Kill off the Dublin airport white elephant and sell Cork and Shannon

I WISH to correct the numerous misleading claims made by the Paul O’Kane of the Dublin Airport Authority (DAA) in his letter (November 17) regarding the DAA and its white elephant, €1.3bn Terminal Two (T2).

* While the Government and airlines supported the need for a low-cost (€170m) T2 in 2003, this was supposed to be an independent competitor to the high-cost, inefficient DAA monopoly.

* The Department of Transport announced in 2005 that the contract for the second terminal would instead be awarded to the DAA monopoly which had so spectacularly mismanaged the existing terminal.

* Having wasted €200m building a new terminal at Cork airport (which Cork’s airlines neither needed nor wanted), the DAA then announced it would build the second terminal for “between €170m to €200m”. Four years later the DAA has delivered a monstrous white elephant T2 at a cost of some €1.3bn, a sevenfold over-run).

* With the new Pier D, the existing terminal at Dublin can handle 30 million passengers per annum, yet traffic at Dublin airport is collapsing to just 20 million passengers in 2009, under the twin burden of the DAA’s high costs and the Government’s crazy €10 tourist tax.

* The DAA did not consult with its airline customers, it ignored them. Ryanair, the DAA’s largest customer, consistently advocated a low-cost €20m terminal. The DAA’s claim that Ryanair opposes improvements in airport facilities is false given that Ryanair has repeatedly offered to pay for and build a €200m competing second terminal at Dublin.

* If there was a competing terminal at Dublin, airport charges would be falling and traffic rising. Instead we have a €1.3bn white elephant T2, with the Government ordering the regulator to approve a 40% price increase which will cause Dublin airport traffic to collapse even further next year.

* Rising airport charges at Dublin and the Government’s €10 tourist tax are the principal barriers to traffic and tourism growth in Ireland. All of the major airlines, including Aer Lingus, British Midland and Ryanair, have confirmed that Dublin airport’s costs are very high by EU standards. How else can the DAA explain why Dublin airport will lose more than three million passengers this year, when both Ryanair and Aer Lingus will grow traffic (but all of this growth is taking place at lower cost airports outside Ireland).

* Mr O’Kane’s claim that “passenger volumes are driven by GDP trends” is rubbish. Passenger volumes are driven by low-cost access and low-cost efficient airports. Thanks to Ryanair, traffic at Dublin airport grew consistently from 1986 to 2008, through three recessions. The collapse in traffic at Dublin airport this year is entirely due to the DAA’s high and rising costs, which are forcing Irish and overseas airlines to switch routes and capacity from Dublin. The white elephant T2 will worsen this trend in 2010, when the supposedly independent aviation regulator has been ordered by the Department of Transport (the downtown office of the DAA) to jack up passenger fees by 40%.

* All of this was avoidable. Ryanair and 12 other parties offered to build a competing second terminal at Dublin airport at no cost to the Government or taxpayer. As the late Seamus Brennan confirmed: The taxpayer gets this for nothing, so we would be mad not to do it”. Sadly, the Department of Transport is not just mad, it repeatedly protects the vested interest of the Government-owned airport monopoly over the greater interest of consumers, tourism and job creation in Ireland.

There is a solution, even now. T2 should be mothballed. It’s not needed. Better still convert it to shops, offices or a conference centre.

The Government should return to Seamus Brennan’s original vision which was to break up the DAA monopoly by selling off Cork and Shannon airports to competent, efficient airport operators, and allow a competing terminal to be built at Dublin airport — financed by any one of the 13 parties that previously expressed an interest in doing so — and allow competition and efficient facilities to force down the DAA’s high costs and return Ireland to traffic and tourist growth. This will allow competition to succeed where the monopoly protection policy of the Department of Transport has failed.

Michael O’Leary

Chief Executive


Dublin Airport

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