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Profits rise at Shannon

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PROFITABILITY at Shannon Airport “improved considerably” in 2014, a year in which passenger numbers also rose by 17%.

That’s one of the messages from Shannon Group’s 2014 annual report, along with a commitment from Shannon Group chief executive, Neil Pakey, to correct what he called “historic underinvestment” at the airport and other facilities under the remit of Shannon Group plc.

In the annual report, Mr Pakey outlined that “profitability of the airport has also improved considerably in 2014, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of €4.6 million, an increase of 34% on 2013. This increase in profit was achieved in part through passenger growth and new routes, but also by managing cost efficiencies.”

Mr Pakey added that work on lowering costs will continue this year, as will capital investment at the airport. “We will continue to address the operating cost base in 2015 and identify further cost efficiencies to ensure our sustainability and enable us to compete effectively and deliver on our investment goals.

“Another priority will be the continued rollout of our capital investment programme and the delivery of projects to improve our customers’ experience and maintain the high standard of security and safety within the airport,” he disclosed.

A sum of €4.4 million was invested in capital expenditure projects last year, which Mr Pakey said was a start in addressing issues in terms of infrastructure at the airport. Regarding passenger numbers, he noted there have been improvements in regard to the major destinations.

“Growth was achieved in our main market sectors with European traffic showing the largest gains, with a 70% increase. Transatlantic traffic continued to perform strongly, increasing by 10% and UK traffic recorded a 5% increase. We are working closely with national tourism agencies and our airline partners to consolidate the passenger growth achieved in 2014.

“Although the year was positive overall, we had one disappointment with the loss of the Stobart Air routes to Birmingham, Bristol and Edinburgh. We are working hard to replace these services and we are delighted that Stobart Air will recommence its Shannon to Birmingham service with a larger aircraft, operating six return flights per week. This adds another route to our summer schedule for 2015, delivering an additional 45,000 seats.”

As well as Shannon Airport, Shannon Group encompasses Shannon Commercial Properties, Shannon Heritage and the International Aviation Services Centre.

Shannon Airport CEO Neil Pakey
Shannon Airport CEO Neil Pakey

With regard to the commercial properties element of the business, Mr Pakey said it had been “a year of transition” but he said that it moved into profit during 2014.

“Operating profit from continuing activities and before impairments in 2014 amounted to €0.6 million versus a loss of €1.6 million in 2013.”

He added that there were numerous transactions throughout the year and work on improving the property portfolio is underway.

“The company continued to invest in its properties in 2014 with capital expenditure of €2.4 million. Among projects undertaken was a partial refurbishment of Shannon Airport House, a large multi-let office building within Shannon Free Zone.

“In 2014, the company signed 66 new lease agreements and completed 26 land transactions, the most significant of which was the sale, to IDA Ireland, of a land bank at the National Technology Park, Limerick.”
Shannon Heritage had a good year, he added. “Over 637,000 visitors attended its portfolio of seven day-visitor attractions and four evening entertainment venues during the year, an 11% increase on the previous year and reflecting its best operational year since 2007. We will work to consolidate this growth in 2015.”

Commenting on the IASC, he added, “The core IASC team is now in place and is focused on the further development of the Shannon Region as the Irish aerospace hub and enabling the implementation of Government aviation policy.”

Owen Ryan

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