Cantillon: Shannon struggles for growth lift-off

Government aviation policy is coming under fire from Shannon Group, the State company responsible for the mid-western airport, aviation cluster and other businesses.

Chief executive Matthew Thomas warned Clare County Council earlier this week that policy risked leaving the Republic with just one State-owned airport, Dublin, at the expense of the regions.

In a statement expanding that point, he says that, in the last five years, 96 per cent of all traffic growth has gone into Dublin Airport.

He also points out that the proposed national planning framework, due to be finalised in December, is silent on the growth of airports outside the capital.

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Thomas argues that airports drive economic activity and points to the fact that 40 per cent of US investment in the Republic is based within Shannon’s catchment area to support this.

He says that aviation policy should fall in line with the planning framework to ensure that we are taking advantages of strengths and weaknesses across the Republic.

Thomas's difficulty, though, is that policy does not determine everything. US carrier United Airlines recently announced that it was axing its Shannon-Chicago service because of its poor financial performance.

In other words, it could not make money from it because there was not enough demand.

CityJet pulled services from Cork for similar reasons. Dublin is drawing much of the expansion in aviation because that is where the market wants to go.

Shannon has always known this. It sought independence from Dublin Airport's operator, DAA, because it believed it could do better if it were in control of its own destiny.

The market was not going to change simply because it had begun competing with the capital.