Aer Rianta seeks rise in its airport charges as Ryanair rejects report

Aer Rianta is to seek an increase in its airport charges after a report it commissioned said the revenue is needed to secure its long-term financial performance.

The report was undertaken by PricewaterhouseCoopers and said that Aer Rianta's charges are among the lowest in Europe. The findings have been strongly rejected by Ryanair which described the report, published yesterday, as "irrelevant".

Aer Rianta has asked the authors to come up with a second report outlining the exact level of charges needed in the future. These will be submitted for approval to the Minister for Public Enterprise, Ms O'Rourke, in a few months.

A spokesman said the report conclusively proved that increased charges were needed, particularly to replace money spent on capital projects at its airports.

The report said Aer Rianta was facing "additional burdens of some £1.50 (#1.90) per passenger rising to some £3.25 per passenger when duty free is withdrawn". It added that the "need to increase aeronautical revenues is inescapable".

The report strongly contested many of the points made by Ryanair during the recent debate about airport charges. It said Ryanair's suggestion that increases in airport charges would reduce the number of airlines offering services at the airports "has been greatly exaggerated". "In the event that Ryanair does not wish to expand or maintain its operations through Dublin, there are now a number of other low-cost carriers looking for attractive route development opportunities," it added.

"A far greater threat to the development of the Irish economy would be the inability of Aer Rianta to finance the continued expansion of Dublin Airport," it said.

Last night the chief executive of Ryanair, Mr Michael O'Leary, said the report was irrelevant because it focused on published charges. "Aer Rianta is well aware that most airlines, including Ryanair, do not pay published charges."

He said the report lacked credibility because it was commissioned by Aer Rianta using Aer Rianta figures. "Pricewaterhouse Coopers have not even discussed these issues with Ryanair during their preparation for this report," he added.

He said the suggestion that charges needed to rise because of Aer Rianta's investment plan was a red herring.

Large funds could be raised by the company if it sold the Great Southern Hotel chain and its overseas airports, he said.

Mr O'Leary said the report said Dublin airport was cheaper than Birmingham, Manchester, Glasgow, Luton, Gatwick, and that was incorrect. "Therefore this whole report is invalid," he said.

The report claims Ryanair is unlikely to move the core of its operations out of Dublin airport because its Irish routes are "more profitable than its new continental routes".