Business Irish

Monday 26 June 2017

Plan for different terminal charges at Dublin airport

John Mulligan

John Mulligan

PASSENGERS using Dublin Airport could be charged different rates for using the existing terminal and the new €600m second terminal if recommendations made yesterday to the Commission for Aviation Regulation (CAR) are adopted.

In what would be a profound change to the way passenger charges are levied at the State's busiest airport, the non-binding recommendations, if applied by CAR, could also compromise Dublin Airport Authority's (DAA) ability to service its burgeoning debt pile -- it currently stands at €616m and is expected to jump to around €1bn within a couple of years.

In February, ratings agency Standard & Poor's cut some of the DAA's bonds to just two levels above junk status, citing concerns over falling passenger numbers. Passenger numbers at Dublin are likely to fall by 1.5 million to 19 million this year. The DAA made a €13m loss last year. Higher passenger rates at Terminal 2 (T2), which is due to open in November, could also affect decisions by airlines to use the controversial facility. Airlines including Abu-Dhabi-based Etihad, Continental and American Airlines have signed up to use the new terminal. An Aer Lingus spokesman reiterated yesterday that any move to T2 would in part be predicated on charges at the new terminal not being higher than those at the existing terminal.

Ryanair and the DAA had appealed rulings made by CAR before Christmas that will see passenger charges at Dublin Airport soar by up to 40pc once the terminal becomes operational. Transport Minister Noel Dempsey had also directed the Aviation Commissioner Cathal Guiomard to be mindful of the DAA's financing requirements in making his decision -- effectively telling the regulator to hike charges.

Ryanair is also awaiting a High Court decision on whether it can seek leave to appeal the Commissioner's pre-Christmas determination to the Supreme Court. The DAA yesterday questioned how differential pricing could be implemented on an "equitable basis". It claimed the "fairest" passenger fee is one that is the same for every passenger. Cityjet chief executive Geoffrey O'Byrne White told the Irish Independent that differential pricing would "not be a bad thing" at Dublin and questioned why his passengers should be paying for facilities they wouldn't be using.

Yesterday, the Aviation Appeal Panel, which is headed by senior legal counsel Michael Durack, told CAR that Dublin Airport shouldn't have a catch-all policy.

"It is precisely because of Dublin Airport's monopoly position that it should strive to cater for different airline business models," said the panel. "DAA's failure thus far to do so has the possible effect that some business models are favoured over others. This, in turn, implies a potential restriction or distortion of competition in airline markets which the panel feels should be addressed by the commission."

However, the commission has previously mulled the notion of differential pricing, in 2005 and 2007, and decided not to adopt such a policy.

Irish Independent

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