Charge hike needed for terminal - DAA

Unless airport charges rise significantly, there is little chance Dublin Airport Authority (DAA) will be able to build any new terminal facilities, the chairman of the authority has warned.

Gary McGann, speaking as the company announced its 2004 results, denied he was imposing a "precondition" on the Government, but said "simple economics" meant the facilities could not be built unless the regulator allowed higher charges.

But, he said, the authority was "ready, willing and able" to build a new terminal.

"No increase, no investment," he told reporters gathered in Dublin to hear about the company's 2004 results.

The figures showed turnover rising by 6.6 per cent to €466 million, with pretax profits almost doubling to €41 million.

Chief executive Declan Collier, agreed with Mr McGann's assertion. "The DAA can only afford to build what it's paid to build. That's an important fact."

In the meantime, he told reporters congestion at the airport was likely to continue for some time because there was no "quick fix" available.

He said the authority would do its best to reduce congestion, but he said it could take several years to make a real impact. "Even if a decision to sanction new terminal facilities were made today, it would take three to four years before those facilities become fully operational," he said.

Mr Collier denied Dublin airport was operating a high charges regime. "Airport charges at Dublin airport are currently capped at less than €5 per passenger, approximately half the average level for European airports of Dublin's size. These charges will have to rise if DAA or any other developer is to invest in a new terminal and other airport infrastructure."

He said that, while he was happy with the profit performance of DAA, it was not enough in the long term: "The profits in my view remain too low for a business with the challenges that face us."

Mr McGann said the company had to address its various "lossmaking businesses" and those that were underperforming. "Unless addressed in time, these could undermine the viability and potential development of the Dublin Airport Authority itself," he said.

Meanwhile, the board of the Great Southern Hotel group has completed its business plan, and sources last night indicated that two of the properties, Galway Corrib and Rosslare, could ultimately be sold.

Mr McGann told reporters earlier the hotel group's financial position continued to "deteriorate". He said difficult trading conditions were compounded by payroll costs that were significantly higher than comparable operators in an increasingly competitive hotels sector.

The Minister for Transport, Martin Cullen, is expected to meet the board of Aer Lingus today. The meeting is described as routine, although Mr Cullen is expected to discuss Government plans to sell-off equity in the airline.