Thursday 30 March 2017

Dublin airport could get new runway - DAA looking at bond funding

It’s been speculated that a new runway at Dublin Airport could cost €250m. Photo: John Cogill/Bloomberg News
It’s been speculated that a new runway at Dublin Airport could cost €250m. Photo: John Cogill/Bloomberg News
John Mulligan

John Mulligan

The DAA will examine all appropriate funding methods - including a possible bond issue - to help bankroll the development of a new runway at Dublin Airport, according to chief executive Kevin Toland.

The DAA, which also controls Cork Airport, is currently examining plans for a second parallel runway at the capital as passenger numbers soar. Last year, Dublin Airport handled over 25 million passengers, a record for the facility and 15pc more than in 2014, making it one of the fastest-growing airports in Europe.

Existing planning permission for a new runway expires next year, and the DAA is currently evaluating whether or not it will rely on that current permission, or submit a new planning application. Under planning rules, such an application would be made directly to An Bord Pleanala under the Planning and Development (Strategic Infrastructure) Act.

"We're still working our way through that," Mr Toland told the Irish Independent. "What's very clear is the need, and the opportunity is greater. We're growing very quickly. We're working through our different options."

He said the opportunity exists to build Dublin Airport out as a "real key European hub".

It's been speculated that the new runway could cost up to €250m to construct.

"The cost of the new Dublin runway is an absolute fraction of any of the other runway projects that are being talked about elsewhere in western Europe, and the UK," said Mr Toland.

The DAA's financing unit, DAA Finance, currently has one bond in issue, which matures in 2018. The €550m, 10-year Eurobond (it was originally €600m) was issued in 2008 with a coupon of 6.5872pc. It was used to help finance the construction of Terminal 2. The DAA had previously accessed the bond market in 2001, with a €250m issue.

"We're considering all those finance options at the moment on the back of increased and improved performance, not only in Dublin, but right across the group," said Mr Toland. Ratings agency Standard & Poor's upgraded the rating on the 2008 bond, and the DAA, to A- from BBB+ in November.

"We're in a very comfortable position to explore those options and pick the right one," the chief executive said.

The DAA could increase passenger charges to help meet the cost of a new runway.

In numbers

€250m - Estimated cost of new runway at Dublin Airport

25m - Number of passengers who used Dublin Airport last year.

€550m - Existing DAA Eurobond in issue. It matures in 2018.

Irish Independent

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