Crisis-hit Kerry Airport lost out on public funding after stockmarket loss
Pulled Kerry Crisis Airport Macmonagle Out Facing As Is The Stobart Picture: Uncertainty Renewed Covid Deepens Aviation Now After Air Don
Kerry Airport, which is reeling from the withdrawal of Stobart Air from its publicly-subsidised Aer Lingus route, was refused a government grant last October due to an investment loss it took on an unusual €1.5m stockmarket bet.
The airport suffered the loss of almost €306,000 after its multi-year €1.5m investment turned sour at the onset of the Covid crisis.
Kerry Airport is now facing renewed uncertainty after Stobart Air, which operates the public service obligation routes on behalf of Aer Lingus, pulled out from Kerry and Donegal airports as the Covid aviation crisis deepens. Aer Lingus said it will step in and directly service commercial routes at the other airports affected by the withdrawal of Stobart Air.
The first reported details of the Kerry Airport stockmarket loss in early November and has now learnt an application by the private airport company to the Department of Transport under a scheme known as 'operating expenses', was turned down after the Department of Transport weighed the investment loss.
Documents released to this newspaper following a freedom of information request show the airport was in contact with Department of Transport officials in late October regarding its 2020 application under the operating expenses scheme.
The Department of Transport has told the in a statement that Kerry Airport did not receive any funding to cover expenses in relation to its “economic activities”, including the investment loss.
The operating expenses scheme subsidises the costs for regional airports to provide core services that cannot be covered from revenues generated from normal commercial operations, as well as carparks and catering.
The airport did receive support of €1.5m in December for “non-economic activities”, which involve air traffic control, fire services, and security, the department said.
“Accordingly, the department can confirm that the €306,000 investment loss was taken into consideration in the assessment process for funding to support economic activities under the operating expenses scheme of the Regional Airports Programme,” the department said.
“As a result of this assessment, Kerry Airport did not receive any operating expenses funding in 2020,” it said.
It was not considered appropriate for the exchequer to cover the loss and “subsequent to this adjustment, Kerry Airport is not forecasting a ‘subventible loss’ in 2020 and, accordingly, does not qualify for subvention under the operating expenses scheme”, the freedom of information documents show.
Kerry Airport has never fully explained publicly the nature of the loss, its involvement in a multi-year market investment, and the identity of the bank or stockbroker who advised or sold it the investment product.
Meanwhile, government ministers and politicians said they will do all in their power to help Kerry and Donegal get back their public service obligation-funded routes.
Foreign Affairs Minister Simon Coveney said the public subsidies to Aer Lingus and Stobart Air were designed to boost connectivity. He said he was confident another operator would be found but the level of subsidies would come into play.
An Aer Lingus spokesperson said its provision of services on all its commercial routes “would be demand-led”.
Separately, Kieran O’Donnell TD, chair of the Oireachtas Transport Committee, said Shannon and Cork airports should be able to avail of capital and operational supports on a permanent basis, similar to those available to regional airports.