SIPTU has warned the Dublin Airport Authority that it will not tolerate dividends being paid to the State before pay cuts imposed on members in 2010 are restored.

The warning comes in a letter to DAA Chief Executive Kevin Toland from SIPTU Aviation Sector Organiser Greg Ennis on Monday.

A spokesperson for the DAA said the payment of a dividend by the DAA is a matter in the first instance for the Board.

In a statement, the company said "Government policy is that dividends should be paid by its commercial semi-State companies by reference to their financial performance and profit level.

"Any queries about pay is an operational matter for the Company."

However, in his letter, Mr Ennis notes an article in the previous day's Sunday Independent claiming that the State airport authority will resume paying a dividend to the Government this year for the first time since the start of the recession.

Mr Ennis writes that in February 2010, temporary pay cuts ranging from 4.25% to 9% were imposed on staff, along with redundancies, cuts in overtime rates and sick pay, the elimination of a Christmas bonus, redeployments, and other "efficiencies".

He also reminds the DAA boss that staff did not receive the 6% pay rise due under the then national wage agreement, and new entrants were to be recruited on lower "market" rates of pay.

He said these measures had resulted in an annual surplus in projected savings since 2010 of €7.9 million.

They also helped to deliver group profits (before exceptional items and after tax) of around €290m over the same five year period.

Given those circumstances, Mr Ennis accuses the DAA of "immorally" continuing to withhold restoration of the pay cuts.
 

He warns that current negotiations for a ‘New Model Agreement’ at the company could collapse if SIPTU does not receive assurances that a state dividend will not be paid before members receive confirmation that the temporary pay cuts are being restored.

Mr Ennis says SIPTU members cannot countenance a situation where they continue to subsidise what is now a highly profitable DAA,  and similarly a State, which by all accounts has returned the best economic growth across the European Union.

Sources at the DAA stressed that nothing had been decided about the payment of a dividend.

However, they noted that the National Aviation Policy states that aviation companies should pay a dividend to the state, as did the McCarthy "An Bord Snip Nua" report.

They added that dividends are normal in a company, and the State as a shareholder has every right to expect a dividend.

The sources said that with the DAA's improved credit rating, Standard and Poors expects it to pay a dividend.

They said the company had paid a State dividend for many years, though an exemption was put in place when passenger numbers fell by five million between 2008 and 2010 during the economic downturn.

The sources noted passenger numbers have returned to strong growth much quicker than was expected, with further growth expected this year.

They also said Chief Executive Kevin Toland has confirmed there is an agreement with the relevant trade unions on what will trigger restoration - and the company will honour its agreement in relation to that.

The last DAA dividend paid to the State was €19.4m in 2009.