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Aer Lingus is to relocate its head office to Hangar 6 at Dublin Airport, according to company sources who say the move could take place towards the end of this year.

The hangar, which has been the subject of huge controversy in recent days, has modern office accommodation for at least 350 staff, a large amount of private parking, its own separate access and huge scope for expansion.

Other sources confirm that it is definitely the intention of the airline to move its entire personnel division, as well as other divisions, into Hangar 6. They were unaware of a plan to relocate the entire head office in the short term.
But the firm's current head-office block is in need of refurbishment.

Plans were previously drawn up, pictured above (courtesy of Henry J Lyons), as far back as 2003 for a €500m development that would comprise a 162,000 sq metre scheme and include shops, offices and hotels, as well as a basement-level airport stop for Metro North. It sits at the heart of the Dublin Airport campus, close to Terminal 2.

Such a move would clear the way for a potentially lucrative hotel, office and leisure development on a 13-acre site on which the airline has a 99 year lease not due to run out until 2062. Reports in the past linked Liam Carroll's purchase of 3.2% of Aer Lingus to the potential of this site alone.

Although Aer Lingus did not return calls to confirm or deny this plan, a number of very well informed contacts believe such a move would make huge sense for the airline and may also explain why Ryanair is so anxious to ensure that it does not happen.

"I believe this is basically a property play that is going on and O'Leary has just been very clever with his use of the airwaves," says one well informed source. "But Aer Lingus management have stood up to it and I think they were absolutely right to do so.

"This looks like a smart business decision by Aer Lingus and they should not be criticised for following through on it. If the 300 jobs were real, Michael O'Leary could produce them in a different way - there is plenty of land around the airport on which a new hangar could be built if it was needed. But the reason he is being so specific about the site is because of its strategic importance."

A number of sources point to other issues that appear not to make sense about Ryanair's insistence that access to Hangar 6 will allow it to create hundreds of jobs. "The labour costs in SR Technics this time last year were more than what he pays his pilots," says one. "As far as I am concerned, this is all a massive PR exercise on his part."
Wage rates at Prestwick, where Ryanair has already agreed to establish a new facility to add to its current operation, are understood to be significantly below what Ryanair would be expected to pay in Dublin. The 25,000 sq metre Hangar 6 is also four times larger than the hangar Ryanair is proposing to build in Scotland.

"I honestly believe that O'Leary's big game plan is to get access to Hangar 6 and once he has it under his control, he will then start putting the pressure on to operate a terminal from it," says another source. "If you look at that site, it has its own road access coming in off the Forest Little road, it has its own big, private car park meaning he could charge people for the privilege of parking there and he wouldn't be paying any fees to the DAA."

But, without another takeover attempt of the rival airline, this site would be closed off as an option if Aer Lingus were to establish its head office at the hangar, says another source. "One of the few remaining options for his low-cost terminal would be the McEvaddy lands to the west of the airport," he says.

It is understood that there has been no contact between Ryanair and Ulick McEvaddy for some time. But the proposition has been discussed by the parties in the past. Experts suggest that if Ryanair's intention is to establish a maintenance facility and, ultimately, a new terminal at Dublin, it would only make sense if it were to build on the same site or within easy access.

Building a stand-alone hangar on the McEvaddy lands, for example, would mean aircraft moving between the two across a runway which would present major difficulties in busy periods.

And O'Leary's protestations have done nothing to move Aer Lingus from the hangar. When it signed the 20-year lease, it was reported that rent to be paid was likely to be in the region of €2.25m per annum, equating to about €107 per sq metre (€10 per sq ft). But this has not been disclosed and it is unclear whether Aer Lingus and DAA have discussed or could come to an arrangement involving the hangar lease and the 99-year lease that the airline holds on the 13-acre head-office site.

But sources suggest it would suit DAA a great deal more to have Aer Lingus in Hangar 6 with a free 13-acre development site at the heart of the airport then to have Ryanair occupying and agitating to convert Hangar 6 into a competing terminal.

"[Aer Lingus CEO] Christoph Mueller is not saying no to Ryanair in order to block 300 jobs," says an airport source.
"He is saying no because there are huge matters of commercial business interest in and around all of this. That head-office land is a little untapped oil well right at the heart of the airport, for example."

One property expert says that office accommodation would not necessarily generate huge rents, particularly without the implementation. But a significant opportunity does exist for a four- or five-star hotel within walking distance of the airport's two terminals.
Fearghal O'Connor

Michael O'Leary's claims that he does not do business with the Dublin Airport Authority (DAA) would appear to be somewhat wide of the mark, with the revelation that the DAA is to refurbish a hangar for him at a cost of between E10-E20m.

Business & Finance has learned that a board meeting of DAA, two weeks ago, agreed to spend the money so as to replace a Ryanair hangar used for the airline's light maintenance work that was demolished to make way for Terminal 2. Ryanair originally refused to move into alternative accommodation at Hangar 1 because it has a significant asbestos problem but the airline is understood to have subsequently agreed once DAA said it would pay for an overhaul.

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