Aviation regulator rejects a DAA demand for rise in passenger charges

THE aviation regulator has dealt the Dublin Airport Authority a severe blow in its efforts to recover the €1.2 billion airport expansion cost, by ruling out a demand for a rise in passenger charges.

The Commission for Aviation Regulator (CAR) has kept airport charges at Dublin Airport on hold at €6.34 per passenger until 2009 and indicated that charges from 2010-2014 will be below what the DAA had sought.

Construction of the new terminal at Dublin Airport, called T2, has yet to begin. Planning permission for the terminal was granted late last year, but was appealed to Bord Pleanála which is due to issue its final decision in the next few weeks.

The DAA had sought a rise in passenger charges to €7.50 to cover the cost of the new terminal and other developments from 2006-2009.

However, regulator Cathal Guiomard yesterday issued a draft determination saying he saw no reason to grant the rise. The regulator also said he would only sanction passenger charges from 2010-2014 of €7.75 — airport chiefs had looked for €8.50.

Mr Guiomard said since the DAA applied for the rise in 2005, its financial position has improved significantly due to the increase in traffic through Dublin Airport. He had also taken into account the gain the DAA had made on the sale of the Great Southern Hotel chain last year.

The DAA said last night it was disappointed that the “modest” rise had not been granted to complete “urgently-needed” facilities. The authority will now have to borrow heavily to pay for the new terminal.

“The DAA welcomes the commission’s findings that the vast bulk of the company’s near-term, €1.2bn investment programme for Dublin Airport is both necessary and reasonably priced. However, it questions why this investment should be remunerated by a prospective larger incremental increase in airport charges for users from 2009, rather than the clarity of a smoother phased increase, commencing this year,” it said in a statement.

The CAR said the €7.75 charge would apply to passengers across the airport, whether they used the existing terminal or T2 if the new facility met its target traffic forecasts. But the regulator said if passenger traffic did not meet the expected demand, the DAA could charge passengers who use T2 at peak times higher than those using the main terminal.

The CAR said it will carry out a four-week consultation period on the draft determination before issuing its final decision.