Belfast shines whilst Shannon whines (redux)…

According to Richard Delevan’s column in last Sunday’s Tribune having an international airport at Shannon is not the boon it once was to the area, and suggests that the area would have been better off lobbying for a datahub to run ‘fat data pipes’ out of. Otherwise, the Shannon project may find itself drifting into the same history books as Valencia Island, which once housed the key telegraph station linking the continents of Europe and America. Though here too, Delevan thinks they may already be too late:

As we reported last month, Hibernia Atlantic …the same company that owns the undersea internet cable connecting Dublin to the world is close to announcing where it will put the next fat pipe connecting the island of Ireland to the world. In Belfast.

Meanwhile, the Limerick Blogger notes that fully 90% of the readers of the Irish Examiner are against the transfer north. Some unions estimate that up to 1000 jobs in the region could be put at risk. But that’s only if the whol Shannon operation were to fall flat on its face after Aer Lingus’ departure. In fact, 80 jobs are at risk, with another 120 coming with the new Belfast hub.

In truth, as Fintan O’Toole pointed out, in yesterday’s Irish Times, the people of Limerick voted for parties that privatised what had been a semi state body:

The people of the broad midwest region voted in their droves for the parties that implemented and supported the privatisation of Aer Lingus. Fianna Fáil took 44 per cent of the vote and half the seats in Clare.

Together, Fianna Fáil and the PDs took 56 per cent in Limerick East; 52 per cent in Limerick West and 48 per cent in Tipperary South. If you include Fine Gael, which declared itself “generally supportive of the partial sale of Aer Lingus in order to give it commercial flexibility”, the endorsement of privatisation in the region was almost total: 80 per cent in Clare, 82 per cent in Limerick East, 92 per cent in Limerick West, 85 per cent in Galway East, 50 per cent in Tipperary North, 67 per cent in Tipperary South, 72 per cent in Longford-Westmeath.

Their horror at discovering that they got what they voted for suggests that most people in the midwest suffered from at least one of two extraordinary delusions. Either there was some part of the word “private” they failed to understand, or, even more bafflingly, they actually believed that the vague assurances of Government Ministers mean something.

Paige Harrison notes that the natural corollary is that it is no longer up to Aer Lingus to provide economic protection for the region. The ending of the historic bilateral Shannon Stopover agreement between the US and the Republic, removes legal obligations on operators to split their use between Dublin and Shannon.

Meanwhile, Michael O’Leary, (to the delight of Sarah Carey) is playing in the background. He clearly doesn’t want a rival Irish operator in Belfast International, when he’s trying to get his first Belfast flights running out of the tiny George Best City Airport:

In a letter to the prime minister, Ryanair chief executive Michael O’Leary called on the government to combine the power of its 25.3 percent holding of Aer Lingus shares with Ryanair’s own 25.2 percent. “You may be assured that Ryanair will support any action taken by your government to encourage Aer Lingus to maintain its existing four flights a day operation between Shannon and London Heathrow.”

Hmmm… As Paige points out: “Michael O’Leary would have done the same thing.” The same thing as Aer Linus that is, were he in the same position. His motive is clear enough. He’s looking after the narrow interests of his own shareholders. It certainly makes commercial sense for him to enlist the help of the Republic’s government by nobbling his corporate rival’s plan to provide him with competition.

But such action on the part of government as shareholders is likely raise some earnest interest in Brussels.

The truth is that 20 years of social partnership agreements, and the rising labour costs of the Tiger economy have created subtle but important differences in the respective economic environments north and south. The result is that southern companies operating in such commodity markets are desperately looking to lower costs and are seeking jurisdictions with less onerous corporate restrictions. In theory at least, this could be just the beginning of a long steady flow north of the border.

One irony is that Aer Lingus’s trade union is lining up against it on the understandable principle of equal pay north and south of the border (would that be net or gross? – ed). In doing so, they risk running one company, which recognises them, out of Belfast to the direct benefit of Ryanair, which doesn’t. Whoever gains the upper hand in this one, Shannon’s legal protections finally run out at the end of March next year. Aer Lingus, or no Aer Lingus!

The company needs a UK hub. The widely touted Birmingham does not carry direct flights to London, and would be a retrograde step. Northern Ireland, does, and it no longer carries the black mark of the Troubles. Belfast International is large, and underused, and has improving public transport routes into Belfast. With Dublin Airport visibly choking at rush hour and holiday times both Northern Irish airports are likely to offer a better service for travellers stretching down the mainline as far Dundalk and Drogheda, where urban populations are thickening.

Limiting Aer Lingus to Shannon would represent a major opportunity cost for the Republic’s former national carrier. Not simply terms of the short term net gain in jobs, but in terms of keeping itself relevant in terms of international air travel. Given the Republic’s Supreme Court’s ruling in favour of Ryanair against the Labour Court, may give some pause for thought too.

Northern Ireland may be in the process of discovering that, in some respects at least, it has a competitive edge over the Republic, regardless of whether Aer Lingus is allowed to relocate to Aldergrove, or not.

Over to you Willie and Mick!!