The Dublin Airport Authority (DAA), formerly known as Aer Rianta, has been advised by Government it will have to start paying dividends to the Exchequer again after declining to make any payment for 2004.
The company, which still retains the ownership of all three airports, paid the Government a dividend of €6 million for 2003, but last year it decided to make no payment.
With the three airports expected to be split up in the months ahead the DAA has declined to make a dividend payment. The company's finances are likely to come under severe strain if all the outstanding debts of Shannon and Cork airports are transferred onto Dublin's balance sheet.
In this environment the management at DAA has ruled out paying a dividend to the Department of Finance. However, it now appears this stance is likely to change.
In a document sent to the aviation regulator, Mr Bill Prasifka, the airport company states: "DAA has been advised that it will be required to pay dividends to its shareholder".
The document adds: "This is a reasonable expectation of a regulated commercial entity with large scale capital investment".
It is understood the DAA has not been formally notified that it must pay a dividend, but the company appears to believe that it will have to resume a dividend policy very shortly.
The company's future financial position is unclear at the moment. Mr Prasifka is working on a new airport charges regime and DAA has made strong representations for a sizeable increase in the current cap on charges.
It has warned that if charges do not increase it could jeopardise the building of a new terminal at Dublin.
The DAA could have its credit rating downgraded if the debts of Shannon and Cork airports impose too much of a financial strain on the company, an international ratings agency warned recently.
The Government will have to make a decision on the debts of Cork and Shannon over the next few months.
It had been presumed over the last year that the debts of the two airports would pass onto the balance sheet of Dublin airport, but recently Minister for Transport Martin Cullen told this newspaper this was not necessarily so.
The London office of Standard & Poors said another major risk to the DAA came from the review of airport charges by Mr Prasifka.
The ratings agency said it would be concerned that Mr Prasifka might sanction "lower than needed" charges and weaken the financial profile of the DAA.
The agency said while the Government's decision not to proceed with an independent terminal was good news for DAA, the company's future was still clouded with some uncertainty.
"DAA's competitive position is expected to remain strong," it said, but it warned that Mr Prasifka's review would be "key" for setting future ratings. At present the company has an A rating, but this might change in future.
