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Dublin: 15 °C Sunday 19 May, 2013

Concern growing over future of Galway Airport

Labour TD says that the AG and Dept of Finance are looking into a recent banking decision which could seriously impact on the airport’s ability to operate.

THE ATTORNEY General and the Department of Finance are reportedly looking into a recent decision at Bank of Ireland in which government funding for Galway Airport was used to offset the airport’s loans.

Labour TD Derek Nolan told TheJournal.ie today that he and the Tánaiste met with representatives of the airport’s board and the Galway Chamber of Commerce yesterday to discuss the issue.

Nolan said the bank’s decision was within the terms of its contract with the airport, but that it was unexpected given that “the airport was up to date with its repayments”.

He also said that the Attorney General is looking into the legality of the move, and that the Tánaiste is awaiting a report from the Department of Finance on the issue.

Last week in the Dáil, Eamon Gilmore said it “would not be appropriate for the government to intervene in the relationship between a bank and an individual account holder.”

Deputy Nolan said today that the Department of Transport had given funding to the airport in order to enable redundancy payments and to facilitate ongoing operations at the airport.

Of the €1.6 million the airport had in its account, €1.1 million was transferred to offset against its term loans, leaving €500,000 to cover redundancy payments as well as ongoing operations. The Examiner reports today that €450,000 of that half a million has already been earmarked for redundancies.

Although there are currently no commercial flights from the airport, it is used as a maintenance facility by Aer Arann and is used for private flights into and out of Galway.

Fianna Fáil TD Éamon Ó’Cuív said he raised the issue in the Dáil last week because he was “very concerned about it because the loans are up to date”.

He said that he is also worried about “the possibility of the same clause being used for other companies”.

Ó’Cuív said the latest development meant that the prospects for Galway Airport are “not good”.

Galway Airport could not be reached today for comment, though airport director Declan Dooley told the Examiner that the airport may have to close within days or weeks if the money is not returned to its deposit account.

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Comments (65 Comments)

  • Concern? Yeah I would be pretty concerned too if I owned an Airport with no commercial flights going through it *eyeroll*
    Sorry but as a Galwegian AND a realist i agree it should be closed. Shannon and Dublin are too easy to get to now to compete. You don’t throw good money after bad.

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  • close it down! 45 mins to shannon from galway and bout an hour to knock, we dont need one in every county!

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    • No commercial flights to or from…….why is it open?

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    • And what would you propose for those from the Aran Islands who depend on Galway Airport? I can understand removing the PSOs from Sligo and Kerry Airports, but not Galway (and I say that as someone who lives in Sligo).

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    • a boat

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    • A boat won’t get a doctor to the islands in an emergency. Neither will it get an injured person from the islands to the hospital in Galway. Closing the airport means that not even emergency chartered flights could operate as there would be no flight tower, which is a legal requirement unless in close proximity to a second air control tower. In this case, the next closest air control tower is Shannon which is outside the legally required distance. In rough weather, ferry services to and from the islands can be suspended for more than a week at a time. In these situations an air connection is the only link the islanders have to the mainland. Without the air connection the islanders could be forced to go weeks on end without a link to the mainland.

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    • @brian I’m pretty sure flights to the Arran islands leave from
      Connemara airport (which is about 20mins from the city)not Galway

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    • fly a doctor from Shannon then, its not rocket science

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    • Brian you’re behind the times on a few points…

      Aran Islands do not depend on Galway airport. “Aer Arann Islands” flights don’t use Carnmore, they go to Inverin “Connemara” airport, one of the other 6 airstrips in the county. Those services are not being closed, intact O’Cuive is trying to get 2 more services open at the new Inishboffin and Clifden airstrips.

      Carnmore lost PSO routes 2 years back, and subsidies were ended last year. Aer Arann ended all commercial routes last October after numbers collapsed and are planning on moving their remaining maintenance service to Dublin.

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    • I stand corrected, Alfonsis.

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    • The coast guard are available in an emergency. If people want to live on an island that is their decision. If they want to live on an island they can either buy a boat, or a helicopter.

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    • Jaysus Joe; you should change your name to “empathy for the common man” ; NOT !!!!! What do you mean “choose”?? that’s a ridiculous comment.

      if I could currently find an island of the coast where I could live in peace and get away from all the sh1te being imposed on us at the moment, I’d CHOOSE to livethere – first rule: target practice to always coincide with election canvassing season ;-)

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  • Galway flying club.

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  • Hope a private business buys it. For those saying ‘we don’t need it’, you don’t need it but I’m sure the people of Galway appreciate it, its not all about me or you we need to look after others too!

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    • Ciaro 04/02/12 #

      It needs to survive as a viable business with NO taxpayers money.

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    • Eh Ciaro, I do believe that’s what I suggested.

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    • wed be alot better off if they finished the motorway between gort and galway besides wastin more money on a dead end airport like this!

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    • Conor, you’re very short-sighted and they can do that if they want but i’m suggesting that PRIVATE businessmen take it over, freshen it up and make it even more beneficial to the people of Galway. I could say ah they could use Shannon but that wouldn’t be fair on them cause I’d be thinking from a point of view that excludes the people of Galway rather than looking at the bigger picture that includes them.

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    • And if you’re from Galway, why are you so against something that would benefit you? It’d be privately owned under my suggestion so you can still have your motorway.

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    • Maybe you don’t fly so you don’t see how it’d benefit your people.

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    • im afraid its common sense bud, have u looked at a map recently? Shannon and galway are less than an hour away from eachother. Better to have 1 profitable airport than 2 crap ones with no routes!

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    • It’s not common sense at all, completely wrong attitude you’ve got there. I’ve saw Galway airport there are houses within a 5 minutes walk of it, I’m pretty sure they’d rather walk 5 minutes and hop on their way abroad than get a bus an hour down the road. You can have 2 profitable airports creating business in 2 places or 1 airport creating business in 1 place and pain in another place and that pain falls in your area. You wouldn’t pay for what i’m suggesting, a private business would so I honestly don’t get how someone can be so bloody short-sighted.

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    • We need to look at the long term and not just the short term after all that’s the attitude FF/FG/LAB had and what got us all into the mess our country is in now.

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    • Denis 05/02/12 #

      It already belongs to a private business, the Galway Chamber of Commerce.
      They spent a lot of time looking for subsidies as they aren’t able to break even running it.
      At one point before Aer Arran stopped flying they were only filling 20% of the seats.

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    • I don’t consider a business which takes money from the taxpayer a private business, just my point of view. It’s mismanagement that got them into it and it doesn’t have to solely work for flights to holiday destinations, it could have more than 1 flying club, tourists flying scenic routes in biplanes and other types of small aircraft people would want to experience as well as some commercial routes, manage this airport properly and in the long term it will become profitable in the long term. We can make it profitable but only if we put the right people in the right places doing the right things.

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  • erm , it is already privately owned. so that didn’t work…

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  • Ciaro 04/02/12 #

    Donegal, Sligo, knock, Galway, Shannon, Kerry, cork, Waterford, Dublin.
    How many airports does a little country need or afford to keep open?

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    • Ireland has 10 primary and regional airports. Scotland, with a population only 500,000 more than the ROI, has 35 primary and regional airports. Estonia, with a population slightly more than 25% that of the ROI, has 7 primary and regional airports.

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  • Being from Galway and having used it, I don’t see any point to keeping it open if it’s not profitable. Dublin is now 2 hours away and Shannon is one. Knock as well.

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    • You might want to read what me and Jack have being saying, it won’t just effect the airport staff it will have a devastating effect on your whole economy. There’s a much bigger picture. If you want to try rely on Shannon, fine we’ll let the airport close, never sell it, stop everything encouraging tourism in Galway and all the related along with it and see how Shannon keeps you afloat, It wont.

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  • Denis 05/02/12 #

    The chamber of commerce screwed the airport when they turned down the chance to move to Oranmore at the height of the boom.
    There they would have had to space to build a larger runway that jets could use.
    Instead they chose to stay at carnmore where the runway can’t be extended and Aer Arran can’t even fill all the seats on the ATR-72 aircraft because the runway would be too short for them to take off full.
    Of course if they had moved Ryanair would be able to come in and compete with Aer Arran then owned by a member of the chamber of commerce.

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  • Ciaro 04/02/12 #

    Karl, you are obviously very passionate about this and rightly do. It’s a pity that the banks have our spineless government by the balls, the people of Galway should par their BOI accounts first thing Monday.

    The airport managers should target tourists, new Zealand have a thriving industry where tourists are flown over scenic locations in old bi planes. Forget about the ryanairs of this world, they will bleed you dry.

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    • Ciaro 04/02/12 #

      Par their accounts? Should be close their accounts, stupid I phone piece of shit.

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    • Of course I’m passionate Ciaro, I want to see these people have a sustainable economy with sustainable business and a profitable airport driving that. Well ideally we should get rid of all Irish bank accounts and cause them a real problem. Yes they should target scenic routes as well as commercial flights going to scenic places and good destinations of other genres. It can be viable and we need to make sure it is. I’m not from Galway so i’ve no vested interests before anyone starts accusing me of that one.

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    • People seem to never ask how about we not exploit our resources but exploit the very land they lie below? Of course we should but people think only of negativity but not of suggestions. Negativity is welcome but only if its backed up with real suggestions. Remember the English had the same scare with Gatwick we now have with Galway, well look at it now. Two different types of aviation correct but same situation with the banks and government, we can save our ventures if we sell them to the right people who will employ the right IRISH people and that will inevitably employ more IRISH people. We cant just close everything down, we need to sell the right assets, change management in the right assets and close the assets in which that is the best option. We’ve over 14% unemployment yet people want to put even more people into that figure just as it comes down in the most gradual of ways but none the less an improvement is an improvement and as one store says ‘every little helps’. The long term is what matters because the short term is over when FG/LAB is out and independents like Stephen Donnely are in and that will be sooner than you may think. People seem to forget that business can be like dominos, close one and others will fall with it and that’s a game of dominos I don’t want to see our nation playing.

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  • 3 airports within an hour of each other.

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  • Don’t worry inda will come to the rescue …….

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  • BOI involved in dodgy dealings. WE own the POS and own the funds that where sent to help the airport out
    We still have no idea with whats going on in that kip.

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  • Laughable idea of someone buying this POS airport and turning it into a viable business. Nothing but a money pit for subsidies for the West.

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    • It can be turned around and it’s not subsidizing the west to make it a viable business under private ownership who would eventually be running a profitable airport. My suggestion stops us paying for the airport and we don’t have the airport to get money for the west, we got it for tourists to go there and pay tax which ends up being spent all around the country.

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    • But Karl it got more subsidies than any other regional for the last 15 years, the airline got PSO subsidies to put on marginal routes and cheap fares, yet less than 5% of Galway tourists came via Carnmore according to the Government when the airport was at it;’s peak! If with all that support and small economical turboprop planes it couldn’t sustain a couple of routes I don’t know how you think it will magically become profitable in private hands.

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    • I never said magically I meant with hard work and the right attitude it could become profitable in the long term. It can become profitable if it targets the right routes as someone suggested use scenic routes. It could also target the right destinations and if they upgrade the airport. No one ever assessed this airport properly it shouldn’t have a barn as a terminal with what you’ve said it should have a state of the art but compact terminal. It was mismanagement that caused this airport problems not its location, we need to look at the bigger picture and the long term.

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    • Like that person said NZ fly tourists around in biplanes out of regional airports, nothing says Galway can’t do the same. People say fair play the aussies and whatever people in NZ are referred to can’t think of ti right now an the people that have to move over there and get the same thinking. Well here’s an idea us that are lucky enough to be at home call our friends in Australia or New Zealand cause we all know at least 1 person in at least 1 of those places and ask them how stuff is done there and turn Ireland into a better place eventually making it that them people can come back to their home nation. Let’s think long term. What annoys me a lot about every government is they plan for 5,10,15,20 years yet none of them have the balls to go out and change things forever or at least for the next 100 years in a way that will benefit the people.

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    • Understand where you’re coming from, and maybe one day someone will buy it and strip it back to make a basic London service viable again.

      But the numbers show that even in the heights of the boom times when Galway had connections to major airports those services struggled and ended, and the airport needed heavy subsidy. Problem is Galway is a small city in a small legion with several bigger better serviced airports and now motorways to Dublin. 100s of millions have been invested in top class infrastructure 40 minutes down the road in Shannon, it makes no sense for a broke Government to continue to encourage the wastage of subsidies by having 3 airports in close proximity struggling to reach critical mass to break even ending up in all 3 failing to provide decent services. Focus on getting fast reliable busses to Knock and Shannon and the tourists will do the rest themselves.

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    • I meant to do that under private ownership, I didn’t mean under government ownership and it can be done so we need to make sure it is done, Galway is not small compared to Dublin in size, Vice Versa, Galway could eat Dublin as a small snack so i’m hoping you meant that in terms of population. It had connections but not the correct connections. I also understand where you’re coming from but I just don’t want that game of dominos being played which is inevitable if we don’t sell Galway airport. I don’t want it to be government owned at all, completely against the notion of any government being involved in any industry that is not health and debt restructuring for the people in need. Why wait when we can do our dang best and ensure the sale happens soon and the airport lasts until then? That would be pointless. Right we make more of a profit in the short term but it’d take a bit longer for the turn around so more costly(due to loss of VAT income from tourists) in the long term I think as we need to start fixing this mess before it gets worse. I know you want buses for tourists but we need to think of the locals as well and a lot of tourists will think ‘why would i get an hour bus and haul a suitcase around town?’ where as there is one hotel pretty much to the side of Galway Airport and another just around the corner, they employ people but close Galway Airport and you close them two hotels, less hotels is less capacity which is less tourists and less tax. I think you might be thinking a bit too much in the short term. Also Shannon airport is mostly commercial which is only one kind of service I’d like to see in Galway, I’m more thinking along the lines of multiple services such as new ventures not yet explored in Ireland. We need to innovate forever not close an airport to save some money in the short term. Short sighted people usually lose money so we can’t afford to have that kind of sight at any time, good or bad.

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  • pagan 04/02/12 #

    Get your self an android phone.

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  • I actually didnt even know Galway had an airport????

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    • It’s very thrown together, they should of used all the money they were getting to upgrade it as best they could and make it competitive rather than whatever they spent it on, clearly these debts have being caused by serious mismanagement

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  • I flew Dublin to Galway in mid 2008 – the last bit of a 32 hour flight from New Zealand to Ireland to visit my sister who lives in Galway. It was a great flight and absolutely brilliant to get to Galway in 45mins rather than a 3 hour train journey after 32 hour’s international flights. I’m coming back again now, and will have to put up with that 3 hour train journey unfortunately. It’s a real pity about Galway airport. A real pity.

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  • Like I said, I want to buy the airport for €1 and turn it into a profitable business which in turn will create jobs. Am a non Irish and don’t have money as such as am a normal worker earning about 300 a week. But am ready to take the jump with my ideas. The only problem is to find investors. And I have an idea how to attract them and make them invest over 10 years without them receiving a penny before. My ideas to turn the airport into a profitable business will surely interest them n encourage them to invest. Now am contemplating another major problem? Will the authorities sell the airport to someone who has only ideas???? I am ready to buy Galway airport for a quid and this will include all it’s assets, cash-on-hand and it’s debts and then turn it into a multi million euro business in a maximum of 10 years.

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  • Galway Airport is a privately owned company, good luck getting them to sell it to you for €1.

    If you are serious look at it from their point of view, you own an airport beside a city with acres of land, hangars, fire trucks (i think they’re state of the art new ones), fuel bowsers, terminal that’s fully kitted out… the list goes on and on. As far as I’m aware their assets equate to way more than anything owed out. Even if they sold one of the airport cars they’d get a few grand. Land is cheap these days but it’s not yet free.

    On the other hand if you do manage to buy it for €1 I’ll go halves once I liquidate a can of beans that’s been lying around my kitchen and is failing to make any profit!! :)

    ***Can of beans for sale, 1 careful owner, can be seen working; €0.50 ono***

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    • 1. If it’s privately owned, why was its redundancy package being funded by the department of transport?
      2. If it had enough cash flow, why would they request funds from the government, which was given to them from tax payers till?
      3. If the company was managing it well, would it be in its actual state of financial difficulty?
      4. Galway Aiport’s management said the airport will probably close down in a matter of weeks. Doesn’t that mean they are heavily indebted and cannot cope anymore?
      I think they are going bust because they liabilities greatly exceeds the actual value of their assets, or else some of these assets would have been sold to cover their costs of running the business and would have given them the opportunity of making their business more viable, thus saving jobs as well as their wouldn’t be any news for redundancies which in turn would have led to no request to the government to spend tax payers money to fund their redundancy package.
      Correct me if and wherever am wrong.

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    • It’s not private if the state pays for part of it as far as i’m concerned.

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    • If they have all those assets such as lands, trucks etc…and the list goes on and on like you said,then they are definitely in the red. It’s a complete negative equity. The value of their liabilities should have never gone beyond the value of their real assets. Btw, Good luck with the can of bean.

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  • What about the Volvo in July? Surely the airport could see an increase in passengers considering the VOR is so global? Wealthy business people etc.

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  • Where’s Galway anyway

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  • Sell the airport to me for €1 and I’ll make it profitable with millions in turnover but will exclude Ryan air from it

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  • I work in Europe and this airport used to be great until Dublin airport screwed it over. When we could swap from one plain to another with hand luggage we could make huge amount European destinations while getting out of our own beds in the morning. Same returning.
    I work in cloud computing and take about 150 flights a year. We are the expanding economy we need access to Europe and wasting a Sunday going to Dublin and returning after midnight on a Friday is not sustainable. So Galway will not be able to access this industry?

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    • There’s the domino effect I was talking about in my comments, people only look at the short-term and not the long term. They think Shannon(1 hour away) and Dublin will keep them afloat, not going to happen I’m afraid for the very reasons you stated.

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  • It’s definitely not fully private. I think it’s part state-owned. And I also think that they don’t have enough cash flow to survive because I bet their liabilities well exceed their assets or else some would have been sold to offset loans and other debts or their assets would have been used as guarantee for further loans so as to stay afloat. Galway Airport is actually definitely going bust. That’s why various government departments are rushing at its rescue so as not to be blamed for the consequences and impacts this affair will have on business in general, the economy and the local residents and indirect stakeholders who depend on the airport for their business to flourish, like local pubs, b&b and hotels etc… Galway Airport is not even working on break even.

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    • Haha I’ve had a few ‘can kickers’ for the can of beans :)

      Dublin, Cork and Shannon are state owned. Galway Chamber of Commerce owns Galway airport. You can’t say that anything the state gives funding or grants to is suddenly state owned. For example if the enterprise board gives me a grant to start my business they don’t suddenly own my business. In fact from the public’s perspective it’s a good thing the state don’t own Galway Airport!!

      I’m not saying management did a good job, quite the opposite, they created top jobs for the boys, skimming unrealistic salaries off the top and scared operators off with over the top charges. They messed it up big time.

      You’re talking about their land being completely in negative equity, maybe if they bought it in 2007 and took out a massive loan for it but they’ve owned that land for decades. It’s worth more than they paid for it way back when, not every piece of land is in negative equity.

      You see it from time to time where a company buys another for €1/$1 as they are taking on massive debt. The buyer will have a lot of money to back them up, they’ll turn it upside down and shake it up by stripping back the company, put in a new management team, kick out unions, use their expertise, contacts etc to change it around and make it profitable.

      Galway Airport only has 13 employees now and running on skeleton staff, it is costing €40-50k a week to run. If you buy it for €1 how do you reckon you’ll keep it running while you attract investors and then turn it around when you find investors with no prospect of government funding and no PSO subsidised routes to attract airlines?

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    • There’s a correction here, Galway Chamber of Commerce holds the majority of shares, they are not the sole owner of the airport. If you want to start a business or expand your business, do you think the IDA will fund you with million euro? Don’t think so. There should be something connecting the State to the airport in terms of ownership.

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    • My point is that Galway Airport is not state owned like you said. If you want to buy it for €1 you’re best bet would be to approach the majority shareholders which is Galway Chamber of Commerce.

      Not sure what you mean about the IDA but they are currently investing at record levels and IDA client companies spend €19 billion in the Irish economy!

      State owned companies are a drain on the economy, they’re usually big inefficient giants crippled by strong unions and little incentive. I do believe it’s important to retain partial ownership for strategic assets but Galway Airport doesn’t fall into that category at this time.

      There’s a comprehensive list of state assets they’re currently looking to offload so it’s highly unlikely for them to now go out and buy a privately owned company with no current and limited future strategic value ie no scheduled flights operating, Shannon (already state owned) & Knock close by, N4 to Dublin 2.5hrs drive, on top of that it’s losing money every day.

      Please don’t take anything I’m saying personally, I just think it’s a no goer to buy Galway Airport for €1 and if you can pull it off then hats off to you. Again I’d be interest in knowing how you plan to pull it off?

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