Airport lands in the red after subsidy ends

Galway Airport incurred a €6m loss after the Government’s decision to end its subsidies, figures show.

Last year, Leo Varadkar, the transport minister, announced the end of the annual operational grant and subsidy on the airport’s Dublin route.

The move — along with Aer Arann ending its routes out of Galway — resulted in scheduled services ending at the airport last year.

In spite of the collapse in traffic, the directors of Corrib Airport Ltd, which operates the airport, state in the 2011 accounts that they are “exploring all avenues to secure the future of the facility at the Galway Airport site” and “to maintain air access into Galway”. The directors said they were “convinced” that the airport was “an important piece of strategic infrastructure” for the city and the West.

Figures returned to the Companies Office show the loss arose from a €6m impairment charge as a result of writing down the value of the runway, lands, car park, and hangar.

The ending of commercial traffic reduced the numbers of employees from 54 to five after a major restructuring and at the end of December last, the airport had bank loans totalling €6.8m.

The filings confirm that with the agreement of the firm’s bankers, it has suspended repayments on borrowings — the firm paid interest charges totalling €224,997 last year.

A note adds that the company “has successfully negotiated a settlement figure from one of its main bankers and it is currently in discussions regarding a writedown of its loans with its other main banker”.

The figures show the State’s operational grant last year totalled €2.3m and this included €381,446 spent on redundancy payments.

The accounts state a revised business plan has been developed and this is based on three core streams: Air services and related activities; the hangar facilities; and the car parks on site at the airport.

The directors’ report says ongoing efforts are being made by management to secure tenants for the hangars and to conclude agreement with Galway city and cou-nty councils for the use of the car parks for park and ride purposes, while continuing to meet the air service needs of customers including private charter aircraft and private aircraft.

Gross profit last year fell 29% to €3.2m from €2.3m. The €6m loss followed the firm recording a €59,845 pre-tax profit after taking account of the €1.7m operational grant in 2010.

The firm’s accumulated losses at the end of Dec 2011 stood at €5.2m. The firm had €1.87m in cash at the end of last year.

Directors’ remuneration was €102,953, while staff costs stood at €3m.