IAA increases profit despite difficult operating conditions

30 April 2012: The Irish Aviation Authority (IAA) has reported a successful financial performance in 2011 with increased traffic, turnover and operating profit, despite the current economic downturn and the uncertain economic situation in Europe.

Operating profit increased to €17.9 million up from €14.9 million in 2010. Turnover for 2011 was €179 million (up from €168.5 million in the previous year), an increase of 6.3%. Overflights and communications revenue amounted to 74% of turnover.

According to the IAA 2011 annual report and results, the IAA introduced new systems to reduce airline fuel costs and CO2 emissions. It was also ranked by the International Civil Aviation Organisation (ICAO) among the best in the world, and placed third in Europe for its safety oversight of civil aviation.  

IAA charges are amongst the lowest in Europe and in January 2012 airport charges were reduced by 21% and overflight charges by 6%. Safety regulation charges are frozen at 2007 levels. In efficiency terms the IAA ranks amongst the best in Europe with a high level of major projects delivered on time and to budget. IAA costs per flight hour are €366 against a European average of €427 per flight hour and its airport costs per flight are 13% below the European average, (source EUROCONTROL).  The IAA currently operates one of Europe’s most advanced air traffic management systems which will further improve its productivity in the years ahead.

Air traffic levels

Air traffic levels during 2011 were as follows:

•    En route overflights (throughout the 451,000 square kilometres of Irish-controlled airspace) amounted to 300,408, an increase of 2.6% over 2010.

•    North Atlantic communications (served by the IAA’s High Frequency (HF) communications centre at Ballygirreen) provided 403,534 flights with high-frequency voice communications services, an increase of 3.7%.  The centre is responsible for communications via long-range radio, with up to 1,250 transatlantic crossings per day.

•    Terminal (the combined number of terminal commercial aircraft movements at Cork, Dublin and Shannon airports) remained static at 195,905.  

IAA revenues primarily come from charging aircraft that use Irish-controlled airspace. The IAA receives no funding from the Government; it 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.

Ms Anne Nolan, Chairman IAA, noted that throughout 2011 there was traffic growth in the Authority’s international en route and North Atlantic communications business, while domestic business, including terminal commercial traffic, remained static.  

“During 2012 we intend to work with the industry to promote growth and develop new initiatives to help expand the industry in Ireland,” she said.  

Mr Eamonn Brennan, Chief Executive IAA, said that the economic challenges facing the Authority’s customers place ever-increasing demands to improve operational efficiency for them while, at the same time, maintaining and improving safety levels.  

“Ireland operates well above its weight in European aviation terms and many of the industry’s major innovations have been fostered here.  We continue to deliver high levels of safety efficiently, and at reducing cost levels. The new operational efficiencies, introduced by the IAA in December 2009, continued to bring financial benefits to airlines in 2011, through savings in route kilometres flown, in carbon emissions and other operational cost savings. In my view, we are well positioned to respond to the demands of the industry and can look forward with confidence to facing whatever the future holds,” he said.

Safety is – and always has been – the primary objective of the IAA, both in regulating the Irish civil aviation industry and in managing the 451,000 square kilometres of Irish-controlled airspace.

Safety oversight
In March 2011, the ICAO Safety Oversight Audit Programme ranked Ireland among the best in the world, and placed third in Europe for its safety oversight of civil aviation.  The IAA, principally through the Safety Regulation Directorate – with assistance from the Department of Transport, Tourism and Sport – was the chief focus for the intensive audit of the State under the relevant Annexes of the Chicago Convention.  

In 2011, IAA also piloted the implementation of a common air traffic management (ATM) platform with its partners in the COOPANS (Co-operation in Procurement of Air Navigation Systems) initiative.  Under this initiative the IAA, Naviair (Denmark) and the LFV Group (Sweden) worked with Thales ATM to develop a common ATM platform.

This new system is the most advanced in Europe and the first to be introduced under such a co-operative procurement agreement between air navigation service providers and an ATM system manufacturer.  It represents a collective investment of almost €200 million, of which the IAA share is €50 million.  According to independent analysts, the co-operative procurement methodology adopted effected savings of around 30% of the total cost.

UK/Ireland Functional Airspace Block (FAB)
Europe’s first operational functional airspace block (FAB), under the Single European Sky regulations, between the IAA in Ireland and NATS in the UK continued in 2011 to deliver on its commitments towards the Single European Sky. The FAB focused on operational integration and adding value to transatlantic aircraft crossing Irish and UK airspace.  The operational efficiencies and savings in route-kilometres flown, flight times, fuel tonnage, carbon (CO2) emissions added value to the airlines, while at the same time helped to minimise the environmental impact of air traffic management activities.  

It is estimated in a recent FAB Cost Benefit Analysis (independently reviewed by KPMG) that annual savings in each year from 2012 to 2020 are likely to be €36 million, comprising savings of 35,000 tonnes of fuel and 111,000 tonnes of CO2.  It is also anticipated that the total cumulative savings from 2008–2020 will amount to over €336 million, including reduced fuel burn of 332,000 tonnes and reduced CO2 emissions of over 1 billion tonnes.  

Sustainable Energy Authority of Ireland (SEAI) award
In November 2011 the IAA received a special award from the SEAI for its work in optimising airline routes to cut travel distances by 2.2 million kilometres, thus saving 16 million litres of airline fuel per annum.  

The industry (figures as at 31 December 2011)
Category     2011
Large aircraft registrations     669
Small aircraft registrations     500
Helicopters     64
Irish registered aircraft leased abroad    276
Commercial pilot licenses    5,334
General aviation pilot licenses     1,997
Irish air operators certificates     15
Irish airlines operating worldwide     Aircraft
Ryanair     282
Aer Lingus     44
Air Contractors     28
CityJet     20
Aer Arann     13