Airport lost €6m since subsidies stopped

Fri, Oct 26, 2012, 01:00

THE UNCERTAINTY about the future of Galway Airport is further underlined by annual accounts just filed.

The airport incurred a €6 million loss after the Government decision to end subsidies, the figures show.

The directors’ report states that management is trying to secure tenants for the hangars and to conclude agreements with Galway City and County Councils for the use of the car parks for park-and-ride purposes, while continuing to meet the air service needs of customers, including private charter aircraft and private aircraft.

Last year Minister for Transport Leo Varadkar announced the ending of the airport’s annual operational grant and subsidy on the airport’s Dublin route. The move – along with Aer Arann ending its routes out of Galway – resulted in scheduled services ending at Galway last year.

In spite of the collapse in traffic, the directors of Corrib Airport Ltd, which operates the airport, state in their 2011 accounts that they are “exploring all avenues to secure the future of the facility at the Galway airport site” and “to maintain air access into Galway”.

The filings state: “The board remain convinced that the Galway airport facility is an important piece of strategic infrastructure that has a vital role to play in the continued economic development of Galway city and the west region and we are committed to exploring every avenue in order to achieve this objective.”

The figures just returned to the Companies Office show that the €6 million loss arose from an impairment charge of that amount as a result of writing down the value of the airport’s runway, lands, building and car park and hangar building.

The ending of commercial traffic reduced the numbers working at the airport from 54 to five following a major restructuring, and, at the end of December last, the airport had bank loans totalling €6.8 million.

The filings confirm that with the agreement of the firm’s bankers, it has suspended all repayments on the company’s borrowings – the firm paid interest charges totalling €224,997 last year.

A note adds that the company “has successfully negotiated a settlement figure from one of its main bankers and it is currently in discussions regarding a write-down of its loans with its other main banker”.

The figures show the Government’s operational grant last year totalled €2.3 million and this included €381,446 spent on redundancy payments.

The accounts state that a revised business plan has been developed and this is based on three core streams: air services and related activities; the hangar facilities; and the car parks on site at the airport. The firm’s accumulated losses at the end of December 2011 stood at €5.2 million. The firm had €1.87 million in cash at the end of last year.

Remuneration to directors last year stood at €102,953, while staff costs last year were €3 million.