A turbulent year for airport authority

DUBLIN Airport Authority chief executive Declan Collier has acknowledged that it has been a challenging year following the publication of the authority’s annual report for 2009 last week.
“It was a very difficult year, both in terms of the domestic and international economies.They were both in severe recession and we sit on the edge of the economy and get hit hardest and first.
“If your GDP is growing by 5%, your passenger numbers are growing by about 1.5 to two times that and it’s like that too if it’s contracting. Ireland was down about 7.5% and passenger numbers were down about 13%, by about 3.8 million across the three airports. That’s a major contraction. Aer Rianta International faced a similar contraction.”
He said that while Shannon’s passenger figures hadn’t dipped as much as Cork or Dublin, in part, this was because the Clare airport had already faced its own difficulties for the last few years.
“Shannon was down by less than Dublin and Cork but in the last three years, Shannon has had a succession of issues. The first was the introduction of open skies and the removal of the stopover, while this year, we had the issues with Ryanair. It’s been a difficult few years,” Mr Collier explained.
While some have claimed that benefits have been slow to arrive following the delivery of Customs and Border Protection (CBP), Mr Collier said that some patience is needed. “CBP is a huge opportunity. American airlines are using it, BA are delighted with it and they have two flights a day. There is now an opportunity with general aviation. This is brand new and it takes time for passengers and airlines to get used to it but it’s a strong opportunity. You can’t switch on business that easily. British Airways didn’t just drop in, we’d been talking to them for 18 months by the time of the first flight.”
Using the facility has a cost benefit, he claimed. “As it starts to motor, more airlines should see the benefit. It costs $25 to $40 per passenger in the US and in Ireland, it’s $10 to $15. It takes time for the benefits of it to sink in and at the moment, they may be committed to a more expensive international terminal,” he said.
The loss of the majority of Ryanair services was a further blow to a beleaguered Shannon. However, Mr Collier said that the terms Ryanair sought weren’t reasonable and that the low-fares airline has also cut back at a number of other airports.
“Shannon had offered a very significant incentive under a five-year programme, to deliver passengers. What happened was that Ryanair failed to meet the targets and the vast majority of the passengers were going out of Ireland. They had an issue with the €10 tax and they maintained that was the reason [for failing to make targets]. Ryanair came back and said that they were going to scale back on services but they wanted to retain the deal, with less than 20% of the passengers. Despite engaging with them, they were not for turning and the airport had to refuse. The same thing happened in Manchester, Prague and in German airports,” the chief executive said.
He added that efforts were being made to promote Shannon but that it’s a difficult time to be looking for new services to be provided. “We’ve had a marketing team on the road for the last year talking to airlines and there’s definitely interest but it takes time. We have to ramp up what we do and it’s not an easy market.”
The last few years have seen a series of crises at Shannon and Mr Collier feels that there are more tough times to come. He said that a new approach will be needed.
“I don’t think we’re through the worst of it now. Shannon will have to deal with very tough circumstances in the short to medium term but there are opportunities to turn it around and there’s a need for a completely new paradigm for Shannon. We have the expertise to produce a service that is attractive. There has been a substantial investment in restructuring and I think it will be tough but the possibility is there to turn it around. The first thing that is needed is a general economic recovery. Airlines are using the situation to put pressure on airports,” he said.
Mr Collier spoke to The Clare Champion last Friday, before the Icelandic volcano made its presence felt once again. He was already of the view that the knock-on effect from the first shutdown might be felt throughout the rest of 2010.
“It was a very severe hit but we have to keep moving. What it’ll mean for the rest of the year we don’t know and we don’t know what it’ll do for the perception of air travel. If you were caught in Rome, it could mean that all your discretionary money for spending in the summer will be gone.”
He said that a combination of circumstances had made the first few months of the year incredibly difficult. “It’s been a very severe hit. The first quarter of 2010 was very difficult. There was the worst winter weather in decades and then there was the volcano ash. We were hit by everything but a plague of frogs,” he concluded.