53% drop in military traffic

WHILE Shannon Airport’s assets were valued at €105.5 million when granted separation from the Dublin Airport Authority (DAA), the airports had a turbulent 2012, with the lucrative US military transits through Shannon down by a whopping 53%.

 

According to the DAA’s annual report, Shannon’s performance was the worst of the three State airports in 2012, with passenger numbers down by 14%. Cork is experiencing a year-on-year decline of just under 1%, while Dublin had an increase in passenger numbers of just under 2%.

A spokesman for the DAA told The Clare Champion the figure of €105.5m reflected what Shannon had been valued at by the DAA but it also took into account certain liabilities.

“The €105.5m dividend in specie represented the assets transferred, less the liabilities. A dividend in specie means a dividend of the assets in their current form. The fixed assets that were transferred had a value of about €110m but there were also some creditors and liabilities, which meant the dividend in specie was €105.5m.”

While this was the book value of the airport, it’s debatable how possible it would have been to realise this figure had the Government opted to privatise Shannon, given that it was loss-making in recent years.

The DAA’s report stated that while it had been a difficult year for Shannon, when military traffic is excluded, the drop in passenger numbers wasn’t as serious as bald figures suggest.

“Passenger numbers at Shannon Airport declined by 14% to 1.4 million last year. The main reason for the large decline in passenger numbers was a significant reduction in the amount of military transit traffic at the airport.

“Terminal traffic – that is passengers who started or ended their journey at Shannon – declined by 6% last year to 1.3 million.”

The drop in military traffic was very significant. “Shannon’s transit business declined by 53% to 133,000 last year. The fall came after one of the main companies that routes military transits through Shannon lost part of the business, following a tender process.”

Traffic to all Shannon’s major markets declined, especially to mainland Europe. “Traffic to Britain, which was Shannon Airport’s largest market last year, declined by 2% to 736,000. Transatlantic traffic fell by 10% to 288,000, while traffic from Shannon to continental Europe was down 12% to 236,000.”

Aer Rianta International (ARI), which was founded in Shannon but which all claim to was lost under the separation after a controversial decision by Government, enjoyed a great year, the report outlines.

“ARI delivered another very solid trading performance during 2012, despite continued challenging conditions in some of its core markets, including Ireland.

“The company’s operations outside Ireland made profits of €27.4m last year, compared to €31.8m in 2011 when certain one-off factors, such as the disposal of its shareholding in three Russian businesses, boosted its financial performance. ARI’s sales at overseas locations increased by 5% during the year.”

In Ireland, ARI’s sales rose by an average of 1%, although there was a poor performance at Shannon due to the decline in military transit traffic.

The report includes details of where Shannon’s 1.4 million passengers were travelling to and from last year and Britain made up more than half the market. A total of 735,967 passengers flew between Shannon and the UK, averaging more than 2,000 per day.

Transatlantic traffic was second most significant, with 287,923 passengers, while traffic to continental Europe was third with 236,118.