Six companies have been identified as potential partners in a joint venture to run the City of Derry Airport, which could lead to its eventual privatisation. Derry City Council at present owns the airport, which is receiving a ratepayer subsidy this year of £3.5m.
The businesses engaged in initial discussions with the council include an aviation services company, a property development business and an infrastructure fund. It is hoped that these and other potential partners will respond to an invitation to tender seeking expressions of interest in a joint venture.
A stipulation of the tender process will be that the site must continue to operate as an airport and that the proceeds of any eventual sale must be split with the council. Ownership of the airport is to transfer to new arm’s length companies, that will initially be wholly owned by the council. A holding company Coda (Holdings) Ltd will own two other companies: Coda (Property) Ltd that will own the airport site and Coda (Operations) Ltd that will run the airport.
At present only Ryanair and Aer Arann operate from City of Derry. But Damien Tierney, a manager at the airport, said: “We are engaged in talks with other carriers who are not currently operating from the City of Derry. We are hopeful.” He added that the council is “confident” that some of the routes suspended by Ryanair during the recession will resume as the economy recovers.
The council is to publicly advertise for private sector leaders with relevant experience to join the boards of the new companies. They will sit alongside representatives of the council.
Councillor Colum Eastwood, chair of the council’s airport committee said: “We recognise that the subvention from the ratepayers is just too much for them to bear going forward. We are attempting to run the airport in a more commercial way, while reducing the subvention from the ratepayers of the city of Derry.”
The business plan aims to increase total passenger numbers at the airport from the 380,000 expected to use it this year to between 1 million and 1.2 million within ten years. It aims to eliminate the council subsidy within five years.