Knock airport laid off half its staff last year to manage pandemic

Turnover at Ireland West Airport in Knock, Co Mayo collapsed by 80 per cent last year and the company behind the facility swung into the red despite sweeping cuts to headcount and spending as it sought to manage the Covid-19 crisis.

The latest accounts filed with the Companies Registration Office for Connaught Airport Development Company, which cover the year ended December 31st, 2020, lay bare the “profoundly negative impact” of the pandemic on the aviation industry.

The directors said its impact on Ireland West Airport over the period was “severe”, and that “immediate action” was taken to protect the business when the pandemic hit in early March 2020.

“This unfortunately resulted in staff redundancies, reduced working hours and layoffs for a significant period of time whilst commercial flight operations were temporarily suspended due to travel restrictions,” they said.

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The initial impact of the pandemic was the loss of three of the airport’s key UK routes, the Flybe routes to Manchester, Birmingham and Edinburgh, as the British carrier entered administration. This resulted in the loss of more than 90,000 passengers annually at Knock.

Following on from this in late March, all commercial flight operations were suspended up to July. While a reduced level of flight activity resumed over the summer period, there was “no recovery” and further periods of suspended operations were later announced.

The pandemic had a “major impact” on the airport’s revenue, which collapsed by 80 per cent from €14.9 million to €3 million, while it also led to an 82 per cent reduction in passenger numbers from 807,000 to 143,000. Gross profit fell 78 per cent to €2.1 million.

Cost-cutting

The airport attempted to manage the crisis by introducing a series of cuts, which included laying off half its staff as the average headcount fell from 147 full-time employees in 2019 to 73 last year.

HR costs were reduced year on year by 55 per cent, while the airport availed of a moratorium on loan payments with its main lenders, which helped preserve cash.

Despite cutting costs by 45 per cent, the airport went from turning a profit of €1.8 million in 2019 to suffering significant losses of €3.7 million in 2020. Assistance from the State’s Covid support schemes as well as grant aid reduced the net loss to €120,894.

Despite the impact of the pandemic, Ireland West Airport completed capital projects to a value of €1.1 million, towards which it received €900,000 in State funding.

These projects included the final phase of the runway overlay project, airfield maintenance and upgrade, and the first phase of the electrical infrastructure upgrade project.

Looking ahead, the directors said the pandemic “continues to have a devastating effect on the entire aviation, tourism and hospitality sectors”, and added that they did not expect passenger numbers to return to pre-pandemic levels until 2024 “at the earliest”.

They said passenger numbers for 2021 would be close to 150,000, while they also forecast “substantial losses” during the year despite continuing aggressive cost-saving plans.

“Despite what will be another very difficult trading year for the airport in 2021 the airport board are confident that there will be a strong recovery in 2022 and with a close to full resumption of growth into 2023 and beyond,” they said.

The accounts were signed off on by the board on September 24th.