The company revealed last month that 200 of the positions were being located at Prestwick Airport in Glasgow.

The airline offered to base the 300 remaining jobs at Dublin Airport if the Government helped the carrier acquire Hangar 6 which is occupied by Aer Lingus.

However Ryanair spokesman Stephen McNamara has said the Government has failed to secure the jobs.”

http://breakingnews.iol.ie/news/ireland/ryanair-govt-has-failed-to-secure-hangar-6-jobs-449294.html

Poster Nickyn on the pin says it best:
“Another great day for Ireland !!!!

What great politicians we have, I have to admire the way they fought with such vigour and the way they left no stone unturned to secure those jobs. They must be really exhausted now from the ‘tough job of politics’. I think we should send them on all expenses paid trip around the world.”

http://designcomment.blogspot.com/2010/02/liars-poker.html

I would like to scrutinise deputy Fahy’s summation also. But I have to admit, except for a discourse, like the one we saw yesterday, involving all the CEO’s, of private and public bodies - we would still be a million miles from ‘the truth’. At least the Oireachtas inquiry yesterday got us all a little closer to a meaningful picture of things. And it has gone on record, more importantly.

Even if the interrogation by the Dail deputies was a bit child-ish at times, and deputy Fahy does come across as too innocent, by a long shot. I will qualify that if I may. If deputy Fahy had done as much home work as I have done, on the capital investment program by DAA, he would appreciate the ridiculous contrast in scales. We are talking about billion(s) of euro of investment, in the short space of a few years into the airport projects.

DAA could carry out that investment program, by carefully managing the €600 million per year, cash flow they have. (As a state organisation, DAA receives no funding at all from the state. Neither does DDDA btw) That is why you need real top guys such as Declan Collier about, for those few years, when the big capital investment is being undertaken. Even if Michael O’Leary cannot appreciate that.

However, in the matter of Hangar no. 6, O’Leary most definitely has a point. While DAA were spending hundreds of millions on aprons, air bridges, air-side - and on land-side projects too - getting the electricity power infrastructure sorted out etc - and everything performing with new Co2/energy standards - DAA could have driven some investment into Hangar construction. It was peanuts, compared to the other stuff. They should have hangars for both airlines, because it was obvious there were 2 no. strong airlines present on site.

I remember once reading Michael Lewis’s book, Liar’s Poker. Lewis in the concluding chapter noted, he walked away from Salomon bond trading floor with a lot of money in his pocket. During his time at Salomon brothers, he had learned how to invest a couple of million, here or there, and make that investment pay off. But on the other hand, he noted, he didn’t have a clue how to invest a couple of thousand dollars into an SME. In that case, he would probably end up losing the thousand(s) of dollars of investment.

That is the paradox too with Ryanair and DAA. They are a different culture. Ryanair know precisely what to do with a few million. DAA know what to do with a few hundred million. Hence, it is so difficult for Michael O’Leary to come to terms with that. It was the same in my experience, working for Zoe developments. They could not be convinced to take on the skills of the ‘hundreds of million(s)’ class of management. Hence why they lost their shirts in the end. BOH.

False. Aer Lingus Chief Exec Mueller contradicted this today when he said there was no tender. (And) Michael O’Leary (disputes it too).

“Ryanair knew it was available and did not apply for it…”

False on two counts. First, that Ryanair “knew it was available” is an impossibility: it is apparent now it never was available. Second, Ryanair was trying to obtain the hangar since 12 February 2009. It was negotiating with the IDA and trying to use the IDA and the Tanaiste’s office to proxy negotiations for it. It is true that they did not apply for it, in a competition or tender, but Aer Lingus, the IDA, DAA, the Dept of Transport and the Tanaiste were all aware that Ryanair were interested in pursuing the property and providing up to 500 jobs. To argue that Ryanair did not apply for a non-existent competition and therefore this statement is true would surely be bordering on madness.”

He also believes that other aspects of the hearings sounded planned:

“”Originally Posted by darkknight
Mueller did not say that Aer Lingus owns Hangar 6.
It is much more convoluted:”

I wonder who asked about Aer Lingus renting from Aer Lingus? That sounded rehearsed to me at the time.

The summation given by Frank Fahey at the end of the meeting is now also worth scrutinising. He read out a pre-arranged commendation of the DAA, thanking them for getting 20 million Euro rent out of Aer Lingus when they could have paid nothing. It seems clear now that Aer Lingus is not the owner of the property. So what sort of clause in the agreement - in any agreement - would have allowed Aer Lingus to remain as tenants for free? I’m guessing that this was nonsense.

Something isn’t right about this whole deal.”

First Active sublets it to Shinagh, an Aer Lingus subsidiary, which held the building for the old Team Aer Lingus maintenance business, which the airline sold in 1998. Shinagh subsequently sublet it on to a subsidiary of SR Technics (SRT), which ultimately acquired what had been Team Aer Lingus. SRT pulled out of Dublin early last year with the loss of 1,100 jobs…

The DAA bought SRT’s interest in Hangar 6 last year. It said yesterday that it decided that when the “legal complexities” surrounding the building became clear, it decided that leasing the building back to Aer Lingus was the best course of action.”

This is simply not credible. We are seeing an all too familiar pattern: Insiders behaving contrary to the public interest. This reminds me of the astounding €400Bn blanket bank guarantee that almost brought down the country and the cooperation by all the political parties in the concealing of the truth about the banks and in passing NAMA.

http://www.irishtimes.com/newspaper/finance/2010/0225/1224265142048.html

The only facts, which deserve to lay on the table now, for everyone to contemplate (most especially the FF/Green coalition) are these: How does a state agency, the Dublin Airport Authority manage to spend €2.0 billion in the last five years - but forget to spend €15 million to buy, as Mr. Mueller himself, CEO of AerLingus described it - a 19 year old hangar building, which doesn’t keep the heat in at night, and is owned by the Royal Bank of Scotland. Which in turn is owned by the government of the United Kingdom.

If Taoiseach Mr. Cowen and Tanaiste Ms. Coughlan had any self respect left, they would be on a Ryanair flight to London right now, to see if they can buy the hangar back from Gordon Brown. And simply cut through all of the rubbish. I dare say, if Albert Reynolds was around, and it was his plane high-jacked, by someone in pursuit of the third secret of Fatima, he would be on a plane journey wherever. BOH.

Brian Cowen: There was a competition (Dail debate 17/02/10)

Christoph Mueller (CEO Aer Lingus): There was no tender (Oireachtas Transport Committee submission 24/02/10).

Brian Cowen in the Dail: “There was a competition. Michael O’Leary and Ryanair for whatever reason, which is their own business, did not compete for the hangar, seek ownership of the hangar or seek a lease for it last September, even though they suggested they needed the hangar to go ahead with a heavy line maintenance operation. However, they never negotiated and they never contacted the DAA about that hangar. They contacted the authority in the past about hangars 1 and 2 and they are using them. Ryanair knew it was available and did not apply for it while another company required it because it is the only hangar that can facilitate the maintenance it required for wide bodied aircraft. Other hangars exist in Dublin Airport to do this job. They are vacant and available.”

Middle of this page:
http://debates.oireachtas.ie/DDebate.aspx?F=DAL20100217.xml&Node=355#N355

It’s total fiction.”

However, I believe that the Aer Lingus CEO’s evidence ruled out a tender:

Poster Bokonon:
“”Originally Posted by lostexpectation
missed the bit about the competition what did mr mueller say?”

He wittered on about how he felt that the negotiations were fraught and he had the sensation there were other interested parties, he supposed.

Then he said, there was no tender.

He didn’t actually say “no competition” (or I didn’t catch it if he did) but his answer was clear enough.”

This raises huge questions as Ryanair have already publicly stated the following:
“Ryanair again calls on the Taoiseach to provide evidence of his false claims in the Dáil yesterday that there was a “competition” which Aer Lingus won in order to occupy Hangar 6. How did Aer Lingus win this competition (and who were the judges) when they have no heavy maintenance business (as all their heavy maintenance is undertaken in France), when the Hangar 6 facility is currently empty and when Aer Lingus have created not one new job in the Hangar 6 facility?”
http://www.ryanair.com/en/news/ryanair-s-proof-of-its-maintenance-only-plan-for-hangar-6

With the exception of Leo Varadkar the other deputies, especially Labour’s Tommy Broughan because you would have expected more, seem to have been DAA cheerleaders.

(€2.0 billion euro of Irish taxpayers’ money)

In all of that investment, over an intense period of the last say, 5 years, in it, they couldn’t find a few million to buy a hangar worth €15 million.

Those are the facts, and deputy Frank Fahy can dispute them all his wants.

Ireland is losing 500 no. high skilled jobs, at Dublin, to the United Kingdom, because hangar no. 6, worth €15 million is owned by Royal bank of Scotland?

Taoiseach Brian Cowen should be utterly and absolutely ashamed. Make no mistake, this is a shocker - but all we are getting from the present Fianna Fail and Green coalition, is window dressing by deputy Fahy.

BOH.

In some parallel universe, if I had challenged Mr. Declan Collier for his position as chief executive of Dublin Airport Authority - I would have been in less hurry to proceed with the capital investment program I described in an earlier blog.

Perhaps, to execute the said program at a slower pace.

What I would have done was to use profits which DAA generated (in their bumper years) to at least buy out Royal Bank of Scotland, (owned by the British government) which is ‘landlord’ to AerLingus at Hangar no. 6, for the last 19 no. year(s). BOH.

http://www.politics.ie/economy/124218-have-cowen-coughlan-been-telling-truth-about-ryanair-offer-500-jobs-33.html

It’s also another victory for our army of Oireachtas committees.
Poster Fat Brian says it best:
“Adjourned until 3:45 March 10th
yes, thats right… MARCH 10th
a 2:45 meeting zaps broughan, fahy and kennedy so much that they need over 2 weeks to recover
That system is a FAIL”

Between them they have managed to discuss this hugely important, massively publicised issue for…..two hours fourty five minutes. Well done lads! You deserve those huge salaries and expenses. Keep writing letters for constituents because you don’t want to set up a national citizens advice and advocacy network. It’s all you aspire to anyway.

Ireland’s insiders would never give up power without a bitter fight. But they needn’t worry because no one is going to even verbally complain about them anyway. The Oireachtas Class are all so tight and corrupt that it would be literally unthinkable. For Ireland the late nineties will be as good as it gets. With our failed establishment it’s all downhill from now on.

http://designcomment.blogspot.com/2009/08/builders-land.html

I believe, my suggestion for what ‘NAMA should do’, is what Dublin Airport Authority should have done regarding Hangar no. 6, if they had the foresight, and the personnel on board, who trully understands land and development. I fear, that NAMA without people such as myself working on board, will make a string of the very same mistakes, which Dublin Airport Authority has done. BOH.

What should NAMA do?

But in some cases unfortunately, like a true pyramid scheme of things, the scandalous complexity of ownership and legal rights associated with our land banks may have began with the third last previous ‘owner’ of the lands.

http://designcomment.blogspot.com/2010/02/who-is-dealing-here-with-whom.html

BOH.

http://www.rte.ie/news/2008/1204/primetime.html

€4.0 million per annum over a 25 year lease period, equals €100 million over the lifetime of the lease. It is not dissimilar in fact to the terms agreed between Dublin Airport Authority and AerLingus for Hangar 6. Bearing in mind, that DAA can use the future rent roll from AerLingus as collateral against the €1.0 billion deficit they began with.

(See John McManus’s piece from Monday’s Irish Times newspaper, Hangar 6 saga reveals flaw at heart of State’s aviation policy.)

That is just Hangar 6. What is AerLingus paying for Terminal 2 one may wonder? It is astonishing really, for a company which seems to be losing money and employees, in no particular order, hand over fist, to be able to pay so much in various leases each year. BOH.

http://www.independent.ie/national-news/daa-wont-reveal-price-paid-for-hangar-ryanair-valued-at-836413m-2073512.html

“Ken Griffin, Sunday Tribune, Jan 13, 2008.

RYANAIR…British court ruling granting the low-cost airline hangar space at Dublin airport…

…The British ruling on hangar access came last month after maintenance firm SR Technics tried to evict the airline from a hangar at the airport. Mr Justice Gray found that SR Technics had conspired with the DAA to force Ryanair to vacate the hangar and ordered that the airline be granted a 15-year hangar licence.

The judgment was particularly critical of the DAA’s failure to provide documents to the court. Mr Justice Gray noted that chief executive Declan Collier had “unhelpfully replied [to one request from Ryanair] that it would not be appropriate for the DAA to discuss commercial discussions it might. . . be having with third parties”. He also rejected the evidence of former DAA general manager Michael Murphy, who appeared as a witness for SR Technics, and said he was part of an attempt to construct a justification retrospectively for the attempted eviction….”

http://www.tribune.ie/archive/article/2008/jan/13/ryanair-renews-fight-against-daa/

Just in case it is of any use to you, I based the following writing on lectures I attended by the DAA in 2009.

http://designcomment.blogspot.com/2009/06/dublin-airport-authoritys-capital.html

As I stated above, we at Zoe were involved in a joint venture agreement with DAA, for the lands at Harristown. My intention, back at that time was to foster an awareness of better program and project management skills at Zoe. So that we could genuinely tackle the issue of our €3.0 billion outstanding debt, and make good on some of our land assets. The trouble as I see it, Frederick P. Brooks, saw it worthy of incorporation into his essays. But there was no Mr. Brooks in Zoe, more is the pity too. We need to watch that, and bank lenders to the private entreprise need to watch that too.

Another reference Mr. Brooks appreciated on my recommendation was Ramo, Simon; Robin K. St.Clair (1998) (PDF). The Systems Approach: Fresh Solutions to Complex Problems Through Combining Science and Practical Common Sense. Anaheim, CA: KNI, Inc. You can download from the link here:

http://en.wikipedia.org/wiki/Systems_engineering

BOH.

I promise, I’ll make this as brief as I can. I am glad you brought up the point about Davy Stockbrokers and misallocation of resources. I have thought about many of the dimensions of this problem myself. There is a big discussion which could happen about that, which I would like to participate in, though not perhaps through this restricted ‘comment’ medium. In passing, there is a person named Adrian Leaman, who works with Bill Bordass in the UK. They are involved in something called ‘usable buildings’, which aims to do post-construction analysis of projects. Mr. Leaman has plenty of contacts on this side of the water too. He is an interesting guy. The simple fact of the matter, as I see it, organisations such as ESB Networks, Dublin Airport Authority and so forth, do possess a lot of skills required, in dealing with large capital investment programs. They also understand the pitfalls which can occur. I like the quotation in the Irish Times project management supplement by Charles Lindburgh (aviator) about Ford Motor Company in the 1930s.

“Once they got an idea, they want to start in right now and get action tomorrow, if not today. Their policy is to act first and plan afterward, usually overlooking completely essential details. Result: a tremendous increase of cost and effort, unnecessarily.”

The understanding and skills which Ford-like, lean, high volume organisations such as Ryanair, Zoe developments and so forth do not posess. The challenge is to merge in some way, the culture and approach of these 2 no. extremes. I had a look back through the banter and discussion at Irish Economy blog, about investment and about infrastructure. There was, Keynes and floods by Richard Tol. McCarthy on the Green New Deal, Tol on the carbon tax, by Richard Tol. Investing in Electricity Infrastructure and Renewables in Ireland, by John Fitzgerald. A lot of the contexts of those debates is rambling (a lot of it from myself) no doubt, but they do address some of the issue about misallocation of resources in the boom. I have been struggling to get my head around this for some time - the problem of, how does one get value for money, from large investment programs? How does one do that right? Having listened to individuals, such as the head of ESB networks describe the problem, as they experienced it, of managing the spending of billions of euros, over a period of time.

http://designcomment.blogspot.com/2009/08/ford-cobra.html

That blog entry, was one piece of text I wrote last August for instance. That would be my contribution basically - you have ESB Networks who actually know, spending €4.0 billion on their medium voltage network, was a crazy project to embark upon - even with good management, and a defined brief. Then you have privately funded companies such as Zoe developments, who embarked with the same amount of cash, on project(s) without good management and without a defined brief. How does one reconcile those extreme cultures? Bearing in mind, there are serious strengths and weaknesses in both. That is the puzzle which occupies my brain, most of the time. BTW, I have done extensive research and study on the design of Terminal 2 myself. I sent it to Frederick P. Brooks, author of The Mythical Man Month, for use in his new book publication of essays. Back when I had involvement with Zoe, I had hoped that our and Dublin Airport Authority could make their joint venture partnership work on the Harristown lands. I was really looking forward to that project, having gone through some planning stages with DAA. It requires an acceptance of culture on both sides. BOH.

Just to prove the point, a note by Davy Stockbrokers (reported on in yesterdays Irish Independent), argues that there was significant misallocation of resources during the boom - too much for housing and not enough for infrastructure. This is not news - in reports I co-edited we made this point e.g. in 2006 and also 2003. My colleagues also had a “wasted opportunities” scenario in their 2001 and 2003 medium term projections.

We underinvested in infrastructure in the mid 90’s, we overpaid in the noughties and now will under invest going forward. However the biggest problem is that we have not adequately considered the appropriate ownership and regulation of our infrastructure which gets us back to the hangar 6 saga. With the wrong ownership and regulation it is easy to end up with underinvestment or overinvestment, out of line costs and peculiar decision making.

Shan Ross in today’s Sunday Indo makes an interesting point – the DAA needs to keep Aer Lingus sweet so that they will fulfil their promise to move into Terminal 2.

Why does Aer Lingus want to keep hangar 6? Could the DAA/IDA not build a new hangar for Aer Lingus and give hangar 6 to Ryanair?? If Michael O’Leary is bluffing why are they not calling his bluff?

“It is unfortunate and inappropriate that DDDA adopted the same business model as DAA. Because DDDA doesn’t have a continuous and sustainable income stream like DAA enjoys. Indeed, Turner and Townsend main priority in DAA’s capital investment program, was to program construction work dates sos that DAA’s continuous project investment stream would be able to release funding at ‘major milestones’ so that construction could be bought at the lowest possible price.”

http://www.irisheconomy.ie/index.php/2009/12/29/politics-and-economic-policymaking/#comment-30276

You will find stuff about CHQ shopping centre in there also, which appeared in the Irish Times newspaper recently, because it has dropped below 50% occupancy. I guess, we could call it DDDA’s version of Hangar no. 6. In July 2009, I also wrote something for the Archiseek Irish Architectural forum, called A New Knowledge Campus for the Customs House Area. Which looks carefully at the DDDA’s lack of effective management of spatial resources at the centre of Ireland’s capital. (At the time both Royceton and Danninger all lost their jobs, and I was trying to make some sense of it all) DDDA as an organisation isn’t robust enough to fulfill its actual purpose. It seems as though DAA, has its faults too. Although I stand by both organisations, in terms of the skill levels they have managed to build up, in the last decade. BOH.

“Former Green Party Senator Déirdre de Búrca has accused the Minister for Environment of delaying the publication of a report on the Dublin Docklands Development Authority.

Speaking on RTÉ’s This Week, Ms de Búrca said John Gormley delayed publishing the report on controversial planning at the DDDA because it would cause ’serious discomfort’ for Fianna Fáil.”

http://www.rte.ie/news/2010/0221/docklands.html

I have a lot of appreciation for the fine project work undertaken by the Dublin Docklands Authority, let it be known to all. If I had anything to say about it, I would not restrict DDDA’s involvement with urban planning in Ireland’s capital city, to just the docklands area. I would further expand their remit to develop policy and directions for much of the city, and even surrounding region. There is a lot to salvage out of both DDDA and DAA, and perhaps even those 2 no. organisations in collaboration. What is lacking is management and foresight - and guys who understand the strengths and weaknesses of both of those organisations.

My old boss Liam Carroll was certainly not one, who had enough training to appreciate them - either for his land(s) at Harristown, or North Wall Quay. But like Michael O’Leary’s frustration with Hangar 6, I believe Liam Carroll was justifiably disgusted by DDDA’s handling of North Wall Quay, and other sites, which left more than 500 no. Royceton and Danninger employees without a livelihood. It is high time for the government to be called to account. BOH.

“Also significant is the fact this letter was dropped in the Tanaiste’s in tray a full nine months before Aer Lingus inked a deal with the Dublin Airport Authority last November last to take over SRT’s former facility, signing a lease which Ms Coughlan insists cannot now be undone to facilitate Ryanair.”

http://www.independent.ie/national-news/tanaiste-saw-ryanair-deal-long-before-srt-closed-2072821.html

“Ireland is a dynamic system that is miles from being an honestly administered world of perfect competition.”

That rings a bell with me. I know I found myself tackling that point recently, in some discussion. I managed to find a quote about economics and urban planning policy, made by Tom Dunne recently:

“Also, it appears to me that many economists think in terms of a model that tends towards equilibrium and this model is not good at handling the housing market where the supply cannot be withdrawn and where demand comes from both investors and occupiers.”

I had picked up on that statement, and had attempted to make some sort of response here:

http://www.irisheconomy.ie/index.php/2010/02/09/sweden-the-property-market-and-monetary-policy/#comment-35365

BOH.

Policy formation is most definitely important. I was in the audience the other evening at a lecture given by BENE, Better Environment with Nuclear Energy. They were talking about the perception of the nuclear industry in Ireland. I couldn’t help to wipe the smirk off my face, throughout the lecture. I was thinking to myself, you fellows think you have it tough. But try looking for sympathy and support for the construction industry in Ireland now! My industry went through a period, in which we could do no wrong. There wasn’t enough man hours available to cater for Irish peoples’ insatiable appetite(s) for property. I hated that. I knew that would leave me without an occupation in life, sooner rather than later. And it did. I am disgusted now with just about everything. The construction in Ireland, should have run whatever course it had to run, within some sort of policy containment. Instead, we had a construction Chernobyl. A no trespass fall out zone for the next couple of generations. That is why I couldn’t stop smiling at BENE’s presentation. I tried to elaborate on it here:

http://www.irisheconomy.ie/index.php/2010/02/12/mortgage-repayment-burdens/#comment-35859

I also rambled the following (much to Karl Whelan’s annoyance I have no doubt).

“I suppose, the point I am making, is that from an economic point of view, if we were producing arms to win back the Ukraine from the Axis powers - then the model we used for house building in Ireland during the Celtic Tiger, would have been the ideal model to adopt.”

I have no idea why Ireland adopted that sort of ‘war time’ ramp-up production of property and development. I have no idea why we did that. When I wrote my blog entry, Ryanair to Fail yesterday, all I realised was, private entreprise in Ireland has been shelter-ed. Not in a good way either. I assume the construction industry had to maximise on it’s particular ’shelter’, or something. It doesn’t lead to good, long term private entreprise. I.e. The stuff that will give a guy an occupation, instead of a pink slip. In my blog entry, The Shoe Box King, I tried to argue the need for better sequential planning. If the Green-tech guys in particular do not employ the low periods of growth in the Irish economy, to foster the best models and policy - then no one has any control, over anything, when the pressure to ramp-up begins. By that point, industry will grab whatever darn model it can, off the shelf (even if it was conceived for the 1950s). and deploy it. We have to learn to ‘ride the waves’ better in Ireland. We are so focussed on very large things, like Europe, NAMA and so on, we could easily miss this.

Sub-note: Architect James Pike spoke at the Feasta conference last summer ‘09 about his research into ‘Equity Partnerships’. I just throw it out there, as an example. They appreciate better now, the need for some strong economic under-pinning to whatever the draw on paper. To enable a formation of a good urban society. The current head of the RIAI is getting smart-er about urban planning policy generation. But it is important to remember, these guys spent the last ten years, in a mobile phone link-up, to the construction equivalents to Michael O’Leary. They are start-ing with to learn the baby steps today. BOH.

The value of this blog is that we can discuss issues with the benefit of research, which hopefully results in better policies and decision making. I also think that it is a good vehicle to have interaction between specialists in various fields and the general public.

On your second point - interesting, but I am not sure what mechanism would result in implementation of policy recommendations. One thing has to be borne in mind - what might be an optimal policy from an economic point of view might be completely unacceptable to the public and hence to politicians (I don’t have to get elected).