Airports' profits jump 57% on sales

Profits at Dublin Airport Authority (DAA) jumped 57 per cent rise last year on the back of strong passenger growth and a greater contribution from associated companies.

Higher sales from retail concessions and car parks boosted company turnover to €525 million from €466 million, a 13 per cent jump.

However, despite rising passenger numbers at Dublin, Shannon and Cork, the authority warned that it will take at least another year to break up the State's three airports.

Pretax profits at the DAA grew to €63.9 million from €40.8. The profit contribution from associated companies, which are grouped under the Aer Rianta International heading, grew to €30 million from €23 million in the previous year.

Figures released by the company show passenger traffic growing at all three airports, with Dublin up 8 per cent, Shannon up 38 per cent and Cork up 21 per cent. For the group, the number of passengers was up to 24.4 million, a rise of 12.4 per cent.

Despite the strong results, the directors of the company have warned that the break-up of the three airports will not be take place for some time. The authority's chairman Gary McGann warned it would not take place for at least a year.

The break-up of the airports authority was a long standing policy aim of former minister for transport Séamus Brennan and was provided for in the State Airports Act 2004. However, Mr McGann said the DAA needed about €300 million of distributable reserves before the airports could be split up. At present reserves stand at jus €141 million.

He said giving Cork airport a debt-free status in future could make the break-up even harder to achieve. "Based on all reasonable forecasts, the establishment of a debt-free Cork airport and a timely separation of Cork airport are not mutually compatible objectives, given the current and foreseeable level of the DAA's reserves". Mr McGann said he supported the new terminal at Cork which was due to open shortly, but the question was "who writes the cheque?".

He said while some newspapers claimed there was a falling out between Cork and Dublin airports over the issue, this was not the case. He said he was confident a solution could be arrived at. "Wise counsel will prevail", he commented. The company is pressing for a airport charge of €7.50 per passenger, but so far the aviation regulator has only allowed €6.14. According to the DAA's annual report: "This leaves the company unsure of whether it can retain the capital cost benefits of its current A rating." Standard & Poor's, the ratings agency, recently left this rating in place, but said the issue would have to be revisited.

Chief executive Declan Collier said the airport charge was not "merely an abstract accounting issue", but held the key to the DAA financing a new terminal and runway.

The company has gross borrowings of €472 million on its balance sheet and, if this exceeds €700 million the Government, as shareholder, will have to amend legislation setting up the company to allow a larger credit line.