SBP Shannon 30-11-2014

SBPost


Published on November 28, 2014

I t has been almost two years since Shannon Airport Authority (SAA) gained ull independence, becom- ing a publicly-owned commercial semi-state company. By that time, the numbers passing through the airport, once a vibrant magnet or business and tourism in the midwest, had dropped o signicantly. Te reedom aorded by the airport’s independence allowed Shannon to turn a corner, striking its own deals with airlines including Ryanair, which launched routes to new destinations, including Alicante, by the spring o 2013. Other new or expanded services to Chicago, Philadelphia, New York, Boston, Glasgow, Faro, Palma and Malaga, were announced across a range o carriers. Positive turnaround Te airport handled 1.4 million pas- sengers last year, and 24,000 aircrat movements. erminal trac, compris- ing passengers that begin or end their journey at Shannon, rose by three per cent in 2012 to total close to 1.3 million. ransatlantic trac increased by 18 per cent to just under 340,000 passen- gers, as carriers increased capacity and new routes were added to Chicago and Philadelphia. Te upward trajectory has continued this year. “Te airport’s strong momen- tum across 2014 has continued into the nal month o the Autumn, with pas- senger numbers or October, the most recent gures to hand, showing a 28 per cent increase on the same period twelve months ago,” said Andrew Murphy, chie commercial ocer with Shannon Air- port. “Te biggest gains in passenger num- bers through the terminal were again on European services, with eight continental services among the nine attractive new routes launched or the summer season – April through to end o October”. Passenger throughput aking the tough shoulder month o October as an example, Murphy said: “we enjoyed a 111 per cent increase (rom 20,347 to 42,950) in passenger numbers to and rom the continent last month compared to October 2013”. ransatlantic passenger trac was up by 15 per cent (rom 23,511 to 27,108) or the same period, due to the increased requency across New York and Boston services this year, with Shannon’s biggest market, the UK, up by six per cent in October (rom 61,681 to 65,243). With just a month to go until the end o the year, and the busy Christmas period to look orward to, Murphy is condent that Shannon will record double-digit growth or 2014. “It will still be strong growth some- where in the early to mid teens, which is a signicant and positive development.” He conrmed that Shannon Airport had the summer season shored up, due in part to the success o the Wild Atlan- tic Way, an initiative that has resonated strongly and ignited the imagination o inbound tourists. Tere had been gains across the air- port’s three main markets, Europe, Britain and US, he said. “Increases in European services are particularly strong thanks to the nine new services this summer season, but the US also perormed ahead o expected on the back o greater requencies”. Te strength o the Sterling sent British passengers in Shannon’s direction. “Te UK is the strongest market or Ireland and a six percentage growth month-over- month is quite signicant,” said Murphy. Continued growth With six new services launching this winter, Murphy is condent that trac to and rom Shannon Airport will con- tinue to grow. “Some o the new winter services, such as Berlin, Fuerteventura, Krakow, Paris and Warsaw, together with our other winter services, provide a really strong array o destinations or weekend or win- ter sun breaks as well as or business travellers,” he said. “It’s good news also or the region, as our winter schedule this year has really good options rom an inbound perspec- tive, which will be good or the domestic tourism sector”. Murphy said urther services would be launched next year. “Our transatlantic o- ering is now much more comprehensive than it has been or years and we expect that to continue or 2015,” he said. Aer Lingus operates a daily service to Boston year round and six daily services per week to New York (JFK) across ten and a hal months o the year. Delta oers daily fights rom May to October into New York while United op- erate a year round daily service to Newark and a daily service into Chicago, which is a leading hub, rom May – October. American Airlines fy to Philadelphia, one o their most signicant hubs, rom May to October. Next year marks the 70th anniversary o commercial transatlantic fights into Shannon. Te rst carrier, American Overseas Airlines (AOA, now American Airlines), made a scheduled fight rom the US to Shannon on October 24, 1945, when a DC4 aircrat “Flagship London” few rom Gander to Shannon in 8 hours 20 minutes. It was a fight o such signicance that broadcasts were made rom the aircrat while en route, which were relayed over a nationwide radio network in the US. Within weeks, Shannon began re- ceiving scheduled aircrat rom rans World Airways (WA) and Pan American Airways (Pan AM). Murphy conrmed that plans were in place to celebrate the event in 2015. Cargo trafc Aside rom passengers, the other key service airline oered by Shannon Air- port is cargo, an area o business Murphy and his team hope to build on. “Currently, DHL and Fedex run daily overnight services to hubs in Paris and Cologne. Given our location cargo has to be a target or growth and we are in discussions to grow cargo services ur- ther,” he said. Murphy is condent that Shannon Air- port has several strong selling points. “Full US customs pre-clearance services are a very important selling point,” he said. “In 2009, Shannon became the rst airport outside North America and the Caribbean to oer US pre-clearance a- cilities or scheduled and corporate avi- ation. It is now the only airport in Ireland to oer pre-clearance acilities or both commercial and private aircrat”. In the past, Shannon Airport was seen as a leader in innovation, a reputation Murphy is keen to regain. “While we strive or greater innova- tion as a driver o new business, we will also remain committed to the delivery o a sae, secure and customer-ocused airport operation, through the delivery o our service to the highest national and international standards and best prac- tice,” he said. Other Shannon Airport acilities that appeal to passengers, according to Mur- phy, include easy pick-up and drop-o acilities or hire cars, convenient parking with discounted online oering o up to 50 per cent o long-stay rates. Passengers can park a car within a ve to seven-minute walk o the airport or €30 a week. At the short stay car park, located just by the terminal, monthly and annual parking is sold to regular customers at reduced rates. Shannon Airport is located on 855 hectares o land. It has its own uel storage arm with hydrant delivery systems and water supply acilities. “We operate a 24-hour service with no curews, slots or noise restrictions,” said Murphy. “Te airport’s runway is the longest in Ireland at 3,199 metres and is capable o handling all aircrat types. We also oper- ate a re and rescue service to Category 9 standard”. T he International Aviation Services Centre (IASC) is the business unit within Shannon Group tasked with growing and strengthening the well-estab- lished aviation cluster in the region. o deliver on this challenge, IASC will help existing aerospace rms to develop their business, while working alongside IDA Ireland and Enterprise Ireland to encourage and provide positive reasons or new companies to locate in Shannon. Te aviation industry is global in nature and growing rapidly. Ireland is in the ortunate position o being an established as a major world- wide centre or aviation activity, espe- cially aircrat leasing. GPA legacy Tis is in large part due to the legacy o Guinness Peat Aviation, the pioneering leasing rm ounded in Shannon in the 1970s. IASC’s work in growing the aerospace cluster at Shannon is set to urther con - tribute to the development o Ireland’s aerospace capabilities thus ensuring that the country remains a global centre or the aviation industry. When Patrick Edmond was appointed to the role o managing director o IASC last year, he was new to the job but not to the brie. “My background is in aviation and I was part o the Aviation ask Force, ormed by the government in 2012, to identiy business opportunities or Shannon.” Based on the ndings o the resultant report, the government decided to sep- arate Shannon rom Dublin airport and make it independent once more. Interestingly, Edmond now nds him- sel involved on a day-to-day level in progressing many o the ideas identied within that report. “We run a small lean team at IASC with an ambition and mandate to develop aerospace activity, creating a globally recognised aviation industry cluster at Shannon with specialisations developed in areas such as leasing, maintenance, aircrat recycling, component manuac- ture and repair, and business aviation,” said Edmond. With 40 aerospace rms based in and around Shannon, employing approxi- mately 1,600 sta, there is already a solid oundation in the region or development. “We are not starting rom scratch, it is already a strong cluster,” said Edmond. “However we are working to urther develop that cluster by attracting new companies as well as building on what’s here.” Business advantages Ireland oers many well-heralded ad- vantages to inbound businesses including a low corporate tax rate, English as a rst language, and being part o the eurozone. For Shannon, there is the added bonus o geographic location and a long estab- lished and strong reputation within the global aviation sector. “Shannon is home to the world’s rst Duty Free and Industrial Free Zone, and it was the place where GPA started. Having such a strong heritage is invaluable,” said Edmond. “In order to attract more aviation busi- ness IASC has identied strengths o the region and matched them to aerospace company requirements. “We look at what Shannon is good at, and at its core its key advantage is un- rivalled heritage in leasing and nance and in aircrat maintenance”. Lease transition Lease transition has emerged as a strong area o ocus. “Leased aircrat released by a lessor have to be re-branded, painted and serviced. We already have strong skill sets in those areas in Shannon – now we need to grow business in this particular niche,” said Edmond. “Maintenance companies already op- erating here include Shannon Aerospace, Shannon ransaero and Eirtech, all o which are already expanding and we are looking to help them develop urther by attracting a greater volume o mainte- nance work to Shannon”. IASC is also looking to develop Shan- non’s business aviation oer as a priority or the year ahead. “We are unique in that we oer ull US Customs and Border Protection pre-clearance or private and corporate jets to land in any airport in the US,” said Edmond. “Shannon is already established as an important transit point or business jets crossing the Atlantic, with numerous private aircrat passing through the air- port every day. “Coupled with Shannon’s heritage as a major transit stop between the US and Europe or the Middle East, this is an area ready-made or urther development”. Targeted approach As Edmond highlighted, it is pointless to adopt a scattergun approach to new business. “We try to be smart in what we target. We look or a confuence o maintenance and leasing, or example, or leasing with aircrat nance and operations support,” he said. “We already have a number o leasing and business support companies located here at present, but there is ample room or growth. “We are ocused on building a cluster and or that we need to create an environ- ment conducive to big players as well as start-ups and SMEs in expansion mode.” Skilled graduates One o the region’s strengths is the pres- ence o high quality third level institutes, including the University o Limerick and Limerick Institute o echnology, both o which work closely with Shannon Group and businesses within Shannon. “By oering appropriate courses they ensure that people with relevant qual- ications are available to employers in Shannon and that relevant research is undertaken,” said Edmond. “Similarly, NUI Galway and GMI are within an hour o the airport and they too are in dialogue with local industry”. A case in point, according to Edmond, is the National Centre or Composite Ma- terials at UL. Composite materials are advanced plastics that are used more and more requently in building aircrat. Tis is a key capability or Shannon and having the Centre and ergo access to cutting edge research at its doorstep is hugely signicant. Cargo has been identied as another growth area. Edmond is convinced that there is great scope to build cargo activity ex-Shannon and the starting point is to address the identiable demand. “We know through research that a major cargo transport hub located in Shannon would be to the benet o Irish exports. “Around 40 per cent o all FDI in Ire- land is located in our catchment area. We know rom local exporters that the de- mand or direct cargo services is strong,” said Edmond. “Currently a great deal o the exports rom the region are transported by road to the UK and by plane onwards to their nal destination. “Because there isn’t enough direct ca- pacity here this trac is being trucked out o Ireland, which is detrimental to Irish export competitiveness. Te opportunity is there right now or that trac to be shipped by air rom Shannon”. Growth areas o help make Shannon more attractive as a hub, Edmond and his team have been researching the possibility or ac- celerated cargo clearance as well other process improvements that could speed up cargo fows out o Shannon thus giving the airport a competitive edge. Another area enjoying growth already, but identied or urther leverage, is air- crat maintenance. “Our nine maintenance hangars are ull, even the hangars dedicated to large aircrat maintenance are in use,” said Edmond. “We are currently in planning phase or a new maintenance hangar, and while its progression will depend on discussions with developers, we expect to break ground in 2015 as we are already in ad- vanced talks with potential partners and tenants”. As Edmond sees it “Shannon Group has a antastic range o assets, the airport, the existing cluster, the tax benets o the ree zone and the geographic location. “What we now need to do is to ully exploit those assets. Shannon was pio- neering in the past and its business model was highly innovative. Our job now is to innovate once again or the 21st century, in a world o global trade fows. “I am condent not only that the in- dividual business units that comprise Shannon Group will succeed, but also that the synergies between those businesses will open opportunities that we could not previously access”. For more information visit iasc.ie The Sunday Business Post November 30, 2014 2 Shannon 2014 Andrew Murphy, chie commercial ofcer, Shannon Airport Picture: Press 22 Patrick Edmond, International Aviation Services Centre Picture: Press 22 Everything in this world is connected Airport boss is predicting double-digit growth this year Aviation industry takes wing in Shannon Since its split rom the DAA two years ago, Shannon Airport has enjoyed a huge rebound, with new routes, increases in passenger numbers, and more reight, writes Margaret O’Brien Shannon Group’s aviation services wing believes Ireland’s aircraft leasing sector has scope for further growth, writes Margaret O’Brien