Things looking up for Shannon, but support still required

WHILE 2021 was more promising than 2020, it was still a very difficult year for Shannon Group, according to its newly published annual report.

Writing in the report Shannon Group CEO Mary Considine stated that while there are some grounds for optimism, there are also threats present.

“The Covid-19 pandemic continued to impact Shannon Group during 2021, contributing to another challenging year for the Group.

“Throughout the year we focused on the recovery and rebuilding of our businesses, with positive developments in the second half of the year providing grounds for future optimism.

“However, while air travel demand continues to recover, the Group is mindful of current geopolitical uncertainties and their potential influence on business performance during 2022.”

While the Group’s financial performance did improve, she claimed that Shannon Airport will need State support for some time to come.

“Shannon Group delivered an improved financial performance for 2021, with an increase of 18% in turnover to €40.5 million (2020: €34.3 million), while EBITDA (earnings before interest, taxes, depreciation, and amortization) before exceptional items increased to €8.6 million compared to €1.2 million in 2020.

“These improvements should however be measured against the devastating effect of the pandemic on the aviation sector globally in 2020, and its impact on the Group’s performance that year.”

She attributed the results in part to the continuation of Government supports such as the Employment Wage Subsidy Scheme and waiving of commercial rates, which the Group availed of during both 2021 and 2020.

Shannon Airport also received funding under the Covid-19 Regional State Airports Programme during 2021, she noted.

“Shannon Group is extremely grateful for Irish Government supports received during the year. Given the continued significant challenges facing the aviation industry, the Group believes that Shannon Airport will continue to require support as it rebuilds its business and restores route connectivity in the aftermath of the pandemic.”

Passenger numbers were up by 8% in 2021 compared to 2020, but were still 78% below 2019 levels, the last full year of operations before the pandemic.

On the plus side the second half of the year saw noticeable improvements.

“The latter part of 2021, in particular, saw Shannon Airport experience a strong recovery in its European and UK air services.

“European passenger numbers from August to December recovered to 67% of 2019 levels, with the UK market recovering to 44% of 2019 levels.

“Both markets saw a five-fold increase in passengers between August and November 2021, when compared to the same period in 2020.”

Ms Considine stated that she expects the transfer of Shannon Heritage sites to local authorities to be completed in 2022, while she was positive about the future of Shannon Group’s property portfolio.

“Shannon Group has also been putting the necessary steps in place to facilitate the next stage of its property development strategy.

“This will see a Group investment of approximately €30 million in new building and airport upgrade projects, starting in 2022.

“Initiatives due to commence and for which planning approval has been granted include the upgrade and refurbishment of the Bays 135/137 complex in the Shannon Free Zone, construction of a new 60,000 square feet multi unit warehousing development, and construction of a 40,000 square feet high-bay research and development unit, all located within the epicentre of the Shannon Campus.”

Planning permission was also received for construction and development of a 58,000 square feet four-storey office.

Planning permission has been granted for the development of a new landside/airside cargo facility, to be located on a strategic site at the main entrance to the airport.

Average staff numbers at Shannon increased to 318 compared to 306 in 2020.