The Covid-19 pandemic has cost the DAA, which operates Dublin and Cork Airports, €160m in lost revenue so far and continues to lose it €1m a day, the semi-State company said this morning.
It said it will record “significant financial losses” for 2020 and that combined passenger numbers at Dublin and Cork could slump to nine million this year, from 35.5m in 2019.
With virtually no passengers and no shoppers at its once busy retail outlets in Dublin and Cork, the DAA’s losses are being compounded on a daily basis.
“This is the most serious crisis that has ever faced the international aviation sector and our business,” said DAA chief executive Dalton Philips.
“Our business and the wider sector have weathered many previous upheavals, such as the recent recession, the impact of September 11, and the 1970s oil crisis, and it will eventually recover from the economic impact of Covid-19,” he added. “But it is likely to take some time as the short-term future is bleak, and the post Covid industry will be very different.”
The DAA has already implemented a major cost reduction programme. Staff are on a four-day week, and the company is in the midst of a radical restructuring process that will see hundreds of job losses.
The combined passenger numbers at Dublin and Cork airports could be as low as nine million this year, compared to a combined 35.5 million last year, according to Mr Philips.
Passenger numbers for 2021 may be about 21 million, which would represent a 40pc decline in traffic compared to 2019, he predicted.
“When Dublin and Cork airports last had that level of passenger numbers, they had between 750 and 1,000 fewer employees, so unfortunately we have to take unpalatable measures to lower our costs across all areas of the business,” said Mr Philips.
The DAA warned staff last week that those who decide to remain with the company that the business will be need to operate in a “radically different manner”.
The DAA currently employs about 3,300 people in Ireland, with more working at its Aer Rianta International unit.
All staff members are being offered reduced working hours, while a voluntary severance scheme is being introduced.
The DAA said today that in 2019 its turnover rose 4pc to €935m. It was boosted by domestic revenue, which accounts for about two-thirds of the DAA’s overall business.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) were 4pc higher at €302m last year. Profit for the year before exceptional items rose 13pc to just over €150m.
The DAA is reviewing all capital spending, but some projects, such as the new North Runway at Dublin Airport and new baggage screening systems and Dublin and Cork, will be completed.
“Ireland should not make the mistakes of the past when it comes to building key pieces of national infrastructure,” said Mr Philips this morning.
“North Runway will help boost Ireland’s economic recovery and airport operators need to plan for decades ahead for the benefit of the national economy rather than just manage through the current difficulties.
He added: “During the last downturn, some commentators argued that we should stop building Terminal 2, or that it was a white elephant. Last summer, T2 was effectively full, and it will be full again. Our assets have forty or 50-year lives, and certain parts of Dublin Airport are up to 80 years old.”
The DAA has businesses in 16 countries, including Ireland, Canada, Cyprus, Bahrain, India, Lebanon and New Zealand. It operates Terminal 5 at King Khalid International Airport in Riyadh, Saudi Arabia and owns a stake in Dusseldorf Airport.