IRELAND. Aer Rianta International (ARI) contributed €25 million in profits for parent Dublin Airport Authority (DAA) in 2008, the group reported today. This was down -13% on 2007, but was up by +6% on a like-for-like basis. Last year’s figures included a provision for the sale of ARI’s stake in Birmingham Airport.
DAA group turnover increased by +1% to €631 million in 2008. Turnover from retail and commercial operations at the three Irish airports contributed 45% of group revenues.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) declined by -9% to €155 million. Gross borrowings were more than €1 billion at the year-end, as the group raised debt to fund investments in better airport infrastructure.
Excluding exceptional items, the group made profits of €78 million for the year to 31 December 2008, down -28% on a like-for-like basis from the previous year. ARI contributed 32% of group profits. Total passenger numbers at Dublin, Cork and Shannon airports were 29.9 million, a decline of -0.6% on 2007.
Increased share in ARI-Middle East
On the ARI contribution, DAA said in its annual report: “ARI’s underlying retail business had another record year in 2008. A strong performance by its international retail operations, particularly in the CIS and Ukraine, was the principal reason for its continued profit contribution to the Group last year.
“The performance of retail operations at many locations towards the end of 2008 has been impacted by the global downturn, resulting in a reduction in the number of airline passengers at locations where ARI operates retailing concessions.
“This trend has been maintained into early 2009 and is expected to continue through the year. During the year under review, ARI increased its shareholding in its Middle Eastern company, Aer Rianta International (Middle East) WLL (ARIME) by acquiring an additional 11.25% of the business. ARI now owns 61.25% of ARIME.”
DAA warned that its core airport business, comprising Dublin, Cork and Shannon airports, is expected to be loss-making this year, and if present trends continue, is facing significantly higher losses next year.
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Dublin Airport Authority this week unveiled its new T1 extension, with a water bar named “˜Ã“l – Waters of the World’, as its centrepiece. The development is part of a major capital programme designed to modernise and improve the Irish gateway |
DAA Chief Executive Declan Collier said the recession had led to a drop in passenger numbers and a fall in spending patterns that was having a significant effect on the company’s business.
“The scale of this downturn is unprecedented and it is having a dramatic impact on travel patterns throughout the world,” Collier said. “Passenger traffic is falling at our three airports in line with similar declines at airports throughout Europe. With fewer people travelling, airlines are also cutting capacity.”
DAA is forecasting an -11% drop in passenger numbers this year across its three Irish airports. Up to 2011, the DAA expects minimal passenger growth, given the global economic climate and the dramatic fall off in Irish GDP.
“The company is facing a very difficult financial situation,” according to Collier. “This is the deepest recession since the 1930s and it is having a huge impact on the aviation sector.”
Investment plans reduced
Due to the challenging business environment, the DAA has been reviewing all aspects of its business, with a particular focus on costs, including capital development and operating expenditure. Discussions will begin shortly with DAA staff representatives on a major cost recovery programme.
The DAA has also reduced its investment plans at Dublin Airport for the 2010-2014 period by about -50% to less than €400 million to take account of the current economic downturn. A number of major projects, including the planned new second runway and additional aircraft parking areas, will be deferred. These projects will be “reactivated” when appropriate circumstances dictate, said DAA.
The current €1.2 billion Transforming Dublin Airport capital programme will be completed over the next 18 months. Construction of Dublin Airport’s new Terminal 2, which is the central element of the programme, will be completed in February 2010, 12 weeks behind the original schedule.
As agreed with T2’s main tenant Aer Lingus, the new terminal will open fully by November 2010, said DAA.
“The delivery of T2 will transform Ireland’s premier gateway and position the country to take advantage of the economic upturn when it comes,” Collier said. “We believe the new terminal will stimulate traffic and help make Ireland a more attractive destination for investment, and business and leisure travel.”
Collier said the DAA had “recorded a satisfactory performance during 2008 against the background of a much more difficult operating environment”. He added that lower passenger numbers, weaker economic conditions, increased competition, and lower disposable income all impacted upon the financial performance during the year.
Dublin Airport had its busiest year on record in 2008, handling almost 23.5 million passengers. Passenger volumes at Cork Airport increased by +2.5% to almost 3.3 million during 2008, marking the 17th consecutive year of growth at the airport. Passenger traffic at Shannon Airport declined by -12% to almost 3.2 million.
Note: DAA’s retail vision for the new T2 was unveiled this week, and we’ll report on that in full soon. Click here for a special Podcast with DAA Director Retail Paul Neeson on the T2 development.
MORE STORIES ON DUBLIN AIRPORT AUTHORITY
Dublin Airport unveils major T1 extension; creates fresh new look for commercial areas – 23/04/09
Dublin Airport Authority calls London meeting to discuss T2 commercial opportunities – 15/04/09
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