Plan to cut airport jobs and shelve Dublin’s 2nd runway

Date added: 18 December, 2008

18.12.2008   (Irish Times)

by CIARAN HANCOCK, Business Affairs Correspondent

Dublin Airport Authority has told trade unions that it will seek voluntary redundancies early next year at Dublin, Cork and Shannon
airports as part of a plan to save €20 million in costs.

The move is in response to an anticipated decline in passenger numbers and fall
in profits both it will seek voluntary redundancies early next year at Dublin, Cork and Shannon
airports as part of a plan to save €20 million in costs.next year and in 2010.

The cuts are in addition to €15 million in savings that have already been implemented
by DAA for 2009.

DAA employs just under 2,700 staff in Ireland, who are represented by Siptu,
Impact and Mandate.

It is understood that talks with the unions will begin before Christmas. Siptu
official Dermot O’Laughlin said the union had so far received no details of the
cuts being planned.

In a bleak pre-Christmas message to staff in the latest edition of the airport
manager’s internal newsletter, Connect, DAA chief executive Declan Collier said
“the majority” of the €20 million savings would be from cuts in payroll, which
account for two-thirds of its costs.

“These discussions will focus on the need for action across a wide range of issues
including voluntary severance, non-recruitment, overtime, absenteeism and discretionary
staff payments,” Mr Collier said.

DAA has already frozen senior executive pay for next year and no bonuses will
be paid.

DAA’s payroll bill has been growing by 7 to 8 per cent annually in recent years,
which Mr Collier said was “not sustainable and must be addressed immediately”.

He said revenues from its car parks and shops have “fallen” this year and are
“likely to worsen”.

Staff have also been told by Mr Collier that its plan to build a second runway at Dublin airport, at a cost of more than €200
million, has been deferred due to the decline in passenger numbers.

“We now feel the airport will not experience significant capacity constraints
on the runway system for a number of years, thereby pushing back its commencement
date,” Mr Collier said. It is understood that the runway, which was due to open
in 2014, could be deferred by three or four years.

Mr Collier warned that DAA’s profits this would be “lower” than in 2007, when
it made an operating profit of €111.6 million. “The company is exposed to further
falls in profit in 2009 with the situation potentially worsening markedly in 2010,”
he added.

Passenger volumes “could fall across the three airports in 2009” and also in
2010, “depending on the economic outlook”.

He said passenger numbers have declined in the past three months at the airports.
While Dublin and Cork will show “modest” rises in passenger numbers for 2008,
Shannon’s figure will be lower. The three airports handled a record 30.1 million
passengers last year.

Mr Collier said the DAA’s large investment in Terminal 2 at Dublin airport would
be unaffected by the cutbacks.

The proposed €20 million in savings does not include the DAA’s duty free subsidiary
Aer Rianta International, which employs 495 staff, mostly at retail operations
outside Ireland, and is managed separately.

Posted: Thursday, December 18th, 2008. Filed in News about Airports.