Committee Reports > List of Committees > Joint > 1979 > Committee on Commercial State-Sponsored Bodies > Report No. 06 - Aer Rianta Teoranta

APPENDIX I

MEMORANDUM FROM AER RIANTA TEORANTA

1 FUNCTIONS

Aer Rianta is a State Company responsible for the management and development of Cork, Dublin and Shannon Airports as agent for the Minister for Tourism and Transport.

(a) Airport Services Operated Directly by Aer Rianta

(b) Ancillary Activities Operated Directly by Aer Rianta

Shannon Mail Order

Castle Tours

(c) Airport Services Operated by Other Bodies on behalf of Aer Rianta

In addition, a number of concessions are operated at the airports under contract with Aer Rianta.

(d) State Services not under the direct control of Aer Rianta

2 SHARE CAPITAL

Aer Rianta is a public limited liability company incorporated under the Companies Acts.

Authorised Share Capital

Shareholdings

3 THE BOARD

The Board of Aer Rianta is appointed by the Minister for Tourism and Transport with the agreement of the Minister for Finance.

4 MANAGEMENT

General Management Council (GMC)

The GMC comprises the following senior executives from within the company:

The GMC has two main functions, namely,

(i) To assist the Chief Executive in formulating policy proposals for submission to the Board

(ii) To co-ordinate the operations of the company in accordance with Board policy.

5 HISTORICAL DEVELOPMENT

Although Aer Rianta is quite a new company under its present terms of reference, it has existed since 1937. Originally it was set up as the holding company in Aer Lingus and later Aerlínte, and in 1941 it was given responsibility for the management of Dublin Airport as agent for the then Minister for Industry and Commerce. In practice, however, Aer Rianta’s functions and those of the national airline were inter-twined to a considerable extent. When it became possible for the Minister for Finance to hold the total shares of Aer Lingus and Aerlínte, Aer Rianta relinquished its function as a holding company but continued as the Minister’s agent in managing Dublin Airport. The Air Companies Act in 1966 rationalised this position, separating Aer Rianta from the other two companies. This cleared the way for the appointment of a new Board of Directors and arrangements were made for the separation of functions to be performed by Aer Rianta from those performed by Aer Lingus.

By 1 April, 1969 the separation of these functions had taken place and Aer Rianta assumed the additional responsibility of managing Shannon and Cork airports as agent for the then Minister for Transport and Power (now Tourism and Transport).

The Shannon Sales and Catering Organisation, which operated since 1943 under a separate arrangement between the Minister and Mr. Brendan O’Regan was integrated with Aer Rianta on 1 April 1973.

6 CORPORATE OBJECTIVES

The corporate objectives of the company are as follows:—

(a)to plan, develop and manage Dublin, Shannon and Cork airports to meet the present and future requirements of air transport, its passengers and cargo and to ensure that this traffic is handled with optimum safety, comfort and speed;

(b)to encourage the development and use of air transport as a travel medium;

(c)to support and co-ordinate the agencies and organisations operating at the three airports;

(d)to develop and maximise the revenue-earning potential of non-aviation activities, compatible with the airports’ primary operational role, either by direct operation or by way of licence;

(e)to be self-financing by generating sufficient revenue to cover operating costs and to give a return on capital investment sufficient to provide for future development;

(f)to develop a properly skilled workforce with appropriate rates of pay and working conditions and to encourage staff in an environment of equity and participation to develop a sense of personal attainment and a pride in the economic and efficient operation of the company;

(g)to promote and maintain good relations with communities resident in the airports’ regions.

7 CAPITAL STRUCTURE

Fixed Assets

Aer Rianta is a State Company, and all fixed assets are vested in the Minister for Tourism and Transport. Consequently no fixed assets appear in Aer Rianta’s accounts.

Fixed assets are acquired by the Minister under the Air Navigation and Transport Acts. The Department of Tourism and Transport Vote has two headings for such acquisitions, namely:—

Expenditure under the above headings since the Acts were passed is as follows (to 31 December 1978)

Expenditure under G1 is controlled by the Department of Finance.

Control of expenditure under G2 is exercised by the Department of Finance through the Airports Construction Committee.

A summary of capital expenditure over the last ten years is as follows:—

Appropriations-in-Aid

Any trading surpluses made by Aer Rianta are paid to the Minister for Tourism and Transport and appear in that Department’s Vote under the heading “Appropriations-in-Aid”.

However, due to inflation and growth in Aer Rianta’s activities over the last ten years, working capital has been deducted and retained by Aer Rianta from trading surpluses. The figures therefore appearing under the heading “Appropriations-in-Aid” are purely cash amounts remitted to the Minister for Tourism and Transport on account of the surpluses rather than the true financial surplus as shown in the published accounts.

The surpluses earned by Aer Rianta for the last ten years are as follows:—

8 MAIN SOURCES OF REVENUE

Note:

The above figures take no account of interest and depreciation on the fixed assets of the airports.

9 INTEREST AND DEPRECIATION

Interest and depreciation on the fixed assets of the airports are not included in the formal Aer Rianta accounts because the fixed assets are held directly by the Minister for Tourism and Transport.

However, the Department of Tourism and Transport calculates notional interest and depreciation for internal purposes, and Aer Rianta includes these figures by way of note only in the annual report. The basis for calculation of the interest and depreciation was set down many years ago and needs updating. This will be done during discussions on increased autonomy for Aer Rianta.

10 SUMMARY OF NET POSITION

11 PERSONNEL POLICIES

Characteristics

Aer Rianta as an organisation fits into a number of categories which have a particular influence on its personnel policies:

(a)it is relatively large by Irish standards

(b)it is in the Public Sector

(c)it is a vital national service

(d)it is in three separate locations and in highly diversified activities

(e)its employees come from a variety of previous backgrounds with conflicting traditions and cultures.

Problems: General

Added to this variety of specialised characteristics is a number of general trends in industrial relations which are common to most organisations. These would include (i) the erosion of traditional management/staff relationships in which managers decided things and gave orders and staff were expected to obey and (ii) the growth in the power of shop stewards with its consequential effects on the power of the un-official trade union structure. As a result of these trends, there is a demand on the part of staff for the right to negotiate in areas where decisions were formerly regarded as exclusively management’s prerogative.

Important psychological factors also arise from the values of modern society where the emphasis is on the needs and aspirations of people rather than on older concepts such as a sense of duty, the rewards of hard work etc.

Mention must also be made of the role which national agreements have played in recent years, particularly in regard to larger organisations. While these agreements have undoubtedly helped on the national level to curtail overall payroll costs and to reduce the number of strikes over pay issues, there has been a growth in disputes over other matters. In many cases the new subjects for dispute (e.g. changes in work patterns, the processing of productivity deals, union recognition, demarcation disputes etc.) are more difficult to resolve than basic pay disputes. While many of these disputes would take place whether there was a national agreement or not, their frequency in recent years is partly due to the fact that negotiations on basic pay have been removed from the local scene giving more time for and more emphasis to the formulation of claims and demands relating to other matters.

Strategies:

Given the circumstances outlined above, there has obviously been a need for revised thinking within Aer Rianta on industrial relations policies and the company has accordingly formulated long term strategies for dealing with the new environment. Basically these are as follows:—

(a)to establish relationships with staff whereby the company is recognised as a good employer, dealing reasonably but firmly with demands

(b)to develop in staff an identification with the interests of the total organisation and with their own individual airports and work areas

(c)to instil in staff a sense of professionalism and pride in their own achievements

(d)to convince staff of the need to operate efficiently and to involve them genuinely in efforts to improve the economics of our operation

(e)where possible, to give staff a direct financial interest in the company’s efforts to control costs

(f)to establish procedures for the speedy resolution of disputes.

With the above general objectives in mind, specific programmes have been introduced in recent years in a number of areas. These include:

1. training programmes aimed in particular at supervisors with a view to improving their communications abilities and their knowledge of industrial relations procedures and priorities.

2. the operation of an executive development programme aimed at strengthening the company’s position at middle management level: it is hoped to produce from this a greater sense of purpose among these staff as well as a higher level of skill and professional ability in dealing with staff at lower levels.

3. the establishment of training programmes aimed at informing new and existing staff of company policies, programmes and procedures.

4. an intensive examination of communications procedures in the company as a whole; this has involved the setting up of regular meetings involving the Chief Executive and senior management with company staff throughout the organisation. In addition, a pattern of meetings at lower levels in various specific areas is at present being promoted.

5. the establishment of an Organisation Development Unit which will over a period of years involve itself in setting up a healthy organisational environment in each area of Aer Rianta’s activities. This unit uses the most modern techniques to establish healthy intergroup relations on a continuing basis.

6. the adoption of a very patient and painstaking approach to the introduction of change in organisational attitudes and behaviour. This has involved the setting up of local committees to deal with standards and efficiency and the establishment of elaborate consultative machinery to ensure that staff are involved to the optimum extent in efforts to improve the overall operation.

In addition to the above specific programmes, the company has been pursuing every opportunity to improve staff relations in all areas by building on the strengths of existing local relationships while at the same time developing an overall company loyalty.

It is the company’s policy where a dispute exists to avail of every opportunity to discuss problems with a view to mutual agreement. Failing agreement internally, it is company policy to channel the dispute into another forum, whether it be our own internal conciliation machinery, the Labour Court machinery the national Employer/Labour Conference or any other available and acceptable third party.

Staff Numbers

The main staff groupings at 31/12/78 were:

12 AVIATION OPERATIONAL ACTIVITIES

(a) Airport Management

Aer Rianta has responsibility for the general co-ordination of all airport activities, including overall monitoring of the operating standards of other organisations or agencies using the airports. In addition, Aer Rianta provides a number of direct passenger services of an operational nature, including apron control, flight information displays, telephones, public address, baggage trolleys etc.

(b) Airport Security

Aer Rianta is responsible for the provision of an airport police service at each of the three airports. This includes road traffic control, passenger screening and general security of the airfield and buildings. The cost of these services has escalated in recent years as a result of the national and international security situation (1978 total costs were £1.6 million) and Aer Rianta is hoping that it will at some future date be relieved by the State of direct responsibility for some of these cost areas.

(c) Fire-Services

Aer Rianta provides at each airport a fire-fighting and rescue service up to internationally recommended standards. The service includes the provision at Shannon of a marine rescue service.

(d) Airport Design and Planning

Aer Rianta is responsible for the planning and design of all airport facilities, including runways, taxiways, aprons, buildings, roads and car parks.

(e) Construction and Maintenance

Aer Rianta is also responsible for the maintenance and cleaning of airport facilities, including construction by direct or indirect labour.

13 TRAFFIC DEVELOPMENT

A Cork Airport

The promotion and development of Cork Airport is an on-going activity. The company’s Traffic Development Supt. at Cork is in constant contact with airlines and tours operators, encouraging the build-up of business through this airport.

(i)During 1979 there will be some significant traffic developments including the following by Aer Lingus:—

(ii)Dan-Air which is a British airline, will process its application to the British and Irish Governments for permission to commence a new London (Gatwick) —Cork air service.

B Shannon Airport

(i) Terminal Traffic — this traffic is on the increase mainly as a direct result of the current aviation regulatory policies for the North Atlantic, emanating from the Carter administration which has caused a large transfer of passenger numbers from charter operations to the scheduled air carriers. Aer Rianta is in constant liaison with other State bodies in regard to the promotion of Shannon terminal traffic, particularly Bord Fáilte and SFADCO.

(ii) Technical Transit Operations—Aer Rianta has successfully developed technical transit operations at Shannon and since 1974 revenue from this business has greatly helped, not only Shannon Airport’s financial position but also that of the Shannon area generally. This business is tenuous and is being retained by aggressive selling and negotiation in face of keen competition from other European airports.

A promotional team comprising Aer Rianta, SFADCO and Aer Lingus (through Shannon Repair Services) regularly visit the United States and Canada, and have promoted Shannon successfully as a technical stopping point for refuelling on service between the US/Canada and Europe/Middle East. These transit stops are extremely valuable to Shannon, as they provide customers for the duty free shops and also make significant use of the flight catering facilities.

Transit traffic by its very nature is not dependable. Operators naturally consider any stops on a flight as a waste of resources, and they accept them only as technical necessities. Due to dramatic technical development in aircraft over the last decade, particularly the Boeing 747, the Douglas DC 10 and the Lockheed Tristar, the older less sophisticated aircraft are being phased out in favour of the new. The increased operating range of these new aircraft is having an adverse effect on Shannon as the need for technical stops is being gradually eliminated on most routes.

However, because of runway limitations at some European airports, even with the latest type of aircraft, operators will continue to need to make stops for technical reasons and Shannon will continue to benefit for some time.

(iii) Training Landings — these continue at a significant level and represent an important source of earnings. Shannon is particularly well suited for training because the normal pattern of traffic consists of two short peak periods during the day, leaving the valley periods available for training purposes.

Airlines currently using Shannon on a regular basis for training are KLM, Swissair, Air France (Concorde), Aer Lingus, British Caledonian and British Airways.

C Dublin Airport

At Dublin Airport the emphasis is on terminal traffic with exceptional growth anticipated on the Dublin/London, Dublin/Paris services and on foreign holiday packages.

As an indication of growing confidence in Dublin as a destination, the following additional airlines will operate into Dublin Airport in 1979:

In 1980 KLM plan to re-open the Dublin-Amsterdam service, and in 1981 Alitalia plan to re-open the Dublin-Rome service.

14 TRAFFIC OPERATIONAL REVENUE

Note: The above figures take no account of interest and depreciation on the fixed assets of the airports.

15 LANDING FEES AND PASSENGER LOAD FEES (£8.6 MILLION: 1978)

The landing fees and passenger load fees are reviewed annually with effect from 1 April each year. Details of current charges are attached.

Aer Rianta has formal consultations with the International Air Transport Association (IATA) and the user airlines at least six months prior to each review. Agreement is reached at these meetings on the charges to be levied from the following 1 April. The agreed charges are submitted by Aer Rianta to the Minister for Tourism and Transport for his approval and then to the National Prices Commission.

Landing fees and passenger load fees earned £8.6 million during 1978 for Aer Rianta at Dublin, Shannon and Cork airports. This figure is expected to reach £10.2 million in 1979.

In fixing our charges we are mindful of the need to maintain the general competitiveness of Irish airports vis-a-vis other European airports.

16 RENTS AND CONCESSION FEES—£2.68 MILLION IN 1978

Rents—(£1.73 million in 1978)

Rents are collected by Aer Rianta from tenants to recover monies spent on land, buildings or offices.

Rents are divided into two categories:—

Basic rent is the recovery of the capital cost of the land, buildings or offices over the life of the asset. Variable rent is reviewed annually to recover the out-goings on the land, buildings or offices i.e. light, heat, maintenance, cleaning, air conditioning.

Concessions— (£0.95 million in 1978)

In order to generate revenue for the airports and to recover the high cost of running airport facilities, concessions are offered to interested firms.

The main concessions at Irish Airports are:—

The shops and catering facilities are run directly by Aer Rianta at the three airports, with minor exceptions.

17 CAR PARKS AND OTHER REVENUE

Car Parks—(£0.32 million in 1978)

Aer Rianta operates the car parks at the three airports. The car park at Dublin, because of throughput, is manned by staff. The car parks at Shannon and Cork are automatically controlled.

The rates of charge are reviewed from time to time and are approved by the Minister for Tourism and Transport and the National Prices Commission.

Other Revenue (£0.66 million in 1978)

Included in the accounts under the heading “other revenue” are the following main items:—

(a) Aircraft Parking Fees

(b) Airbridge Fees

(c) Bank Deposit Interest

18 COMMERCIAL ACTIVITIES

Objective:

To generate revenue for the airports by selling merchandise or providing services. The revenue generated is intended to:

(a) contain airport charges at a reasonable level

(b) provide capital for future expansion

Facilities:

See separate listing.

Commercial Activities Staff Strength 31/12/78

Background—Shops:

Shannon has traditionally been the hub due to the fact that Shannon Airport was, and still is, an important transit stop for European/US flights and passengers avail of their short stop-over by shopping in the transit area. The merits of the shops are well known to the international traveller and Shannon will continue as one of the foremost duty free facilities in the world.

Until 1 March 1978, Dublin and Cork airports were restricted to selling duty free to European passengers. Now that the UK passengers are availing of duty free the impact has been very significant. The commercial sales in Dublin increased from £2 million in 1977 to £4.8 million in 1978 (140% increase). The commercial sales in Cork increased from £51,000 in 1977 to £377,000 in 1978 (660% increase).

Background—Catering:

Catering at airports is divided into two categories namely, flight victualling and ground catering.

Flight victualling at Irish airports is handled as follows:

Flight victualling is an Aer Lingus operation at Dublin for historical reasons. At the time Aer Lingus and Aer Rianta were separated, it was agreed that Aer Lingus rather than Aer Rianta should run the flight victualling because Aer Lingus were, and still are, 99% users of the facility.

At Shannon, again because of transit operations, operators avail of the catering facilities when refuelling. In 1979 we expect to achieve sales of £1.16 million from this source compared with £1 million in 1978. It is worth noting that all the food is Irish produce.

The flight victualling at Cork has been very small till recent years. Now that Aer Lingus are basing aircraft at Cork, more use is being made of local facilities. Aer Rianta in 1979 will be extending and improving the flight kitchen at Cork.

Background—Tours:

‘Castle Tours’ is the marketing name for an operation carried out under the combined umbrella of Aer Rianta and Shannon Free Airport Development Company Ltd. Aer Rianta is the operating arm and SFADCO is responsible for promoting ‘Castle Tours’ in the market place.

The ‘Castle Tours’ operation embraces:

(i) Tours organisation

(ii) Reservations

(iii) Courier Services

(iv) Banqueting and entertainments at:

Bunratty Castle

Knappogue Castle

Dunguaire Castle

Bunratty Castle Folk Park

(v) Castles Management — at Bunratty, Knappogue, Dunguaire and Cragganowen.

The Tours Services Division of Aer Rianta provides the following services:

(a) The management and staff of the Castles and Folk Park.

(b) The operation, in association with Tour Operators, of extended tours originating at Shannon, which include the Castle Banquets and entertainments.

(c) The operation of the Tourist Bureau at Shannon, providing general tours information and room reservation service.

(d) The provision of a booking service for ‘Rent-an-Irish-Cottage Ltd.’

The Division also provides a ‘handling’ service for overseas travel agents, including services related to inbound holidays and special interest holidays.

Castle Tours are budgeting for a turnover of £2.78 million in 1979.

Background — Mail Order:

The Mail Order Division at Shannon grew out of demand from passengers for merchandise to be mailed to them after departure from the airport. It has now developed into a highly professional business generated by the circulation of three million catalogues annually throughout the United States. The merchandise ranges from crystal glass, Wedgwood, china, to menswear, ladieswear, perfume and souvenirs.

Mail order activity is very susceptible to market forces, in particular, US dollar exchange rates with Irish pounds, the cost of postage of the merchandise, the cost of circulating catalogues and the availability of attractively priced goods.

Aer Rianta is making every effort to promote mail order at Shannon Airport because the business is not dependent on passenger traffic as is other commercial activity at the airport. Extensive test marketing is taking place to evaluate a number of European markets.

19 MAIN COMMERCIAL OUTLETS BY AIRPORT

Dublin Airport

Shannon Airport

Cork Airport

20 SALES — COMMERCIAL ACTIVITIES

21 FUTURE PLANS

(1) Aer Rianta as an Independent Airports Authority

It is Aer Rianta’s aim to become a full airports authority with the same level of financial independence as other semi-State bodies. Such an authority would give the Board and management of the company a greater stake in its own development.

The authority would have control over the raising and spending of capital monies, better motivation to achieve results and less dependence on financial aid from central government.

At present the surplus earned by Aer Rianta and paid directly to the Minister bears no relationship to the capital expenditure paid directly out of the Minister’s vote. If Aer Rianta was a semi-State body, the surplus would be retained by the company and would be the sole source of funds (other than borrowings) for capital development. Income and expenditure under all headings would then be interrelated: the higher the operating surpluses the more funds would be available for expansion.

Draft proposals for setting up an authority were considered some years ago, but due to the uncertain climate in international aviation at that time it was agreed to defer the authority until the future trend appeared more favourable. Now that the international aviation scene is more buoyant and the results for 1976, 1977 and 1978 are showing favourable trends, preliminary discussions have taken place with the Department of Tourism and Transport with a view to putting our case for a statutory authority during 1979.

While Aer Rianta has achieved profitability under the present arrangement, the motivation to improve results could be further intensified if the company becomes independent and has the additional commercial incentive of producing a profit to finance its own future development.

(2) Traffic Development

Aer Rianta will continue to develop traffic both terminal and transit as outlined earlier in this report.

(3) Corporate Services

(a) Airports Development

Adaption, extension and improvement of facilities at the three airports is a continuing process, expenditure in recent years being of the order of £1.5 million each year on such developments. Master development plans for the three airports are in preparation to provide for airport expansion over the next twenty years.

Traffic projections show a healthy growth rate in terminal traffic over the period and at Dublin Airport, where exceptional growth is envisaged, a working group has been formed to review existing plans for runway development. This group includes representatives of the State services and the airlines.

Over the last ten years the Department of Tourism and Transport has purchased virtually all the land surrounding the airports needed for any expansion in facilities.

(b) Corporate Planning

A corporate planning unit was appointed in August 1978 following a study of the long term financial structure of the company.

The long range plan when completed during 1979, will highlight the strengths and weaknesses of the company and will be of considerable benefit to the Board and senior management in guiding the future of Aer Rianta. The objectives of the first five year plan will be to improve the efficiency and profitability of existing operations, to plan the expansion of these operations and to identify opportunities for new enterprises to stimulate growth in activity and employment.

(c) Marketing

Much of Aer Rianta’s substantial commercial activity has resulted from the integration with Shannon’s Sales and Catering organisation. Additionally, in view of the growth in duty free operations and the company’s ambitions to expand its area of viable commercial enterprises, it has been considered necessary to provide a co-ordinating function through a newly formed marketing department with the following in mind:—

(a)to ensure that the quality of earnings from the existing commercial activities is at the appropriate level.

(b)Insofar that passenger and cargo traffic are generated by other services, mainly airlines. Aer Rianta will influence the policies of such companies.

(c)Initiate new prospects for commercial development consistent with the overall objectives of Aer Rianta. As a basic philosophy, Aer Rianta wishes to take a more aggressive stance towards revenue generation, whether in the aviation or commercial sections of our business while at the same time encouraging a more personalised service to passengers.

(4) Commercial Activities.

The total commercial operations of Aer Rianta are very sizeable and the business received a dramatic boost by the decision of the Government to extend duty free facilities to cross-channel passengers in 1978.

(a) Cork

With the advent of cross-channel duty free facilities on 1 March 1978 Cork Airport got a great incentive to the commercial activity at the airport. With the expected growth in traffic the commercial results will continue to improve.

A VAT-free shop at Cork was opened recently and early returns of sales are good.

Projected sales for 1979 at Cork are:

(b) Shannon

Shannon has for many years had cross-channel duty free facilities so no dramatic change took place on 1 March 1978 as at Dublin and Cork.

The projected sales for 1979 at Shannon are:

Due to the nature of traffic through Shannon, business peaks in the months June to October, and falls to a trickle in the months November to April.

This causes severe problems in staffing the various facilities as outlets are at peak for such a short few months of the year. The substantial increase in payroll costs at Shannon Airport over the last few years has caused strain on the viability of some trading outlets and the Director—Shannon Airport has recently had meetings with unions in an effort to resolve the winter trading problem.

(c)Dublin

The advent of cross-channel duty free at Dublin was of exceptional importance to Dublin Airport. Because of the much larger numbers of passengers using Dublin the financial effects were substantial.

A VAT-free shop was opened recently at Dublin to take advantage of increased Customs allowances into EEC countries.

Projected sales for 1979 at Dublin are:

(5) Other Commercial Matters

(a) Tourism

Castle Tours is a handling company at Shannon for tourist operations into Ireland. It also operates the highly successful Bunratty, Knappogue and Dunguaire Banquets in the Shannon region. Castle Tours generates packages into Ireland in full co-operation with SFADCO, and is giving a first class service to tourists. The trend in Castle Tours is good. The operation is at present the subject of a special study with a view to increasing the effectiveness of promotional activity and improving management controls in co-operation with SFADCO.

(b) Mail-Order

Mail-Order at Shannon is a highly professional business generated by the circulation of three million catalogues annually throughout the United States. The catalogue features high quality Irish and European merchandise and the projected revenue for 1979 is £2.8 million. The fact that mail-order sales are independent of traffic patterns is significant, and consequently every effort is being made to boost this activity at Shannon, to increase employment in the region.

(c) European Mail-Order

A detailed study is being made of the possibilities of expanding the mail-order business into continental Europe. It is planned that test-marketing in the UK and Denmark will be conducted in the near future.

(d) Catering

Aer Rianta operates a very significant catering operation at both Dublin and Shannon airport terminals in addition to the flight kitchen at Shannon for transatlantic carriers.

Plans are well in progress for the rationalisation of our catering systems, including the introduction of a new Regéthermic System at Shannon later this year. The extension of the Regéthermic System throughout Aer Rianta is planned for the future.

(e) Hotel Management College

Aer Rianta operates the Hotel Management College at Shannon. This costs the Company approximately £40,000 annually and efforts are being made to achieve a greater involvement of the other interests who benefit directly from it.

(f) Projects

The company have studied in detail the desirability of operating (a) an ice-skating rink and (b) a public golf course at Dublin Airport. These projects could be implemented when funds permit.

(g) Retailing

Aer Rianta is by any standards a very major retailer. A study entitled “An Integrated Retailing System” will be undertaken by the Marketing Department, to refine and streamline the retailing process across the whole spectrum of Aer Rianta.

(h) Import/Export Agency

Arising from our extensive commercial operations at Shannon, we have recently established an agency trading under the name of Shannon Worldtrade, aimed at identifying foreign markets for both foreign and Irish goods and acting as agents for the manufacturers in those markets. While job content in this would not initially be high, a successful operation could generate considerable foreign currency earnings.

(i) Consultancy and Training in Relation to Overseas Countries

Aer Rianta is becoming increasingly involved in the provision of consultancy and training services for Third World and other countries. We have been engaged in projects involving the design and construction of a new airport in Saudi Arabia, the provision of duty-free shopping facilities in Somalia and the training of personnel for the Nigerian Airports Authority. The development of consultancy services of this nature is being pursued actively in consultation with DEVCO and the United Nations Organisation.

(j) Involvement with Irish Manufacturers in developing new Products

Aer Rianta is at present involved in a number of cases where the company uses Irish firms to develop new products to meet airport needs: it is possible that some of these products can then compete for utilisation at foreign airports.

March 1979.

ANNEX A

TEN YEARS SUMMARY OF TRAFFIC STATISTICS

ANNEX B

CHIEF EXECUTIVE

(J. O’Sullivan)

* Accounting year changed from 31 March to 31 December.