Business Opinion:The surprising thing about the current fuss over Cork Airport is not that the Government broke its promise to leave it debt-free when it emerged from under the wing of the Dublin Airport Authority (DAA), writes John McManus

After all, promise breaking is one of the core skills of any politician worth his or her salt.

What is more surprising is that Cork Airport would appear to be broke, which is quite an achievement for the second airport in an economy such as ours. But what other conclusions can we draw from the various figures that have been drip fed into the public domain over the last few weeks as the story built momentum?

These leaked reports say that Cork Airport lost some €5.8 million last year and needs to increase its passenger through put by 14 per cent before it breaks even. Dublin airport by contrast made profits of €78 million, while Shannon made a profit of €4.8 million, due mainly to US military traffic, which has now been diverted elsewhere.

The losses at Cork Airport come before the company pays a penny towards servicing its debts of €220 million, which are currently lumped in with the DAA's debts of more than €1 billion. Servicing its debts would cost Cork something in the region of €20 million a year, according to the figures put into circulation last week.

As an aside, it is worth noting that these seem like extraordinarily expensive borrowings for an infrastructure business owned by a sovereign state.

But be that as it may, Cork Airport does seem to have got itself into a sticky situation. If it cannot cover its costs without increasing passengers by 14 per cent, what chance does it have of generating another €20 million a year to pay the debts incurred building a swish new terminal and other facilities? Again, according to leaked reports, some €90 million of the debt relates to the new terminal building, while another €90 million relates to new facilities.

This sort of overspending is a pretty common occurrence with infrastructure business. And usually result in the company being restructured by its lenders. Think Eurotunnel.

This in effect is what is now happening at Cork Airport. It is getting over half of its debt forgiven by its banker, the DAA.

And it is reasonable to assume that the DAA would not have decided to do this if it did not think it was a viable arrangement. They claim consultants, whose work was vetted by yet more consultants hired by the Government, believe that it is sustainable.

Underpinning this view is projected earnings before interest, tax, depreciation and amortisation of €12 million a year at the airport, assuming that there will be no increase in charges in the immediate future.

Equal any hiving off of Cork, which has a book value of €200 million, before taking into account 180 acres of development land, which will have to be approved by the DAA's banks and bond holders. They will want to be sure that the numbers add up.

You would like to think that the board of Cork Airport Authority would accept all this with some grace and get on with the job they were all hired to do - running Cork as an independent airport.

Instead, they have allowed themselves to get involved in the sort of whining and special pleading that confirms most business people's prejudices about State companies.

Although in their defence, it should be pointed out that they have pretty limited powers to stop politicians using the issue for their own purposes.

But should any of the directors of Cork Airport Authority - and indeed the other stakeholders - have any doubt that they have got a good deal, they only have to ask themselves what would happen if they really went bust owing the banks €220 million.

The banks would have sought far tougher terms than those being proposed by the DAA. In addition to any rescheduling of the debt and refinancing, the banks would force asset disposals and above all, would force big changes in the way that the business is run.

There is not enough verifiable information about Cork Airport in the public domain to see where savings could be made, but given what we know about Shannon and the company in general, one suspects that payroll, working practices and all of that would be the place that most people would start.

That said, it looks as though the issue will rumble on until the election at least and the Taoiseach signalled last Friday that compromise was likely. The whole issue is in danger of getting wrapped up with the future of Shannon, which will come into focus following the agreement, also on Friday, of an open-skies agreement between the EU and US that will end the stopover.

Things are about to get serious and it really is time for the directors of Cork Airport Authority to step up. They were hired with a mandate to operate the airport as an independent business that would compete with Dublin and Shannon.

If they really feel that they cannot operate the business with a €100 million debt, then they have no business remaining on the board. What they don't need is another consultants' report.