Coillte is the latest semi-state company to announce the payment of a huge dividend to the public treasury. The forest agency agreed to pay 30 million euros, its highest amount to date. ESB, meanwhile, recently agreed to pay 126 million euros in dividends to the state for 2021, up almost 50% from the previous year.
One agency that may not be able to pay a significant financial return to the Treasury for some time is DAA, the operator of Dublin Airport and Cork.
Until the pandemic, the DAA had become a stable source of revenue for the Ministry of Finance. It paid more than €40m to the state in 2019 and €125m in total over the four years from 2015, after striking a deal with the government to pay it 30% of its profits every year.
But once the coronavirus hit, sales fell by more than two-thirds while its net debt soared by more than 80% as aviation was devastated by Covid-19 restrictions. DAA responded by cutting costs and letting up to 1,000 employees benefit from generous severance packages.
However, that recently backfired on the DAA, as the airport operator struggled to cope with a resurgence in post-pandemic travel, leading to massive queues, opprobrium from politicians and a series of annoying headlines.
There is a school of thought among some in the airline industry that DAA should have been an outlier in recent years when it comes to state policy on taxpayer-owned business dividends. Airports are primarily catalysts for wider economic activity, the logic goes, and should not be seen as a mere source of revenue for the state.
If the DAA hadn’t been so focused on short-term financial goals, they say, it might not have been so focused on self-defeating layoff plans, as well as its recent controversial pay-rise plans. income, including deposit fees and upgrades. in parking fees, which DAA justified by the reduction of its competition; maybe that was a little too honest.
Less financial pressure from the State on DAA would obviously suit the airlines, which could then plead for lower charges from the airport operator. The question, of course, would be whether airlines would pass the savings on to their customers or simply pocket them.