Air chief defends Shannon stance

THE Dublin Airport Authority (DAA) published its financial results for 2009 this week and in his review of the year, chief executive Declan Collier said a deal couldn’t have been done with Ryanair to maintain services at Shannon.

“During the year, Shannon Airport refused to accede to a number of unreasonable, non-negotiable demands made by Ryanair in an ultimatum on a possible new five-year agreement. Ryanair had failed to honour the contractual commitments within the existing agreement with Shannon Airport and was seeking even more generous terms for a new agreement. Services have to be commercially viable for both the airport operator and the airline but the non-negotiable demands made by Ryanair did not meet these criteria,” he said.
Mr Collier said that the DAA had made a sizeable investment in Shannon in 2009. “Shannon Airport opened Europe’s first full US Customs and Border Protection (CBP) facility last summer and US-bound passengers can now undertake all necessary immigration, customs and agriculture inspections at Shannon before departure for the United States. The CBP service was extended to general aviation post, opening up an important additional market for Shannon.
“CBP is already delivering new business to Shannon and it is hoped that the airport’s transit business will further increase with the availability of CBP. British Airways uses the facility twice daily as a transit stop on its new all business class service from London City Airport to JFK in New York.
“The DAA invested more than €28 million in capital projects at Shannon last year as it completed the new US CBP facility and made a number of upgrades in other areas.”
The DAA controls all three State airports and the figures showed that passenger numbers at Dublin declined by 15%, at Cork by 13% and at Shannon by 12% in 2009. However, terminal traffic (the number of passengers who either began or ended their journey at Shannon) was actually down by 14% to 2.4 million.
The DAA figures showed that traffic to UK from Shannon had dropped by 7%, traffic to continental Europe was down by 13% to 900,000, while transatlantic numbers fell by 23% to 442,000. Domestic numbers were down by 46% to 52,000.
Overall, it was a very poor year for the DAA with earnings before interest, taxation, depreciation and amortisation declining by almost a fifth to €126 million. The group recorded an after-tax loss of €13 million for 2009, compared with a profit of over €47 million in 2008. However, there was an exceptional cost of €46.5 million in respect of a DAA cost-recovery programme, which was largely related to its voluntary severance scheme.
Mr Collier claimed that the group has taken necessary steps to deal with the recession. “The group has reacted to the changed economic circumstances with a series of measures that will significantly reduce its cost base.
“Payroll costs, coupled with the cost of materials and services, were reduced by €18 million during the year under review.
“Following several months of negotiations, a cost-recovery programme generating €38 million in payroll savings and other efficiencies was agreed with unions representing the vast majority of the group’s employees at the Labour Relations Commission in December.”
He paid tribute to staff that voted to accept reductions in their pay. “Voting to accept a reduction in one’s pay is a hugely difficult thing to do and the employees that supported the group in its efforts to address its cost base deserve praise and respect in equal measure.”
He said it had been a difficult year for Shannon-based Aer Rianta International. “The retailing arm of our international business, Aer Rianta International (ARI), also experienced a challenging year in 2009.
“From the beginning of the year, sharp reductions in both the number of airline passengers and passenger spending were recorded at overseas airports, where ARI operates retailing concessions, particularly in Russia and the Ukraine. These factors, together with provisions in relation to ARI’s balance sheet, led to a sharp reduction in profits in the year.”