DAA profits climb 56% to €109m

PROFITS AT the Dublin Airport Authority (DAA) increased 56 per cent to €109 million last year, as the parent group for Dublin, Cork and Shannon airports garnered boosted revenues from higher passenger traffic at Dublin airport and new contracts won by Aer Rianta International (ARI).

The DAA also secured an additional net profit of €239 million in exceptional items, mostly from the sale of its 24 per cent stake in Birmingham airport. This takes total profits after tax to €348 million for 2007, double the level of 2006.

DAA chairman Gary McGann confirmed that the construction of Dublin airport's new passenger terminal, T2, was on schedule for completion before the end of 2009 and would be open to passengers in April 2010.

The authority is investing €2 billion in the expansion of Dublin airport in order to increase its capacity to more than 35 million passengers a year. Last year, passenger numbers at the airport increased 10 per cent to 23 million, with total passenger numbers at the three airports exceeding 30 million for the first time.

The DAA spent €250 million on improving and expanding Dublin airport in 2007 and will spend a further €450 million in 2008.

Mr McGann said the board of the DAA had agreed to accept the recommendations of the report by Peter Cassells in relation to the level of debt that Cork airport should shoulder at its separation. The board of the Cork Airport Authority (CAA) accepted the recommendations last week.

Approval of the final figures, which will leave Cork airport with a debt of €113 million, is now required from the Department of Transport and the Department of Finance. The DAA said the "complex" demerger of Cork and Shannon airports would take nine to 12 months to complete once the Government made its decision.

Mr McGann said it was important in the context of "challenging financial markets" for the funding of Dublin airport's expansion that the debate now move on from the level of debt that Cork airport should handle.

The DAA said it had sufficient funding in place for its expansion projects up until "the back end of 2009". Mr McGann added that it was seeking regulatory approval for higher airport charges in order to "absolutely backstop" its financial position.

"Every €50 million matters," he said. "The DAA does not lightly seek to increase its car parking charges or check-in desks charges or the charge for any other commercial service it provides."

DAA chief executive Declan Collier said Dublin airport's charges would still be 55 per cent of the current average for major European airports even if it is granted the €2-per-passenger increase in charges it is seeking.

Dublin airport's debt levels are expected to peak at €1.2 billion to €1.3 billion during the expansion phase and will stand at around €300 million at the end of 2008. At the end of 2007, the DAA had a positive balance of €35 million.

The DAA's financial performance in 2007 includes a 3 per cent increase in commercial revenues, which include car parks and catering, to €303 million. Aero-nautical activities contributed €204 million in turnover, up 19 per cent, while international activities from Aer Rianta International jumped 30 per cent to €116 million. Overall turnover rose 6 per cent to €623 million, while operating costs per passenger fell 4 per cent.

Mr Collier said the DAA would "learn lessons" from the botched opening of Heathrow's Terminal 5 in preparing for the launch of T2.

Defending the cost efficiency of the T2 project, Mr McGann said Dublin needed an airport that reflected its status as a capital city.