DAA posts 9% drop in profits for last year

PROFITS AT the Dublin Airport Authority declined by 9 per cent last year to €30 million as passenger traffic at Cork and Shannon declined and costs associated with the development of Terminal 2 and other assets impacted on its bottom line.

Turnover was flat for the year at €557.5 million while the combined passenger traffic from the three airports rose by just 0.5 per cent to 22.7 million.

The DAA is predicting a “modest” rise in passenger numbers at the three airports this year.

The DAA’s 2011 annual report, published yesterday, shows that the company was kept out of the red by a strong performance from its overseas duty-free arm, Aer Rianta International.

The drop in profits was largely due to a €51 million increase in depreciation and interest costs relating to T2 and other assets.

The DAA said its Ebitda (earnings before interest, tax, depreciation and amortisation) grew by 9 per cent to a record €160 million.

Dublin, Cork and Shannon airports made a combined loss of €6 million last year after interest and depreciation costs, compared with a surplus of €14 million in 2010. Aer Rianta International’s profit rose by 68 per cent to €32 million.

The DAA said Cork lost €14 million last year after interest and depreciation costs, while Shannon was €7 million in the red. This suggests Dublin achieved a surplus of €15 million for the 12 months. In terms of passengers, Dublin recorded a 1.7 per rise to 18.7 million. In Cork, traffic was down 2.6 per cent to 2.4 million while Shannon showed a decline of 7.4 per cent to 1.6 million.

Shannon’s traffic has declined by two million passengers a year since 2007. The airport is due to be separated from the DAA.

The report shows the DAA’s net debt declined last year by 4 per cent to €735 million. Its gross borrowings stood at €1.188 billion.

DAA chairman Pádraig Ó Ríordáin said its funding position was “secure” out to 2018 but added that it was “focused” on reducing its debts “as quickly as possible”, and on renewing paying dividends to the State.

The DAA said talks to resolve the deficit in the pension scheme jointly run with Aer Lingus and SR Technics continue at the Labour Relations Commission.

The deficit stood at €640 million at the end of March and the DAA represents about 27 per cent of the members of the scheme.

Thirty airlines grew their passenger traffic at Dublin Airport in 2011, with the DAA paying €1.5 million to them in charges rebates for operating new routes. This did not include Ryanair, which has a 39 per cent share of traffic at Dublin, but has steadily reduced its capacity there over the past four years.

Interim chief executive Oliver Cussen said the DAA wrote to Ryanair before Christmas 2011 to outline the various incentives it offers for new routes and incremental passenger traffic. He said that, based on a Ryanair offer to the Government to bring an additional five million to Dublin over a five-year period under certain conditions, the airline could benefit by up to €75 million from availing of its incentives.

Minister for Transport Leo Varadkar welcomed the increase in the DAA’s Ebitda. A spokesman for the minister said “more needs to be done to incentivise passenger growth at the airports and to secure a higher yield from passengers using the airport in terms of non-aeronautical revenues”.