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

APPENDIX 2

SUPPLEMENTARY MEMORANDUM FROM AER RIANTA TEORANTA

1 AIRPORT SERVICES

Concession agreements contain clauses giving Aer Rianta control over the standard, quality and efficiency of the service provided by the concessionaire. Any complaints by the public are vigorously pursued by Aer Rianta and there is no evidence that this system in any way diminishes the service. All concessions are put out to public tender from time to time and existing concessionaires are aware that tenders are judged not only on a financial basis but also on the basis of our past experience of the performance of the firms involved.

2 IRISH AIRPORTS AS GATEWAY TO UK FOR AMERICAN TRAVELLERS

In physical terms the Irish airports are ‘gateways’ to UK provincial destinations. The extent to which they are used as such depends on the marketing policies of the airlines and on the competitiveness of the air-routes via Ireland when compared with direct services to UK destinations or services via British Airports.

It is part of our marketing philosophy to encourage the airlines to market the Irish Airports as widely as possible in the mass consumer area. Furthermore, some of the charter operations into Ireland, especially those using Shannon, do use surface transport on occasions for the on-movement to British destinations, but only in cases where the economics of the operation are favourable.

3 OBJECTIVES

The objectives set out in our original submission to the Committee are intended as broad aspirations rather than as operational goals.

Within the existing framework of its agency relationship with the Department, Aer Rianta is not really in a position to set operational objectives in precise terms. The scope and nature of the facilities which the company operates are determined to a great extent by capital availability and by international aviation standards, both of which are matters outside the immediate control of Aer Rianta. The company’s principal objective at present is to make a financial surplus of a level that will establish the viability of an independent airports authority, while maintaining a range of services and facilities in keeping with the national interest.

In practical terms the company’s operating objectives could be described as:—

(a) to provide airport facilities, both in terms of the range of services and of physical accommodation, up to the highest standards attainable within the financial resources available;

(b) to operate these facilities as economically, efficiently and profitably as possible, having regard to:

(i) the need to keep charges to public and airlines at an acceptable level and

(ii) the need to maintain staff numbers, conditions of service and rates of pay at levels mutually acceptable to the company and the unions and

(c) to develop profitable ancillary activities to the maximum extent possible.

No fundamental change in these operational objectives is foreseen within the next five to ten years. If, however, the establishment of Aer Rianta as an independent airports authority takes place the emphasis on objectives will alter to the extent that (a) the desirable standard and scope of facilities and services will be determined as a first priority on a planned basis and (b) financial requirements will follow from these.

4 PRICING POLICIES

It is true that air travel is sensitive to cost of fares, however, fares are set by the airlines and airport charges form only a small proportion of the total cost of air transportation.

Purchases at airport shops are an entirely discretionary activity. The growth or decline of this business is highly dependent on the quality of the operation and on the value we offer our customers. In our view, the costs arising from using our shopping facilities are not a deterrent and there is strong evidence that passengers regard shopping at the airport as an attractive feature of air travel.

5 PRODUCTIVITY

Because of the unusual diversity of its activities and the nature of the employment given—firemen and chefs, coxswains and watchmakers, barmen, waiters, crime prevention officers, harpists, dog handlers, architects etc—a global measurement of productivity (such as Work Load Units) would not be appropriate. For example, very few of our activities are directly related to passenger numbers or aircraft movements. Many staff are employed in essential services (security and firefighting, maintenance, cleaning etc) which are operated on a 24-hour basis and which are related essentially to the size and nature of the airport complexes themselves. A ratio of staff numbers to passenger or aircraft movements would not, therefore, be a realistic yardstick by which to measure productivity, as the same basic plant is required to cope with large variations in traffic intensity.

In practice, the measurement of productivity in Aer Rianta varies enormously from one activity to another. In commercial areas we would take account of payroll ratio to turnover or gross profit, sales per passenger and net profitability.

In areas like maintenance and cleaning we would have regard to the square footage to be covered plus the complexity of the areas involved. Staffing requirements are agreed with the unions and the company retains the right to allow staff numbers on particular shifts to fall below agreed levels if operational considerations allow this. In other areas, e.g. security and firefighting, it is a question of meeting international and national standards as laid down by ICAO, the National Civil Aviation Security Council etc and productivity is, in any event, hard to express in mathematical terms. Again, the number of posts to be covered and the staffing requirements are negotiated and the company retains the right to curtail numbers where operational considerations permit.

Productivity negotiations are approached by the company on the basis that:—

(i) increases in pay must come out of actual savings, and

(ii) the company must get its fair share of these cost savings.

The savings would normally arise from the elimination of restrictive practices, the introduction of new systems or equipment to increase output and fresh agreements on minimum staffing strengths. Savings are reviewed from time to time during the currency of each productivity agreement to ensure that costs are maintained at agreed levels.

6 STAFF DEVELOPMENT AND TRAINING

Aer Rianta recognises the value of a trained and skilled work force, the need to keep abreast of change, both social and technological and the importance of man-power planning and development. The company has adopted a programme which includes direct training, attendance by staff at courses and seminars given by outside educational and development agencies and the encouragement of staff towards self-development in their own time with facilities for special leave of absence.

The company employs a full-time training staff of five—three at Head Office and two based at Shannon Airport.

Executive Development and Training

The company has embarked on a programme of executive development and staff at middle management level have attended in-company training courses on finance, computer appreciation and corporate planning. A series of seminars on industrial relations is currently in preparation. Managers have also recently attended outside training programmes on a number of topics including Personnel, Industrial Relations, Internal Audit, Property and Contract Management, Airport Management and Planning, Airport Security and Rescue Services, Airport Engineering and Stocks and Stores Management.

An Executive Appraisal Scheme will be introduced this year and all managers have received training in the implementation and operation of the scheme. The scheme is based on individual target setting and emphasis is put on identification of the training and development needs of those involved.

Operations and Engineering

Staff from the operations and engineering departments of the three airports have recently attended a training course on airport and airline operations. It is planned to send staff on an Airport Management Training Programme which is being developed at Loughborough University later this year. Engineering tradesmen have attended in-company courses on painting techniques, electrical plan maintenance, welding and brazing and stocks and stores control.

Intensive language training programmes have been designed and implemented for Information Assistants and a programme of familiarisation visits to other airports has been in operation for the past two years.

Commercial and Catering

Staffs from these areas of the company’s activities have participated in specially designed training programmes covering such areas as customer handling, product knowledge and display, merchandising, cash handling, sales and hygiene.

Induction, Supervisory and Pre-Retirement Training

All new staff attend a two-day induction training course which outlines the company’s activities, history, organisation and policies. All supervisory staff attend a week long programme aimed at developing man-management skills.

Staff who are within 10 years of retirement are invited to attend a two-day course aimed at preparing people for retirement and covering such subjects as finance, pensions, social welfare, health, hobbies etc. This course has been very successful and to date has been attended by over 200 staff.

Clerical and Secretarial

In-company courses on report writing, effective reading, typing-skills and understanding finance have been developed over the past five years.

Airport Security and Fire Service

All staff in the security and fire service receive extensive initial and annual refresher training. Officers of the force have attended the CAA Fire Training School at Stansted, England.

Apprentices

The company employes apprentices in its maintenance and catering departments and sponsors their attendance at Technical and Catering Colleges on day release courses.

Spare Time Study

The company encourages staff to take up courses of study during their spare time and offers attractive incentives viz study and examination leave, advance of course fees and cash awards on successful completion of approved courses.

August 1979.