Media

30 April 2010: The Irish Aviation Authority's (IAA) annual report and results for 2009 reveal the impact of the economic downturn on the Authority's turnover last year. In 2009, the IAA saw a decline in air traffic activity across all of its services. Turnover for 2009 was €161.1 million, down 3.3% on 2008 (€166,683). Profit after tax was down 67.3% to €4 million compared to €12.2 million the previous year.

The Safety Regulation Directorate of the Authority oversees and regulates the implementation of safety standards for the Irish civil aviation industry in full compliance with the International Civil Aviation Organisation (ICAO) the European Aviation Safety Agency (EASA), the European Union (EU) and Eurocontrol standards. The Authority continued in 2009 to maintain these high standards of safety despite the diffficult times. 

Turnover

Air traffic levels during 2009 were as follows;

• Commercial aircraft landing at, or departing from, the three State airports (known as terminal commercial traffic) dropped by 17.4% to 222,727 movements. This accounted for €21.8 million (13.5% of turnover).
• There were 286,061 en route or ‘over-flights' in 2009, down 7.5% on the previous year. The majority of these movements are accounted for by aircraft that fly through Irish-controlled airspace between Europe and North America, but do not touch down at Irish airports. Air traffic management services delivered to these flights generated €102.8 million (or 63.8% of turnover) in 2009.
• Air traffic managed by North Atlantic Airspace Communications fell to 389,864 flights in 2009, a 7.6% reduction on the previous year. The IAA radio station at Ballygirreen, Co. Clare provides the vital radio link between air traffic controllers and pilots on the Eastern half of the North Atlantic. Turnover for these services was €16.6 million.

The IAA's revenue primarily comes from charging aircraft that use Irish-controlled airspace. The Authority receives no funding from the Government. The IAA is a commercial semi-State body responsible for the provision of air traffic control services in Irish-controlled airspace, and the safety regulation of the Irish civil aviation industry.

Acting Chairperson, Ms Anne Nolan, said that 2009 proved to be one of the most financially challenging years for the aviation industry and this was reflected in the IAA 2009 returns.

"The Authority, which gets more than 75% of its business from customers flying over the North Atlantic, has suffered from the downturn in the aviation industry. We expect that the current year will also be a challenging one, due to the fall in this North Atlantic traffic," she said.

Aviation Industry in Ireland

Despite the global downturn, the Irish aviation industry continued to grow.

Mitigation

Mr. Eamonn Brennan, IAA Chief Executive, said that the IAA continued to take action throughout 2009 to mitigate the financial impact of the economic downturn on its customers and to make a direct contribution towards financial recovery of the industry.

"While it has been necessary to introduce cutbacks, these are not proposed in either capital or operating expenditure that might have a negative impact on future safety or capacity."

Steps taken include;

• A combination of postponement of pay increases due since 2008;
• Pay freezes during 2009 and 2010;
• A pay cut for the Chief Executive in 2009 and 2010;
• Cancellation or deferral of capital projects worth almost €40 million that do not impact on safety or operations during 2009 and 2010.

Pension fund

An actuarial valuation of the IAA Pension Fund at January 1, 2009, disclosed a pension deficit of €234 million requiring a 48% funding level. This pension deficit will oblige Trustees, in the Pensions Act 1990, to make a funding proposal to the Pensions Board during the course of the current year to restore solvency to the plan.

Industrial relations

The Authority's proposal to defer payment of increases due under the Towards 2016 Review and the Transitional Agreement 2008-2009 met with strong resistance from unions representing IAA staff. A dispute with IMPACT trade union, on behalf of air traffic controllers over pay, pensions and the introduction of new technology, required the intervention of the Labour Court.

The Labour Court recommended that the new technology changes associated with the disputed projects did not go beyond the parameters of what could properly be classified as normal ongoing change.  It also recommended that a 6% pay increase be applied in two phases in 2011, subject to a resolution of the pension funding issue, with any retrospection paid into the Authority's pension fund as a one-off cash injection.

Development

During 2009, the IAA progressed a number of important initiatives to improve the quality and efficiency of the services provided to the airline industry. They included COOPANS (Co-operation in Procurement of Air Navigation Systems), which brings together European air navigation service providers.

The IAA will also continue to deliver on its commitment towards the Single European Sky. This delivery is achieved through the functional airspace block (FAB) initiative between the IAA and NATS in the UK.

The recent flying restrictions arising from the Icelandic volcanic ash situation will, however, impact on the aviation industry's recovery from the difficult economic climate. Estimated losses (Europe-wide) by the aviation industry are severe - Airlines €1,250 million, Airports €250 million, Air Navigation Service Providers €25 million. The Irish Aviation Authority estimates its loss at €4 million.   

Commenting on the future trends, Mr. Eamonn Brennan said it was, however, encouraging to see both global passenger-demand and global cargo-demand in the early months of 2010 increased by 6.4% and 28.3% respectively.

"I look forward to seeing these early signs of growth being translated into a positive outcome for our airline customers in the North Atlantic and domestic airspace. 2010 will still be dominated by the downturn, but there are some encouraging signs for the industry already."  

END

Further information

David Curtin
086 283 2123