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Pandemic leaves a €28m hole

SHANNON Group recorded a loss of over €28 million in 2020, with the pandemic devastating its aviation and tourism businesses.
In the group’s annual report for 2020, Chief Executive Mary Considine wrote, “We found ourselves facing an unprecedented crisis which resulted in the group recording a loss for the year of €28.2 million (post tax and exceptional items) compared to a profit in 2019 of €21.6 million, a reduction of almost €50 million.
“During the year, the group incurred exceptional charges of €27.9 million, the main exceptional item being an impairment in the carrying value of the airport of €24.5 million, which was necessitated as a result of the uncertain passenger outlook due to Covid-19.
“Group revenue was down 57% to €34.3 million in 2020 from almost €80 million in 2019. Faced with this significant reduction in revenue, the group implemented stringent cost control measures.
“Our overall operating costs reduced by 42.5% in the year, to just under €30 million,” the report stated.
Writing about the challenges of 2020, Ms Considine stated, “The collapse of the aviation sector resulted in just over 352,000 passengers using Shannon Airport last year, a 79% decrease on 2019.
“It is important to note that this full year performance was distorted by a strong start to the year before the impact of the pandemic, with passenger numbers from April to December declining by over 92% compared to the same period in 2019.”
In addition, she noted, the group experienced a collapse in visitors across its portfolio of heritage attractions, which are heavily reliant on international visitors.
The sites recorded just over 302,000 visitors in 2020, a reduction of almost 69% on 2019.
Despite the global economic damage wreaked by the pandemic, she wrote that the commercial property arm of Shannon Group’s activities had still performed well.
“On a positive note, our property business performed strongly during 2020, and we continued to deliver on our property development strategy which has seen the group deliver 1 million sq ft of commercial property solutions across the Shannon Campus at Shannon Free Zone and Shannon Airport since 2015.”
Regarding the cost cutting at Shannon in 2020, she added, “The scale and devastating impact of the global pandemic, and the resulting collapse in airport passengers and visitors to our attractions, required us to take difficult but necessary actions to preserve our businesses and protect jobs for the future.
“We eliminated discretionary spending across the group with only essential or key strategic capital projects undertaken during the year.
“Similar to airports, airlines, and the tourism industry around the world, we also engaged with our employees on a range of measures to manage payroll costs to reflect the decline in business activity. These included temporary reduction in working hours; career breaks; temporary layoffs; temporary reduction in pay and a voluntary severance scheme.
“These were difficult but necessary decisions taken to navigate the crisis and we recognise the impact they have had on our people,” wrote the CEO. “We availed of Government supports for which we are very grateful, including the Temporary Wage Subsidy Scheme (TWSS) and the Employment Wage Subsidy Scheme (EWSS) to preserve employment across the group and its businesses. We also availed of the waiver of commercial rates scheme, and our heritage business received grants under the Covid Restrictions Support Scheme (CRSS) and the COVID-19 adaptation fund.”
Regarding post-Covid recovery, Ms Considine acknowledged that “it will take several years for activity to return to anything like normal levels”. In the interim, she called for continuing support for the aviation sector.
“The Government’s support to date for airports provides a framework for recovery and growth, and it is critical that this is maintained to ensure that benefits of international connectivity for tourism, trade and investment are realised as soon as is possible. We appreciate the range of Government support Shannon Group received for 2020 and we will continue to advocate the benefits of putting in place a multi-year funding arrangement, providing capital and operational funding for State-owned regional airports over the coming years.
“With our fellow stakeholders in the Irish Taskforce for Aviation Recovery, Shannon Group is also advocating for a support package for airlines to support routes which would encourage the rebuilding of air traffic and restore vital services to the regions.”
Ms Considine also reiterated calls for an increase in regional route marketing funds available to Tourism Ireland to ensure that routes into the regions “which will be critical to the economic recovery of the regions” are retained and developed.
“These initiatives will be critical to the restoration of Ireland’s air services which will be pivotal to national economic recovery as we emerge from the pandemic, particularly given Ireland’s reliance on global markets to drive our industrial, tourism and international service sectors,” she concluded.

About Owen Ryan

Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked for a number of other regional titles in Limerick, Galway and Cork.