SHANNON Airport is facing the possibility of offering only a seasonal operation to the United States, according to a report commissioned by the Mid West Regional Authority. It may even be reduced to being a feeder airport to an increasingly dominant Dublin, the report says.
At present, Shannon offers a year round service to New York, Boston and Chicago. Under the terms of the bilateral air transport agreement between Ireland and the US, airlines wishing to serve Dublin directly from American cities must operate an equivalent number of flights into Shannon.
The report says it seems probable that within the next five years the EU will complete an open skies agreement with the US which will provide rights of nonregulated access to all EU and US airports.
Such an agreement would deny the Irish authorities the right to impose any form of Shannon gateway policy on flights between Ireland and the US, according to the report. "If they so wished, airlines would be free to operate only to Dublin."
The report says that the two carriers currently serving Shannon, Aer Lingus and Delta, incur significant additional costs from the present Shannon gateway policy and strongly support the demise of such a policy". Delta in particular has always made its views clearly known about the "perceived iniquities" of this policy, according to the report.
The report concludes that there would be two possible reactions to an EU/US open skies agreement to serve Dublin and Shannon markets in whatever way best matches demand and optimises operating costs (which may imply seasonal operations at Shannon) or to concentrate services solely at Dublin, with feeder services from, Shannon.
A spokesman for the Mid West Regional Authority told The Irish, Times yesterday that the report was not finalised and should be more accurately, described as "working papers".
The privatisation of Aer Rianta, which owns and operates Shannon, Dublin and Cork airports, within the next few years is considered likely by the report's authors. This would lead to a greater emphasis on financial returns at the expense of the traditional support given to Shannon Airport as a pivotal part of the mid west's regional development, the report says.
Another threat to Shannon is the "increasingly aggressive and competitive airports" in Knock, Galway and Kerry, according to the report. It questions the wisdom of the Exchequer providing, subsidies to the regional airports if the effect is to siphon off business from existing airports, such as Shannon.
The report says that despite the campaign to retain intra EU duty free sales after the proposed elimination date of 1999 "it would perhaps be unwise to assume that the campaign will be successful".
It calculates that the loss of intra EU duty free sales would cost Shannon 50 per cent of all duty free sales and about 20 per cent of all sales in the shops. If the restriction had been in force in 1995, the report says the loss of revenue would have been in excess of £2 million.
The report urges the Shannon Airport management to explore actively the opportunities which the new aviation environment may bring as well as taking measures to meet the dangers.