DoT to review Kerry Airport's €306,000 investment loss as part of current application for regional funds
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The Department of Transport is to review a loss of almost €306,000 made by Kerry Airport on a soured market investment, but said it "is not in the business" of covering losses from poor investment or commercial decisions.
The has reported that privately-run Kerry Airport will book the loss as part of an unusual €1.5m investment it took on an investment bond, which went disastrously wrong when markets crashed at the onset of the Covid-19 crisis in March.
The market loss will add to the already significant deficit facing Kerry Airport this year as passenger revenues collapsed when airlines cancelled flights into the airport due to the pandemic. Last week, the airport announced it was laying off around half of its staff on a temporary basis to help stem further losses.
The airport is operated by a private company, but has so far this year received €1.2m in public grants from the Department of Transport for capital expenditure projects and has also received significant public funding in recent years.
In a reply to questions put by the on Kerry Airport's investment losses, a spokesperson for the Department of Transport said the airport had submitted information on the investment last month "as part of this year's application for operational funding under the Regional Airports Programme".
"As part of the process to assess applications, the financial position and accounts of all eligible airports are currently being reviewed with the assistance of the department’s financial advisor," the spokesperson said.
"The issue of Kerry’s investment will be considered as part of that review.
"While the department has no governance oversight of private companies, it is satisfied that it has a robust procedure in place for assessing grant applications and allocating funding under the programme."
Kerry Airport has told the the investment was bought and managed by a bank and the losses were made after markets collapsed in March. It said it had no comment to questions on the identity of the bank and the specific underlying assets that triggered the investment losses. The airport will also not say whether it has any other outstanding market investments.
Kerry Airport handled almost 369,840 passengers last year and posted a net profit of just over €1m on revenues of €8.6m. Amid the Covid-19 crisis, it has said it anticipates significant losses this year.
The Department of Transport said it provides funding to regional airports because "without State support, these smaller airports would struggle to comply with international regulatory obligations in the areas of safety and security".
"For that reason, national policy has committed to supporting Ireland’s smallest regional airports [ie typically those that handle less than 1m annual passengers] in these areas," it said.