Decision on future of Aer Rianta to be taken in July

The Government is expected to decide in July whether to float Aer Rianta, the chairman of the airport management company, Mr Noel Hanlon, said after announcing a pre-tax profit growth for the group of 15 per cent to £52.3 million in 1998.

Aer Rianta's turnover rose to £266 million, an increase of 8 per cent on 1997. It invested £75 million in its three airports at Dublin, Shannon and Cork. Passenger numbers grew by 11 per cent to 14.8 million.

Mr Hanlon said he would like to see a 49 per cent stake of Aer Rianta being sold in the initial public offering (IPO). "But we would like to see the Government retain some stake," he said.

Five per cent is the normal amount of stock for the staff to hold following a public sector flotation, he said.

Aer Rianta International, which manages the group's international duty free outlets, made sales of £19 million and after-tax profits of £7 million, a 40 per cent increase on the previous year. This is in spite of the Russian economic collapse last August which affected the Moscow and St Petersburg outlets.

Sales at the three duty free shops in the State amounted to £105 million. However, profit figures for these outlets are not listed separately.

The group's chief executive, Mr John Burke, said that if intra-EU duty free sales were abolished on June 3rd at the EU heads of government meeting, it would take £30 million from Aer Rianta's bottom-line profit. "The problem with the [European] Commission is they have no secure arrangements in place. There would be chaos if duty free stops at midnight on June 3rd," he said.

Dublin showed the greatest increase of passenger numbers last year up by 13 per cent to 11.64 million, followed by Cork up by 10 per cent to 1.3 million, and Shannon, up by 1 per cent to 1.84 million.

However, the group expects passenger numbers to exceed two million in Shannon this year, for the first time.

Overall, cargo throughput was up to 192,000 tonnes, an increase of 13 per cent. The Great Southern Hotels group, from which Aer Rianta wishes to exit, made an after-tax profit of £3.4 million, representing a 17 per cent increase on 1997.

"The staff will get the same benefits from the sale of the Great Southern group as the employees of Aer Rianta will get if there is an IPO," he said. Mr Hanlon added that surface access to the three airports continued to be the single biggest difficulty for passengers.