Aer Rianta split prompts fresh questions

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Cork, Shannon and Dublin airports may face a loss of purchasing power if the facilities are forced to compete following the decision to divide the national airport authority

The Irish government's plans to break up national airports authority Aer Rianta could have big implications for purchasing and retail operations at the country's three main airports, when the proposed split occurs next year. The government announced last week that it would break up the airport monopoly and create separate boards and operating companies for Dublin, Cork and Shannon airports, but insisted this was not a prelude to privatising any of the airports. Opposition parties and the trade unions representing airport workers have vigorously opposed the move, although the government said no jobs would be lost.

Industry observers told TRW that the move to break up the group within 12 months was very ambitious. Many areas of the business are centralised and will require unwinding from the core group, not least purchasing for the three airports, which leans heavily on the buying power of Aer Rianta International (ARI). If the airports are encouraged to compete against each other for business, as stated in the government plan, it is unclear whether they would continue to buy together. In this case, Cork and Shannon, which operate on a much smaller scale than Dublin, would lose out. At this stage, the future of ARI remains uncertain and will be decided over the coming year.

But director-general Eamon Foley said operations would remain unaffected in the short term. "We have our own board, separate from the main Aer Rianta group, so we can take our own decisions. Of course the sooner we have certainty about the future of ARI, the better. But as a separate company, we're not affected. All the projects we have coming on stream will be undertaken through our own cash flow and with our own resources."

The government said it would announce details of the new airport boards later this week.