Most of Shannon Airport’s profits wiped out by €2m pension payment

A one-off €2 million payment to the old aviation staff pension scheme wiped out most of the profits earned by Shannon Airport last year.

Profit at State-owned Shannon Airport Authority rose by 37.5 per cent to €2.2 million last year on the back of an increase in passenger numbers, according to accounts just published.

However, the company had to pay €2.1 million to cover past service benefits to the pension scheme as part of the overall settlement of the dispute over the Irish Airlines Superannuation Scheme (IASS).

The payment left the company with profit for the year of €300,000, against €1.6 million in 2014. It also reduced its net cash to €4.7 million from €6.7 million.

The €750 million shortfall in the IASS was the subject of four-year dispute involving Aer Lingus, Dublin Airport owner DAA, the Government and a small number of Shannon employees.

Under a settlement agreed in 2014 the scheme was frozen and workers transferred to a new defined contribution plan. The companies involved had to make various payments, the largest of which was €191 million from Aer Lingus.

Shannon Airport, which is now part of the larger Shannon Group, handled 1.71 million passengers in 2015, up from 1.64 million the previous year.

Its accounts show turnover grew to €42.6 million last year from €42.4 million the previous year.

Earnings before interest, tax and write-offs , a measure of the cash a company generates, were €5.6 million in 2015, from €4.6 million the previous year.

Net assets stood at €36.4 million on December 31st, little changed from 12 months earlier.

The figures show that former chief executive Neil Pakey was paid a basic salary of €174,530. Combined with pension and other benefits, his total package came to €255,676 in 2015.

The figure was less than the €281,869 total he received in 2014, but this was primarily due to the fact that pension contributions of €30,789 due in 2013 were paid in 2014.

Mr Pakey was chief executive of the overall Shannon Group but left the company after it unexpectedly announced in December that it would not be renewing his three-year contract.

The airport increased its business during his tenure, with passenger numbers up by 22 per cent between 2013 and 2015.

Meanwhile, retired workers who had their pensions cut under the IASS deal are due to begin a case against the State in the High Court on Friday.

The cut was the first applied under a change to legislation that allowed payments to pensioners who are members of insolvent pension schemes to be clawed back.