place as scheduled this morning. No details yet but hopefully it is a sign the matter is being taken up a level politically and the pressure will be unyielding from now. Yes, the suggestions above about writing to your TDs and Minister Cullen are spot on and I too would urge anyone whom has a positive interest in Cork Airport to do the same. Letters to the newspapers are another good tool in the armoury so get those thoughts together now and start scribbling. It will all help in the future of our airport at Cork.

Cork Airport needs to be able to compete for new business without a millstone of enormous debt around her neck and the unfair advantages that Dublin and especially Shannon has enjoyed for so long must and will be brought to an end.

Do your bit for Cork Airport! Ar aghaidh Aerfort Chorcai!

[CCR]

As the Government is loaded with cash from the buoyant economy, wouldn't is not make sense for the government to pay for the Terminal Debt thus relieving both the DAA & CAA of the debt. Its essential infrastructure!!!

[840]

Aer Arann is to launch Jersey (1x weekly) and Angers (3x weekly) in May.

Birmingham is still not bookable

[eick320]

Aer Arann are pulling out of birmingham , although passenger figures were strong yield was way down ... thats 4 rotations lost a day for the summer. Has anyone any news on SKY the new handling company in the airport, have heard they have secured the Spanair contracts for the summer bad news for servisair especially when rent for check in desks etc will rise by 300%. Also stories of staff having to pay for car parking to pay for the debt !!!

[Tom the Tenor]

The early birds among you may have heard Cork Airport being discussed on the RTE Radio flagship Morning Ireland news programme today just before 7.30 am. Councillor Michael O'Connell (Labour) in his role as chairman of the South West Regional/Cork Airport Consultative Committee (or something like that!) set out the reasons why Cork should not be saddled with the Euro 160 million debt. He made a fair hand of it. What should be focused on that he missed out on is 840's comment above about how it was Aer Rianta initially commissioned the new terminal not the new CAA therefore that is enough reason alone why the government should honour the committment it's Transport Minister of the time, Seamus Brennan, gave saying that a new Cork Airport Authority should start off being debt free. He made good comment on the improvements/refurbishments made at Dublin and Shannon and how Cork has always had to play catch up.

So, does it look like Aer Arann are to drop Cork-Birmingham? Troubling. Going the same way now as Manchester has gone with no double daily flights? This is bad. Time for Cork's new marketing manager, Mr Cullinane, to at last cut his teeth and try to save this or failing that can EI be coaxed to somehow reschedule their summer programme and start a little earlier on their new service to Birmingham?

The new Aer Arann flight from Cork to Angers is very welcome and should do well and from their point of view should be relatively high yielding with minimal risk. Hope they do well!

[EI-MICK]

we all know about catch up and the pro dub and sha monopoly and my email to cullen said a bit more,and of course no reply.

is that sky thing not the new servisair name????

[eick320]

No SKY are the new third party handling company, i think they have taken over the TNT cargo contract already and are moving into passenger handling very shortly. They handle the likes of RE , OK and Ma in Dublin , their allowed in due to the fact that Cork Airport now handles excess of 2m pax

[asianfly]

more on the terminal fiasco.....becoming more like a soap opera with every passing day....from the Irish Independent today

Airlines fly off the handle over €160m terminal debt
AIRLINES and aviation service providers warned last night that they will be forced to massively revise operations from Cork Airport if, as it is feared, charges are dramatically increased to fund its €160m new terminal.

The South Western Regional Authority (SWRA) yesterday staged an emergency meeting over the escalating Cork Airport crisis - amid fears an €80m debt could cost the airport more than €4m per annum in additional costs.

Cork Airport has already caused outrage amongst some airport operators by proposing to increase check-in desk fees by a whopping 900pc - up from €3,000 to €28,000 per annum.

Furthermore, all non-Cork Airport employees will now have to pay for car-parking - a move which alone could generate more than €250,000.

But greatest concern focuses on the passenger handling charge which currently stands at around €9. If this is increased to around €13 per passenger - effectively to fund the terminal debt - it will make Cork significantly more expensive than either of its rivals, Shannon or Dublin.

Last night, sources within two major airlines - Aer Lingus and Ryanair - warned that their existing operations and new route proposals from Cork are based on current charges.

Ryanair described the new terminal as a 'Taj Mahal'.

Ironically, the controversy over the airport debt escalated further last night with two Government Ministers clashing over the €80m involved.

Junior Minister, Batt O'Keeffe, claimed that former Transport Minister, Seamas Brennan, was wrong to offer a debt-free guarantee to Cork airport.

Minister O'Keeffe said that while Minister Brennan - who is currently in the Department of Social Welfare - did promise in 2003 that Cork would begin independent airport operations debt free, this assurance did not take into account the full legal restraints involved.

He pointed out that, by 2004, Minister Brennan had qualified this debt assurance in a Dail statement.

"He clearly outlined that there were legal constrictions and that Dublin Airport could only take on the full debt if their distributable assets matched up and that this was enshrined in company law," Minister O'Keeffe said.

Opposition TDs slated this explanation as "total rubbish".Munster MEP Simon Coveney (FG) said it was "absolutely beyond belief" that any Cabinet Minister could offer a debt assurance like that delivered by Minister Brennan without being properly briefed by Department officials.

"Does anyone seriously expect us to believe that a minister would offer an assurance about a multi-million euro debt without advice from the civil service," he asked.

Economy

SWRA director, John McAleer, warned that the whole debt issue is not just about Cork Airport but the economic well-being of the entire Cork-Kerry area.

"Cork was very happy that it had a chance to start out without a huge capital debt. Our concern from the SWRA point of view is that this is much bigger than an airport - this is about the entire economy of the region," he said.

Government TD and Deputy Chief Whip, Billy Kelleher (FF), said he was concerned that Cork be treated in the same fashion as Shannon Airport.

"Shannon got a fantastic new terminal a number of years ago and, as far as I know, it has not been expected to foot any major portion of the cost.

"I think Cork should enjoy precisely the same treatment," he declared.

The Dublin Airport Authority - which faces funding a brand new terminal in the capital - are refusing to accept the full €160m debt generated by the Cork facility.

Cork Airport is adamant that, irrespective of the debt issue, the new €60m terminal will open as planned next May.

[Tom the Tenor]

Yes, that is an excellent review of the near comical situation of the goings on up above at the asylum in today Irish Indo' and as a Dublin newspaper they are covering the new terminal story very well which is at last getting a good political airing at both local and now at national level.

Let us hope that it all works out right for Cork Airport.

[Faire d'income]

and the unfair advantages that Dublin and especially Shannon has enjoyed for so long must and will be brought to an end.

Tom it is difficult not to comment on your demented rantings. What unfair advantages exactly has Dublin enjoyed over Cork. Dublin operates at 133% of its capacity with not a sod turned on future construction and is likely to be lumbered the cost with yet of another Cork aviation screw up.
Yet Mr. Gombeenman thinks Dublin Airport should pay for everything. Your thinking is worse, given today's less naive population, than the most ludicrous Shannon lobby position.
Any solution to Cork's financial mess should be dealt with by the idiots in government that created the fiasco. Dublin has had to operate with a severe handicap for all of it's existance due to the Shannon lobby. Now it seems Cork is to try to beg it's way out it's current situation. Someday I would like to see the 'cap in hand' merchants that plague this country dispatched to a real life in a real world. Cork is well able to fend for itself without clowns like Tom the Tenor playing the poor mouth all the time.

[ryan2000]

It's not a question of Dublin servicing Cork's Debt. Why should the DAA keep all of the assests from the Great Southern Hotels and Aer Rianta International. Let's distribute them among the three airports.

Cork was starved of investment for decades and now some people expect it to carry a massive debt for work that should have been carried out years ago.

I can't see Cork being established as a seperate company with a 200 milion euro debt, it would immediately be in reckless trading territory.

Years of neglect at Cork and indeed at Dublin are now taking their toll and Irish Aviation Policy is been exposed as a farce.

Any country that allows its 21st Century aviation policy to be based on the flying boat era i.e the Shannon Stopover is asking for trouble.

2008 is simply too late and Irish Aviation will be held back for decades.

[Tom the Tenor]

Faire d'income, you will receive my full attention later once I get some rest after working a very long day today. However, it looks like you are in some ways just as frustrated as I am at the state our airports are in now - what our airports at Cork and even at Dublin have had to sacrafice to keep the sacred cow in the midwest as number one is indeed dementing. It terms of Cork it seems to me a kind of mindset was allowed whereby Cork was hardly looked on being at airport at all for a long, long time. Dublin saw this weakness too and the investments in infrastructure went west and never south.

Just how is Cork able to fend for itself with the potential of a Euro 160 million debt to service? You have got to be kidding, right? Read the Irish Indo' article again above. Seems pretty clear that EI and FR are giving notice on not wanting to fork out more on higher fees. Take them out of the picture and Cork is left with little else?

Yes, what this is now is a political mess. You are right there and it will be the idiots whom you mention that are in government that will have to sort out this matter now. The Irish aviation policy for the last 60 years or so is now on it's arse.

[840]

How about this as a solution...

Cork Airport is sold debt-free. The money raised goes to reduce the debt, which is held by DAA.

I know there would be plenty of screaming from the unions and a lot of local politicians, but at least it would be fair to both Dublin and Cork airports.

[ryan2000]

840 reply

840. That's the one option nobody wants to contemplate ! at least not in the run up to a General Election. It's amazing that State Enterprise is still thriving in Ireland when the rest of the EU seems to be moving in the opposite direction.

[Tom the Tenor]

Cork Airport - Sturm und Drang!

Cork made a profit in 2005 of about 6 million Euro so in theory a privatisation of the airport if it was sold debt free might be possibly attractive to investors with that kind of loot. However, look at the history of attempted privatisations. When there has been talk of privatising EI over the last few years the ol' chestnut that nothing can happen until after the next General Election has been regularly given an airing and with Dithering Bertie staying in charge it is likely nothing fast is going to happen be it in Dublin with EI or in Cork with the new terminal. This makes the Cork terminal story even more interesting as to what kind of outcome there will be. Another option might be to reabsorb Cork fully back into the DAA. Charges might have to be pretty similar in those circumstances?

Cork Airport is unique - she has some quality that no other airport has anywhere. She just gets under your skin and there you are, hooked! The mere mention of the place stirs the emotions and leaves one on another plane be it a pleasurable one or one of frustration and angst. For example, take a look at Faire d'income's hissy fit outburst. The storm, the stress!

That is Cork Airport. Love her and hate her all in the same moments! She is merciless with your emotions! Small airport, big heart!

[neidin]

Cork did not make a profit of 6 Million in 05. It was closer to 2m. It only made a profit last year as on that P&L and Bal sheet no account was taken for curent capital works and associated expenses. Now the maintenance I am told on the new facility annually will be more than EURO 6 million. So Cork going forward will have to use the profits/revenue from the first Million passengers just to cover the maintenance. They need to add a million full revenue passngers fast.

Then take it that over the next 18 months they will lose EasyJet due to Ryanair pressure and that LH closes BMI Baby and you are looking at a sorry state.

[Tom the Tenor]

A company of consultants called BDO Simpson Xavier have been appointed presumably by Minister Cullen to negotiate between the CAA and DAA as the working relationship between the two has been poor of late. Quelle surprise! The are due to report by end of March but whether that is this year or next is anyone's guess! The Cork Business Association were a part of a tour of the new terminal last week and they were full of praise for a lot of what they saw there with just the one proviso, they want more airbridges to reduce the wettings but their concerns are soothed a little on finding out the aircraft will now be parked nose in!

TG4 (Irish language channel) news did a good feature on the airport last night as Gaeilge. Michael Cawley was being quoted but I am ashamed to report my Gaeilge is not up to knowing what he said so if anyone can help it would be great. Councillor Tom O'Driscoll, FF, was interviewed and Lord Mayor of Cork, Councillor Deirdre Clune also made a contribution.

TG4 had one other interesting report last night from the Revenue Commissionsers that I was able to make out as charts and diagrams were used. It appears at Shannon during the period of the winter shopping flights to New York no goods were seized off any returning passengers at Shannon.

Enough said.

[asianfly]

When a minister appoints a bunch of consultants it usually means he is kicking a decision to touch or he needs an 'independent analysis' to justify the decision he wants to make. More often than not, it means we are yet another report away from a decision. Hiring these guys allows him to claim that he is doing something, when in fact, he is doing nothing at all.
In any case, I find it quite amusing that the minister needs to pay consultants to mediate between two factions within one of the department's state controlled companies! Says it all really.
Management and accountability are sadly lacking at both the CAA/DAA and of course with the minister and the government, who are ultimately responsible.