The downturn in the aviation industry and increasing capital expenditure caused profits to fall by almost 16 per cent at the Irish Aviation Authority (IAA) in 2002.
The authority's turnover rose by 10 per cent to €95.7 million, but profits fell by almost 16 per cent to 4.7 million. Chairman Mr Donal Geaney said the IAA had a very challenging year with airline traffic down by 3 per cent. The authority is to pay the Government a 1 million dividend.
Mr Geaney said the financial performance, although down for the second year in succession, was satisfactory "bearing in mind the economic conditions encountered".
The authority continued its capital-building programme in 2002, including an investment of 108 million on a new air traffic control and training centre at Shannon, Co Clare and upgraded management systems at traffic- control centres in Shannon, Dublin and Cork.
Managing director Mr Eamonn Brennan said traffic levels, particularly on the north Atlantic routes, continued to be depressed. "The general levels of air traffic through Irish-controlled airspace during 2002 were well below those experienced during the first nine months of 2001," he said.
The authority's financial fortunes are tied directly to the level of activity in international aviation. It gets 79 per cent of its turnover - via fees - from aircraft that never touch down on Irish soil.
In tandem with the falling levels of airline traffic, total costs at the IAA rose by 10.3 per cent to € 90.4 million. Staff costs as a percentage of total costs rose from 59.2 per cent in 2001 to 60 per cent in 2002. These increases reflected pay awards made as part of the Programme for Prosperity and Fairness.
The authority said its rates for airlines were the lowest in Europe and this was borne out by a Eurocontrol survey conducted in December 2002.
The authority also charges fees when airlines land at the three main airports in the Republic - Dublin, Cork and Shannon. The authority said there was a 7.3 per cent decrease in terminal traffic in 2002, however the fall was not uniform, with Dublin down just 2 per cent, while Shannon was down 24 per cent.
Mr Geaney said there were many challenges facing the aviation industry. "We are particularly aware of this in Europe in addressing the endemic and chronic congestions which takes place in the areas of high density air traffic." He said the creation of a new single European sky would help the different European air traffic systems integrate.
He said in the light of 9/11, the aviation industry had to devote more resources to security. But he warned that this should not mean any diminution of safety standards. "Our customers demand the highest level of safety standards and thus every operational investment and operational decision taken by the authority are driven by the ethos of safety."
