Date of Defense

Fall 12-3-2004

Department

Aviation

First Advisor

Mark Murphy, Aviation

Second Advisor

Vladimir Rishukhin, Aviation

Third Advisor

Rick Maloney, Aviation

Abstract

The Trans-Atlantic Aviation Area is a proposed liberalization of the air services agreements known as bilateral agreements between the United States of America and the member states of the European Union. The new agreement would replace the restrictive bilateral and Open Skies bilateral agreements between the United States and the EU with a single comprehensive agreement. The emergence of true open skies between the US and EU creates many economic opportunities and some economic threats. One such threat is the situation faced by the Shannon Airport, Ireland. Under the current US/Ireland bilateral, Shannon's existence is protected by requiring US carriers to serve Shannon with the same frequency they serve Dublin International Airport. Under TCAA rules, air carriers will be able to serve any destination at any frequency they desire (with the exception of airports such as London Heathrow, where limited slots are allocated). Ireland as a whole will benefit from the opening of the TCAA, as it is expected to increase tourism to the country, bringing in an additional 160,000 tourists annually. Regionally, the west of Ireland will see an economic downturn caused by the opening of the TCAA. The economy of the west is pegged to the success of Shannon Airport and the industries which Shannon supports. The TCAA will have the impact of a dramatic reduction of air services to Shannon, a reduction of direct foreign investments in the west, a loss of jobs in the region, and a reduction in tourism as access to the region is reduced. US carriers are almost certain to relocate all operations from Shannon Airport to Dublin Airport under the TCAA. In the EU countries with which the US has an Open Skies agreement, greater than 95% of US airline traffic enters through a single city. Further complicating the issue is the breakup of the Aer Rianta, the government owned airport management group under which Shannon, Dublin, and Cork Airports were managed. The 2004 State Airports Act separated the Irish components of the company into three new, independent airport authorities, each individually responsible for their financial well-being. The Shannon and Cork Airport Authorities will start out debt free, while the Dublin Airport Authority will assume the total debt of the former Aer Rianta group. Research indicated that while the Aer Rianta group was profitable in 2003, Shannon Airport would have posted significant losses if it had been listed separately from the group. A history lesson can be taken from the situation faced by Glasgow Prestwick International Airport, the former sole international gateway to Scotland. As in Ireland, heated debate occurred as to how Prestwick would be affected if international gateway status was granted to Glasgow Abbotsinch Airport. To survive, Prestwick changed its focus from passenger traffic to cargo, enticed a low cost carrier (Ryanair) to hub operations there, and improved the ground infrastructure between the airport and the nearest large city, Glasgow. If Shannon is to survive the post-implementation of the TCAA, its caretakers need to take decisive action to give it a fighting chance in the "no holds-barred" world of open skies.

Access Setting

Honors Thesis-Open Access

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