Historic deal saves Knock airport

Historic deal saves Knock airport


Councils join forces to buy IWAK debt

Ciara Galvin

MAYO County Council is to become part-owner of Ireland West Airport Knock (IWAK), it was announced yesterday (Monday). The move will wipe out the airport’s debt and secure its future.
At what was described by many councillors as a historic monthly meeting of the council at IWAK, Chief Executive of Mayo County Council Peter Hynes announced that the council, along with six other local authorities in the western region, is to take a 17.5 percent equity stake in the airport.
Mayo County Council will borrow €7.3 million to pay off a large portion of IWAK’s debt in return for the 17.5 percent stake. In a deal that has been brokered by Mayo County Council, the six other councils will help the council to repay the loan over a 30-year term, in exchange for shares in that 17.5 percent stake. The strategy forms part of a two-pronged approach to the airport’s debt and development.
Following negotiations with the Department of Transport, An Taoiseach Enda Kenny and Minister of State Michael Ring, it is believed that once the airport’s debt has been dealt with, the Government, with EU approval, will be in a position to grant aid up to 90 percent of the infrastructural works needed to allow the airport to grow beyond one million passengers. When this happens, the airport will be fully self-sufficient.
Mayo County Council has received ‘support in principle’ from Galway, Galway City, Roscommon, Sligo, Leitrim and Donegal local authorities to repay €9 million that IWAK currently owes to financial institutions. Key to this was each council’s view of IWAK as a regional asset, delivering access, bed nights, tourism and jobs right across the west and north west.
Mr Hynes informed the meeting that the proposal by the seven local authorities would focus on repaying €7.3 million of this debt, while the balance – €1.7 million – would be repaid by the Western Development Commission.
“We’ve done a lot of work with the other local authorities in the region, and a proposal was put to them that the airport would convert part of that debt to equity. In other words, the local authorities would be able to buy a stake in the airport,” explained Mr Hynes.
The equity will be divided among each authority on the basis of the benefits accruing to each council from the airport, in terms of passenger numbers and ‘economic spin off’.
The Chief Executive told the meeting that up to six of the seven local authorities have already included some details of the proposed loan repayments in their 2015 budgets, and that a report on the proposed set-up for the loan repayments would be brought before Mayo County Council early next year.
Mr Hynes said the Mayo County Council would become ‘part-owners’ of the airport and that the airport would have an ‘emotional attachment’ to each of the other counties.
“It’s an extremely exciting development and one which we are looking forward to bringing to fruition over the next two to three months,” said Mr Hynes.

Significant move
Sinn Féin councillor Gerry Murray said Mayo County Council’s decision to bring other local authorities on board was a ‘significant move’, and that securing them as stakeholders was ‘a remarkable achievement’ by the Chief Executive.
The Charlestown councillor added he expected an Taoiseach to make a ‘significant announcement’ in the New Year on capital investment for the airport which he said should help expand the airport and increase traffic.
Responding to the announcement, Fianna FΡil councillor Lisa Chambers reminded those gathered that the money from the seven local authorities was ‘only going towards debt’.
“What this airport needs is a firm commitment for funding, not promises, not further reports, not dangling a carrot in front of the airport to keep them down and keep them quiet, actually commitment for funding,” said Cllr Chambers.
An emotional Paul McNamara, told the meeting that the airport figured heavily in his life in the 1980s, as he and his family used to wave goodbye to their father at the airport and in turn welcome him home every six weeks. “People used to have to spend two days travelling on a boat,” added the Fianna FΡil councillor.

The future
Outlining details of the future plans of the airport, Managing Director of IWAK Joe Gilmore told those gathered that the airport required an investment of €36 million, and that the partnership between the airport and local authorities was a positive development.
Mr Gilmore told the meeting that An Taoiseach Enda Kenny had visited IWAK on Monday last and had ‘lent his full support’ to the airport.
The Managing Director said the plan for the airport was to double passenger numbers over the next ten years, to increase the airport’s number of routes from 25 to 40 and to establish a chartered service to America next summer.