Kerry Airport to book €306,000 loss on unusual market investment          

File photo of Kerry Airport.

Kerry Airport will book a loss of almost €306,000 on an unusual €1.5m investment it said it took on shares and other assets which disastrously soured when markets crashed at the onset of the Covid-19 crisis, the Irish Examiner has learned.

It came on the day that Kerry Airport moved to lay off around half its 50 full-time staff on a temporary basis as it scrambled to stem further significant losses from the fallout of the Covid crisis.

Kerry Airport, like Dublin, Cork, and Shannon, has been hard hit as airlines cut schedules or stopped flying altogether and passenger numbers slumped amid health concerns or Government restrictions on international travel.

However, the news that Kerry Airport will book even higher losses because of a poor market investment will likely raise concerns.

According to its 2019 accounts, Kerry Airport received Government grants of €1.9m last year and held in total grants worth many millions relating to capital expenditure and public policy funding schemes under the Department of Transport’s regional airport programme.

A spokesman for the airport told the Irish Examiner the market investment, which was worth €1.5m at the end of 2019, was due to mature at the end of last March.

The investment, which was described as a European fixed-rate bond, was bought through a bank which the airport said it will not identify. 

The investment was part of a portfolio as recommended by the unnamed bank and had been running for three years. It was in the black in February just ahead of the collapse of markets amid the Covid crisis, the spokesman said.

The airport said it had agreed with the unnamed bank managing its investment a loss limit of 20%, but that the losses nonetheless during the March market slump exceeded that protection limit.

The airport will not say what underlying assets the bond investment, which led to a loss of €305,931, were based on, but described the investment as involving stocks and shares.

It will book the loss in its 2020 accounts which will be released next year, the airport said.

The airport took a medium risk on the investment and there was guaranteed income every year, but the maturity of the bond coincided with the drop in the markets, the spokesman said.

Kerry Airport handled almost 369,840 passengers last year and posted a net profit of just over €1m on revenues of €8.6m.

Those revenues included over €2.8m on fuel sales to airlines, €394,800 from gift shop sales, as well as €398,345 in income from its car park.

However, amid the Covid-19 crisis, “most commentators predict that air travel will not return to neat 2019 levels until at least 2023”, the airport said in the 2019 accounts.

“Thus the directors consider the implications if the Covid-19 pandemic to be a significant uncertainty at the time of approving the financial statements,” it said, adding that the airport projected “major trading losses not seen before in the airport’s history”.