Irish Aviation Authority Annual Report 2019 Annual Report 2019 1 Contents Key messages for 2019 2 What we do 4 Key figures 2019 5 Our values 6 Financial and operating highlights 2019 7 Chairperson's statement 8 Chief Executive's review 10 Operating review 12 Safety Regulation review 12 Air Traffic Management review 14 Financial review 17 Human Resources review 18 Climate action performance 19 Corporate social responsibility 20 Directors and other information 21 Directors’ report 23 Statement of directors’ responsibilities 30 Independent auditor’s report 31 Consolidated profit and loss account 34 Consolidated statement of other comprehensive income 35 Consolidated balance sheet 36 Company balance sheet 37 Consolidated statement of changes in equity 38 Company statement of changes in equity 39 Consolidated cash flow statement 40 Notes forming part of the financial statements 41 Five year summary 2015–2019 58 For more information visit our website www.iaa.ie 2 Irish Aviation Authority Key Messages for 2019 1,349 We safely handled 352,000 We effectively regulated the We continued to progress overflights, 272,500 terminal safety of the Irish AOC fleet of the aviation regulatory reform commercial movements and 602 aircraft and total aircraft project in line with Government 511,000 flights on the North on the Irish aircraft register policy and guidance Atlantic of 1,349 aircraft 2nd 92% Ireland is ranked 2nd in Europe We achieved the highest score in We are in the top-tier of for effective implementation the 2019 CANSO/EUROCONTROL European air navigation service of ICAO standards and safety management systems providers with a safety maturity recommended practices standard of excellence level score of 92% in the EASA (aviation safety) measurement (air traffic measure of the effectiveness management safety) of safety management Annual Report 2019 3 Our en route customer charges Our new iconic air traffic control We launched Aireon ALERT in continue to be amongst the tower at Dublin Airport was July, providing a global aircraft lowest in Europe and, for the constructed on time and location and emergency 4th year in a row, regulatory within budget response tracking service, fees remained unchanged free to the industry 90.2% 37.6% We achieved a 90.2% satisfaction We exceeded our flight efficiency Through the expertise and rating from our airline customers targets and introduced air traffic dedication of our staff and management initiatives with our ongoing commitment to direct environmental benefits. innovation, we continued to We delivered energy efficiency deliver a world-class ATM/ANS savings to date, through energy service and a best-in-class efficiency improvement projects, aviation safety regulatory of 37.6%, ahead of our 2020 service target of 33% 4 Irish Aviation Authority What We Do Civil Aviation Aviation Security Air Traffic Commercial Safety Regulation Management Activities Air Navigation Services in the North Atlantic CA NA DA U SA Annual Report 2019 5 Key Figures 2019 Turnover Operating profit €197.2m €31.9m Profit after tax Net assets €27.8m €215.6m Dividend for 2019 Average employees €7.8m 714 CA NA DA Aircraft on Irish Register Licences 1,349 18.3% U SA Overflights Domestic traffic 1.5% 2.1% 6 Irish Aviation Authority Our Values SAFETY S A SERVICE EXCELLENCE F E We exceed our customer’s TY expectations IS OU R PRIORITY INNOVATION INTEGRITY We are constantly looking We always do what for new ways to do is right things RESPECT TEAMWORK For our customers We are stronger and each other together Annual Report 2019 7 Financial and Operating Highlights 2019 2019 2018 FINANCIAL HIGHLIGHTS €’000 €’000 % Change Turnover 197,228 198,922 -0.9% Operating Profit 31,885 31,550 +1.1% Profit After Tax 27,804 31,321 -11.2% Dividends Paid 19,524 19,458 +0.3% 2019 2018 AIR TRAFFIC ACTIVITY Number Number % Change En Route Overflights 351,731 346,486 +1.5% Terminal Commercial Traffic 272,527 266,917 +2.1% North Atlantic Communications 511,294 505,397 +1.2% 2019 2018 EMPLOYMENT Number Number % Change Average Employed 714 685 +4.2% 2019 2018 CUSTOMER CHARGES € € % Change En Route Overflight 28.12 27.69 +1.6% Airport Terminal Traffic 150.44 151.75 -0.9% North Atlantic Communications 45.00 45.00 +0.0% Safety Regulation No change in Fees Order since 2016 8 Irish Aviation Authority Chairperson’s Statement I am very pleased to present the IAA’s annual report and financial statements for 2019. Michael McGrail Chairperson Safety Regulation and Security continuing to progress towards Oversight the separation of the IAA’s air traffic In 2019, the Irish Aviation Authority control services from its safety (IAA) provided effective regulatory regulation functions and the oversight of the Irish civil aviation subsequent transfer of the CAR’s industry. Safety is our top priority. economic functions to the IAA, EASA, the European Aviation Safety as aviation regulator. Agency, carried out four audits of This year was a very busy year, the IAA’s Safety Regulation Division particularly in the area of licensing (SRD) and found a high standard of of pilots and maintenance compliance. Under the International engineers. The UK’s decision to Civil Aviation Organisation’s (ICAO’s) leave the EU led to a significant continuous monitoring approach to number of transfer applications. compliance, Ireland maintained its The number of licences in issue ranking of second in Europe for increased by 18% compared with effective implementation of ICAO 2018. After many years of increases standards and recommended in the number of aircraft on the practices. Irish register, this year witnessed a The IAA progressed work with the reduction of almost 6%, principally Department of Transport, Tourism in the commercial air transport and Sport and the Commission for sector, to 1,349 aircraft. Aviation Regulation (CAR) on the The IAA continued to conduct restructuring of its regulatory security inspection and oversight activities. We assisted in the activities on behalf of the State. In development of the General Scheme 2019, the aviation security activities of Bill (Air Navigation and Transport of more than 340 organisations Bill 2019) as well as putting in place were overseen by the IAA. detailed plans for the delivery of the project. All stakeholders are Annual Report 2019 9 Air Traffic Management headcount. While the Plan is currently On the ground, we have also During the year, the IAA delivered under review by the EC, it is likely that invested in various energy efficiency safe and effective air traffic control the significant impacts on the aviation improvement projects and have services. En route traffic increased by sector as a result of the COVID-19 already exceeded our 2020 energy 1.5% to almost 352,000 overflights pandemic will require a full targets. We are working on a five-year while flights on the North Atlantic re-plan for the coming years. sustainability management plan to increased by 1.2% to just over 511,000 meet the requirements of the State’s flights. Terminal commercial traffic Financial Overview 2019 Climate Action Plan. Climate increased by 2.1% to 272,500 The Group recorded a positive change and environment movements with Dublin Airport financial result in 2019. Turnover responsibility have always been accounting for 85% of this traffic. was €197.2 million with an operating priorities for us and will be in the margin of 16.2%. Consolidated net coming years. The construction of our new visual assets of €215.6 million were down control tower at Dublin Airport was from €236.4 million last year mainly COVID-19 completed in March 2019, on time due to an increase in the company’s At the time of writing, we, along and within budget. The new tower defined benefit pension liability from with all stakeholders in the aviation is currently being fitted out with air €65.2 million (net of tax) at 31 industry, are experiencing a crisis traffic management systems. The December 2018 to €96.5 million at brought about by the global public plan is for the tower to be in service 31 December 2019. While pension health pandemic that is COVID-19. for existing runway operations in assets delivered a strong return in Air traffic activity has been largely 2020. Parallel runway operations the year, the pressure on bond yields suspended with significant reductions are planned for late 2021. resulted in a lower discount rate at in the number of flights planned for In July, we, in partnership with Aireon, 31 December 2019 giving rise to an the end of March and the month launched Aireon ALERT (Aircraft increase in pension liabilities of of April at least. IAA management Location Emergency Response 14.6% to €698.5 million. have put in place measures to ensure Tracking). An aircraft locating and business continuity throughout this The Board has recommended the tracking service for aircraft in crisis with our priority being the payment of a dividend of €7.8 million, distress, this service is provided free safety of our staff and our airline based on 30% of the company’s of charge to the aviation industry and customers. The IAA, as a commercial profits after tax. This brings the has already facilitated search and semi-State company, does not receive total dividends paid to the State in rescue services around the world any funding from the State. the last five years to €63.4 million. by providing targeted search Acknowledgements information. Corporate Governance In October 2019, Michael Norton’s Our annual engagement with our The Board is committed to the term of office ended. I would like top thirty domestic and international highest standards of corporate to thank Michael for his service.