Coillte is the latest semi-state company to announce the payment of a huge dividend to the exchequer. The forestry agency has agreed to pay €30 million, its highest yet. ESB, meanwhile, recently agreed to pay €126 million in a dividend to the State for 2021, up almost 50 per cent on the prior year.
One agency that may not be in a position to pay a large financial return to the exchequer for quite some time is DAA, the airport operator for Dublin and Cork.
Until the pandemic, DAA had become a steady source of revenue for the Department of Finance. It paid over €40 million to the State in 2019 and €125 million in total in the four years from 2015, after it reached an agreement with the Government to pay out 30 per cent of its profits each year.
But once coronavirus hit, sales fell by more than two-thirds while its net debt climbed by more than 80 per cent as aviation was devastated by Covid-19 restrictions. DAA responded by slashing costs and letting up to 1,000 staff go on generous redundancy packages.
This recently backfired on the DAA, however, as the airport operator struggled to cope with a resurgence in post-pandemic travel, leading to massive queues, opprobrium from politicians and a raft of unwelcome headlines.
There is a school of thought among some in the airline industry that DAA should have been a special case in recent years when it came to the State’s policy on dividends from taxpayer-owned companies. Airports primarily are enablers of wider economic activity, the logic goes, and should not be viewed as simply a source of revenue for the State.
If DAA wasn’t so focused on short-term financial goals, they say, perhaps it wouldn’t have been so focused on self-defeating layoff plans, as well as its recent controversial revenue-raising plans including drop-off charges and hikes in parking fees, which DAA justified on the basis that its competition has shrunk; that may have been a little too honest.
Less State financial pressure on DAA would obviously suit airlines, which could then argue for lower fees from the airport operator. The question, of course, would be whether the airlines would pass on the savings to their customers or simply pocket it.