DAA to miss out on third Dublin terminal

An independently-operated third terminal at Dublin Airport is now the preferred option of government ministers, the Irish Examiner can reveal.

“We are very favourable on it,” said one minister.

The prospect of a third terminal has arisen given a significant upsurge in passenger numbers at Dublin Airport, and a formal decision to approve the new terminal is due by ministers shortly.

The commencement of development of the second parallel runway at Dublin at a cost of €320m has led people to conclude that the airport will breach its passenger capacity levels, requiring the additional terminal sooner than previously expected.

“We are very much going that way, and there is broad agreement within Government that it is needed,” said one minister.

It is understood confidential discussions within the Government in recent weeks have raised the prospect of not giving control of the proposed €200m terminal to the monopoly Dublin Airport Authority (DAA).

“We are kind of taking the DAA on. The third terminal thing they are furious about, the prospect of it being considered. It is very likely to be considered very favourably,” said one senior government source.

The Irish Examiner has learnt that Ryanair and Aer Lingus have complained about congestion at Dublin Airport to authorities, with Ryanair boss Michael O’Leary offering to build the new terminal privately.

It is also understood that the potential of a new terminal would allow Dublin to be used by Aer Lingus’ parent company, IAG Group, as an alternative global hub, which experts have suggested could deliver an extra 20,000 jobs to the economy.

New Dublin Airport terminal a prize worth pursuing

Formally, Transport Minister Shane Ross has fast-tracked an expert-led capacity review of Dublin, Cork and Shannon airports and is awaiting the return of the report.

“In the case of Dublin Airport only, the study will consider the timeframe for the development of new terminal capacity — Terminal 3 — and its appropriate design and optimum location,” Mr Ross has said.

While the review will “assess the relative advantages and disadvantages of the funding and operation of Terminal 3 by the existing airport operator in comparison to being operated on an independent basis,” Mr Ross and Fine Gael ministers believe it would be best to keep it separate to the DAA.

Almost 28m passengers passed through Dublin Airport last year, an increase of 11% in passenger numbers on the previous year.

Of these, 24.3m passengers took short-haul flights to and from the airport while 3.6m were on long-haul flights.

Both 2015 and 2016 set new records for Dublin Airport. Traffic grew by a total of 6.2m passengers, or 29%, over the two-year period, the company said.

Speaking at a civil aviation conference in Dublin earlier this year, Mr Ross said: “Is a State monopoly at Irish airports in the interest of the users, the taxpayer or the travelling public? I think I know the answer.”

DAA chief executive Kevin Toland is on record as having said the idea of an independent terminal was a theoretical model, which was costly and inflexible. He said it had been tried and had failed, and had been reversed in two major airports in Europe and North America.

Mr Ross remains unconvinced also at the DAA’s price tag of €320m for the second runway, given that it was previously put at €250m.

There is strong scepticism within the Government as to why the costs have spiralled so significantly and the €70m cost escalation too has been savagely criticised by Mr O’Leary.

Last week, ministers approved a plan to enhance the powers of the aviation regulator to put the consumer first. The regulator will no longer have to consider the financial position of the DAA in determining charges, in a major blow to the body, which controls Dublin and Cork airports.