Published on August 15th, 2016 | by Jim Lee0
Shannon Airport reports positive first half in 2016 on the back of good results in 2015
The UK delivered the biggest increase in passenger numbers of any of Shannon Airport’s markets, in the first half of 2016, figures released by the airport show.
The figures released on 2nd August, show that this market, including London services, was up by 9%, to 362,242, from January to the end of June, compared to the same period last year. Overall, passenger numbers were up almost 4% to over 791,000, with a healthy increase (5%) also in another key market, the US.
Shannon Airport is also looking forward to a positive winter season with new services to Fuerteventura and Malaga and a return on the winter schedule of Shannon to Edinburgh. In addition, the airport has increased capacity on the Aer Lingus Boston service this year.
Details of traffic for the first six months are given in the table below:-
Good results for Shannon Airport and the Shannon Group in 2015
Passenger numbers at the airport grew by 5%, to 1.71 million, in 2015, the third successive year of passenger growth. This was the first year since 2010 that the airport has exceeded the 1.7 million passenger mark. After the high of 2014, when the airport achieved 17% growth, the 5% increase in 2015 was a solid performance, and passenger growth and route development remains a key priority for Shannon Airport.
During the three year period since Shannon Airport became independent, total passenger numbers have increased by over 22%. The biggest growth area over this period has been on European services, which have more than doubled, while the US market has enjoyed a 12% increase. The airports is consolidating and building on this success in 2016 and beyond, while continuing to invest in the airport’s infrastructure to improve standards, customer experience and address historic underinvestment.
Growth at the airport during 2015 was achieved through a combination of increased capacity and frequency on 16 air services. In 2015, Aer Lingus increased capacity on its Heathrow service by 20%, adding an extra 25,000 seats by restoring the Airbus 320 to the popular London service, replacing the A319. In addition, they expanded capacity on the Shannon to Boston service from June to September replacing the Boeing 757 with the larger 767 aircraft and added an extra 1,300 seats on their Lanzarote service. 2015 also saw the welcome return of the Birmingham service, operated by Stobart Air under the Aer Lingus Regional brand, which delivered 45,000 additional seats.
During the year Ryanair operated services to 19 destinations from Shannon and Sunway introduced a new charter to Izmir in Turkey. American Airlines increased its capacity by 44% on its Philadelphia service as the airline looked to build on the growing demand for flights between Shannon and the US. 2015 marked the 70th anniversary of the first commercial transatlantic flight to Ireland which was operated by American Overseas Airlines, a forerunner to American Airlines.
During 2015, the Shannon Group embarked on a five-year €60 million capital programme to address historical infrastructure deficits at Shannon Airport, at Shannon Commercial Properties and Shannon Heritage. This investment will deliver long-term benefits in terms of growing revenue across all businesses, moving each of the businesses onto the next level and improving competitiveness.
Among projects targeted in the capital investment programme are: a major overlay of the airport runway; a significant upgrade of the Airport’s Transit Lounge and European departure gates; a major redevelopment programme to regenerate the Shannon Free Zone, which will significantly strengthen the hand of development agencies in attracting major investments and enabling job creation in the region; a new retail offering and cafe at Bunratty Castle and Folk Park to enhance the visitor experience.
On the back of the increased passenger numbers, profit at the Shannon Airport Authority rose by 37.5%, to €2.2 million in 2015, according to accounts just published by the company. Turnover grew to €42.6 million, only slightly up, compared to €42.4 million, recorded in the previous year. Earnings before interest, tax and write-offs, a measure of the cash a company generates, were €5.6 million in 2015, from €4.6 million the previous year. Net assets stood at €36.4 million on 31st December, virtually unchanged from 12 months earlier. However, the Authority had to pay €2.1 million in respect of its contribution to the Irish Airlines Superannuation Scheme and as part of the overall settlement of the deficit. This left the company with profit for the year of €300,000, against €1.6 million in 2014. It also reduced its net cash to €4.7 million from €6.7 million.
Under a settlement agreed in 2014, the scheme was frozen and workers transferred to a new defined contribution plan. The companies involved, Aer Lingus, the daa, and small number of Shannon employees, had to make various payments to meet a €750 million shortfall, the largest of which was €191 million from Aer Lingus.
Earlier, figures published for the Shannon Group plc, which in addition to Shannon Airport, includes Shannon Commercial Properties and Shannon Heritage, show that in its first full year of trading in 2015, it recorded total turnover of €65.6 million, with post-tax profits of €7.3 million. The Group was formally established on 5th September 2014, following the enactment of the State Airports (Shannon Group) Act, 2014. Full details of the 2015 Shannon Group plc Annual Report can be viewed here.
Shannon Group plc provides air transport and aviation services at Shannon Airport and its environs, supports the growing aviation cluster at Shannon through the IASC brand, harnesses its property and land assets owned by Shannon Commercial Properties, and offers visitors a range of heritage tourism options through its tourism company Shannon Heritage. Today, the Group employs over 600 people in high season.
The Shannon Airport Authority Limited’s principal activity is the day-to-day management of Shannon Airport. It is the home of Shannon Duty Free, the world’s first duty free shop. The airport operates a 24 hour service with no curfews, slots or noise restrictions. At 3,199 metres in length, the airport has the longest runway in Ireland and is capable of handling all aircraft types. Shannon Airport operates a fire and rescue service to Category 9. The airport campus comprises approximately 855 hectares of land of which 493 hectares are used for the operation of the airport. It has its own fuel storage farm with hydrant delivery systems and its own water supply facilities and employs over 260 employees.
Neil Pakey leaves the group in good shape as Matthew Thomas takes the helm
The fact that Shannon Group made huge strides in its first full year of operation while at the same the airport over the three year period since it became independent has dramatically increased its passenger numbers, is due in no small part to Neil Pakey, the outgoing CEO of Shannon Group, who made a vital contribution to the revitalisation of Shannon Airport and formation of the wider group. He has left Shannon Group on a very positive footing, primed for growth even though the announcement, late last year, that he was to leave the group, when his three year contract expired, was seen as a shock and a potential blow to the company and wider region, given his extensive experience. Mr. Pakey was paid a basic salary of €174,530. Combined with pension and other benefits, his total package came to €255,676 in 2015. This figure was actually less than the €281,869 total he received in 2014, but this was primarily due to the fact that pension contributions of €30,789 due in 2013 were paid in 2014.
His replacement as Shannon Group CEO, Matthew Thomas, was announced on 3rd May. The 43-year old Manchester native was previously Chief Commercial Officer at Vantage Airport Group, where Mr. Pakey acted as a senior director, before joining Shannon Group. On 20th June, Mr. Thomas was appointed to the Board of Shannon Group, after taking up his appointment as CEO for a five year term. He brings to the role a deep knowledge of the aviation industry, combined with significant commercial experience. He combines pragmatic, effective management with strategic purpose and has an excellent track record, As Chief Commercial Officer at Vantage he has been responsible for leading the implementation of the Group’s business development strategy. Most recently in New York, where he played a leading role in winning the $4 billion (around €3.57 billion) redevelopment contract of the Central Terminal at La Guardia Airport, the largest public-private-partnership in the United States. Matthew was also at the forefront of negotiations at other major US airports including JFK, Chicago and Denver as well as in the Bahamas.
He also has responsibility for the development of Vantage’s existing portfolio of eight airports across four countries, and was a Board member of Lynden Pindling International Airport in Nassau, Bahamas and John C. Munro Airport in Hamilton, Toronto.
In addition, from 2010-2014, Mr, Thomas was based in England initially as the Chief Commercial Officer of Peel Airports and subsequently as CEO (comprising Liverpool John Lennon Airport, Doncaster Robin Hood Airport and Durham Tees Valley Airport) following its acquisition by Vantage.
As CEO of Liverpool John Lennon Airport, he led a number of key transformational projects, including a major terminal redevelopment, attracting new airlines and routes and the creation of an award-winning people development strategy. These initiatives helped restore passenger growth and resulted in Liverpool becoming the most efficient as well as the best performing airport operation in the UK. We wish him well in his new role.