DAA says €2bn plan for airport thrown into doubt

Headwinds: Dublin Airport could suffer if fees are cut, DAA has indicated

Donal O'Donovan Twitter Email

July 30 2019 02:30 AM

Dublin Airport will have to slash capital spending by as much as €1bn if a cut to passenger fees proposed by the Commission for Aviation Regulation (CAR) goes ahead next year, airport operator DAA has warned.

In May, CAR proposed reducing the maximum charge DAA can levy on airlines to €7.50 per head from the start of next year for four years.

It said lower prices will benefit consumers. The charge is currently capped at €8.81 per passenger.

The proposal was followed by a consultation period that has drawn 37 submissions, mainly from airlines, but including filings by trade unions, employers groups, local politicians and groups representing travellers.

Airlines including Aer Lingus and Ryanair were supportive of DAA's investment plans for Dublin Airport in their submissions, but also favour reduced fees.

However, in its submission, DAA said it could be forced to dramatically scale back its €2bn five-year capital investment plans, if the cut goes ahead.

DAA said that CAR's proposed cut in charges would mean the airport having between €500m and €1bn less in funds available for approved infrastructure projects.

Its submission warned that decisions taken by CAR could damage the Irish economy and make it more difficult for Dublin Airport to compete with airports overseas for new routes and expansions.

"The proposed sharp reduction in pricing creates an unsustainable level of risk for Dublin Airport, at a time when it proposes to embark on a €2bn capital investment programme. Our financial analysis indicates that in practice, the funding required for sizeable elements of the capacity development programme will not be achieved," DAA said.

It said charges at Dublin Airport are 30pc lower than the average at its European peers.