Government Approves drafting of Bill to establish Shannon Group plc to take over Shannon Development & Shannon Airport Authority
23 July 2013
Minister for Transport, Tourism and Sport Leo Varadkar and Minister for Jobs, Enterprise and Innovation Richard Bruton announced today (Tuesday) that the Government has approved the drafting of the Shannon Aviation Services and Miscellaneous Provisions Bill 2013, paving the way for the creation of the new Shannon Group entity.
Minister for Transport, Tourism & Sport Leo Varadkar said: “This is another significant milestone in the restructuring of the State’s assets in Shannon. The changes that we have already made, and the further changes that will be facilitated by this Bill when enacted, will serve to drive the economy of the Shannon-Limerick area and the wider national economy. I have reconstituted the board of the Shannon Airport Authority and Minister Bruton has also appointed three members of the SAA board to the board of Shannon Development in order to augment the relationship between the two companies at the earliest possible stage.”
Minister for Jobs, Enterprise and Innovation, Richard Bruton, also welcomed the Government’s approval to advance this important piece of legislation: “Last May, the Government decided in principle to establish an independent Shannon airport and restructure the enterprise agencies in the region in a drive to create a world class aviation industry in the Shannon region. Since then we have made major progress, and the legislation approved by Cabinet today marks another significant milestone towards implementing that vision.
“By restructuring the enterprise agencies in the Shannon Free Zone we can ensure that indigenous and multinational industry already in the Zone or considering locating there have access to a comprehensive range of supports. By merging a strong independent Shannon Airport with the extensive property holdings, experience and expertise of Shannon Development we will create a strong new State company which will work with the IDA and Enterprise Ireland on developing an International Aviation Services Centre in the region. I am convinced that with strong implementation we can create a world-class cluster in this region and help create the growth and jobs we need.”
In the seven months since Shannon Airport was separated from the Dublin Airport Authority (daa) very significant progress has been made, including:
In June passenger numbers grew at Shannon for the first time in five years – up 8% compared to June 2012;
Shannon Development’s enterprise, investment and tourism functions and the associated staff are in the final stages of transfer to the IDA, Enterprise Ireland and Fáilte Ireland and other State agencies;
The appointment of Neil Pakey as CEO of Shannon Airport Authority, bringing considerable experience in aviation. He will also become chief executive of Shannon Group;
The board of the Shannon Airport Authority has been reconstituted with some members also now sitting on Shannon Development’s board to enhance co-operation;
The inclusion in this year’s Finance Act of provisions which provide for accelerated capital allowances for the construction and refurbishment of certain buildings and structures for use in the maintenance, repair and overhaul of aircraft at all Irish airports.
The approval by Cabinet of the Heads of the Shannon Aviation Services and Miscellaneous Provisions Bill 2013 paving the way for the creation of the new Shannon Group entity.
Under the Bill a new State company, Shannon Group plc, will be established and the existing shareholdings held by the Government in both Shannon Development (SFADCo) and Shannon Airport Authority will be transferred to the new company.
Shannon Airport was separated from the Dublin Airport Authority (daa) last December and now operates on an independent commercial basis. This will continue to be the case under the merged corporate structure that will be provided for in the new Bill.
Shannon Development has undergone major restructuring during the first half of this year and when completed, it will retain its significant property assets including the strategic lands and property in the Shannon Free Zone adjacent to the airport. To emphasise this more focused commercial remit, Shannon Development will be renamed Shannon Commercial Enterprises Limited.
Under the proposed new regime, both of these companies will operate under the aegis of Shannon Group and the latter will promote and drive interaction and common purpose between them at local level. This will include the promotion and development of an international aviation services centre on the Shannon campus, centred on the airport.
Minister Varadkar added that: “The new Bill will also provide the necessary legal mechanism to allow Ireland to adopt a new insolvency regime in relation to aircraft and aircraft engines, equivalent to the regime known as Alternative A under the Cape Town Convention. Ireland has a long and successful history in aircraft finance and aviation leasing. This measure will provide greater certainty to investors in the event of default and it is hoped that the change will also facilitate the issuance of Enhanced Trust Equipment Certificates, a form of security used in aircraft finance, in Ireland to bolster Ireland's position as a user friendly and leading jurisdiction for aircraft finance and leasing.”
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