Regulator urges airlines to avoid legal challenges

THE AVIATION regulator has said his office received a €190,000 cheque from Ryanair last week as payment for legal costs accumulated from court actions lost or not pursued by the low-cost airline.

Speaking at the publication of his office's 2007 annual report yesterday, Cathal Guiomard said this would result in a reduced levy being imposed on industry operators in 2010.

The legal costs relate to a 2003 judicial review of ground-handling fees, which was dismissed by the court, and a 2005 case in relation to a price cap at Dublin airport, which was withdrawn by Ryanair.

Mr Guiomard highlighted the six legal challenges his office had faced since 2001 from either Ryanair or Aer Rianta, now known as the Dublin Airport Authority (DAA).

He said time and money had been wasted on these challenges - the regulator has lost just one - and called on operators to channel their energies more effectively, as the costs were ultimately borne by passengers.

"A large amount of energy and costs arises from the nature of the interaction between ourselves and both sides of the industry [airlines and the DAA]," Mr Guiomard said.

"If the energy was redirected, we would be using our time more helpfully."

Accounts for the Commission for Aviation Regulation show its legal bill in 2007 almost doubled to €1.2 million.

The bill played a large part in it posting a deficit for the year of €367,471. This compared with a deficit of €707,296 in 2006.

The steep reduction in the deficit was due to a €1.1 million increase in the levy imposed on industry operators last year.

This income rose to €3.7 million. When licence fees and other income are factored in, the commission's total revenue was €4.2 million.

Expenditure rose to €4.5 million from €3.9 million in 2006.

The bill for salaries rose by more than 9 per cent to €1.6 million. Mr Guiomard said the increase was due to one staff member being hired and pay rises due under national wage agreements and public service increments. The office employs 21 staff.

Advertising and public relations costs almost doubled to €150,213.

The commission also made savings, however. Consultants' fees were €475,525, compared with €539,434 in 2006, and there was a €10,000 reduction in insurance costs. The amount spent on "other" items declined to €113,521 from €156,055 in 2006.

Mr Guiomard said his office had undertaken a review of travel-trade licensing and would also begin a review of Dublin airport charges, with a new price cap to be determined in September 2009.