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Nation in a tailspin thanks to Shannon lobby
Shane Coleman, Political Correspondent



IT'S EARLY morning in beautiful Cornwall and the British prime minister is woken from his holiday slumber by a call from his private secretary. "Prime Minister, we have a huge problem, " he is told. In an instant, a dozen horror stories . . . Sellafield, a terrorist attack, a stock market crash, a metatarsal fracture of Wayne Rooney's foot impacting on national confidence . . .

flash through Gordon Brown's mind before the bad news is delivered.

"British Airways is moving its Heathrow service from Glasgow Prestwick to Belfast. The Glasgow area is up in arms about this and demanding that the service is restored. Local business and tourist interests want the government to intervene to force BA to change its mind.

And I'm afraid it gets worse, Prime Minister. The Catholic and Anglican bishops in the area have released a statement condemning the move, stating BA must have 'regard to their moral obligations'."

"But, " responds Brown, "they didn't object when US military flights were using Prestwick. Besides, how can I interfere in a decision made by a private company, particularly when it's going to benefit Belfast, of all places? And anyway, aren't there routes to the other three London airports from Prestwick and a Heathrow service from Edinburgh just over an hour's drive from Glasgow?"

"All very true, Prime Minister, but these arguments are cutting no ice with the Prestwick lobby. Feelings are running very high in the area with predictions of tens of thousands of job losses. Your minister for defence and one of your junior ministers is backing the campaign, likening the chief executive of the airline to Napoleon and saying the government is badly advised.

There are calls for you to come back from holiday and recall the rest of the cabinet.

An opinion poll in this morning's newspaper says there is widespread opposition to the move and the BBC keeps interviewing American tourists saying they wouldn't have come to play golf in St Andrews unless the link with Heathrow had been there. It's a state of crisis."

At that moment, Gordon Brown wakes up in a lather of perspiration. "My God, " he says to himself, "what a strange dream.

That's what it must be like to be Bertie Ahern."

Genuine issues at Shannon Only in Ireland, where vested interests and local lobby groups retain enormous influence over politics, would the story of Aer Lingus withdrawing its ShannonHeathrow route gain such national prominence. Could anybody seriously imagine the scenario outlined above actually coming to pass in Britain? The story of BA pulling one of its routes would hardly make the business briefs in the national papers, never mind prime-time billing.

Nobody doubts that there is a genuine issue at Shannon. The loss of the connectivity . . . so important for multinationals . . .

offered by a hub airport is a real worry.

But the reaction both in the area and beyond, has been way, way out of proportion.

The most pertinent example of this comes from a finding in the Ibec survey on the impact of the ending of the Heathrow link. Almost half the companies surveyed claimed the decision would "impact on their ability to transfer freight abroad".

However, Aer Lingus hasn't operated a short-haul freight service for years.

But just because many of the claims don't stack up doesn't make life any easier for the government. The instant dismissal by local politicians of suggestions that the problem could be largely solved by the development of a new route to an alternative hub airport, such as Charles de Gaulle or Schiphol, shows just how difficult it will be to placate the Shannon lobby.

The fact that Heathrow has taken on a kind of iconic status for the mid-western region is deeply ironic because in Britain, hardly a day has gone by this summer without a politician or a business leader labelling the airport a national disgrace that is damaging Britain's stature and competitiveness. Last week, the London Times devoted two full pages to this issue, describing Heathrow as an "airport under siege" and a "wretchedly outdated airport". The piece described how "passenger surveys have voted it one of the world's worst airports. Newspapers have been filled with travellers' horror storiesf The phrase 'Heathrow Hassle' has entered the lexicon". Another commentator referred to scenes "reminiscent of Nairobi slums".

Despite this, some local politicians here have taken an exclusively 'Heathrow or bust' approach to the problem caused by Aer Lingus' decision.

Tensions between Aer Lingus and Shannon are not new. Aer Lingus has long wanted to reduce its commitment to Shannon, particularly on the transatlantic route, but as a 100% state-owned airline, couldn't do so because of the political strength of the Shannon lobby.

In 1992, Aer Lingus campaigned strongly to end the compulsory stopover at Shannon. Under the impression (wrongly, according to the government at the time) that they would get some kind of changed arrangement on the stopover, the airline acquired, at the top of the market, two Boeing 767s for a direct Dublin-Los Angeles service. However, their lobbying was rebuffed by then transport minister Maire Geoghegan Quinn after serious protests from the mid-west. Aer Lingus had to drop its plans for the LA service and the two white airplanes, left sitting on the tarmac in Dublin airport, were quickly dubbed "the white elephants". Ironically, they were used, from time to time, to fill in on the Heathrow route.

A couple of years later, however, commercial reality finally intruded in the form of the Cahill Plan to save Aer Lingus.

Despite claims that it would lead to tens of thousands of jobs losses in the mid-west (sound familiar? ), the new transport minister Brian Cowen gave the go-ahead for a dilution of the stopover, with every second flight to the US now passing through Shannon.

Over a decade on, it was inevitable that an Aer Lingus free from political control would once again look at its operations at Shannon. The airline has had serious industrial relations issues there. And in business terms, shifting operations to Belfast . . . lower costs and four times the population . . . was a no-brainer.

But there is serious anger at top levels of government at the way Aer Lingus handled the decision, and a questioning of the political nous of the Aer Lingus chairman and chief executive. "If you were sitting down to do this, there are a hundred different ways you could do it without it turning out like this, " said one government source.

"Mistakes were made. Perhaps the management thought that the political benefits of flying out of Belfast would balance out pulling out of Shannon. If so, they were seriously naive. All they had to do was look at the files and the cuttings from the past, " said another close observer.

The feeling in business and political circles is that Aer Lingus should have been more pragmatic in its approach rather than pulling the service in its entirety and in one go. However, despite this irritation . . .

reportedly felt particularly by Bertie Ahern . . . there doesn't appear to be any question of the government using its 25% shareholding to try to force Aer Lingus to reverse its decision. It's not just the impact it would have on Aer Lingus's viability and its share price. It's even more important than that. What message would it send to the international investment community, on which the country is so utterly dependent, if the Irish government voted against a commercial decision by the Aer Lingus management at an EGM? Ireland, a good place to do business, as long as it doesn't conflict with the government's political popularity.

It's been a bruising couple of weeks for all concerned. Shannon is set to lose important connectivity; the government has been hammered in the media and in the mid-west; and Aer Lingus's brand has been damaged (albeit probably only temporarily). The only winner has been the PR genius that is Michael O'Leary, even if Kieran Mulvey did describe his antics as "Monty Pythonesque". Ryanair has been portrayed as a white knight riding to the rescue of the mid-west and O'Leary won't shed any tears over the discomfort he has caused Aer Lingus, or Bertie Ahern for that matter.

The Ryanair chief is no fool. He would surely have calculated the government wouldn't intervene in a commercial decision by Aer Lingus, and that his efforts to force the decision to be reversed were doomed. But there was only upside for his airline in being seen to try.

Conspiracy theorists have also pointed out that O'Leary effectively had an eachway bet. They say that, in the unlikely event that he embarrassed the government into forcing a u-turn by Aer Lingus, the Ryanair boss would have seriously boosted his case against the European Commission's decision to block his takeover of Aer Lingus (he could argue this proved the government was constantly meddling in Aer Lingus affairs). However, Ryanair has given a commitment that it would not use this tactic.

Ryanair stands to benefit Ryanair has proposed two resolutions for the Aer Lingus EGM it is seeking. The first calls for a reversal of the Shannon decision. But the second calls on directors to take slots out of either Dublin- Heathrow or Dublin-Gatwick and transfer them to Belfast. No prizes for guessing which airline would benefit from a reduction in Aer Lingus' Dublin-Gatwick service. But then Ryanair also gains if Aer Lingus pulls out of Shannon. O'Leary can't lose, no matter what happens. Whatever he's at, there is little doubt that the interests of Ryanair and its shareholders are foremost in his mind, as evidenced by his offer to provide planes to Aer Lingus to cover this week's strike action, and rightly so.

In Shannon on Friday, in the wake of Dermot Mannion's visit and despite the tough talking about the battle only beginning, the realisation seemed to be dawning that the Aer Lingus decision wouldn't be reversed. There is some vague talk about Aer Lingus 'doing something' for Shannon, but it won't involve a return of the route any time soon. The unpalatable truth for the mid-west is that any such move will be made not because of any need for the airline to court the Shannon lobby, but because Aer Lingus needs to show good faith with the government of the country. And not because of its shareholding but because this is where most of its activities are still based. That is the new commercial reality for Aer Lingus, and for Shannon.

DESTINATIONS INACCESSIBLE FROM SHANNON WITHOUT THE HEATHROW CONNECTION, ACCORDING TO THE ATLANTIC CONNECTIVITY ALLIANCE
North America Calgary Chicago Denver Halifax Los Angeles Mexico Montreal Ottawa Phoenix San Francisco Seattle Washington Edmonton St John's, Canada* South America Buenos Aires Rio De Janeiro* Sao Paulo Middle East Abu Dhabi Amman Cairo Damascus Jeddah Kuwait Riyadh Asia Bangkok Beijing Colombo* Delhi Hong Kong Kuala Lumpur Mumbai Osaka Seoul Shanghai Singapore To k y o Europe Casablanca Moscow Oslo Vienna Africa Accra Cape Town Nairobi South West Pacific Auckland Brisbane Melbourne Sydney

* If Shannon were to use Sciphol as a hub, all these destinations would be accessible, with the exception of St John's, Colombo and Rio de Janeiro




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