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Good afternoon ladies and gentlemen and thank you once again for taking the time to attend the DAA's annual media briefing.
Special thanks this year for travelling to the Airport. We appreciate you'd rather be closer to your own offices in the afternoon, but we thought it would give some of you the opportunity to view at first hand, the progress that is being made with regard to building T2 and associated facilities.
For those of you who haven't met us before, my name is Gary McGann, Chairman of the DAA. Beside me is Declan Collier, Chief Executive of the Company, who in a few moments, will take you through a presentation of our financial performance for 2007, and an update on the Transformation of Dublin Airport and other current business issues.
We're also joined up here by our colleagues, Oliver Cussen, Company Secretary and Bob Hilliard, Director Dublin Airport.
I'd like to begin proceedings today by reminding you of the DAA's three key policy objectives. These are:
When we met at this briefing last year, I outlined to you the significant progress I believed had been made towards delivering these objectives over the first two-and-a-half years of the DAA Board's term of office.
I believe the progress made over the past year or so has maintained this positive trend.
In that period, we obtained (albeit belatedly) planning permission for Dublin Airport's new passenger terminal and parallel runway. These are the key pieces of infrastructure required to address the Airport's long-standing congestion problems and to provide sufficient capacity to manage up to 35m passengers per annum at internationally accepted service levels for a successful capital city airport.
With the receipt of that positive planning decision and the subsequent withdrawal by Ryanair of its judicial review proceedings, I can confirm to you today that construction work on T2 will be completed by the end of next year and that passengers will begin to enjoy the benefits it offers, in just 24 months time.
It shouldn't be lost on anyone however, that this time frame presents many challenges in the context of the scale of the construction project on which we have embarked, the supporting services that need to be put in place and the busy airport environment in which it is taking place.
The good news is that we have met our post planning decision milestones to date and we are determined to continue meeting them, in the same way as we have done with projects such as Pier D and Area 14.
The DAA is more aware than anyone that the quality of service it offers at Dublin Airport at busy travel periods is not of the standard desired or required by passengers and other customers and pending the major structural developments I outlined, we are doing everything possible to address this challenge.
The Group has invested significant funds, manpower and time to try to mitigate the impact of the constrained facilities at Dublin Airport and we believe passengers have seen real tangible evidence of these efforts over the past year.
For instance, Dublin Airport processed an average of 6,000 additional passengers every day during 2007 and on the busiest days saw well over 90.000 people travel through its facilities. Yet passenger flows were effectively managed throughout and we achieved one of our key performance objectives, that waiting times at passenger security screening were no longer than seven minutes, for 95% of the time.
As you know, Airports are complex places where many different organisations (airlines, customs, immigration, etc.) need to work in close harmony to deliver a streamlined level of customer service and where relatively minor systems failures can lead to incremental difficulties.
In this context the DAA cannot guarantee that the journey through Dublin Airport will always be stress or incident free. But given the environment in which we currently operate and the level of control we currently exercise, we believe we are progressing towards a more satisfactory service, as we work to deliver longer-term transformational initiatives.
One such initiative is Pier D. This impressive facility was opened on time and on budget last October and not only offers its users more space, comfort, and light but also a foretaste of the quality of infrastructure the DAA is determined to deliver right across the airport campus.
Cork and Shannon Airports have also benefited over the past decade from investment in passenger facilities, but last year saw the beginning of a more fundamental and vital transformation at Shannon Airport.
Through the summer months, close to 200 employees left Shannon on a voluntary basis. This was part of a cost restructuring programme designed to secure the Airport's future viability, its competitiveness relative to peer airports at home and overseas and its status as an economic gateway for the entire region.
The cost restructuring at Shannon Airport was a necessary pre-requisite to the SAA completing a viable business plan. As provided in the 2004 State Airports Act, viable business plans for Dublin, Shannon, and Cork are a pre-requisite to the Government making a decision on separation. Those plans were submitted to the Minister in late 2007.
The Board of the DAA today agreed to accept the recommendations contained in the Cassells Report, to help resolve outstanding financial issues pertinent to the possible separation of Cork Airport, and as you know, the Board of the CAA agreed to accept the proposals late last week.
This agreement represents a very important step in the separation process. The Cassells recommendations will now be incorporated in the business plans for Government evaluation and the DAA will await the final decision by Government as to whether the separation process can be effected. Declan will provide more details of our financial performance in 2007 very shortly, but two key developments, which will underpin the DAA's ongoing investment in airport facilities, deserve a brief mention here.
Last Autumn the Group realised a net profit of close to €240m through the sale of its 24% shareholding in Birmingham Airport. The foresight with which this investment was originally made ten years ago and the impressive return on capital it achieved for the DAA and ultimately the Irish taxpayer, represents a significant achievement for the oft-maligned, commercial semi-state sector.
Secondly, just before Christmas the credit rating agency, Standard & Poors affirmed the Group's 'A' credit rating after a period on negative outlook. This positive outcome was supported by indications from the Commission for Aviation Regulation that it recognises the importance for the DAA of maintaining key minimum financial ratios given the nature of the business, the long-term nature and impact of investments, and the extended time for the proposed infrastructural investment.
I want to conclude my opening remarks by restating the commercial status of the DAA and the fact that all the Group's operational overheads and capital investment requirements are funded from three revenue sources; regulated airport charges that passengers pay to use our airport services; the commercial revenues that we generate from our activities such as retail and car parking; and borrowings.
The DAA does not lightly seek to increase its car parking charges or check-in desk charges or the charge for any other commercial service it provides. But we are a fully commercial business, defined by independent consultants as one of the more efficient of our peers in Europe, and we intend to remain so.
As a public sector company, all profits earned by the DAA are re-invested in our airports for the benefit of all our customers, the taxpayer and the Irish economy.
In our regulated environment, the commercial revenues that we generate from certain passengers and other customers, effectively subsidise the airport charges paid by our passengers in general. Those airport charges, which are passed through in full by the airlines to passengers (the ultimate customers), are already the lowest of any major airport in Europe.
It has been a successful year on many fronts for our company, I believe, and while many challenges remain, the DAA is confident that further progress will be made towards delivery of its three key objectives in 2008 and beyond.
Thank you for your attention. Before opening up to questions, I would now like to ask Declan to make his presentation to you.
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