Review under way into DAA's international duty free and consulting operations
Dublin Airport
operator
DAA
is reviewing its international duty free and consulting operations, raising questions over the terms on which the State-owned business invests in global aviation markets.
The internal review of duty free retailer Aer Rianta International (ARI) and management consultancy arm DAA International (DAAI) comes amid uncertainty over their growth prospects after failing to land new contracts they had targeted.
Still DAA chief executive Kenny Jacobs said there were no plans to seek a buyer for either subsidiary. 'Neither ARI nor DAAI are for sale,' Mr Jacobs said in reply to questions.
ARI is considered a likely contender to bid against rival retailers for a big duty free concession at Dubai airport, one of the world's busiest, which is soon expected to come on the market.
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The business runs duty free shops in 27 airports in 13 countries around the world. They include Montreal, Winnipeg, Québec, Edmonton and Vancouver in Canada; Bridgetown, Barbados; Larnaca and Paphos, Cyprus; Lisbon and Faro, Portugal; Bahrain; Muscat, Oman; and Riyadh, Saudi Arabia
In recent times, however, ARI failed to win contracts for new duty free concessions it sought at JFK airport in New York, Keflavik in Iceland and Belfast International Airport. Certain contracts have been renewed but ARI has lost concessions it once held in New Zealand and Delhi, India.
DAAI has big contracts in Saudi Arabia to manage the King Abdulaziz International Airport in Jeddah and the Red Sea International Airport. It came close to a deal to build an airport in Kuwait during the term of the last government but the proposal was vetoed by then transport minister, Eamon Ryan of the Greens.
The review, scheduled to conclude this summer, was notified last week to representatives of Minister for Transport
Darragh O'Brien
at DAA's annual meeting. Such meetings take place in private.
One option under consideration is whether Government approval is sought for DAA to raise external capital for ARI or DAAI under the umbrella of State ownership.
The review comes as DAA seeks swifter assessment for proposed investments from NewERA, the Government's adviser on the affairs of semi-State groups such as DAA.
The approval of Mr O'Brien and Minister for Public Expenditure Jack Chambers is required for any big DAA investment, usually after NewERA advice. Still, questions have been raised about the pace at which potential investments are scrutinised.
This is in addition to questions over the prospective investment returns required under the terms of DAA's 'shareholder expectation letter' from the Government, its controlling shareholder.
'DAA, like all commercial businesses, is always reviewing every division of the business, both domestic and international. These internal reviews are focused on how we continue to evolve and grow the business,' the company said
In reply to questions the Department of Transport said: 'The Minister and department regularly review the performance of the commercial State bodies under the department's remit, including DAA.'
It added: 'In this regard the Minister and the department have regular engagement with DAA, and NewERA provides financial and commercial advice to the Minister and department as appropriate.'
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