Regulator incites flights of fancy

AVIATION REGULATOR Cathal Guiomard has received an eclectic mix of submissions to his draft ruling on Dublin airport passenger charges for the next five years.

Angela Lawton lamented she could not obtain the determination “as Gaeilge” before offering a one-page submission in English.

Goodbody Corporate Finance, which is advising the Minister for Transport on securing an operator for the new Terminal 2 facility, argued that the Dublin Airport Authority (DAA) should be allowed to recover any redundancy costs in the event that it doesn’t win the T2 tender and finds itself with a surplus of staff.

“It is the belief of the consortium that Car [Commission for Aviation Regulation] should allow the cost [in the new passenger charge] of any such redundancies to DAA,” Goodbody argued.

Aer Lingus said the new T2 was “over-sized”, which raised some eyebrows given that in three previous submissions to the regulator, the airline gave its full support to the design and specification of T2.

Then there was Siptu, which wants Guiomard to increase the passenger charge by a whopping 42 per cent to €10.50 in 2010.

This is three times the level suggested by Guiomard in his interim determination in June.

In supporting its position for a big increase, Siptu raised concerns about the financial health of the airport authority and gave an insight into the state of the Irish airlines (general employees) superannuation scheme.

The pension fund had a deficit of €79 million at the end of March 2008. Siptu estimates that it has widened to €628 million, based on a 40 per cent collapse in the value of its investments. This would put it in breach of statutory minimum requirement.

“It is noted that the two primary employers [in the scheme], ie Aer Lingus and the Dublin Airport Authority, have substantial net cash balances in the region of €1.375 billion. The main employers must set aside funds from their cash reserves to demonstrate the appropriateness of an investment approach that will secure the viability of the scheme.”

In a nutshell, Siptu wants Guiomard to gouge passengers so that the airport authority’s coffers will be boosted to the extent that it can sort out the shortfall in the worker’s pension fund.

Never mind the recession or the decline in tourist numbers. It seems a funny kind of logic.